BlackRock Variable Series Funds 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:811-03290

Name of Fund: BlackRock Variable Series Funds, Inc.

BlackRock Advantage Large Cap Core V.I. Fund

BlackRock Advantage Large Cap Value V.I. Fund

BlackRock Advantage U.S. Total Market V.I. Fund

BlackRock Basic Value V.I. Fund

BlackRock Capital Appreciation V.I. Fund

BlackRock Equity Dividend V.I. Fund

BlackRock Global Allocation V.I. Fund

BlackRock Government Money Market V.I. Fund

BlackRock International V.I. Fund

BlackRock International Index V.I. Fund

BlackRock iShares Dynamic Allocation V.I Fund

BlackRock Large Cap Focus Growth V.I. Fund

BlackRock Managed Volatility V.I. Fund

BlackRock S&P 500 Index V.I. Fund

BlackRock Small Cap Index V.I. Fund

Fund Address:    100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock Variable

            Series Funds, Inc., 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 Variable Series Funds, Inc.

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 basedrisk-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 offlare-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/rewardtrade-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.

THIS PAGEISNOT PARTOF YOUR FUND REPORT

DECEMBER 31, 2018

ANNUAL REPORT

BlackRock Variable Series Funds, Inc.

^Ø  BlackRock Advantage Large Cap Core V.I. Fund

Not FDIC Insured • May Lose Value • No Bank Guarantee

Fund Summary  as of December 31, 2018 BlackRock Advantage Large Cap Core V.I. Fund

Investment Objective

BlackRock Advantage Large Cap Core V.I. Fund’s (the “Fund”) investment objective is to seek high total investment return.

Portfolio Management Commentary

How did the Fund perform?

For the 12-month period ended December 31, 2018, the Fund underperformed its benchmark, the Russell 1000^® Index.

What factors influenced performance?

After beginning the year favoring growth stocks and trend-based strategies, investors later reversed course and sold out of more expensive, growth-oriented areas of the market on fears of expensive valuations and of approaching the end of the market cycle. As the sell-off was often disconnected with the broader sentiment of management and market participants, it created a difficult environment for sentiment-based signals and resulted in sentiment insights detracting from relative performance for the period. A signal that gauges company sentiment based on trends in online job postings was the largest detractor for the period. Identifying sentiment based on short positions of hedge funds acted as a drag on performance as well, largely due to significant hedge fund de-risking toward the end of the year. A signal that uses geo-location data to determine consumer foot traffic patterns into various brick-and-mortar locations further detracted. Given a rotation out of growth positions, investors typically flock to pockets of attractive relative valuation. However, as value stocks showed some of the strongest earnings trends heading into the fourth quarter, they sold-off amid the rotation away from growth expectations. As a result, while fundamental signals held up well for the period, an insight that evaluates each stock based on forward sales relative to enterprise value hindered relative performance for the year.

As volatility and concerns about the approaching end of the current cycle increased, investors returned their focus to company fundamentals and to finding quality businesses offering sustainable growth prospects. In this vein, the Fund’s fundamental insights, particularly quality insights, were the primary drivers of positive relative return over the course of the year. Among the portfolio’s fundamental signals, identifying companies with attractive cash flow growth relative to operating assets was the top contributor. Identifying positive dividend growth trends as a measure of quality also proved beneficial. Although the portfolio’s sentiment insights overall were a drag on relative performance, sentiment insights that provide a more quality-based lens into companies contributed positively. Specifically, an insight that gauges sentiment from informed bond investors contributed significantly, given interest rate volatility. Text-based analyses of management conference calls to determine longer-term trends in company fundamentals proved beneficial as well. Both of these signals held up extremely well in the fourth quarter, in a market environment that was generally challenging for trend- and sentiment-based insights. Finally, thematic signals showed mixed results for the period, contributing marginally overall to relative performance.

Describe recent portfolio activity.

Over the course of the period, the portfolio maintained a balanced allocation of risk across all major return drivers. However, a number of new stock selection insights were added to the portfolio. Among these insights, a model that evaluates companies on the basis of governance and the ethics and sustainability of its business practices from a social and environmental perspective was added to the Fund’s bucket of quality signals. In addition, a new insight was added that captures the location of hotel booking trends and invests in related stocks most sensitive to those areas. A new macro thematic model that evaluates industries across various inputs such as labor costs and hiring activity was added as well.

Describe portfolio positioning at period end.

Relative to the Russell 1000^® Index, the Fund was positioned essentially neutrally from a sector perspective. The Fund had slight overweight positions in health care and financials and slight underweight positions in communications services and consumer discretionary.

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.

2 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Fund Summary  as of December 31, 2018 (continued) BlackRock Advantage Large Cap Core V.I. Fund

TOTAL RETURN BASED ON A $10,000 INVESTMENT

^(a)  Assuming transaction costs, if any, and other operating expenses, including investment advisory fees. Does not include insurance related fees and expenses. For a portion of the period, returns do not show the effects of distribution fees(12b-1 fees) applicable to Class II Shares. If such fees were included, returns shown would have been lower. The returns for Class III Shares prior to January 27, 2009, the recommencement of operations of Class III Shares, are based upon the performance of the Fund’s Class I Shares. The returns for Class III Shares, however, are adjusted to reflect the distribution(12b-1) fees applicable to Class III Shares.

^(b)  Under normal circumstances, the Fund seeks to invest at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in large cap equity securities and derivatives that have similar economic characteristics to such securities. The Fund’s total returns prior to June 12, 2017 are the returns of the Fund when it followed different investment strategies under the name “BlackRock Large Cap Core V.I. Fund”.

^(c)  An index that measures the performance of the large cap segment of the U.S. equity universe. It is a subset of the Russell 3000^® Index and includes approximately 1,000 of the largest securities based on a combination of their market capitalization and current index membership. The index represents approximately 92% of the total market capitalization of the Russell 3000^® Index.

Performance Summary for the Period Ended December 31, 2018

	6-Month Total Returns (b)			Average Annual Total Returns
				1 Year (b)			5 Years (b)			10 Years (b)
Class I(a)		(8.56	)%		(5.22	)%		7.68	%		11.56	%
Class II(a)		(8.64	)		(5.37	)		7.50			11.38
Class III(a)		(8.71	)		(5.51	)		7.38			11.25	(c)
Russell 1000® Index		(7.42	)		(4.78	)		8.21			13.28

^(a)  Average annual and cumulative total returns are based on changes in net asset value for the periods shown, and assume reinvestment of all distributions at net asset value on theex-dividend date. Insurance-related fees and expenses are not reflected in these returns. For the portion of the period, returns do not show the effects of distribution fees(12b-1 fees) applicable to Class II Shares. If such fees were included, returns shown would have been lower. The Fund’s total returns prior to June 12, 2017 are the returns of the Fund when it followed different investment strategies under the name “BlackRock Large Cap Core V.I. Fund”.

^(b) For a portion of the period, the Fund’s investment adviser waived a portion of its fee. Without such waiver, the Fund’s performance would have been lower.

^(c)  The returns for Class III Shares prior to January 27, 2009, the recommencement of operations of Class III Shares, are based upon the performance of the Fund’s Class I Shares. The returns for Class III Shares, however, are adjusted to reflect the distribution(12b-1) fees applicable to Class III Shares.

Past performance is not indicative of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

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

Expense Example

	Actual						Hypothetical (a)
	Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Annualized Expense Ratio
Class I	$	1,000.00	$	914.40	$	2.80	$	1,000.00	$	1,022.28	$	2.96		0.58	%
Class II		1,000.00		913.60		3.62		1,000.00		1,021.42		3.82		0.75
Class III		1,000.00		912.90		4.15		1,000.00		1,020.87		4.38		0.86

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

^(b)  For each class of the Fund, expenses are equal to annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect theone-half year period shown).

See “Disclosure of Expenses” on the following page for further information on how expenses were calculated.

FUND SUMMARY 3

Fund Summary  as of December 31, 2018 (continued) BlackRock Advantage Large Cap Core V.I. Fund

Portfolio Information

SECTOR ALLOCATION

Sector	Percent of Net Assets
Information Technology		20	%
Health Care		15
Financials		14
Industrials		10
Consumer Discretionary		10
Communication Services		9
Consumer Staples		6
Energy		5
Real Estate		4
Utilities		4
Materials		2
Short-Term Securities		4
Liabilities in Excess of Other Assets		(3	)

For Fund compliance purposes, the Fund’s sector classifications refer to one or more of the sectorsub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine sector sub classifications for reporting ease.

Disclosure of Expenses

Shareholders of the Fund may incur the following charges: (a) transactional expenses; and (b) operating expenses, including investment advisory fees, service and distribution fees, including12b-1 fees, acquired fund fees and expenses, and other fund expenses. The expense example on the previous page (which is based on a hypothetical investment of $1,000 invested on July 1, 2018 and held through December 31, 2018) is intended to assist shareholders both in calculating expenses based on an investment in the Fund and in comparing these expenses with similar costs of investing in other mutual funds.

The expense example provides 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 share class under the heading entitled “Expenses Paid During the Period.”

The expense example also provides information about hypothetical account values and hypothetical expenses based on the 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 the Fund and other funds, compare the 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.

The expenses shown in the expense example are intended to highlight shareholders’ ongoing costs only and do not reflect transactional expenses, such as sales charges, if any. Therefore, the hypothetical example is 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 Fund 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 Fund’s 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 the Fund can realize on an investment and/or may result in lower distributions paid to shareholders. The Fund’s investments in these instruments, if any, are discussed in detail in the Notes to Financial Statements.

4 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments December 31, 2018 BlackRock Advantage Large Cap Core V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Common Stocks — 98.7%
Aerospace & Defense — 2.3%
Boeing Co. (The)		11,008	$	3,550,080
General Dynamics Corp.		3,629		570,515
Lockheed Martin Corp.		4,858		1,272,019
Raytheon Co.		31,271		4,795,408
				10,188,022
Airlines — 0.4%
Delta Air Lines, Inc.		9,590		478,541
Southwest Airlines Co.		31,627		1,470,023
				1,948,564
Auto Components — 0.1%
BorgWarner, Inc.		8,248		286,536
Automobiles — 0.1%
Ford Motor Co.		21,778		166,602
General Motors Co.		8,517		284,893
				451,495
Banks — 5.7%
Bank of America Corp.		347,325		8,558,088
BB&T Corp.		47,378		2,052,415
Citigroup, Inc.		39,512		2,056,995
Citizens Financial Group, Inc.		67,573		2,008,945
Cullen/Frost Bankers, Inc.		2,425		213,254
East West Bancorp, Inc.		12,651		550,698
First Republic Bank(a)		23,420		2,035,198
JPMorgan Chase & Co.		45,790		4,470,020
Wells Fargo & Co.		67,477		3,109,340
				25,054,953
Beverages — 1.5%
Coca-Cola European Partners plc		27,993		1,283,479
Constellation Brands, Inc., Class A		5,452		876,791
Keurig Dr. Pepper, Inc.		3,298		84,561
Molson Coors Brewing Co., Class B		3,221		180,891
Monster Beverage Corp.(b)		20,419		1,005,023
PepsiCo, Inc.		27,166		3,001,300
				6,432,045
Biotechnology — 4.0%
AbbVie, Inc.		41,381		3,814,914
Amgen, Inc.		18,019		3,507,759
Biogen, Inc.(b)		2,900		872,668
Celgene Corp.(b)		44,235		2,835,021
Genomic Health, Inc.(b)		2,843		183,118
Gilead Sciences, Inc.		76,975		4,814,786
Incyte Corp.(b)		1,566		99,582
Regeneron Pharmaceuticals, Inc.(b)		948		354,078
Vertex Pharmaceuticals, Inc.(b)		5,103		845,618
				17,327,544
Building Products — 0.3%
Allegion plc		15,287		1,218,527
Capital Markets — 3.4%
Charles Schwab Corp. (The)		102,148		4,242,207
CME Group, Inc.(a)		11,189		2,104,875
Evercore, Inc., Class A		4,815		344,561
Moelis & Co., Class A		23,265		799,851
Morgan Stanley		142,175		5,637,239
S&P Global, Inc.		10,264		1,744,264
SEI Investments Co.		1,201		55,486
TD Ameritrade Holding Corp.		868		42,497
				14,970,980

Security	Shares		Value
Chemicals — 1.7%
Air Products & Chemicals, Inc.		25,670	$	4,108,483
Celanese Corp.(a)		12,482		1,123,006
Eastman Chemical Co.		10,014		732,124
Ecolab, Inc.		6,802		1,002,275
Huntsman Corp.		2,646		51,041
Linde plc		2,638		411,634
Mosaic Co. (The)		1,750		51,117
				7,479,680
Commercial Services & Supplies — 0.2%
Clean Harbors, Inc.(b)		10,980		541,863
Waste Connections, Inc.		1,916		142,263
				684,126
Communications Equipment — 1.1%
Ciena Corp.(b)		16,923		573,859
Cisco Systems, Inc.		63,294		2,742,529
Motorola Solutions, Inc.		8,791		1,011,316
Palo Alto Networks, Inc.(a)(b)		1,905		358,807
				4,686,511
Construction Materials — 0.1%
Martin Marietta Materials, Inc.		893		153,480
Vulcan Materials Co.		814		80,423
				233,903
Consumer Finance — 0.8%
American Express Co.		32,452		3,093,325
Capital One Financial Corp.		4,011		303,191
				3,396,516
Containers & Packaging — 0.3%
Packaging Corp. of America		8,939		746,049
WestRock Co.		20,304		766,679
				1,512,728
Diversified Consumer Services — 0.2%
H&R Block, Inc.		33,266		843,958
Diversified Financial Services — 1.5%
Berkshire Hathaway, Inc., Class B(b)		32,666		6,669,744
Diversified Telecommunication Services — 1.4%
AT&T, Inc.		68,535		1,955,989
Verizon Communications, Inc.		72,987		4,103,329
				6,059,318
Electric Utilities — 2.0%
IDACORP, Inc.		12,489		1,162,226
OGE Energy Corp.		36,658		1,436,627
Pinnacle West Capital Corp.		43,096		3,671,779
Portland General Electric Co.		52,571		2,410,380
Xcel Energy, Inc.		1,598		78,734
				8,759,746
Electrical Equipment — 0.9%
AMETEK, Inc.		15,361		1,039,940
Rockwell Automation, Inc.		19,252		2,897,041
				3,936,981
Electronic Equipment, Instruments & Components — 0.9%
CDW Corp.		19,797		1,604,547
Keysight Technologies, Inc.(b)		1,114		69,157
National Instruments Corp.		41,349		1,876,418
Zebra Technologies Corp., Class A(b)		1,818		289,480
				3,839,602
Energy Equipment & Services — 0.5%
Halliburton Co.		73,965		1,965,990
Nabors Industries Ltd.(a)		38,421		76,842
				2,042,832

SCHEDULE OF INVESTMENTS 5

Schedule of Investments  (continued) December 31, 2018 BlackRock Advantage Large Cap Core V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Entertainment — 1.1%
Activision Blizzard, Inc.		2,485	$	115,726
Electronic Arts, Inc.(b)		13,468		1,062,760
Netflix, Inc.(b)		5,585		1,494,881
Twenty-First Century Fox, Inc., Class A		6,278		302,097
Twenty-First Century Fox, Inc., Class B		4,497		214,867
Viacom, Inc., Class B		45,965		1,181,301
World Wrestling Entertainment, Inc., Class A		4,449		332,429
				4,704,061
Equity Real Estate Investment Trusts (REITs) — 3.8%
Apartment Investment & Management Co., Class A		962		42,212
Equity LifeStyle Properties, Inc.		4,883		474,286
Host Hotels & Resorts, Inc.		100,640		1,677,669
Outfront Media, Inc.		9,140		165,617
Park Hotels & Resorts, Inc.		75,988		1,974,168
Prologis, Inc.		92,260		5,417,507
Realty Income Corp.		48,022		3,027,307
Simon Property Group, Inc.		21,321		3,581,715
				16,360,481
Food & Staples Retailing — 1.0%
Costco Wholesale Corp.		18,364		3,740,930
Walmart, Inc.		6,760		629,694
				4,370,624
Food Products — 2.0%
Archer-Daniels-Midland Co.		84,970		3,481,221
Hershey Co. (The)		41,401		4,437,359
Kellogg Co.		2,696		153,699
Lamb Weston Holdings, Inc.		5,373		395,238
Tyson Foods, Inc., Class A		4,114		219,687
				8,687,204
Gas Utilities — 0.5%
Atmos Energy Corp.(a)		20,596		1,909,661
UGI Corp.		2,276		121,425
				2,031,086
Health Care Equipment & Supplies — 3.0%
Abbott Laboratories		18,988		1,373,402
Danaher Corp.		31,557		3,254,158
DexCom, Inc.(b)		1,390		166,522
IDEXX Laboratories, Inc.(b)		2,358		438,635
Intuitive Surgical, Inc.(b)		2,316		1,109,179
Masimo Corp.(b)		6,742		723,889
Medtronic plc		14,781		1,344,480
STERIS plc		6,399		683,733
Stryker Corp.		26,842		4,207,483
				13,301,481
Health Care Providers & Services — 3.5%
AmerisourceBergen Corp.		18,612		1,384,733
Anthem, Inc.		1,021		268,145
Cardinal Health, Inc.		37,392		1,667,683
CVS Health Corp.		13,743		900,441
Halfmoon Parent, Inc.		1,935		367,588
Humana, Inc.		6,567		1,881,314
McKesson Corp.		15,460		1,707,866
Quest Diagnostics, Inc.		2,179		181,445
UnitedHealth Group, Inc.		25,979		6,471,889
WellCare Health Plans, Inc.(b)		2,666		629,416
				15,460,520
Health Care Technology — 0.3%(b)
athenahealth, Inc.		681		89,844
Cerner Corp.		1,179		61,827
Veeva Systems, Inc., Class A		15,293		1,365,971
				1,517,642

Security	Shares		Value
Hotels, Restaurants & Leisure — 2.2%
Boyd Gaming Corp.(a)		3,394	$	70,527
Carnival Corp.		22,856		1,126,801
Darden Restaurants, Inc.		8,257		824,544
Domino’s Pizza, Inc.		7,960		1,974,001
Dunkin’ Brands Group, Inc.(a)		6,753		433,002
Extended Stay America, Inc.		33,215		514,833
Hilton Worldwide Holdings, Inc.		13,123		942,232
Las Vegas Sands Corp.		7,166		372,990
McDonald’s Corp.		13,902		2,468,578
Norwegian Cruise Line Holdings Ltd.(b)		15,326		649,669
Yum! Brands, Inc.		1,345		123,632
				9,500,809
Household Durables — 0.3%
Garmin Ltd.		22,797		1,443,506
Household Products — 0.7%
Church & Dwight Co., Inc.		36,543		2,403,068
Clorox Co. (The)		2,795		430,821
Procter & Gamble Co. (The)		4,365		401,231
				3,235,120
Industrial Conglomerates — 0.8%
3M Co.(a)		14,398		2,743,395
General Electric Co.		66,648		504,525
Honeywell International, Inc.		1,998		263,976
Roper Technologies, Inc.		625		166,575
				3,678,471
Insurance — 2.3%
Allstate Corp. (The)		32,004		2,644,491
American Financial Group, Inc.		16,682		1,510,221
Arthur J Gallagher & Co.		12,979		956,552
Athene Holding Ltd., Class A(b)		16,159		643,613
First American Financial Corp.		19,017		848,919
Hartford Financial Services Group, Inc. (The)		22,110		982,790
Lincoln National Corp.		6,359		326,280
Loews Corp.		1,913		87,080
Progressive Corp. (The)		12,036		726,132
Unum Group		42,917		1,260,901
				9,986,979
Interactive Media & Services — 4.4%(b)
Alphabet, Inc., Class A		4,778		4,992,819
Alphabet, Inc., Class C		5,623		5,823,235
Cargurus, Inc.		8,051		271,560
Facebook, Inc., Class A		52,098		6,829,527
Snap, Inc., Class A(a)		11,073		61,012
TripAdvisor, Inc.		2,675		144,289
Twitter, Inc.		5,863		168,503
Yelp, Inc.		26,045		911,315
				19,202,260
Internet & Direct Marketing Retail — 2.9%(b)
Amazon.com, Inc.		7,996		12,009,752
Booking Holdings, Inc.		387		666,577
				12,676,329
IT Services — 4.6%
Accenture plc, Class A		9,011		1,270,641
Amdocs Ltd.		671		39,307
Automatic Data Processing, Inc.		26,925		3,530,406
Booz Allen Hamilton Holding Corp.		41,891		1,888,027
Broadridge Financial Solutions, Inc.		5,869		564,891
Cognizant Technology Solutions Corp., Class A		1,512		95,982
Fidelity National Information Services, Inc.		17,721		1,817,289
First Data Corp., Class A(b)		14,039		237,399
GoDaddy, Inc., Class A(b)		14,890		977,082

6 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Advantage Large Cap Core V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
IT Services (continued)
International Business Machines Corp.		9,916	$	1,127,152
Mastercard, Inc., Class A		23,822		4,494,020
Paychex, Inc.		1,733		112,905
PayPal Holdings, Inc.(b)		8,890		747,560
Square, Inc., Class A(b)		3,529		197,942
Total System Services, Inc.		638		51,863
Visa, Inc., Class A		12,649		1,668,909
Western Union Co. (The)		64,409		1,098,818
				19,920,193
Life Sciences Tools & Services — 0.2%
Agilent Technologies, Inc.		14,552		981,678
Thermo Fisher Scientific, Inc.		487		108,986
				1,090,664
Machinery — 3.3%
Crane Co.		55,294		3,991,121
Illinois Tool Works, Inc.		25,749		3,262,141
Ingersoll-Rand plc		37,248		3,398,135
PACCAR, Inc.(a)		50,808		2,903,169
Snap-on, Inc.		6,852		995,527
				14,550,093
Media — 1.9%
AMC Networks, Inc., Class A(b)		19,373		1,063,190
CBS Corp.(Non-Voting), Class B		21,980		960,966
Comcast Corp., Class A		84,309		2,870,721
Interpublic Group of Cos., Inc. (The)		44,255		912,981
Liberty Media Corp.-Liberty SiriusXM, Class A(b)		27,917		1,027,346
Liberty Media Corp.-Liberty SiriusXM, Class C(b)		33,827		1,250,922
Sinclair Broadcast Group, Inc., Class A		3,524		92,822
Sirius XM Holdings, Inc.		29,626		169,165
Tribune Media Co., Class A		1,616		73,334
				8,421,447
Metals & Mining — 0.3%
Newmont Mining Corp.		24,723		856,652
Reliance Steel & Aluminum Co.		5,115		364,034
Steel Dynamics, Inc.		5,842		175,494
				1,396,180
Multiline Retail — 0.9%
Target Corp.		62,284		4,116,350
Multi-Utilities — 0.4%
Consolidated Edison, Inc.		20,102		1,536,999
Oil, Gas & Consumable Fuels — 4.5%
Anadarko Petroleum Corp.		53,469		2,344,081
Antero Resources Corp.(b)		4,262		40,020
Chevron Corp.		24,031		2,614,332
Concho Resources, Inc.(b)		786		80,793
ConocoPhillips		50,350		3,139,323
Continental Resources, Inc.(b)		6,938		278,838
Exxon Mobil Corp.		63,810		4,351,204
Kinder Morgan, Inc.		111,448		1,714,070
Occidental Petroleum Corp.		31,631		1,941,511
Phillips 66		22,288		1,920,111
Suncor Energy, Inc.(a)		31,570		883,013
Williams Cos., Inc. (The)		11,074		244,182
				19,551,478
Personal Products — 0.5%
Estee Lauder Cos., Inc. (The), Class A		15,787		2,053,889
Pharmaceuticals — 4.2%
Bristol-Myers Squibb Co.		53,269		2,768,922
Eli Lilly & Co.		27,072		3,132,772
Johnson & Johnson		46,073		5,945,721

Security	Shares		Value
Pharmaceuticals (continued)
Merck & Co., Inc.		62,365	$	4,765,310
Zoetis, Inc.		18,666		1,596,689
				18,209,414
Professional Services — 0.6%
Insperity, Inc.		21,743		2,029,927
Robert Half International, Inc.		10,366		592,935
				2,622,862
Road & Rail — 0.9%
Landstar System, Inc.		20,732		1,983,430
Norfolk Southern Corp.		11,965		1,789,246
Schneider National, Inc., Class B		4,456		83,194
				3,855,870
Semiconductors & Semiconductor Equipment — 3.4%
Analog Devices, Inc.		13,503		1,158,962
Applied Materials, Inc.		41,276		1,351,376
Broadcom, Inc.		745		189,439
Intel Corp.		108,310		5,082,988
Maxim Integrated Products, Inc.(a)		26,536		1,349,356
NVIDIA Corp.		10,714		1,430,319
NXP Semiconductors NV(b)		517		37,886
QUALCOMM, Inc.		9,736		554,076
Skyworks Solutions, Inc.		11,020		738,560
Texas Instruments, Inc.		20,182		1,907,199
Xilinx, Inc.		11,936		1,016,589
				14,816,750
Software — 6.5%
Dropbox, Inc., Class A(b)		23,231		474,609
Intuit, Inc.		9,260		1,822,831
Microsoft Corp.		138,635		14,081,157
New Relic, Inc.(b)		3,297		266,958
Oracle Corp.		86,214		3,892,562
salesforce.com, Inc.(b)		37,825		5,180,890
Synopsys, Inc.(b)		19,368		1,631,560
Ultimate Software Group, Inc. (The)(b)		1,109		271,561
VMware, Inc., Class A(b)		4,380		600,630
				28,222,758
Specialty Retail — 1.8%
AutoNation, Inc.(b)		5,444		194,351
Best Buy Co., Inc.		857		45,387
Dick’s Sporting Goods, Inc.		4,234		132,101
Five Below, Inc.(b)		4,254		435,269
Home Depot, Inc. (The)		19,674		3,380,387
Penske Automotive Group, Inc.(a)		30,936		1,247,339
Ross Stores, Inc.		5,294		440,461
TJX Cos., Inc. (The)		40,883		1,829,105
				7,704,400
Technology Hardware, Storage & Peripherals — 3.8%
Apple, Inc.		86,175		13,593,244
Dell Technologies, Inc., Class C(b)		13,609		665,061
Hewlett Packard Enterprise Co.		11,052		145,997
HP, Inc.		86,695		1,773,780
Pure Storage, Inc., Class A(b)		36,324		584,090
				16,762,172
Textiles, Apparel & Luxury Goods — 1.1%
NIKE, Inc., Class B		52,446		3,888,346
VF Corp.		9,793		698,633
				4,586,979
Thrifts & Mortgage Finance — 0.1%
Essent Group Ltd.(b)		7,964		272,209

SCHEDULE OF INVESTMENTS 7

Schedule of Investments  (continued) December 31, 2018 BlackRock Advantage Large Cap Core V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Tobacco — 0.7%
Altria Group, Inc.		35,084	$	1,732,799
Philip Morris International, Inc.		18,711		1,249,146
				2,981,945
Water Utilities — 0.7%
American Water Works Co., Inc.		34,083		3,093,714
Wireless Telecommunication Services — 0.1%
Telephone & Data Systems, Inc.		19,334		629,128
Total Common Stocks — 98.7% (Cost: $452,555,247)				430,576,378
Total Long-Term Investments — 98.7% (Cost: $452,555,247)				430,576,378
Short-Term Securities — 4.2%(c)(e)
BlackRock Liquidity Funds,T-Fund, Institutional Class, 2.32%		4,753,078		4,753,078
SL Liquidity Series, LLC, Money Market Series, 2.57%(d)		13,426,942		13,425,600
Total Short-Term Securities — 4.2% (Cost: $18,179,509)				18,178,678
Total Investments — 102.9% (Cost: $470,734,756)				448,755,056
Liabilities in Excess of Other Assets — (2.9)%				(12,735,817	)
Net Assets — 100.0%			$	436,019,239

^(a)  Security, or a portion of the security, is on loan.

^(b)  Non-income producing security.

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

^(d)  Security was purchased with the cash collateral from loaned securities.

^(e)  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, 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		4,977,061		(223,983	)		4,753,078	$	4,753,078	$	76,446		$	—	$	—
SL Liquidity Series, LLC, Money Market Series		8,447,651		4,979,291			13,426,942		13,425,600		19,228	(b)		1,006		(810	)
								$	18,178,678	$	95,674		$	1,006	$	(810	)

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

^(b)  Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.

For Fund compliance purposes, the Fund’s industry classifications refer to one or more of the industrysub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such industrysub-classifications for reporting ease.

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

Description	Number of Contracts		Expiration Date		Notional Amount (000)		Value/ Unrealized Appreciation (Depreciation)
Long Contracts
S&P 500E-Mini Index		50		03/15/19	$	6,263	$	(86,760	)

8 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Advantage Large Cap Core V.I. Fund

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statement of Assets and Liabilities were as follows:

	Commodity Contracts		Credit Contracts		Equity Contracts		Foreign Currency Exchange Contracts		Interest Rate Contracts		Other Contracts		Total
Liabilities — Derivative Financial Instruments
Futures contracts
Net unrealized depreciation(a)	$	—	$	—	$	86,760	$	—	$	—	$	—	$	86,760

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

For the year ended December 31, 2018, the effect of derivative financial instruments in the Statement of Operations were 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	$	—	$	—	$	(75,793	)	$	—	$	—	$	—	$	(75,793	)
Net Change in Unrealized Appreciation (Depreciation) on:
Futures contracts	$	—	$	—	$	(122,486	)	$	—	$	—	$	—	$	(122,486	)

Average Quarterly Balances of Outstanding Derivative Financial Instruments

Futures contracts:
Average notional value of contracts — long	$	5,773,625

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

Fair Value Hierarchy as of Period End

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

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

	Level 1			Level 2		Level 3		Total
Assets:
Investments:
Long-Term Investments:
Common Stocks(a)	$	430,576,378		$	—	$	—	$	430,576,378
Short-Term Securities		4,753,078			—		—		4,753,078
	$	435,329,456		$	—	$	—	$	435,329,456
Investments valued at NAV(b)									13,425,600
Total Investments								$	448,755,056
Derivative Financial Instruments(c)
Liabilities:
Equity contracts	$	(86,760	)	$	—	$	—	$	(86,760	)

^(a)  See above Schedule of Investments for values in each industry.

^(b)  As of December 31, 2018, certain investments of the Fund were fair valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

^(c)  Derivative financial instruments are futures contracts, which 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.

SCHEDULE OF INVESTMENTS 9

Statement of Assets and Liabilities

December 31, 2018

	BlackRock Advantage Large Cap Core V.I. Fund
ASSETS
Investments at value — unaffiliated (including securities loaned at value of $13,163,231) (cost — $452,555,247)	$	430,576,378
Investments at value — affiliated (cost — $18,179,509)		18,178,678
Cash pledged for futures contracts		207,000
Receivables:
Investments sold		5,191,119
Securities lending income — affiliated		2,577
Capital shares sold		23,228
Dividends — affiliated		7,845
Dividends — unaffiliated		697,442
Variation margin on futures contracts		28,982
Prepaid expenses		511
Total assets		454,913,760
LIABILITIES
Bank overdraft		849
Cash collateral on securities loaned at value		13,426,198
Payables:
Investments purchased		4,567,236
Capital shares redeemed		98,777
Distribution fees		62,116
Board realignment and consolidation		38,554
Investment advisory fees		223,370
Directors’ and Officer’s fees		6,554
Other affiliates		1,121
Other accrued expenses		469,746
Total liabilities		18,894,521
NET ASSETS	$	436,019,239
NET ASSETS CONSIST OF
Paid-in capital	$	463,747,711
Accumulated loss		(27,728,472	)
NET ASSETS	$	436,019,239
NET ASSET VALUE
Class I — Based on net assets of $152,716,640 and 6,699,050 shares outstanding, 200 million shares authorized, $0.10 par value.	$	22.80
Class II — Based on net assets of $4,390,013 and 192,328 shares outstanding, 100 million shares authorized, $0.10 par value.	$	22.83
Class III — Based on net assets of $278,912,586 and 12,340,300 shares outstanding, 100 million shares authorized, $0.10 par value.	$	22.60

See notes to financial statements.

10 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Statement of Operations

Year Ended December 31, 2018

	BlackRock Advantage Large Cap Core V.I. Fund
INVESTMENT INCOME
Dividends — affiliated	$	76,446
Dividends — unaffiliated(a)		10,329,163
Securities lending income — affiliated — net		19,228
Foreign taxes withheld		(14,428	)
Total investment income		10,410,409
EXPENSES
Investment advisory		2,353,682
Transfer agent — class specific		1,057,929
Distribution — class specific		830,186
Accounting services		74,807
Professional		73,304
Printing		66,549
Custodian		52,568
Board realignment and consolidation		38,861
Directors and Officer		23,606
Transfer agent		5,000
Miscellaneous		41,177
Total expenses		4,617,669
Less:
Fees waived and/or reimbursed by the Manager		(3,633	)
Transfer agent fees waived and/or reimbursed — class specific		(701,494	)
Total expenses after fees waived and/or reimbursed		3,912,542
Net investment income		6,497,867
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — affiliated		1,006
Investments — unaffiliated		48,104,009
Foreign currency transactions		655
Futures contracts		(75,793	)
		48,029,877
Net change in unrealized appreciation (depreciation) on:
Investments — affiliated		(810	)
Investments — unaffiliated		(75,854,122	)
Foreign currency translations		(611	)
Futures contracts		(122,486	)
		(75,978,029	)
Net realized and unrealized loss		(27,948,152	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(21,450,285	)

^(a)  Includesnon-recurring dividends in the amount of $300,804.

See notes to financial statements.

FINANCIAL STATEMENTS 11

Statements of Changes in Net Assets

	BlackRock Advantage Large Cap Core V.I. Fund
	Year Ended December 31,
	2018			2017
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income	$	6,497,867		$	5,600,747
Net realized gain		48,029,877			142,044,998
Net change in unrealized appreciation (depreciation)		(75,978,029	)		(44,362,526	)
Net increase (decrease) in net assets resulting from operations		(21,450,285	)		103,283,219
DISTRIBUTIONS TO SHAREHOLDERS(a)(b)
Class I		(24,262,357	)		(51,545,511	)
Class II		(685,736	)		(1,328,480	)
Class III		(44,148,933	)		(94,394,118	)
Decrease in net assets resulting from distributions to shareholders		(69,097,026	)		(147,268,109	)
CAPITAL SHARE TRANSACTIONS
Net increase (decrease) in net assets derived from capital share transactions		(5,862,992	)		67,256,971
NET ASSETS(b)
Total increase (decrease) in net assets		(96,410,303	)		23,272,081
Beginning of year		532,429,542			509,157,461
End of year	$	436,019,239		$	532,429,542

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

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

See notes to financial statements.

12 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Financial Highlights

(For a share outstanding throughout each period)

	BlackRock Advantage Large Cap Core V.I. Fund
	Class I
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	28.45		$	31.91		$	31.40		$	33.26		$	33.80
Net investment income(a)		0.42	(b)		0.44			0.39			0.36			0.34
Net realized and unrealized gain (loss)		(1.90	)		6.64			2.91			(0.16	)		3.86
Net increase (decrease) from investment operations		(1.48	)		7.08			3.30			0.20			4.20
Distributions(c)
From net investment income		(0.44	)		(0.47	)		(0.40	)		(0.39	)		(0.36	)
From net realized gain		(3.73	)		(10.07	)		(2.39	)		(1.67	)		(4.38	)
Total distributions		(4.17	)		(10.54	)		(2.79	)		(2.06	)		(4.74	)
Net asset value, end of year	$	22.80		$	28.45		$	31.91		$	31.40		$	33.26
Total Return(d)
Based on net asset value		(5.22	)%		22.33	%		10.55	%		0.52	%		12.36	%
Ratios to Average Net Assets
Total expenses		0.74	%		0.73	%		0.72	%		0.71	%		0.73	%
Total expenses after fees waived and/or reimbursed		0.58	%		0.58	%		0.58	%		0.56	%		0.57	%
Net investment income		1.45	%(b)		1.27	%		1.26	%		1.08	%		0.97	%
Supplemental Data
Net assets, end of year (000)	$	152,717		$	185,938		$	175,947		$	184,151		$	212,067
Portfolio turnover rate		149	%		149	%		50	%		31	%		48	%

^(a)  Based on average shares outstanding.

^(b)  Net investment income per share and the ratio of net investment income to average net assets includes $0.02 per share and 0.06%, respectively, resulting from anon-recurring dividend.

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

^(d)  Where applicable, excludes insurance-related fees and expenses and assumes the reinvestment of distributions.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 13

Financial Highlights  (continued)

(For a share outstanding throughout each period)

	BlackRock Advantage Large Cap Core V.I. Fund (continued)
	Class II
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	28.47		$	31.93		$	31.42		$	33.27		$	33.79
Net investment income(a)		0.37	(b)		0.38			0.34			0.30			0.28
Net realized and unrealized gain (loss)		(1.89	)		6.64			2.90			(0.16	)		3.87
Net increase (decrease) from investment operations		(1.52	)		7.02			3.24			0.14			4.15
Distributions(c)
From net investment income		(0.39	)		(0.41	)		(0.34	)		(0.32	)		(0.29	)
From net realized gain		(3.73	)		(10.07	)		(2.39	)		(1.67	)		(4.38	)
Total distributions		(4.12	)		(10.48	)		(2.73	)		(1.99	)		(4.67	)
Net asset value, end of year	$	22.83		$	28.47		$	31.93		$	31.42		$	33.27
Total Return(d)
Based on net asset value		(5.37	)%		22.12	%		10.37	%		0.34	%		12.23	%
Ratios to Average Net Assets
Total expenses		0.89	%		0.88	%		0.88	%		0.85	%		0.89	%
Total expenses after fees waived and/or reimbursed		0.75	%		0.75	%		0.75	%		0.73	%		0.74	%
Net investment income		1.28	%(b)		1.08	%		1.09	%		0.91	%		0.81	%
Supplemental Data
Net assets, end of year (000)	$	4,390		$	4,862		$	5,170		$	5,333		$	6,203
Portfolio turnover rate		149	%		149	%		50	%		31	%		48	%

^(a)  Based on average shares outstanding.

^(b) Net investment income per share and the ratio of net investment income to average net assets includes $0.02 per share and 0.06%, respectively, resulting from anon-recurring dividend.

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

^(d)  Where applicable, excludes insurance-related fees and expenses and assumes the reinvestment of distributions.

See notes to financial statements.

14 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Financial Highlights  (continued)

(For a share outstanding throughout each period)

	BlackRock Advantage Large Cap Core V.I. Fund (continued)
	Class III
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	28.23		$	31.74		$	31.25		$	33.11		$	33.66
Net investment income(a)		0.34	(b)		0.34			0.31			0.27			0.24
Net realized and unrealized gain (loss)		(1.89	)		6.59			2.88			(0.17	)		3.84
Net increase (decrease) from investment operations		(1.55	)		6.93			3.19			0.10			4.08
Distributions(c)
From net investment income		(0.35	)		(0.37	)		(0.31	)		(0.29	)		(0.25	)
From net realized gain		(3.73	)		(10.07	)		(2.39	)		(1.67	)		(4.38	)
Total distributions		(4.08	)		(10.44	)		(2.70	)		(1.96	)		(4.63	)
Net asset value, end of year	$	22.60		$	28.23		$	31.74		$	31.25		$	33.11
Total Return(d)
Based on net asset value		(5.51	)%		21.97	%		10.26	%		0.23	%		12.07	%
Ratios to Average Net Assets
Total expenses		0.99	%		0.99	%		0.97	%		0.96	%		0.98	%
Total expenses after fees waived and/or reimbursed		0.86	%		0.86	%		0.86	%		0.84	%		0.85	%
Net investment income		1.17	%(b)		0.98	%		0.98	%		0.80	%	��	0.69	%
Supplemental Data
Net assets, end of year (000)	$	278,913		$	341,630		$	328,040		$	306,567		$	322,418
Portfolio turnover rate		149	%		149	%		50	%		31	%		48	%

^(a)  Based on average shares outstanding.

^(b) Net investment income per share and the ratio of net investment income to average net assets includes $0.02 per share and 0.06%, respectively, resulting from anon-recurring dividend.

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

^(d)  Where applicable, excludes insurance-related fees and expenses and assumes the reinvestment of distributions.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 15

Notes to Financial Statements

1. ORGANIZATION

BlackRock Variable Series Funds, Inc. (the “Company”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as anopen-end management investment company. The Company is organized as a Maryland corporation that is comprised of 15 separate portfolios. The funds offer shares to insurance companies for their separate accounts to fund benefits under certain variable annuity and variable life insurance contracts. The financial statements presented are for BlackRock Advantage Large Cap Core V.I. Fund (the “Fund”). The Fund is classified as diversified. Class I, Class II and Class III Shares have equal voting, dividend, liquidation and other rights, except that only shares of the respective classes are entitled to vote on matters concerning only that class. In addition, Class II and Class III Shares bear certain expenses related to the distribution of such shares.

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

2. SIGNIFICANT ACCOUNTING POLICIES

The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. The 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 Fund is 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. Income, expenses and realized and unrealized gains and losses are allocated daily to each class based on its relative net assets.

Foreign Currency Translation:The 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.

The 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 Statement 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. The 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 the Fund enters into certain investments (e.g., futures contracts) that would be treated as “senior securities” for 1940 Act purposes, the Fund may segregate or designate on its books and records cash or liquid assets having a market value at least equal to the amount of its future obligations under such investments. Doing so allows the investment to be excluded from treatment as a “senior security.” Furthermore, if required by an exchange or counterparty agreement, the Fund 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 Fund are recorded on theex-dividend date. Distributions of capital gains are recorded on theex-dividend date and made at least annually. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP.

Recent Accounting Standards: 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 Fund.

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

Other: Expenses directly related to the Fund or its classes are charged to the 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 Fund and other shared expenses prorated to the Fund are allocated daily to each class based on its relative net assets or other appropriate methods.

3. INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS

Investment Valuation Policies: The Fund’s 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 Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Fund determines the fair values of its financial instruments using various independent dealers or pricing services under policies approved by the Board of Directors of the Company (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.

16 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

Fair Value Inputs and Methodologies: The following methods and inputs are used to establish the fair value of the 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.

• Investments inopen-end U.S. mutual funds are valued at net asset value (“NAV”) each business day.

• The Fund values its investment in SL Liquidity Series, LLC, Money Market Series (the “Money Market Series”) at fair value, which is ordinarily based upon its pro rata ownership in the underlying fund’s net assets. The Money Market Series seeks current income consistent with maintaining liquidity and preserving capital. Although the Money Market Series is not registered under the 1940 Act, its investments may follow the parameters of investments by a money market fund that is subject to Rule2a-7 under the 1940 Act.

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

If events (e.g., a company announcement, market volatility or a natural disaster) occur that are expected to materially affect the value of such instruments, 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 the 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 the 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. The pricing of all Fair Valued Investments is subsequently reported to the Board or a committee thereof on a quarterly basis.

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 the Fund has the ability to access

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

• Level 3 — Unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the 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 privately held companies or funds. 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 the 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.

As of December 31, 2018, certain investments of the Fund were valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

4. SECURITIES AND OTHER INVESTMENTS

Securities Lending: The Fund may lend its securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received by the Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current market value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Fund and any additional required collateral is delivered to the Fund, or excess collateral returned by the Fund, on the next business day. During the term of the loan, the Fund is entitled to all distributions made on or in respect of the loaned securities, but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.

The market value of any securities on loan, all of which were classified as common stocks in the Fund’s Schedule of Investments, and the value of any related collateral are shown separately in the Statement of Assets and Liabilities as a component of investments at value — unaffiliated, and collateral on securities loaned at value,

NOTESTO FINANCIAL STATEMENTS 17

Notes to Financial Statements  (continued)

respectively. As of period end, any securities on loan were collateralized by cash and/or U.S. Government obligations. Cash collateral invested by the securities lending agent, BlackRock Investment Management, LLC (“BIM”), if any, is disclosed in the Schedule of Investments.

Securities lending transactions are entered into by the Fund under Master Securities Lending Agreements (each, an “MSLA”), which provide the right, in the event of default (including bankruptcy or insolvency), for thenon-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, the Fund, as lender, would offset the market value of the collateral received against the market value of the securities loaned. When the value of the collateral is greater than that of the market value of the securities loaned, the lender is left with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, absent an event of default, the borrower can resell orre-pledge the loaned securities, and the Fund can reinvest cash collateral received in connection with loaned securities. Upon an event of default, the parties’ obligations to return the securities or collateral to the other party are extinguished, and the parties can resell orre-pledge the loaned securities or the collateral received in connection with the loaned securities in order to satisfy the defaulting party’s net payment obligation for all transactions under the MSLA. The defaulting party remains liable for any deficiency.

As of period end, the following table is a summary of the Fund’s securities lending agreements by counterparty which are subject to offset under an MSLA:

Counterparty	Securities Loaned at Value		Cash Collateral Received (a)			Net Amount
Citigroup Global Markets Inc.	$	5,010,925	$	(5,010,925	)	$	—
Credit Suisse Securities (USA) LLC		4,156		(4,156	)		—
Fidelity Investments		69,821		(69,821	)		—
JP Morgan Securities LLC		3,587,911		(3,587,911	)		—
Morgan Stanley & Co. LLC		2,890,551		(2,890,551	)		—
State Street Bank & Trust Co.		264,037		(264,037	)		—
UBS Securities LLC		1,335,830		(1,335,830	)		—
	$	13,163,231	$	(13,163,231	)	$	—

^(a)  Cash collateral with a value of $13,426,198 has been received in connection with securities lending agreements. Collateral received in excess of the value of securities loaned from the individual counterparty, if any, is not shown for financial reporting purposes in the table above.

The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Fund benefits from a borrower default indemnity provided by BIM. BIM’s indemnity allows for full replacement of the securities loaned if the collateral received does not cover the value on the securities loaned in the event of borrower default. The Fund could incur a loss if the value of an investment purchased with cash collateral falls below the market value of loaned securities or if the value of an investment purchased with cash collateral falls below the value of the original cash collateral received.

5. DERIVATIVE FINANCIAL INSTRUMENTS

The Fund engages in various portfolio investment strategies using derivative contracts both to increase the returns of the Fund and/or to manage its 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 Schedule of Investments. These contracts may be transacted on an exchange orover-the-counter (“OTC”).

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

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

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

6. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

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

18 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

For such services, the Fund pays the Manager a monthly fee at an annual rate equal to the following percentages of the average daily value of the Fund’s net assets:

Average Daily Net Assets	Investment Advisory Fee
First $250 Million		0.500	%
$250 Million — $300 Million		0.450
$300 Million — $400 Million		0.425
Greater than $400 Million		0.400

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

	Class II			Class III
Distribution fees		0.15	%		0.25	%

BRIL and broker-dealers, pursuant tosub-agreements with BRIL, provide shareholder servicing and distribution services to the Fund. 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 distribution fees borne directly by each share class of the Fund:

	Class II		Class III		Total
Distribution fees	$	7,481	$	822,705	$	830,186

Transfer Agent: On behalf of the Fund, the Manager entered into agreements with insurance companies and other financial intermediaries (“Service Organizations”), some of which may be affiliates. Pursuant to these agreements, the Service Organizations provide the Fund with administrative, networking, recordkeeping,sub-transfer agency and shareholder services tosub-accounts they service. For these services, the Service Organizations receive an annual fee per shareholder account, which will vary depending on share class and/or net assets of Fund shareholders serviced by the Service Organizations, which is shown as transfer agent — class specific. For the year ended December 31, 2018, the Fund did not pay any amounts to affiliates in return for these services.

In addition, the Fund pays the transfer agent, which is not an affiliate, a fee for the issuance, transfer and redemption of shares and the opening and maintenance of shareholder accounts, which is included in transfer agent in the Statement of Operations.

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

Class I		Class II		Class III	Total
$	373,603	$	10,418	$673,908	$	1,057,929

Expense Limitations, Waivers and Reimbursements: With respect to the Fund, the Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees the 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. This amount is included in fees waived and/or reimbursed by the Manager in the Statement of Operations. For the year ended December 31, 2018, the amount waived was $3,633.

The Manager has contractually agreed to waive its investment advisory fee with respect to any portion of the 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. The contractual agreement may be terminated upon 90 days’ notice by a majority of the directors who are not “interested persons” of the Fund, as defined in the 1940 Act (“Independent Directors”), or by a vote of a majority of the outstanding voting securities of the Fund. For the year ended December 31, 2018, there were no fees waived and/or reimbursed by the Manager pursuant to this arrangement.

For the year ended December 31, 2018, the Fund reimbursed the Manager $7,211 for certain accounting services, which is included in accounting services in the Statement of Operations.

The Manager has contractually agreed to reimburse transfer agent fees in order to limit such expenses to a percentage of average daily net assets as follows:

Class I	0.05	%
Class II	0.07	%
Class III	0.08	%

The Manager has agreed not to reduce or discontinue this contractual expense limitation through April 30, 2019 unless approved by the Board, including a majority of the Independent Directors, or by a vote of a majority of the outstanding voting securities of the Fund.

These amounts waived and/or reimbursed are shown as transfer agent fees waived and/or reimbursed — class specific in the Statement of Operations. For the year ended December 31, 2018, class specific expense waivers and/or reimbursements were as follows:

	Class I		Class II		Class III		Total
Transfer agent fees waived and/or reimbursed	$	283,927	$	6,927	$	410,640	$	701,494

NOTESTO FINANCIAL STATEMENTS 19

Notes to Financial Statements  (continued)

With respect to the 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 the Fund’s business (“expense limitation”). The expense limitations as a percentage of average daily net assets are as follows:

Class I		Class II	Class III
	1.25%	1.40%		1.50%

The Manager has agreed not to reduce or discontinue this contractual expense limitation through April 30, 2019, unless approved by the Board, including a majority of the Independent Directors, or by a vote of a majority of the outstanding voting securities of the Fund. For the year ended December 31, 2018, there were no fees waived and/or reimbursed by the Manager.

Securities Lending: The U.S. Securities and Exchange Commission (“SEC”) has issued an exemptive order which permits BIM, an affiliate of the Manager, to serve as securities lending agent for the Fund, subject to applicable conditions. As securities lending agent, BIM bears all operational costs directly related to securities lending. The Fund is responsible for expenses in connection with the investment of cash collateral received for securities on loan (the “collateral investment expenses”). The cash collateral is invested in a private investment company managed by the Manager or its affiliates. However, BIM has agreed to cap the collateral investment expenses of the private investment company to an annual rate of 0.04%. The investment adviser to the private investment company will not charge any advisory fees with respect to shares purchased by the Fund. The private investment company in which the cash collateral has been invested may, under certain circumstances, impose a liquidity fee of up to 2% of the value withdrawn or temporarily restrict withdrawals for up to 10 business days during a 90 day period, in the event that the private investment company’s weekly liquid assets fall below certain thresholds.

Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment expenses. The Fund retains a portion of securities lending income and remits a remaining portion to BIM as compensation for its services as securities lending agent.

Pursuant to a securities lending agreement, the Fund retains 71.5% of securities lending income, and this amount retained can never be less than 65% of the total of securities lending income plus the collateral investment expenses.

In addition, commencing the business day following the date that the aggregate securities lending income earned across the Equity-Bond Complex in a calendar year exceeds a specified threshold, the Fund, pursuant to the securities lending agreement, will retain for the remainder of that calendar year securities lending income in an amount equal to 75% of securities lending income, and this amount retained can never be less than 65% of the total of securities lending income plus the collateral investment expenses.

The share of securities lending income earned by the Fund is shown as securities lending income — affiliated — net in the Statement of Operations. For the year ended December 31, 2018, the Fund paid BIM $6,870 for securities lending agent services.

Interfund Lending: In accordance with an exemptive order (the “Order”) from the SEC, the 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 the Fund’s investment policies and restrictions. The Fund is currently permitted to borrow under the Interfund Lending Program.

A lending BlackRock fund may lend in aggregate up to 15% of its net assets, but may not lend more than 5% of its net assets to any one borrowing fund through the Interfund Lending Program. A borrowing BlackRock fund may not borrow through the Interfund Lending Program or from any other source more than 33 1/3% of its total assets (or any lower threshold provided for by the fund’s investment restrictions). If a borrowing BlackRock fund’s total outstanding borrowings exceed 10% of its total assets, each of its outstanding interfund loans will be subject to collateralization of at least 102% of the outstanding principal value of the loan. All interfund loans are for temporary or emergency purposes and the interest rate to be charged will be the average of the highest current overnight repurchase agreement rate available to a lending fund and the bank loan rate, as calculated according to a formula established by the Board.

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

Directors and Officers: Certain directors and/or officers of the Company are directors and/or officers of BlackRock or its affiliates. The Fund reimburses the Manager for a portion of the compensation paid to the Company’s Chief Compliance Officer, which is included in Directors and Officer in the Statement of Operations.

7. PURCHASES AND SALES

For the year ended December 31, 2018, purchases and sales of investments, excluding short-term securities, were $756,706,339 and $824,897,218, respectively.

8. INCOME TAX INFORMATION

It is the 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.

The 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 the Fund’s U.S. federal tax returns generally remains open for each of the four years ended December 31, 2018. The statutes of limitations on the 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 Fund 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 Fund’s financial statements.

20 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

The tax character of distributions paid was as follows:

	12/31/18		12/31/17
Ordinary income	$	43,577,979	$	18,336,131
Long term capital gains		25,519,047		128,931,978
	$	69,097,026	$	147,268,109

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

Undistributed ordinary income	$	45,876
Net unrealized losses(a)		(24,879,700	)
Qualified late-year losses(b)		(2,894,648	)
	$	(27,728,472	)

^(a)  The difference between book-basis and tax-basis net unrealized losses was attributable primarily to the tax deferral of losses on wash sales, the realization for tax purposes of unrealized gains/losses on certain futures contracts 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.

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:

Tax cost	$	473,711,601
Gross unrealized appreciation	$	14,572,660
Gross unrealized depreciation		(39,529,205	)
Net unrealized depreciation	$	(24,956,545	)

9. BANK BORROWINGS

The Company, on behalf of the Fund, 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 Fund may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Fund, 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. Prior to April 19, 2018, the aggregate commitment amount was $2.1 billion and the fee was 0.12% per annum. 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 Statement 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 Fund did not borrow under the credit agreement.

10. PRINCIPAL RISKS

In the normal course of business, the Fund invests in securities or other instruments and may enter into certain transactions, and such activities subject the 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. The Fund’s prospectus provides details of the risks to which the Fund is subject.

The Fund may be exposed to additional risks when reinvesting cash collateral in money market funds that do not seek to maintain a stable NAV per share of $1.00, and which may be subject to redemption gates or liquidity fees under certain circumstances.

Valuation Risk: The market values of equities, such as common stocks and preferred securities or equity related investments, such as futures and options, may decline due to general market conditions which are not specifically related to a particular company. They may also decline due to factors which affect a particular industry or industries. The Fund may invest in illiquid investments and may experience difficulty in selling those investments in a timely manner at the price that it believes the investments are worth. Prices may fluctuate widely over short or extended periods in response to company, market or economic news. Markets also tend to move in cycles, with periods of rising and falling prices. This volatility may cause the 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 the Fund may lose value, regardless of the individual results of the securities and other instruments in which the Fund invests.

Counterparty Credit Risk: The Fund 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 Fund manages 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 Fund to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Fund’s exposure to market, issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Statement of Assets and Liabilities, less any collateral held by the Fund.

NOTESTO FINANCIAL STATEMENTS 21

Notes to Financial Statements  (continued)

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.

With exchange-traded futures, there is less counterparty credit risk to the Fund 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, the Fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency). Additionally, credit risk exists in exchange-traded futures with respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Fund.

11. CAPITAL SHARE TRANSACTIONS

Transactions in capital shares for each class were as follows:

	Year Ended 12/31/2018						Year Ended 12/31/2017
	Shares			Amount			Shares			Amount
Class I
Shares sold		77,175		$	2,212,730			53,694		$	1,884,794
Shares issued in reinvestment of distributions		1,041,683			24,262,358			1,784,901			51,545,512
Shares redeemed		(956,268	)		(28,134,590	)		(815,802	)		(28,296,841	)
Net increase (decrease)		162,590		$	(1,659,502	)		1,022,793		$	25,133,465
Class II
Shares sold		36,314		$	1,069,473			17,194		$	592,585
Shares issued in reinvestment of distributions		29,415			685,735			45,977			1,328,480
Shares redeemed		(44,166	)		(1,311,866	)		(54,296	)		(1,841,122	)
Net increase		21,563		$	443,342			8,875		$	79,943
Class III
Shares sold		375,928		$	10,947,281			117,007		$	4,065,534
Shares issued in reinvestment of distributions		1,909,440			44,148,933			3,293,938			94,394,117
Shares redeemed		(2,048,354	)		(59,743,046	)		(1,644,501	)		(56,416,088	)
Net increase (decrease)		237,014		$	(4,646,832	)		1,766,444		$	42,043,563
Total Net Increase (Decrease)		421,167		$	(5,862,992	)		2,798,112		$	67,256,971

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 Fund has adopted the amendments pertinent to RegulationS-X in this shareholder report. The amendments impacted certain disclosure presentation on the Statement 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
Class I	$	(2,307,598	)	$	(49,237,913	)
Class II		(51,894	)		(1,276,586	)
Class III		(3,340,143	)		(91,053,975	)

Undistributed net investment income as of December 31, 2017 was $36,205.

13. SUBSEQUENT EVENTS

Management has evaluated the impact of all subsequent events on the Fund 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.

22 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Report of Independent Registered Public Accounting Firm

To the Shareholders of BlackRock Advantage Large Cap Core V.I. Fund and the Board of Directors of BlackRock Variable Series Funds, Inc.:

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying statement of assets and liabilities of BlackRock Advantage Large Cap Core V.I. Fund of BlackRock Variable Series Funds, Inc. (the “Fund”), including the schedule of investments, as of December 31, 2018, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of December 31, 2018, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s 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 Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its 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 Fund’s 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 15, 2019

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

NOTESTO FINANCIAL STATEMENTS 23

Glossary of Terms Used in this Report

Portfolio Abbreviations
S&P	Standard & Poor’s

24 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

DECEMBER 31, 2018

ANNUAL REPORT

BlackRock Variable Series Funds, Inc.

^Ø  BlackRock Advantage Large Cap Value V.I. Fund

Not FDIC Insured • May Lose Value • No Bank Guarantee

Fund Summary  as of December 31, 2018 BlackRock Advantage Large Cap Value V.I. Fund

Investment Objective

BlackRock Advantage Large Cap Value V.I. Fund’s (the “Fund”) investment objective is to seek long-term capital appreciation.

Portfolio Management Commentary

How did the Fund perform?

For the 12-month period ended December 31, 2018, the Fund’s Class I Shares outperformed its benchmark, the Russell 1000^® Value Index, while the Fund’s Class II and Class III Shares underperformed.

What factors influenced performance?

In a year characterized by increased volatility and concerns about the approaching end of the current cycle, investors returned their focus to company fundamentals and to finding quality businesses that offer sustainable growth prospects. In this light, fundamental insights, particularly quality insights, were the primary drivers of positive relative return over the course of the year. Among the portfolio’s fundamental signals, identifying positive dividend growth trends as a measure of quality was the top contributor. Identifying companies with attractive cash flow growth relative to operating assets also proved beneficial. Although performance was mixed with respect to the portfolio’s sentiment insights, those that provide a more quality-based lens into companies added value. Specifically, an insight that gauges sentiment from informed bond investors contributed significantly, given interest rate volatility. Text-based analyses of management conference calls to determine longer-term trends in company fundamentals proved beneficial as well. Both of these signals held up extremely well in the fourth quarter, in a market environment that was generally challenging for trend- and sentiment-based insights. Results from thematic signals were mixed for the period, contributing marginally to the Fund’s relative performance.

After beginning the year favoring growth stocks and trend-based strategies, investors later reversed course and sold out of more expensive, growth-oriented areas of the market on fears of expensive valuations and of approaching the end of the market cycle. As the sell-off was often disconnected with the broader sentiment of management and market participants, it created a more difficult environment for sentiment-based signals. The result was that certain sentiment insights detracted markedly from relative performance for the period, although sentiment signals in aggregate were essentially flat. For example, a signal that gauges company sentiment based on trends in online job postings was the largest detractor for the period. Identifying sentiment based on short positions of hedge funds acted as a drag on performance as well, largely due to significant hedge fund de-risking toward the end of the year. A signal that evaluates the impact of seasonality effects on a company’s stock price further detracted. Given a rotation out of growth positions, investors typically flock to pockets of attractive relative valuation. However, as value stocks showed some of the strongest earnings trends heading into the fourth quarter, they sold-off amid the rotation away from growth expectations. As a result, while fundamental signals held up well for the period, an insight that evaluates each stock based on forward sales relative to enterprise value hindered relative performance for the year.

Describe recent portfolio activity.

Over the course of the period, the portfolio maintained a balanced allocation of risk across all major return drivers. However, a number of new stock selection insights were added to the portfolio. Among these insights, a model that evaluates companies on the basis of governance and the ethics and sustainability of its business practices from a social and environmental perspective was added to the Fund’s bucket of quality signals. In addition, a new insight was added that captures the location of hotel booking trends and invests in related stocks most sensitive to those areas. A new macro thematic model that evaluates industries across various inputs such as labor costs and hiring activity was added as well.

Describe portfolio positioning at period end.

Relative to the Russell 1000^® Value Index, the Fund was positioned essentially neutrally from a sector perspective. The Fund ended the period with slight overweight positions in industrials and health care and slight underweights in communication services and materials.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

2 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Fund Summary  as of December 31, 2018 (continued) BlackRock Advantage Large Cap Value V.I. Fund

TOTAL RETURN BASED ON A $10,000 INVESTMENT

^(a)  Assuming transaction costs, if any, and other operating expenses, including investment advisory fees. Does not include insurance related fees and expenses. For a portion of the period, returns do not show the effects of distribution fees (12b-1 fees) applicable to Class II Shares. If such fees were included, returns shown would have been lower. The returns for Class III Shares prior to January 27, 2009, the recommencement of operations of Class III Shares, are based upon the performance of the Fund’s Class I Shares, as adjusted to reflect the distribution (12b-1) fees applicable to Class III Shares.

^(b)  Under normal circumstances, the Fund seeks to invest at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in large cap equity securities and derivatives that have similar economic characteristics to such securities. The Fund’s total returns prior to June 12, 2017 are the returns of the Fund when it followed a different investment objective and different investment strategies under the name “BlackRock Large Cap Value V.I. Fund”.

^(c)  An unmanaged index that is a subset of the Russell 1000^® Index that consists of those Russell 1000^® securities with lower price-to book ratios and lower expected growth values.

Performance Summary for the Period Ended December 31, 2018

	6-Month Total Returns (b)			Average Annual Total Returns
				1 Year (b)			5 Years (b)			10 Years (b)
Class I(a)		(7.60	)%		(8.20	)%		6.14	%		9.68	%
Class II(a)		(7.68	)		(8.37	)		5.93			9.49
Class III(a)		(7.67	)		(8.46	)		5.77			9.29	(c)
Russell 1000® Value Index		(6.69	)		(8.27	)		5.95			11.18

^(a)  Average annual and cumulative total returns are based on changes in net asset value for the periods shown, and assume reinvestment of all distributions at net asset value on the ex-dividend date. Insurance-related fees and expenses are not reflected in these returns. For the portion of the period, returns do not show the effects of distribution fees (12b-1 fees) applicable to Class II Shares. If such fees were included, returns shown would have been lower. The Fund’s total returns prior to June 12, 2017 are the returns of the Fund when it followed a different investment objective and different investment strategies under the name “BlackRock Large Cap Value V.I. Fund”.

^(b)  For the portion of the period, the Fund’s investment adviser waived a portion of its fee. Without such waiver, the Fund’s performance would have been lower.

^(c)  The returns for Class III Shares prior to January 27, 2009, the recommencement of operations of Class III Shares, are based upon the performance of the Fund’s Class I Shares, as adjusted to reflect the distribution (12b-1) fees applicable to Class III Shares.

Past performance is not indicative of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

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

Expense Example

	Actual						Hypothetical (a)
	Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Annualized Expense Ratio
Class I	$	1,000.00	$	924.00	$	2.96	$	1,000.00	$	1,022.13	$	3.11		0.61	%
Class II		1,000.00		923.20		3.68		1,000.00		1,021.37		3.87		0.76
Class III		1,000.00		923.30		4.17		1,000.00		1,020.87		4.38		0.86

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

^(b)  For each class of the Fund, expenses are equal to annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period shown).

See “Disclosure of Expenses” on the following page for further information on how expenses were calculated.

FUND SUMMARY 3

Fund Summary  as of December 31, 2018 (continued) BlackRock Advantage Large Cap Value V.I. Fund

Portfolio Information

SECTOR ALLOCATION

Sector	Percent of Net Assets
Financials		23	%
Health Care		16
Information Technology		9
Energy		9
Industrials		8
Consumer Staples		7
Communication Services		7
Utilities		7
Real Estate		5
Consumer Discretionary		5
Materials		3
Short-Term Securities		4
Liabilities in Excess of Other Assets		(3	)

For Fund compliance purposes, the Fund’s sector classifications refer to one or more of the sector sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine sector sub classifications for reporting ease.

Disclosure of Expenses

Shareholders of the Fund may incur the following charges: (a) transactional expenses; 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 example on the previous page (which is based on a hypothetical investment of $1,000 invested on July 1, 2018 and held through December 31, 2018) is intended to assist shareholders both in calculating expenses based on an investment in the Fund and in comparing these expenses with similar costs of investing in other mutual funds.

The expense example provides 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 share class under the heading entitled “Expenses Paid During the Period.”

The expense example also provides information about hypothetical account values and hypothetical expenses based on the 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 the Fund and other funds, compare the 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.

The expenses shown in the expense example are intended to highlight shareholders’ ongoing costs only and do not reflect any transactional expenses, such as sales charges, if any. Therefore, the hypothetical example is 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 Fund 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 Fund’s 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 the Fund can realize on an investment and/or may result in lower distributions paid to shareholders. The Fund’s investments in these instruments, if any, are discussed in detail in the Notes to Financial Statements.

4 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments December 31, 2018 BlackRock Advantage Large Cap Value V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Common Stocks — 99.2%
Aerospace & Defense — 1.1%
Lockheed Martin Corp.		461	$	120,708
Raytheon Co.		5,243		804,014
United Technologies Corp.		462		49,194
				973,916
Airlines — 0.5%
Delta Air Lines, Inc.		4,210		210,079
Southwest Airlines Co.		5,015		233,097
				443,176
Auto Components — 0.1%
BorgWarner, Inc.		2,084		72,398
Automobiles — 0.5%
Ford Motor Co.		23,133		176,968
General Motors Co.		7,398		247,463
				424,431
Banks — 11.3%
Bank of America Corp.		105,035		2,588,062
BB&T Corp.		16,290		705,683
Citigroup, Inc.		20,211		1,052,185
Citizens Financial Group, Inc.		21,015		624,776
Cullen/Frost Bankers, Inc.		2,801		246,320
East West Bancorp, Inc.		9,967		433,863
First Republic Bank(a)		5,470		475,343
Huntington Bancshares, Inc.		8,693		103,621
JPMorgan Chase & Co.		22,034		2,150,959
Synovus Financial Corp.		795		25,432
US Bancorp		1,362		62,243
Wells Fargo & Co.		30,701		1,414,702
				9,883,189
Beverages — 0.4%
Coca-Cola European Partners plc		4,464		204,674
Constellation Brands, Inc., Class A		220		35,380
Molson Coors Brewing Co., Class B		1,263		70,930
Monster Beverage Corp.(b)		857		42,182
PepsiCo, Inc.		266		29,388
				382,554
Biotechnology — 1.9%
AbbVie, Inc.		2,123		195,719
Amgen, Inc.		1,243		241,975
Celgene Corp.(b)		6,632		425,045
Gilead Sciences, Inc.		12,769		798,701
				1,661,440
Building Products — 0.2%
Allegion plc		2,715		216,413
Capital Markets — 3.3%
Affiliated Managers Group, Inc.		161		15,688
Charles Schwab Corp. (The)		12,331		512,106
CME Group, Inc.(a)		3,098		582,796
Evercore, Inc., Class A		158		11,307
Goldman Sachs Group, Inc. (The)		319		53,289
Invesco Ltd.		7,414		124,110
Legg Mason, Inc.		6,314		161,070
Moelis & Co., Class A		2,585		88,872
Morgan Stanley		32,707		1,296,833
SEI Investments Co.		420		19,404
				2,865,475
Chemicals — 2.3%
Air Products & Chemicals, Inc.		7,444		1,191,412
Celanese Corp.(a)		2,750		247,418

Security	Shares		Value
Chemicals (continued)
Eastman Chemical Co.		4,792	$	350,343
Ecolab, Inc.		519		76,475
Huntsman Corp.		5,270		101,658
Linde plc		383		59,763
				2,027,069
Commercial Services & Supplies — 0.2%
ADT, Inc.		4,891		29,395
Clean Harbors, Inc.(a)(b)		1,471		72,594
Republic Services, Inc.		674		48,588
				150,577
Communications Equipment — 1.9%
Ciena Corp.(b)		1,454		49,305
Cisco Systems, Inc.		31,081		1,346,740
CommScope Holding Co., Inc.(b)		2,108		34,550
Motorola Solutions, Inc.		1,700		195,568
				1,626,163
Consumer Finance — 1.0%
Ally Financial, Inc.		3,099		70,223
American Express Co.		3,559		339,244
Capital One Financial Corp.		6,196		468,356
Discover Financial Services		300		17,694
				895,517
Containers & Packaging — 0.4%
Packaging Corp. of America		727		60,676
WestRock Co.		8,124		306,762
				367,438
Distributors — 0.1%
Genuine Parts Co.		845		81,137
Diversified Consumer Services — 0.2%
H&R Block, Inc.		5,607		142,250
Diversified Financial Services — 2.9%
AXA Equitable Holdings, Inc.		9,469		157,470
Berkshire Hathaway, Inc., Class B(b)		11,746		2,398,298
				2,555,768
Diversified Telecommunication Services — 3.3%
AT&T, Inc.		44,536		1,271,057
Verizon Communications, Inc.		28,325		1,592,432
				2,863,489
Electric Utilities — 3.3%
Alliant Energy Corp.		829		35,025
Evergy, Inc.		4,993		283,453
Eversource Energy		3,688		239,867
OGE Energy Corp.		17,635		691,116
Pinnacle West Capital Corp.		9,909		844,247
Portland General Electric Co.		11,150		511,227
Xcel Energy, Inc.		6,277		309,268
				2,914,203
Electrical Equipment — 0.8%
AMETEK, Inc.		2,035		137,770
Rockwell Automation, Inc.		3,771		567,460
				705,230
Electronic Equipment, Instruments & Components — 0.8%
CDW Corp.		2,851		231,074
National Instruments Corp.		9,714		440,821
				671,895
Energy Equipment & Services — 0.6%
Halliburton Co.		12,866		341,978
Helmerich & Payne, Inc.		1,168		55,994

SCHEDULE OF INVESTMENTS 5

Schedule of Investments  (continued) December 31, 2018 BlackRock Advantage Large Cap Value V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Energy Equipment & Services (continued)
Nabors Industries Ltd.(a)		17,486	$	34,972
Schlumberger Ltd.		1,690		60,975
TechnipFMC plc		853		16,702
				510,621
Entertainment — 0.7%
Cinemark Holdings, Inc.		548		19,618
Electronic Arts, Inc.(b)		148		11,679
Twenty-First Century Fox, Inc., Class A		2,969		142,868
Twenty-First Century Fox, Inc., Class B		2,316		110,659
Viacom, Inc., Class A		2,740		76,199
Viacom, Inc., Class B		10,374		266,612
				627,635
Equity Real Estate Investment Trusts (REITs) — 4.9%
Apartment Investment & Management Co., Class A		2,000		87,760
Brandywine Realty Trust		8,943		115,096
Equity LifeStyle Properties, Inc.		1,220		118,499
Highwoods Properties, Inc.		8,149		315,285
Host Hotels & Resorts, Inc.		26,354		439,321
Outfront Media, Inc.		4,346		78,750
Park Hotels & Resorts, Inc.		19,585		508,818
Prologis, Inc.		20,805		1,221,670
Realty Income Corp.		16,830		1,060,963
Simon Property Group, Inc.		2,153		361,682
				4,307,844
Food & Staples Retailing — 1.4%
Costco Wholesale Corp.		1,936		394,383
Kroger Co. (The)		2,907		79,942
Walmart, Inc.		7,964		741,847
				1,216,172
Food Products — 2.9%
Archer-Daniels-Midland Co.		22,460		920,186
Hershey Co. (The)		9,369		1,004,169
Hormel Foods Corp.(a)		1,033		44,088
Kellogg Co.		1,461		83,292
Lamb Weston Holdings, Inc.		1,458		107,251
Tyson Foods, Inc., Class A		6,230		332,682
				2,491,668
Gas Utilities — 0.8%
Atmos Energy Corp.		5,940		550,757
UGI Corp.		2,644		141,057
				691,814
Health Care Equipment & Supplies — 3.4%
Abbott Laboratories		7,830		566,344
Danaher Corp.		6,814		702,659
Medtronic plc		9,248		841,198
STERIS plc		2,102		224,599
Stryker Corp.		3,941		617,752
				2,952,552
Health Care Providers & Services — 3.2%
AmerisourceBergen Corp.		3,317		246,785
Anthem, Inc.		1,108		290,994
Cardinal Health, Inc.(a)		9,954		443,949
CVS Health Corp.		7,389		484,127
Halfmoon Parent, Inc.		912		173,257
Humana, Inc.		923		264,421
McKesson Corp.(a)		3,625		400,454
Quest Diagnostics, Inc.		1,970		164,042
UnitedHealth Group, Inc.		877		218,478
WellCare Health Plans, Inc.(b)		336		79,326
				2,765,833

Security	Shares		Value
Health Care Technology — 0.1%
Veeva Systems, Inc., Class A(b)		1,293	$	115,491
Hotels, Restaurants & Leisure — 1.9%
Carnival Corp.		3,578		176,395
Darden Restaurants, Inc.		1,210		120,831
Domino’s Pizza, Inc.		1,066		264,357
Extended Stay America, Inc.		8,677		134,494
McDonald’s Corp.		4,472		794,093
Norwegian Cruise Line Holdings Ltd.(b)		3,657		155,020
				1,645,190
Household Durables — 0.4%
Garmin Ltd.		5,198		329,137
Household Products — 1.8%
Church & Dwight Co., Inc.		9,903		651,221
Colgate-Palmolive Co.		1,404		83,566
Procter & Gamble Co. (The)		9,390		863,129
				1,597,916
Industrial Conglomerates — 0.8%
3M Co.(a)		1,270		241,986
General Electric Co.		50,440		381,831
Honeywell International, Inc.		71		9,380
Roper Technologies, Inc.		134		35,714
				668,911
Insurance — 4.2%
Allstate Corp. (The)		9,266		765,650
American Financial Group, Inc.		4,867		440,609
Arthur J Gallagher & Co.		4,983		367,247
Athene Holding Ltd., Class A(b)		1,678		66,835
First American Financial Corp.		8,486		378,815
Hartford Financial Services Group, Inc. (The)		11,202		497,929
Lincoln National Corp.		6,192		317,712
Loews Corp.		8,081		367,847
Travelers Cos., Inc. (The)		431		51,612
Unum Group		15,088		443,285
				3,697,541
Interactive Media & Services — 0.2%(b)
Cargurus, Inc.		962		32,448
Facebook, Inc., Class A		313		41,031
Yelp, Inc.		3,008		105,250
				178,729
IT Services — 1.2%
Automatic Data Processing, Inc.		2,254		295,545
Booz Allen Hamilton Holding Corp.		5,024		226,432
Fidelity National Information Services, Inc.		1,784		182,949
International Business Machines Corp.		788		89,572
Western Union Co. (The)		16,139		275,331
				1,069,829
Life Sciences Tools & Services — 0.4%
Agilent Technologies, Inc.		2,529		170,606
Thermo Fisher Scientific, Inc.		610		136,512
				307,118
Machinery — 3.1%
Crane Co.		11,745		847,754
Illinois Tool Works, Inc.		2,589		328,000
Ingersoll-Rand plc		7,568		690,429
PACCAR, Inc.(a)		10,325		589,971
Parker-Hannifin Corp.		100		14,914
Snap-on, Inc.		1,807		262,539
				2,733,607

6 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Advantage Large Cap Value V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Media — 2.4%
AMC Networks, Inc., Class A(b)		4,609	$	252,942
CBS Corp. (Non-Voting), Class B		1,856		81,144
Comcast Corp., Class A		29,719		1,011,932
Interpublic Group of Cos., Inc. (The)		9,211		190,023
Liberty Media Corp.-Liberty SiriusXM, Class A(b)		6,792		249,945
Liberty Media Corp.-Liberty SiriusXM, Class C(b)		7,063		261,190
Tribune Media Co., Class A		636		28,862
				2,076,038
Metals & Mining — 0.8%
Newmont Mining Corp.		11,524		399,307
Reliance Steel & Aluminum Co.		2,842		202,265
Steel Dynamics, Inc.		2,838		85,253
				686,825
Multiline Retail — 1.1%
Target Corp.		14,284		944,030
Multi-Utilities — 1.6%
CenterPoint Energy, Inc.		5,581		157,552
CMS Energy Corp.		2,035		101,038
Consolidated Edison, Inc.		9,942		760,165
Dominion Energy, Inc.		2,886		206,234
DTE Energy Co.		1,291		142,397
				1,367,386
Oil, Gas & Consumable Fuels — 8.3%
Anadarko Petroleum Corp.		11,303		495,524
Antero Resources Corp.(b)		9,355		87,843
Apache Corp.		3,415		89,644
Chevron Corp.		12,375		1,346,276
Concho Resources, Inc.(b)		714		73,392
ConocoPhillips		16,377		1,021,106
Continental Resources, Inc.(b)		3,720		149,507
EOG Resources, Inc.		748		65,233
Exxon Mobil Corp.		29,174		1,989,375
Kinder Morgan, Inc.		37,798		581,333
Marathon Oil Corp.		1,195		17,136
Newfield Exploration Co.(b)		920		13,487
Occidental Petroleum Corp.		7,928		486,621
Phillips 66		6,145		529,392
Plains GP Holdings LP, Class A(b)		653		13,125
Suncor Energy, Inc.(a)		1,478		41,340
Valero Energy Corp.		1,397		104,733
Williams Cos., Inc. (The)		7,837		172,806
				7,277,873
Personal Products — 0.2%
Estee Lauder Cos., Inc. (The), Class A		1,430		186,043
Herbalife Nutrition Ltd.(b)		276		16,270
				202,313
Pharmaceuticals — 7.1%
Allergan plc		1,261		168,545
Bristol-Myers Squibb Co.		10,149		527,545
Eli Lilly & Co.		3,818		441,819
Johnson & Johnson		19,103		2,465,242
Merck & Co., Inc.		22,929		1,752,005
Pfizer, Inc.		20,363		888,845
				6,244,001
Professional Services — 0.4%
Insperity, Inc.		3,445		321,625
Road & Rail — 0.7%
Landstar System, Inc.		2,299		219,945
Norfolk Southern Corp.		2,565		383,570
Schneider National, Inc., Class B		637		11,893
				615,408

Security	Shares		Value
Semiconductors & Semiconductor Equipment — 3.1%
Analog Devices, Inc.		3,808	$	326,840
Applied Materials, Inc.		1,112		36,407
Intel Corp.		36,462		1,711,162
Maxim Integrated Products, Inc.(a)		1,649		83,852
QUALCOMM, Inc.		6,662		379,134
Skyworks Solutions, Inc.		2,457		164,668
				2,702,063
Software — 1.7%
Dropbox, Inc., Class A(b)		3,126		63,864
Microsoft Corp.		447		45,402
Oracle Corp.		23,253		1,049,873
salesforce.com, Inc.(b)		738		101,084
Synopsys, Inc.(b)		2,954		248,845
				1,509,068
Specialty Retail — 0.1%
AutoNation, Inc.(b)		577		20,599
Dick’s Sporting Goods, Inc.		674		21,029
Five Below, Inc.(b)		122		12,483
Penske Automotive Group, Inc.		358		14,434
				68,545
Technology Hardware, Storage & Peripherals — 0.8%
Dell Technologies, Inc., Class C(b)		1,248		60,995
Hewlett Packard Enterprise Co.		9,214		121,717
HP, Inc.		21,293		435,655
Pure Storage, Inc., Class A(b)		4,616		74,225
				692,592
Textiles, Apparel & Luxury Goods — 0.5%
NIKE, Inc., Class B		3,728		276,394
Ralph Lauren Corp.		312		32,279
VF Corp.		1,238		88,319
				396,992
Tobacco — 0.8%
Altria Group, Inc.		615		30,375
Philip Morris International, Inc.		9,904		661,191
				691,566
Water Utilities — 1.0%
American Water Works Co., Inc.		9,784		888,094
Wireless Telecommunication Services — 0.1%
Sprint Corp.(b)		2,139		12,449
Telephone & Data Systems, Inc.		3,482		113,304
				125,753
Total Common Stocks — 99.2% (Cost: $92,464,539)				86,641,508
Total Long-Term Investments — 99.2% (Cost: $92,464,539)				86,641,508
Short-Term Securities — 4.1%(c)
BlackRock Liquidity Funds, T-Fund, Institutional Class, 2.32%(e)		939,148		939,148
JPMorgan US Treasury Plus Money Market Fund, Agency Class, 2.24%		9,354		9,354

SCHEDULE OF INVESTMENTS 7

Schedule of Investments  (continued) December 31, 2018 BlackRock Advantage Large Cap Value V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Short-Term Securities (continued)
SL Liquidity Series, LLC, Money Market Series, 2.57%(d)(e)		2,669,646	$	2,669,379
Total Short-Term Securities — 4.1% (Cost: $3,617,993)				3,617,881

Security	Value
Total Investments — 103.3% (Cost: $96,082,532)	$	90,259,389
Liabilities in Excess of Other Assets — (3.3)%		(2,885,535	)
Net Assets — 100.0%	$	87,373,854

^(a)  Security, or a portion of the security, is on loan.

^(b)  Non-income producing security.

^(c)  Annualized 7-day yield as of period end.

^(d)  Security was purchased with the cash collateral from loaned securities

^(e)  During the year ended December 31, 2018, investments in issuers considered to be affiliates of the Fund for the 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, Ins Class		1,446,302		(507,154	)		939,148	$	939,148	$	14,593		$	—	$	—
SL Liquidity Series, LLC, Money Market Series		3,613,873		(944,227	)		2,669,646		2,669,379		4,390	(b)		1,231		(28	)
								$	3,608,527	$	18,983		$	1,231	$	(28	)

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

^(b)  Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.

For Fund compliance purposes, the Fund’s industry classifications refer to one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment advisor. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

Description	Number of Contracts		Expiration Date		Notional Amount (000)		Value/ Unrealized Appreciation (Depreciation)
Long Contracts
S&P 500 E-Mini Index		9		03/15/19	$	1,127	$	(11,755	)

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statement of Assets and Liabilities were as follows:

	Commodity Contracts		Credit Contracts		Equity Contracts		Foreign Currency Exchange Contracts		Interest Rate Contracts		Other Contracts		Total
Liabilities — Derivative Financial Instruments
Futures contracts
Net unrealized depreciation(a)	$	—	$	—	$	11,755	$	—	$	—	$	—	$	11,755

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

8 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Advantage Large Cap Value V.I. Fund

For the year ended December 31, 2018, the effect of derivative financial instruments in the Statement of Operations were 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	$	—	$	—	$	(45,163	)	$	—	$	—	$	—	$	(45,163	)
Net Change in Unrealized Appreciation (Depreciation) on:
Futures contracts	$	—	$	—	$	(19,989	)	$	—	$	—	$	—	$	(19,989	)

Average Quarterly Balances of Outstanding Derivative Financial Instruments

Futures contracts:
Average notional value of contracts — long	$	1,105,763

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

Fair Value Hierarchy as of Period End

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

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

	Level 1			Level 2		Level 3		Total
Assets:
Investments:
Long-Term Investments
Common Stocks(a)	$	86,641,508		$	—	$	—	$	86,641,508
Short-Term Securities		948,502			—		—		948,502
Subtotal	$	87,590,010		$	—	$	—	$	87,590,010
Investments valued at NAV(b)									2,669,379
Total Investments								$	90,259,389
Derivative Financial Instruments(c)
Liabilities:
Equity contracts	$	(11,755	)	$	—	$	—	$	(11,755	)

^(a)  See above Schedule of Investments for values in each industry.

^(b)  As of December 31, 2018, certain investments of the Fund were fair valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

^(c)  Derivative financial instruments are futures contracts, which 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.

SCHEDULE OF INVESTMENTS 9

Statement of Assets and Liabilities

December 31, 2018

	BlackRock Advantage Large Cap Value V.I. Fund
ASSETS
Investments at value — unaffiliated (including securities loaned at value of $2,612,432) (cost — $92,473,893)	$	86,650,862
Investments at value — affiliated (cost — $3,608,639)		3,608,527
Cash		333
Cash pledged for futures contracts		55,000
Receivables:
Securities lending income — affiliated		518
Capital shares sold		6,499
Dividends — affiliated		1,907
Dividends — unaffiliated		170,533
From custodian		9,354
From the Manager		1,633
Variation margin on futures contracts		7,432
Prepaid expenses		101
Total assets		90,512,699
LIABILITIES
Cash collateral on securities loaned at value		2,668,546
Payables:
Investments purchased		78,710
Capital shares redeemed		131,936
Printing fees		32,687
Professional fees		69,907
Distribution fees		1,424
Transfer agent fees		81,218
Board realignment and consolidation		6,120
Investment advisory fees		41,325
Directors’ and Officer’s fees		5,274
Other affiliates		229
Other accrued expenses		21,469
Total liabilities		3,138,845
NET ASSETS	$	87,373,854
NET ASSETS CONSIST OF
Paid-in capital	$	94,379,902
Accumulated loss		(7,006,048	)
NET ASSETS	$	87,373,854
NET ASSET VALUE
Class I — Based on net assets of $78,684,869 and 9,370,177 shares outstanding, 100 million shares authorized, $0.10 par value	$	8.40
Class II — Based on net assets of $4,812,991 and 570,315 shares outstanding, 100 million shares authorized, $0.10 par value	$	8.44
Class III — Based on net assets of $3,875,994 and 470,387 shares outstanding, 100 million shares authorized, $0.10 par value	$	8.24

See notes to financial statements.

10 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Statement of Operations

Year Ended December 31, 2018

	BlackRock Advantage Large Cap Value V.I. Fund
INVESTMENT INCOME
Dividends — affiliated	$	14,593
Dividends — unaffiliated(a)		2,567,583
Securities lending income — affiliated — net		4,390
Foreign taxes withheld		(905	)
Total investment income		2,585,661
EXPENSES
Investment advisory		772,802
Transfer agent — class specific		214,374
Professional		59,494
Accounting services		47,721
Custodian		26,424
Printing		23,093
Directors and Officer		18,965
Distribution — class specific		18,554
Board realignment and consolidation		6,182
Transfer agent		5,001
Miscellaneous		31,618
Total expenses		1,224,228
Less:
Fees waived and/or reimbursed by the Manager		(366,925	)
Transfer agent fees waived and/or reimbursed — class specific		(214,374	)
Total expenses after fees waived and/or reimbursed		642,929
Net investment income		1,942,732
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — affiliated		1,231
Investments — unaffiliated		8,787,139
Futures contracts		(45,163	)
		8,743,207
Net change in unrealized appreciation (depreciation) on:
Investments — affiliated		(28	)
Investments — unaffiliated		(18,285,403	)
Futures contracts		(19,989	)
		(18,305,420	)
Net realized and unrealized loss		(9,562,213	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(7,619,481	)

^(a)  Includesnon-recurring dividends in the amount of $97,575.

See notes to financial statements.

FINANCIAL STATEMENTS 11

Statements of Changes in Net Assets

	BlackRock Advantage Large Cap Value V.I. Fund
	Year Ended December 31,
	2018			2017
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income	$	1,942,732		$	1,617,399
Net realized gain		8,743,207			25,548,122
Net change in unrealized appreciation (depreciation)		(18,305,420	)		(10,474,117	)
Net increase (decrease) in net assets resulting from operations		(7,619,481	)		16,691,404
DISTRIBUTIONS TO SHAREHOLDERS(a)(b)
Class I		(11,110,415	)		(25,114,786	)
Class II		(700,196	)		(1,760,796	)
Class III		(534,460	)		(764,127	)
Decrease in net assets resulting from distributions to shareholders		(12,345,071	)		(27,639,709	)
CAPITAL SHARE TRANSACTIONS
Net increase (decrease) in net assets derived from capital share transactions		(1,956,471	)		19,457,704
NET ASSETS(b)
Total increase (decrease) in net assets		(21,921,023	)		8,509,399
Beginning of year		109,294,877			100,785,478
End of year	$	87,373,854		$	109,294,877

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

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

See notes to financial statements.

12 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Financial Highlights

(For a share outstanding throughout each period)

	BlackRock Advantage Large Cap Value V.I. Fund
	Class I
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	10.63		$	12.06		$	11.49		$	12.74		$	13.22
Net investment income(a)		0.20	(b)		0.20			0.15			0.14			0.15
Net realized and unrealized gain (loss)		(1.08	)		1.86			1.41			(0.36	)		1.47
Net increase (decrease) from investment operations		(0.88	)		2.06			1.56			(0.22	)		1.62
Distributions:(c)
From net investment income		(0.21	)		(0.21	)		(0.16	)		(0.15	)		(0.16	)
From net realized gain		(1.14	)		(3.28	)		(0.83	)		(0.88	)		(1.94	)
Total distributions		(1.35	)		(3.49	)		(0.99	)		(1.03	)		(2.10	)
Net asset value, end of year	$	8.40		$	10.63		$	12.06		$	11.49		$	12.74
Total Return(d)
Based on net asset value		(8.20	)%		17.22	%		13.60	%		(1.72	)%		12.22	%
Ratios to Average Net Assets(e)
Total expenses		1.17	%		1.17	%		1.09	%		1.08	%		1.08	%
Total expenses after fees waived and/or reimbursed		0.61	%		0.71	%		0.82	%		0.77	%		0.77	%
Net investment income		1.90	%(b)		1.57	%		1.29	%		1.14	%		1.10	%
Supplemental Data
Net assets, end of year (000)	$	78,685		$	99,213		$	92,795		$	93,983		$	109,570
Portfolio turnover rate		164	%		168	%		47	%		29	%		35	%

^(a)  Based on average shares outstanding.

^(b)  Net investment income per share and the ratio of net investment income to average net assets includes $0.01 per share and 0.09%, respectively, resulting from anon-recurring dividend.

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

^(d)  Where applicable, excludes insurance-related fees and expenses and assumes the reinvestment of distributions.

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

	Year Ended December 31,
	2018			2017			2016			2015			2014
Investments in underlying funds		0.00	%		0.01	%		—	%		—	%		—	%

See notes to financial statements.

FINANCIAL HIGHLIGHTS 13

Financial Highlights  (continued)

(For a share outstanding throughout each period)

	BlackRock Advantage Large Cap Value V.I. Fund (continued)
	Class II
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	10.67		$	12.09		$	11.52		$	12.77		$	13.25
Net investment income(a)		0.19	(b)		0.18			0.13			0.12			0.13
Net realized and unrealized gain (loss)		(1.09	)		1.86			1.40			(0.36	)		1.46
Net increase (decrease) from investment operations		(0.90	)		2.04			1.53			(0.24	)		1.59
Distributions:(c)
From net investment income		(0.19	)		(0.18	)		(0.13	)		(0.13	)		(0.13	)
From net realized gain		(1.14	)		(3.28	)		(0.83	)		(0.88	)		(1.94	)
Total distributions		(1.33	)		(3.46	)		(0.96	)		(1.01	)		(2.07	)
Net asset value, end of year	$	8.44		$	10.67		$	12.09		$	11.52		$	12.77
Total Return(d)
Based on net asset value		(8.37	)%		17.06	%		13.35	%		(1.96	)%		11.94	%
Ratios to Average Net Assets(e)
Total expenses		1.32	%		1.32	%		1.27	%		1.19	%		1.23	%
Total expenses after fees waived and/or reimbursed		0.76	%		0.88	%		1.03	%		0.96	%		0.97	%
Net investment income		1.74	%(b)		1.38	%		1.10	%		0.95	%		0.92	%
Supplemental Data
Net assets, end of year (000)	$	4,813		$	7,063		$	6,060		$	5,680		$	4,002
Portfolio turnover rate		164	%		168	%		47	%		29	%		35	%

^(a)  Based on average shares outstanding.

^(b)  Net investment income per share and the ratio of net investment income to average net assets includes $0.01 per share and 0.10%, respectively, resulting from anon-recurring dividend.

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

^(d)  Where applicable, excludes insurance-related fees and expenses and assumes the reinvestment of distributions.

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

	Year Ended December 31,
	2018			2017			2016			2015			2014
Investments in underlying funds		0.00	%		0.01	%		—	%		—	%		—	%

See notes to financial statements.

14 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Financial Highlights  (continued)

(For a share outstanding throughout each period)

	BlackRock Advantage Large Cap Value V.I. Fund (continued)
	Class III
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	10.46		$	11.92		$	11.37		$	12.61		$	13.12
Net investment income(a)		0.18	(b)		0.16			0.11			0.10			0.10
Net realized and unrealized gain (loss)		(1.07	)		1.83			1.38			(0.36	)		1.44
Net increase (decrease) from investment operations		(0.89	)		1.99			1.49			(0.26	)		1.54
Distributions:(c)
From net investment income		(0.19	)		(0.17	)		(0.11	)		(0.10	)		(0.11	)
From net realized gain		(1.14	)		(3.28	)		(0.83	)		(0.88	)		(1.94	)
Total distributions		(1.33	)		(3.45	)		(0.94	)		(0.98	)		(2.05	)
Net asset value, end of year	$	8.24		$	10.46		$	11.92		$	11.37		$	12.61
Total Return(d)
Based on net asset value		(8.46	)%		16.86	%		13.17	%		(2.11	)%		11.72	%
Ratios to Average Net Assets(e)
Total expenses		1.42	%		1.43	%		1.35	%		1.34	%		1.32	%
Total expenses after fees waived and/or reimbursed		0.86	%		0.99	%		1.18	%		1.13	%		1.13	%
Net investment income		1.70	%(b)		1.26	%		0.92	%		0.78	%		0.73	%
Supplemental Data
Net assets, end of year (000)	$	3,876		$	3,019		$	1,930		$	1,810		$	1,931
Portfolio turnover rate		164	%		168	%		47	%		29	%		35	%

^(a)  Based on average shares outstanding.

^(b)  Net investment income per share and the ratio of net investment income to average net assets includes $0.01 per share and 0.09%, respectively, resulting from anon-recurring dividend.

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

^(d)  Where applicable, excludes insurance-related fees and expenses and assumes the reinvestment of distributions.

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

	Year Ended December 31,
	2018			2017			2016			2015			2014
Investments in underlying funds		0.00	%		0.01	%		—	%		—	%		—	%

See notes to financial statements.

FINANCIAL HIGHLIGHTS 15

Notes to Financial Statements

1. ORGANIZATION

BlackRock Variable Series Funds, Inc. (the “Company”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Company is organized as a Maryland corporation that is comprised of 15 separate portfolios. The funds offer shares to insurance companies for their separate accounts to fund benefits under certain variable annuity and variable life insurance contracts. The financial statements presented are for BlackRock Advantage Large Cap Value V.I. Fund (the “Fund”). The Fund is classified as diversified. Class I, Class II and Class III Shares have equal voting, dividend, liquidation and other rights, except that only shares of the respective classes are entitled to vote on matters concerning only that class. In addition, Class II and Class III Shares bear certain expenses related to the distribution of such shares.

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

2. SIGNIFICANT ACCOUNTING POLICIES

The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. The 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 the ex-dividend date. Dividends from foreign securities where the ex-dividend date may have passed are subsequently recorded when the Fund is informed of the ex-dividend date. Under the applicable foreign tax laws, a withholding tax at various rates may be imposed on capital gains, dividends and interest. Upon notification from issuers, a portion of the dividend income received from a real estate investment trust may be redesignated as a reduction of cost of the related investment and/or realized gain. Income expenses and realized and unrealized gains and losses are allocated daily to each class based on its relative net assets.

Segregation and Collateralization: In cases where the Fund enters into certain investments (e.g., futures contracts) that would be treated as “senior securities” for 1940 Act purposes, the Fund may segregate or designate on its books and records cash or liquid assets having a market value at least equal to the amount of the Fund’s 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 Fund 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 Fund are recorded on the ex-dividend date. Distributions of capital gains are recorded on the ex-dividend date and made at least annually. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP.

Recent Accounting Standards:In August 2018, the Financial Accounting Standards Board issued Accounting Standards Update 2018-13 “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 Fund.

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

Other: Expenses directly related to the Fund or its classes are charged to the 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 Fund and other shared expenses prorated to the Fund are allocated daily to each class based on its relative net assets or other appropriate methods.

3. INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS

Investment Valuation Policies: The Fund’s investments are valued at fair value (also referred to as “market value” within the financial statements) as of the close of trading on the New York Stock Exchange (“NYSE”) (generally 4:00 p.m., Eastern time). U.S. GAAP defines fair value as the price the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Fund determines the fair values of its financial instruments using various independent dealers or pricing services under policies approved by the Board of Directors of the Company (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 the 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.

• Investments in open-end U.S. mutual funds are valued at net asset value (“NAV”) each business day.

16 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

• The Fund values its investment in SL Liquidity Series, LLC, Money Market Series (the “Money Market Series”) at fair value, which is ordinarily based upon its pro rata ownership in the underlying fund’s net assets. The Money Market Series seeks current income consistent with maintaining liquidity and preserving capital. Although the Money Market Series is not registered under the 1940 Act, its investments may follow the parameters of investments by a money market fund that is subject to Rule 2a-7 under the 1940 Act.

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

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

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 the Fund has the ability to access

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

• Level 3 — Unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the 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 privately held companies or funds. 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/or non-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 the 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.

As of December 31, 2018, certain investments of the Fund were valued using NAV as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

4. SECURITIES AND OTHER INVESTMENTS

Securities Lending: The Fund may lend its securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received by the Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current market value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Fund and any additional required collateral is delivered to the Fund, or excess collateral returned by the Fund, on the next business day. During the term of the loan, the Fund is entitled to all distributions made on or in respect of the loaned securities, but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.

The market value of any securities on loan, all of which were classified as common stocks in the Fund’s Schedule of Investments, and the value of any related collateral are shown separately in the Statement of Assets and Liabilities as a component of investments at value — unaffiliated, and collateral on securities loaned at value, respectively. As of period end, any securities on loan were collateralized by cash and/or U.S. Government obligations. Cash collateral invested by the securities lending agent, BlackRock Investment Management, LLC (“BIM”), if any, is disclosed in the Schedule of Investments.

Securities lending transactions are entered into by the Fund under Master Securities Lending Agreements (each, an “MSLA”), which provide the right, in the event of default (including bankruptcy or insolvency), for the non-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, the Fund, as lender, would offset the market value of the collateral received against the market value of the securities loaned. When the value of the collateral is greater than that of the market value of the securities loaned, the lender is left with a net amount payable to the defaulting party.

NOTESTO FINANCIAL STATEMENTS 17

Notes to Financial Statements  (continued)

However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, absent an event of default, the borrower can resell or re-pledge the loaned securities, and the Fund can reinvest cash collateral received in connection with loaned securities. Upon an event of default, the parties’ obligations to return the securities or collateral to the other party are extinguished, and the parties can resell or re-pledge the loaned securities or the collateral received in connection with the loaned securities in order to satisfy the defaulting party’s net payment obligation for all transactions under the MSLA. The defaulting party remains liable for any deficiency.

As of period end, the following table is a summary of the Fund’s securities lending agreements by counterparty which are subject to offset under an MSLA:

Counterparty	Securities Loaned at Value			Cash Collateral Received (a)			Net Amount
Citigroup Global Markets, Inc.	$	1,059,527		$	(1,059,527	)	$	—
Credit Suisse Securities (USA) LLC		34,592			(34,592	)		—
Fidelity Investments		22,300	��		(22,300	)		—
JP Morgan Securities LLC		880,752			(880,752	)		—
Morgan Stanley & Co. LLC		504,274			(504,274	)		—
State Street Bank & Trust Co.		28,000			(28,000	)		—
UBS Securities LLC		82,987			(82,987	)		—
	$	2,612,432		$	(2,612,432	)	$	—

^(a)  Cash collateral with a value of $2,668,546 has been received in connection with securities lending agreements. Collateral received in excess of the value of securities loaned from the individual counterparty, if any, is not shown for financial reporting purposes in the table above.

The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Fund benefits from a borrower default indemnity provided by BIM. BIM’s indemnity allows for full replacement of the securities loaned if the collateral received does not cover the value on the securities loaned in the event of borrower default. The Fund could incur a loss if the value of an investment purchased with cash collateral falls below the market value of loaned securities or if the value of an investment purchased with cash collateral falls below the value of the original cash collateral received.

5. DERIVATIVE FINANCIAL INSTRUMENTS

The Fund engages in various portfolio investment strategies using derivative contracts both to increase the returns of the Fund and/or to manage its 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 Schedule of Investments. These contracts may be transacted on an exchange over-the-counter (“OTC”).

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

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

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

6. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

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

For such services, the Fund pays the Manager a monthly fee at an annual rate equal to the following percentages of the average daily value of the Fund’s net assets:

Average Daily Net Assets	Investment Advisory Fees
First $1 Billion		0.75	%
$1 Billion — $3 Billion		0.71
$3 Billion — $5 Billion		0.68
$5 Billion — $10 Billion		0.65
Greater than $10 Billion		0.64

18 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

Distribution Fees: The Company, on behalf of the Fund, entered into a Distribution Agreement and a Distribution Plan with BlackRock Investments, LLC (“BRIL”), an affiliate of the Manager. Pursuant to the Distribution Plan and in accordance with Rule 12b-1 under the 1940 Act, the Fund pays BRIL ongoing distribution fees. The fees are accrued daily and paid monthly at annual rates based upon the average daily net assets of the relevant share class of the Fund as follows:

	Class II			Class III
Distribution fees		0.15	%		0.25	%

BRIL and broker-dealers, pursuant to sub-agreements with BRIL, provide shareholder servicing and distribution services to the Fund. 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 the Fund:

	Class II		Class III		Total
Distribution fees	$	9,807	$	8,747	$	18,554

Transfer Agent: On behalf of the Fund, the Manager entered into agreements with insurance companies and other financial intermediaries (“Service Organizations”), some of which may be affiliates. Pursuant to these agreements, the Service Organizations provide the Fund with administrative, networking, recordkeeping, sub-transfer agency and shareholder services to sub-accounts they service. For these services, the Service Organizations receive an annual fee per shareholder account, which will vary depending on share class and/or net assets of Fund shareholders serviced by the Service Organizations which is shown as transfer agent — class specific. For the year ended December 31, 2018, the Fund did not pay any amounts to affiliates in return for these services.

In addition, the Fund pays the transfer agent, which is not an affiliate, a fee for the issuance, transfer and redemption of shares and the opening and maintenance of shareholder accounts, which is included in transfer agent in the Statement of Operations. For the year ended December 31, 2018, the following table shows the class specific transfer agent fees borne directly by each share class of the Fund:

Class I		Class II		Class III		Total
$	193,336	$	13,763	$	7,275	$	214,374

Expense Limitations, Waivers and Reimbursements: The Manager has agreed to voluntarily waive 0.05% of its investment advisory fee payable by the Fund. This voluntary waiver may be reduced or discontinued at any time without notice. This amount is included in fees waived and/or reimbursed by the Manager in the Statement of Operations. For the year ended December 31, 2018, the amount waived and/or reimbursed was $51,522.

With respect to the Fund, the Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees the 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. This amount is included in fees waived and/or reimbursed by the Manager in the Statement of Operations. For the year ended December 31, 2018, the amount waived was $635.

The Manager has contractually agreed to waive its investment advisory fee with respect to any portion of the 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. The contractual agreement may be terminated upon 90 days’ notice by a majority of the directors who are not “interested persons” of the Fund, as defined in the 1940 Act (“Independent Directors”), or by a vote of a majority of the outstanding voting securities of the Fund. For the year ended December 31, 2018, there were no fees waived by the Manager pursuant to this arrangement.

For the year ended December 31, 2018, the Fund reimbursed the Manager $1,483 for certain accounting services, which is included in accounting services in the Statement of Operations.

The Manager has contractually agreed to reimburse transfer agent fees in order to limit such expenses to a percentage of average daily net assets as follows:

Class I	0.00	%
Class II	0.05
Class III	0.11

The Manager has agreed not to reduce or discontinue this contractual expense limitation through April 30, 2019 unless approved by the Board, including a majority of the Independent Directors, or by a vote of a majority of the outstanding voting securities of the Fund. These amounts waived and/or reimbursed are shown as transfer agent fees waived and/or reimbursed — class specific in the Statement of Operations. For the year ended December 31, 2018, class specific expense waivers and/or reimbursements were as follows:

	Class I		Class II		Class III		Total
Transfer Agent Fees Waived and/or Reimbursed	$	193,336	$	10,494	$	3,427	$	207,257

With respect to the 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 the Fund’s business (“expense limitation”). The expense limitations as a percentage of average daily net assets are as follows:

Class I			Class II			Class III
	0.60	%		0.75	%		0.85	%

NOTESTO FINANCIAL STATEMENTS 19

Notes to Financial Statements  (continued)

The Manager has agreed not to reduce or discontinue this contractual expense limitation through April 30, 2019, unless approved by the Board, including a majority of the Independent Directors or by a vote of a majority of outstanding voting securities of the Fund. For the year ended December 31, 2018, the Manager waived and/or reimbursed $314,768 and $7,117, which is included in fees waived and/or reimbursed by the Manager and transfer agent fees waived and/or reimbursed — class specific, respectively, in the Statement of Operations.

Securities Lending: The U.S. Securities and Exchange Commission (“SEC”) has issued an exemptive order which permits BIM, an affiliate of the Manager, to serve as securities lending agent for the Fund, subject to applicable conditions. As securities lending agent, BIM bears all operational costs directly related to securities lending. The Fund is responsible for expenses in connection with the investment of cash collateral received for securities on loan (the “collateral investment expenses”). The cash collateral is invested in a private investment company managed by the Manager or its affiliates. However, BIM has agreed to cap the collateral investment expenses of the private investment company to an annual rate of 0.04%. The investment adviser to the private investment company will not charge any advisory fees with respect to shares purchased by the Fund. The private investment company in which the cash collateral has been invested may, under certain circumstances, impose a liquidity fee of up to 2% of the value withdrawn or temporarily restrict withdrawals for up to 10 business days during a 90 day period, in the event that the private investment company’s weekly liquid assets fall below certain thresholds.

Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment expenses. The Fund retains a portion of securities lending income and remits a remaining portion to BIM as compensation for its services as securities lending agent.

Pursuant to a securities lending agreement, the Fund retains 71.5% of securities lending income, and this amount retained can never be less than 65% of the total of securities lending income plus the collateral investment expenses.

In addition, commencing the business day following the date that the aggregate securities lending income earned across the Equity-Bond Complex in a calendar year exceeds a specified threshold, the Fund, pursuant to the securities lending agreement, will retain for the remainder of that calendar year securities lending income in an amount equal to 75% of securities lending income, and this amount retained can never be less than 65% of the total of securities lending income plus the collateral investment expenses.

The share of securities lending income earned by the Fund is shown as securities lending income — affiliated — net in the Statement of Operations. For the year ended December 31, 2018, the Fund paid BIM $1,554 for securities lending agent services.

Interfund Lending: In accordance with an exemptive order (the “Order”) from the SEC, the 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 the Fund’s investment policies and restrictions. The Fund is currently permitted to borrow under the Interfund Lending Program.

A lending BlackRock fund may lend in aggregate up to 15% of its net assets, but may not lend more than 5% of its net assets to any one borrowing fund through the Interfund Lending Program. A borrowing BlackRock fund may not borrow through the Interfund Lending Program or from any other source more than 33 1/3% of its total assets (or any lower threshold provided for by the fund’s investment restrictions). If a borrowing BlackRock fund’s total outstanding borrowings exceed 10% of its total assets, each of its outstanding interfund loans will be subject to collateralization of at least 102% of the outstanding principal value of the loan. All interfund loans are for temporary or emergency purposes and the interest rate to be charged will be the average of the highest current overnight repurchase agreement rate available to a lending fund and the bank loan rate, as calculated according to a formula established by the Board.

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

Directors and Officers: Certain directors and/or officers of the Company are directors and/or officers of BlackRock or its affiliates. The Fund reimburses the Manager for a portion of the compensation paid to the Company’s Chief Compliance Officer, which is included in Directors and Officer in the Statement of Operations.

7. PURCHASES AND SALES

For the year ended December 31, 2018, purchases and sales of investments, excluding short-term securities, were $167,166,176 and $178,939,869, respectively.

8. INCOME TAX INFORMATION

It is the 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.

The 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 the Fund’s U.S. federal tax returns generally remains open for each of the four years ended December 31, 2018. The statutes of limitations on the 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 Fund as 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 Fund’s financial statements.

20 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

The tax character of distributions paid was as follows:

	12/31/18		12/31/17
Ordinary income	$	5,903,454	$	4,512,661
Long term capital gains		6,441,617		23,127,048
	$	12,345,071	$	27,639,709

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

Undistributed ordinary income	$	30,283
Net unrealized losses(a)		(6,263,372	)
Qualified late-year losses(b)		(772,959	)
	$	(7,006,048	)

^(a)  The difference betweenbook-basis andtax-basis net unrealized losses was attributable primarily to the tax deferral of losses on wash sales, the realization for tax purposes of unrealized gains/losses on certain futures contracts 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.

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:

Tax cost . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	96,540,704
Gross unrealized appreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .	$	2,649,576
Gross unrealized depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . .		(8,930,891	)
Net unrealized depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . .	$	(6,281,315	)

9. BANK BORROWINGS

The Company, on behalf of the Fund, along with certain other funds managed by the Manager and its affiliates (“Participating Funds”), is a party to a 364-day, $2.25 billion credit agreement with a group of lenders. Under this agreement, the Fund may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Fund, 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. Prior to April 19, 2018, the aggregate commitment amount was $2.1 billion and the fee was 0.12% per annum. 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 Statement 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 Fund did not borrow under the credit agreement.

10. PRINCIPAL RISKS

In the normal course of business, the Fund invests in securities or other instruments and may enter into certain transactions, and such activities subject the 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. The Fund’s prospectus provides details of the risks to which the Fund is subject.

The Fund may be exposed to additional risks when reinvesting cash collateral in money market funds that do not seek to maintain a stable NAV per share of $1.00, which may be subject to redemption gates or liquidity fees under certain circumstances.

Valuation Risk: The market values of equities, such as common stocks and preferred securities or equity related investments, such as futures and options, may decline due to general market conditions which are not specifically related to a particular company. They may also decline due to factors which affect a particular industry or industries. The Fund may invest in illiquid investments and may experience difficulty in selling those investments in a timely manner at the price that it believes the investments are worth. Prices may fluctuate widely over short or extended periods in response to company, market or economic news. Markets also tend to move in cycles, with periods of rising and falling prices. This volatility may cause the 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 the Fund may lose value, regardless of the individual results of the securities and other instruments in which the Fund invests.

Counterparty Credit Risk: The Fund 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 Fund manages 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 Fund to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Fund’s exposure to market,

NOTESTO FINANCIAL STATEMENTS 21

Notes to Financial Statements  (continued)

issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Statement of Assets and Liabilities, less any collateral held by the Fund.

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

With exchange-traded futures, there is less counterparty credit risk to the Fund 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, the Fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency). Additionally, credit risk exists in exchange-traded futures with respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Fund.

11. CAPITAL SHARE TRANSACTIONS

Transactions in capital shares for each class were as follows:

	Year Ended 12/31/2018						Year Ended 12/31/2017
	Shares			Amount			Shares			Amount
Class I
Shares sold		287,840		$	3,023,352			365,201		$	4,677,279
Shares issued in reinvestment of distributions		1,312,428			11,110,414			2,324,002			25,114,786
Shares redeemed		(1,559,379	)		(16,653,694	)		(1,056,648	)		(13,532,267	)
Net increase (decrease)		40,889		$	(2,519,928	)		1,632,555		$	16,259,798
Class II
Shares sold		246,535		$	2,598,348			110,054		$	1,387,115
Shares issued in reinvestment of distributions		81,856			700,197			162,376			1,760,796
Shares redeemed		(419,810	)		(4,482,072	)		(111,932	)		(1,430,159	)
Net increase (decrease)		(91,419	)	$	(1,183,527	)		160,498		$	1,717,752
Class III
Shares sold		190,480		$	1,969,290			120,811		$	1,549,360
Shares issued in reinvestment of distributions		64,588			534,460			71,929			764,127
Shares redeemed		(73,219	)		(756,766	)		(66,112	)		(833,333	)
Net increase		181,849		$	1,746,984			126,628		$	1,480,154
Total Net Increase (Decrease)		131,319		$	(1,956,471	)		1,919,681		$	19,457,704

12. REGULATION S-X AMENDMENTS

On August 17, 2018, the SEC adopted amendments to certain disclosure requirements in Securities Act Release No. 33-10532, Disclosure Update and Simplification. The Fund has adopted the amendments pertinent to Regulation S-X in this shareholder report. The amendments impacted certain disclosure presentation on the Statement 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 Regulation S-X changes.

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

Share Class	Net Investment Income			Net Realized Gain
Class I	$	(1,493,752	)	$	(23,621,034	)
Class II		(93,118	)		(1,667,678	)
Class III		(38,131	)		(725,996	)

Undistributed net investment income as of December 31, 2017 was $5,506.

13. SUBSEQUENT EVENTS

Management has evaluated the impact of all subsequent events on the Fund 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.

22 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Report of Independent Registered Public Accounting Firm

To the Shareholders of BlackRock Advantage Large Cap Value V.I. Fund and the Board of Directors of BlackRock Variable Series Funds, Inc.:

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying statement of assets and liabilities of BlackRock Advantage Large Cap Value V.I. Fund of BlackRock Variable Series Funds, Inc. (the “Fund”), including the schedule of investments, as of December 31, 2018, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of December 31, 2018, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s 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 Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its 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 Fund’s 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 15, 2019

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

REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 23

Glossary of Terms Used in this Report

Portfolio Abbreviation
S&P	Standard & Poor’s

24 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

DECEMBER 31, 2018

ANNUAL REPORT

BlackRock Variable Series Funds, Inc.

^Ø  BlackRock Advantage U.S. Total Market V.I. Fund

Not FDIC Insured • May Lose Value • No Bank Guarantee

Fund Summary  as of December 31, 2018 BlackRock Advantage U.S. Total Market V.I. Fund

Investment Objective

BlackRock Advantage U.S. Total Market V.I. Fund’s (the “Fund”)investment objective is to seek long-term growth of capital.

Portfolio Management Commentary

How did the Fund perform?

For the 12-month period ended December 31, 2018, the Fund underperformed its benchmark, the Russell 3000^® Index.

What factors influenced performance?

After beginning the year favoring growth stocks and trend-based strategies, investors later reversed course and sold out of more expensive, growth-oriented areas of the market on fears of expensive valuations and of approaching the end of the market cycle. As the sell-off was often disconnected with the broader sentiment of management and market participants, it created a difficult environment for sentiment-based signals and resulted in sentiment insights detracting from relative performance for the period. For example, signals that perform text-based analysis of sell-side research reports to gauge broker sentiment were notable detractors for the period. A signal that evaluates stocks based on seasonality effects on the stock price further detracted. An insight that uses geo-location data to determine consumer foot traffic patterns into various brick-and-mortar locations detracted as well. Given a rotation out of growth positions, investors typically flock to pockets of attractive relative valuation. However, as value stocks showed some of the strongest earnings trends heading into the fourth quarter, they sold-off amid the rotation away from growth expectations. As a result, certain value signals struggled including an insight that evaluates each stock based on forward sales relative to enterprise value. Finally, although quality signals held up well during the period, a signal that rewards stocks whose volatility of returns is less easily explained by broad factors hindered relative performance for the period.

As volatility and concerns about the approaching end of the current cycle increased, investors returned their focus to company fundamentals and to finding quality businesses offering sustainable growth prospects. In this light, the portfolio’s quality insights were the primary drivers of positive relative return over the course of the year. Among the portfolio’s fundamental signals, identifying companies with attractive cash flow growth relative to operating assets was the top contributor. Identifying companies with superior total factor productivity, or asset efficiency, also proved beneficial. Although the portfolio’s sentiment insights overall were a drag on relative performance, sentiment insights that provide a more quality-based lens into companies contributed positively. Specifically, an insight that gauges sentiment from informed bond investors contributed significantly, given interest rate volatility. Text-based analyses of management conference calls to determine longer-term trends in company fundamentals proved beneficial as well. Both of these signals held up extremely well in the fourth quarter, in a market environment that was generally challenging for trend- and sentiment-based insights. Elsewhere, while results for thematic signals were mixed for the period, identifying companies with lower leverage profiles benefitted performance given the market turmoil.

Describe recent portfolio activity.

Over the course of the period, the portfolio maintained a balanced allocation of risk across all major return drivers. However, a number of new stock selection insights were added to the portfolio. Among these insights, a model that evaluates companies on the basis of governance and the ethics and sustainability of its business practices from a social and environmental perspective was added to the Fund’s bucket of quality signals. In addition, a new insight was added that captures the location of hotel booking trends and invests in related stocks most sensitive to those areas. A new macro thematic model that evaluates industries across various inputs such as labor costs and hiring activity was added as well.

Describe portfolio positioning at period end.

Relative to the Russell 3000^® Index, the Fund was positioned essentially neutrally from a sector perspective. The Fund had slight overweight positions in utilities and health care and slight underweight positions in communications services and consumer discretionary.

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.

2 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Fund Summary  as of December 31, 2018 (continued) BlackRock Advantage U.S. Total Market V.I. Fund

TOTAL RETURN BASED ON A $10,000 INVESTMENT

^(a)  Assuming transaction costs, if any, and other operating expenses, including investment advisory fees. Does not include insurance-related fees and expenses.

^(b)  Under normal circumstances, the Fund seeks to invest at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in equity securities of U.S. issuers and derivatives that have similar economic characteristics to such securities. The Fund’s total returns prior to June 12, 2017 are the returns of the Fund when it followed different investment strategies under the name “BlackRock Value Opportunities V.I. Fund”.

^(c)  An index that measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.

Performance Summary for the Period Ended December 31, 2018

	6-Month Total Returns (b)			Average Annual Total Returns
				1 Year (b)			5 Years (b)			10 Years (b)
Class I(a)		(8.64	)%		(6.39	)%		5.34	%		12.95	%
Class II(a)		(8.71	)		(6.53	)		5.18			12.77
Class III(a)		(8.75	)		(6.65	)		5.13			12.71
Russell 3000® Index		(8.20	)		(5.24	)		7.91			13.18

^(a)  Average annual and cumulative total returns are based on changes in net asset value for the periods shown, and assume reinvestment of all distributions at net asset value on theex-dividend date. Insurance-related fees and expenses are not reflected in these returns. The Fund’s total returns prior to June 12, 2017 are the returns of the Fund when it followed different investment strategies under the name “BlackRock Value Opportunities V.I. Fund”.

^(b)  For the portion of the period, the Fund’s investment adviser waived a portion of its fee. Without such waiver, the Fund’s performance would have been lower.

Past performance is not indicative of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

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

Expense Example

	Actual						Hypothetical (a)
	Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Annualized Expense Ratio
Class I	$	1,000.00	$	913.60	$	2.70	$	1,000.00	$	1,022.38	$	2.85		0.56	%
Class II		1,000.00		912.90		3.42		1,000.00		1,021.63		3.62		0.71
Class III		1,000.00		912.50		3.90		1,000.00		1,021.12		4.13		0.81

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

^(b)  For each class of the Fund, expenses are equal to annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect theone-half year period shown).

See “Disclosure of Expenses” on the following page for further information on how expenses were calculated.

FUND SUMMARY 3

Fund Summary  as of December 31, 2018 (continued) BlackRock Advantage U.S. Total Market V.I. Fund

Portfolio Information

SECTOR ALLOCATION

Sector	Percent of Net Assets
Information Technology		20	%
Health Care		15
Financials		14
Industrials		10
Consumer Discretionary		10
Communication Services		9
Consumer Staples		6
Energy		4
Real Estate		4
Utilities		4
Materials		3
Short-Term Securities		4
Liabilities in Excess of Other Assets		(3	)

For Fund compliance purposes, the Fund’s sector classifications refer to one or more of the sectorsub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine sector sub classifications for reporting ease.

Disclosure of Expenses

Shareholders of the Fund may incur the following charges: (a) transactional expenses; and (b) operating expenses, including investment advisory fees, service and distribution fees, including12b-1 fees, acquired fund fees and expenses, and other fund expenses. The expense example on the previous page (which is based on a hypothetical investment of $1,000 invested on July 1, 2018 and held through December 31, 2018) is intended to assist shareholders both in calculating expenses based on an investment in the Fund and in comparing these expenses with similar costs of investing in other mutual funds.

The expense example provides 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 share class under the heading entitled “Expenses Paid During the Period.”

The expense example also provides information about hypothetical account values and hypothetical expenses based on the 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 the Fund and other funds, compare the 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.

The expenses shown in the expense example are intended to highlight shareholders’ ongoing costs only and do not reflect any transactional expenses, such as sales charges, if any. Therefore, the hypothetical example is 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 Fund’s 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 the Fund can realize on an investment and/or may result in lower distributions paid to shareholders. The Fund’s investments in these instruments, if any, are discussed in detail in the Notes to Financial Statements.

4 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments December 31, 2018 BlackRock Advantage U.S. Total Market V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Common Stocks — 98.8%
Aerospace & Defense — 2.3%
Boeing Co. (The)		5,267	$	1,698,608
Curtiss-Wright Corp.		1,433		146,338
General Dynamics Corp.		4,681		735,900
Lockheed Martin Corp.		1,131		296,141
Raytheon Co.(a)		15,203		2,331,380
				5,208,367
Airlines — 0.4%
American Airlines Group, Inc.		1,469		47,169
Southwest Airlines Co.		18,535		861,507
				908,676
Auto Components — 0.1%
Dana, Inc.		13,600		185,368
Automobiles — 0.3%
Ford Motor Co.		32,236		246,605
General Motors Co.		10,997		367,850
				614,455
Banks — 6.1%
Bank of America Corp.		183,999		4,533,735
BB&T Corp.		23,376		1,012,648
Citigroup, Inc.		16,469		857,376
Citizens Financial Group, Inc.		28,628		851,111
East West Bancorp, Inc.		3,772		164,195
First Horizon National Corp.		45,956		604,781
First Republic Bank(a)		16,363		1,421,945
Independent Bank Corp.		22,813		479,529
JPMorgan Chase & Co.		20,329		1,984,517
Republic First Bancorp, Inc.(b)		34,663		206,938
Shore Bancshares, Inc.		4,547		66,114
Synovus Financial Corp.		8,420		269,356
TriState Capital Holdings, Inc.(b)		1,748		34,016
Wells Fargo & Co.		28,341		1,305,953
				13,792,214
Beverages — 1.3%
Brown-Forman Corp., Class B		1,429		67,992
Coca-Cola European Partners plc		10,990		503,891
Constellation Brands, Inc., Class A		2,390		384,360
Molson Coors Brewing Co., Class B		1,544		86,711
Monster Beverage Corp.(b)		9,825		483,587
PepsiCo, Inc.		13,304		1,469,826
				2,996,367
Biotechnology — 4.2%
AbbVie, Inc.		22,063		2,033,988
Amgen, Inc.		9,764		1,900,758
Biogen, Inc.(b)		1,174		353,280
Celgene Corp.(b)		22,323		1,430,681
Genomic Health, Inc.(b)		3,792		244,243
Gilead Sciences, Inc.		37,889		2,369,957
Incyte Corp.(b)		3,950		251,180
Regeneron Pharmaceuticals, Inc.(b)		197		73,579
Vertex Pharmaceuticals, Inc.(b)		5,042		835,510
				9,493,176
Building Products — 0.3%
Allegion plc		7,628		608,028
Capital Markets — 3.9%
BrightSphere Investment Group plc		9,722		103,831
Charles Schwab Corp. (The)		62,063		2,577,476
CME Group, Inc.(a)		7,795		1,466,395
Evercore, Inc., Class A		355		25,404

Security	Shares		Value
Capital Markets (continued)
Invesco Ltd.		12,842	$	214,975
Moelis & Co., Class A		14,909		512,572
Morgan Stanley		72,341		2,868,321
S&P Global, Inc.		3,495		593,940
TD Ameritrade Holding Corp.		9,174		449,159
Westwood Holdings Group, Inc.		3,542		120,428
				8,932,501
Chemicals — 1.7%
Air Products & Chemicals, Inc.		14,658		2,346,013
Celanese Corp.		1,421		127,847
Eastman Chemical Co.		5,968		436,321
Ecolab, Inc.		4,537		668,527
Innospec, Inc.		313		19,331
Linde plc		2,087		325,655
				3,923,694
Commercial Services & Supplies — 0.3%
McGrath RentCorp		8,530		439,125
Steelcase, Inc., Class A		11,993		177,856
				616,981
Communications Equipment — 1.2%
Calix, Inc.(b)		18,233		177,772
Ciena Corp.(b)		5,299		179,689
Cisco Systems, Inc.		36,292		1,572,532
Motorola Solutions, Inc.		4,034		464,071
Palo Alto Networks, Inc.(a)(b)		1,604		302,114
				2,696,178
Construction & Engineering — 0.3%
Comfort Systems USA, Inc.		16,068		701,850
Construction Materials — 0.1%
Martin Marietta Materials, Inc.		624		107,247
Vulcan Materials Co.		313		30,924
				138,171
Consumer Finance — 0.3%
American Express Co.		5,070		483,272
Regional Management Corp.(b)		8,254		198,509
				681,781
Containers & Packaging — 0.3%
Packaging Corp. of America		7,812		651,989
WestRock Co.		3,472		131,103
				783,092
Diversified Consumer Services — 0.2%
H&R Block, Inc.		20,088		509,633
Diversified Financial Services — 1.4%(b)
Berkshire Hathaway, Inc., Class B		15,685		3,202,563
On Deck Capital, Inc.		8,214		48,463
				3,251,026
Diversified Telecommunication Services — 1.2%
AT&T, Inc.		21,882		624,513
Cogent Communications Holdings, Inc.		7,558		341,697
Verizon Communications, Inc.		31,546		1,773,516
				2,739,726
Electric Utilities — 2.4%
Eversource Energy		4,964		322,858
IDACORP, Inc.		18,129		1,687,085
OGE Energy Corp.		21,454		840,782
Pinnacle West Capital Corp.		13,620		1,160,424
Portland General Electric Co.		26,715		1,224,883
Xcel Energy, Inc.		2,315		114,060
				5,350,092

SCHEDULE OF INVESTMENTS 5

Schedule of Investments  (continued) December 31, 2018 BlackRock Advantage U.S. Total Market V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Electrical Equipment — 1.1%
AMETEK, Inc.		10,071	$	681,807
Hubbell, Inc.		796		79,075
Rockwell Automation, Inc.		11,524		1,734,131
				2,495,013
Electronic Equipment, Instruments & Components — 0.8%
CDW Corp.		10,947		887,255
Fitbit, Inc., Class A(b)		24,123		119,891
National Instruments Corp.		18,106		821,650
				1,828,796
Energy Equipment & Services — 0.5%
Archrock, Inc.		7,412		55,516
Halliburton Co.		36,745		976,682
Nabors Industries Ltd.		41,356		82,712
ProPetro Holding Corp.(b)		2,013		24,800
				1,139,710
Entertainment — 1.1%
Activision Blizzard, Inc.		3,563		165,929
Electronic Arts, Inc.(b)		4,556		359,514
Netflix, Inc.(b)		2,929		783,976
Twenty-First Century Fox, Inc., Class A		4,413		212,353
Viacom, Inc., Class A		2,896		80,538
Viacom, Inc., Class B		24,774		636,692
World Wrestling Entertainment, Inc., Class A		4,470		333,998
				2,573,000
Equity Real Estate Investment Trusts (REITs) — 4.0%
EastGroup Properties, Inc.		311		28,528
Highwoods Properties, Inc.		12,622		488,345
Host Hotels & Resorts, Inc.		72,591		1,210,092
Outfront Media, Inc.		7,128		129,159
Park Hotels & Resorts, Inc.		28,524		741,054
Prologis, Inc.		47,471		2,787,497
Realty Income Corp.		40,802		2,572,158
Ryman Hospitality Properties, Inc.		307		20,474
Simon Property Group, Inc.		5,497		923,441
SL Green Realty Corp.		1,935		153,020
				9,053,768
Food & Staples Retailing — 0.9%
Costco Wholesale Corp.		9,226		1,879,429
Kroger Co. (The)		984		27,060
Walmart, Inc.		569		53,002
				1,959,491
Food Products — 2.1%
Archer-Daniels-Midland Co.		48,032		1,967,871
Hershey Co. (The)		24,343		2,609,083
Hormel Foods Corp.		919		39,223
Lamb Weston Holdings, Inc.		1,957		143,957
				4,760,134
Gas Utilities — 0.5%
Atmos Energy Corp.		11,074		1,026,781
Chesapeake Utilities Corp.(a)		1,709		138,942
				1,165,723
Health Care Equipment & Supplies — 3.2%
Abbott Laboratories		10,829		783,262
ABIOMED, Inc.(b)		337		109,539
Danaher Corp.		20,563		2,120,457
DexCom, Inc.(b)		1,255		150,349
IDEXX Laboratories, Inc.(b)		1,657		308,235
Intuitive Surgical, Inc.(b)		1,447		692,997
Masimo Corp.(b)		3,595		385,995
Medtronic plc		4,420		402,043

Security	Shares		Value
Health Care Equipment & Supplies (continued)
STERIS plc		2,857	$	305,270
Stryker Corp.		12,999		2,037,593
				7,295,740
Health Care Providers & Services — 3.4%
AmerisourceBergen Corp.		10,256		763,046
Cardinal Health, Inc.		26,234		1,170,036
CVS Health Corp.		6,933		454,250
Halfmoon Parent, Inc.		785		149,169
Humana, Inc.		3,471		994,372
McKesson Corp.		8,029		886,964
Quest Diagnostics, Inc.(a)		1,251		104,171
UnitedHealth Group, Inc.		10,916		2,719,394
WellCare Health Plans, Inc.(b)		2,104		496,733
				7,738,135
Health Care Technology — 0.4%(b)
athenahealth, Inc.		220		29,025
Veeva Systems, Inc., Class A		9,044		807,810
				836,835
Hotels, Restaurants & Leisure — 2.3%
Carnival Corp.		11,940		588,642
Darden Restaurants, Inc.		5,354		534,651
Domino’s Pizza, Inc.		4,202		1,042,054
Dunkin’ Brands Group, Inc.(a)		6,628		424,987
Eldorado Resorts, Inc.(b)		754		27,302
Extended Stay America, Inc.		16,217		251,364
Hilton Worldwide Holdings, Inc.		3,643		261,567
Las Vegas Sands Corp.		4,517		235,110
Marriott International, Inc., Class A		2,762		299,843
McDonald’s Corp.		7,018		1,246,186
Norwegian Cruise Line Holdings Ltd.(b)		4,767		202,073
				5,113,779
Household Durables — 0.4%
DR Horton, Inc.		1,196		41,454
Garmin Ltd.		10,630		673,092
Meritage Homes Corp.(b)		1,592		58,458
Roku, Inc.(b)		1,027		31,467
William Lyon Homes, Class A(b)		4,203		44,930
				849,401
Household Products — 0.9%
Church & Dwight Co., Inc.		29,895		1,965,895
Clorox Co. (The)		397		61,194
				2,027,089
Industrial Conglomerates — 0.7%
3M Co.		6,285		1,197,544
General Electric Co.		40,348		305,434
Roper Technologies, Inc.		477		127,130
				1,630,108
Insurance — 2.1%
Allstate Corp. (The)		19,522		1,613,103
American Financial Group, Inc.		2,798		253,303
Arthur J Gallagher & Co.		7,825		576,702
Athene Holding Ltd., Class A(b)		8,174		325,570
First American Financial Corp.		1,023		45,667
Hartford Financial Services Group, Inc. (The)		20,290		901,891
Kinsale Capital Group, Inc.		991		55,060
Lincoln National Corp.		2,191		112,420
Progressive Corp. (The)		936		56,469
Unum Group		28,139		826,724
				4,766,909

6 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Advantage U.S. Total Market V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Interactive Media & Services — 4.1%(b)
Alphabet, Inc., Class A		1,864	$	1,947,805
Alphabet, Inc., Class C		2,718		2,814,788
Care.com, Inc.		12,001		231,739
Cargurus, Inc.		7,994		269,638
Facebook, Inc., Class A		24,921		3,266,894
TripAdvisor, Inc.		3,301		178,056
Twitter, Inc.		3,470		99,728
Yelp, Inc.		12,244		428,418
				9,237,066
Internet & Direct Marketing Retail — 2.6%(b)
Amazon.com, Inc.		3,823		5,742,031
Booking Holdings, Inc.		124		213,580
				5,955,611
IT Services — 4.7%
Accenture plc, Class A		1,140		160,751
Automatic Data Processing, Inc.		18,286		2,397,660
Booz Allen Hamilton Holding Corp.		19,208		865,704
Broadridge Financial Solutions, Inc.		1,588		152,845
Fidelity National Information Services, Inc.		14,202		1,456,415
First Data Corp., Class A(b)		21,470		363,058
GoDaddy, Inc., Class A(b)		14,527		953,262
Mastercard, Inc., Class A		9,855		1,859,146
NIC, Inc.		24,946		311,326
PayPal Holdings, Inc.(b)		6,954		584,762
Square, Inc., Class A(b)		5,140		288,303
Total System Services, Inc.		1,665		135,348
Unisys Corp.(b)		2,503		29,110
VeriSign, Inc.(b)		6,005		890,481
Visa, Inc., Class A		1,070		141,176
				10,589,347
Life Sciences Tools & Services — 0.4%
Agilent Technologies, Inc.		7,538		508,513
Medpace Holdings, Inc.(b)		4,178		221,142
Thermo Fisher Scientific, Inc.		1,198		268,100
				997,755
Machinery — 3.6%
Crane Co.		21,058		1,519,966
Illinois Tool Works, Inc.		17,157		2,173,620
Ingersoll-Rand plc		19,011		1,734,374
ITT, Inc.		2,812		135,735
PACCAR, Inc.		37,120		2,121,037
Snap-on, Inc.		2,724		395,770
				8,080,502
Media — 1.8%
Altice USA, Inc., Class A		5,419		89,522
AMC Networks, Inc., Class A(b)		3,172		174,079
CBS Corp.(Non-Voting), Class B		7,654		334,633
Clear Channel Outdoor Holdings, Inc., Class A		22,667		117,642
Comcast Corp., Class A		34,403		1,171,422
Emerald Expositions Events, Inc.		5,160		63,674
Gray Television, Inc.(b)		26,584		391,848
Interpublic Group of Cos., Inc. (The)		24,294		501,185
Liberty Media Corp.-Liberty SiriusXM, Class A(b)		6,341		233,349
Liberty Media Corp.-Liberty SiriusXM, Class C(b)		26,815		991,619
MSG Networks, Inc., Class A(b)		2,741		64,578
Sinclair Broadcast Group, Inc., Class A		1,790		47,149
				4,180,700
Metals & Mining — 0.4%
Carpenter Technology Corp.		1,719		61,214
Newmont Mining Corp.		12,245		424,289
Reliance Steel & Aluminum Co.		4,535		322,756
				808,259

Security	Shares		Value
Multiline Retail — 0.9%
Target Corp.		31,969	$	2,112,831
Multi-Utilities — 0.1%
Avista Corp.		588		24,978
Consolidated Edison, Inc.		1,258		96,187
				121,165
Oil, Gas & Consumable Fuels — 4.0%
Anadarko Petroleum Corp.		27,233		1,193,895
Antero Resources Corp.(b)		6,447		60,537
Apache Corp.		3,213		84,341
Chevron Corp.		6,978		759,137
Concho Resources, Inc.(b)		1,952		200,646
ConocoPhillips		24,052		1,499,642
CONSOL Energy, Inc.(b)		1,758		55,746
Continental Resources, Inc.(b)		4,624		185,839
Exxon Mobil Corp.		26,054		1,776,622
Kinder Morgan, Inc.		49,966		768,477
Newfield Exploration Co.(b)		1,768		25,919
Occidental Petroleum Corp.		11,928		732,141
Phillips 66		12,835		1,105,735
Plains GP Holdings LP, Class A(b)		2,407		48,381
Whiting Petroleum Corp.(b)		3,573		81,071
Williams Cos., Inc. (The)		17,873		394,100
				8,972,229
Personal Products — 0.5%
Estee Lauder Cos., Inc. (The), Class A		7,400		962,740
USANA Health Sciences, Inc.(b)		1,212		142,689
				1,105,429
Pharmaceuticals — 3.8%
Bristol-Myers Squibb Co.		21,394		1,112,060
Eli Lilly & Co.		15,126		1,750,381
Johnson & Johnson		19,402		2,503,828
Merck & Co., Inc.		24,630		1,881,978
Zoetis, Inc.		14,921		1,276,343
				8,524,590
Professional Services — 0.6%
Insperity, Inc.		10,555		985,415
Kforce, Inc.		7,356		227,448
Robert Half International, Inc.		2,327		133,104
				1,345,967
Real Estate Management & Development — 0.1%
Marcus & Millichap, Inc.(b)		8,720		299,358
Road & Rail — 0.6%
Landstar System, Inc.		5,005		478,828
Norfolk Southern Corp.		4,195		627,320
Universal Logistics Holdings, Inc.		9,808		177,427
				1,283,575
Semiconductors & Semiconductor Equipment — 3.1%
Amkor Technology, Inc.(b)		62,281		408,563
Analog Devices, Inc.		6,956		597,034
Applied Materials, Inc.		11,511		376,870
Broadcom, Inc.		270		68,656
Cirrus Logic, Inc.(b)		2,462		81,689
Intel Corp.		43,069		2,021,228
Maxim Integrated Products, Inc.(a)		14,934		759,394
NVIDIA Corp.		6,838		912,873
NXP Semiconductors NV(b)		1,168		85,591
Skyworks Solutions, Inc.		2,924		195,966
Synaptics, Inc.(b)		732		27,238
Texas Instruments, Inc.		11,752		1,110,564
Xilinx, Inc.		5,444		463,665
				7,109,331

SCHEDULE OF INVESTMENTS 7

Schedule of Investments  (continued) December 31, 2018 BlackRock Advantage U.S. Total Market V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Software — 6.2%
Atlassian Corp. plc, Class A(a)(b)		198	$	17,618
Dropbox, Inc., Class A(b)		6,066		123,928
Intuit, Inc.		5,008		985,825
Microsoft Corp.		67,540		6,860,038
New Relic, Inc.(b)		3,805		308,091
Oracle Corp.		34,944		1,577,722
RingCentral, Inc., Class A(b)		2,509		206,842
salesforce. com, Inc.(b)		21,921		3,002,519
ServiceNow, Inc.(b)		1,057		188,199
Ultimate Software Group, Inc. (The)(b)		979		239,728
VMware, Inc., Class A(b)		2,710		371,622
Workiva, Inc.(b)		6,887		247,174
				14,129,306
Specialty Retail — 2.0%
Asbury Automotive Group, Inc.(b)		8,258		550,478
AutoNation, Inc.(b)		5,198		185,569
Best Buy Co., Inc.		442		23,408
Dick’s Sporting Goods, Inc.		3,540		110,448
Five Below, Inc.(b)		2,677		273,911
Home Depot, Inc. (The)		2,950		506,869
Lithia Motors, Inc., Class A(a)		7,745		591,176
MarineMax, Inc.(b)		6,294		115,243
Penske Automotive Group, Inc.		16,556		667,538
Ross Stores, Inc.		3,432		285,542
Sonic Automotive, Inc., Class A		12,162		167,349
TJX Cos., Inc. (The)		23,477		1,050,361
				4,527,892
Technology Hardware, Storage & Peripherals — 3.8%
Apple, Inc.		43,111		6,800,329
Dell Technologies, Inc., Class C(b)		6,905		337,432
Hewlett Packard Enterprise Co.		2,975		39,299
HP, Inc.		54,078		1,106,436
Pure Storage, Inc., Class A(b)		24,397		392,304
				8,675,800
Textiles, Apparel & Luxury Goods — 0.9%
Lululemon Athletica, Inc.(b)		272		33,078
NIKE, Inc., Class B		21,617		1,602,684
Ralph Lauren Corp.		584		60,421
VF Corp.		4,765		339,935
				2,036,118
Thrifts & Mortgage Finance — 0.3%
Essent Group Ltd.(b)		3,639		124,381
Meridian Bancorp, Inc.		1,460		20,907

Security	Shares		Value
Thrifts & Mortgage Finance (continued)
Riverview Bancorp, Inc.		14,015	$	102,029
United Community Financial Corp.		46,814		414,304
				661,621
Tobacco — 0.6%
Altria Group, Inc.		17,540		866,301
Philip Morris International, Inc.		5,848		390,412
				1,256,713
Trading Companies & Distributors — 0.0%
GATX Corp.(a)		1,133		80,228
Water Utilities — 0.8%
American Water Works Co., Inc.		21,307		1,934,036
Wireless Telecommunication Services — 0.2%
Sprint Corp.(a)(b)		15,969		92,940
Telephone & Data Systems, Inc.		14,460		470,528
				563,468
Total Common Stocks — 98.8% (Cost: $240,143,792)				223,953,904
Total Long-Term Investments — 98.8% (Cost: $240,143,792)				223,953,904
Short-Term Securities — 3.9%(c)(e)
BlackRock Liquidity Funds,T-Fund, Institutional Class, 2.32%		2,833,530		2,833,530
SL Liquidity Series, LLC, Money Market Series, 2.57%(d)		6,092,861		6,092,252
Total Short-Term Securities — 3.9% (Cost: $8,926,001)				8,925,782
Total Investments — 102.7% (Cost: $249,069,793)				232,879,686
Liabilities in Excess of Other Assets — (2.7)%				(6,088,845	)
Net Assets — 100.0%			$	226,790,841

^(a)  Security, or a portion of the security, is on loan.

^(b)  Non-income producing security.

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

^(d)  Security was purchased with the cash collateral from loaned securities.

^(e)  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, 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		1,558,684		1,274,846			2,833,530	$	2,833,530	$	40,259		$	—		$	—
SL Liquidity Series, LLC, Money Market Series		8,368,069		(2,275,208	)		6,092,861		6,092,252		11,339	(b)		(53	)		(149	)
								$	8,925,782	$	51,598		$	(53	)	$	(149	)

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

^(b)  Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.

For Fund compliance purposes, the Fund’s industry classifications refer to one or more of the industrysub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such industrysub-classifications for reporting ease.

8 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Advantage U.S. Total Market V.I. Fund

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

Description	Number of Contracts		Expiration Date		Notional Amount (000)		Value/ Unrealized Appreciation (Depreciation)
Long Contracts
S&P 500E-Mini Index		26		03/15/19	$	3,257	$	(48,471	)

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statement of Assets and Liabilities were as follows:

	Commodity Contracts		Credit Contracts		Equity Contracts		Foreign Currency Exchange Contracts		Interest Rate Contracts		Other Contracts		Total
Liabilities — Derivative Financial Instruments
Futures contracts
Net unrealized depreciation(a)	$	—	$	—	$	48,471	$	—	$	—	$	—	$	48,471

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

For the year ended December 31, 2018, the effect of derivative financial instruments in the Statement of Operations were 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	$	—	$	—	$	(26,076	)	$	—	$	—	$	—	$	(26,076	)
Net Change in Unrealized Appreciation (Depreciation) on:
Futures contracts	$	—	$	—	$	(46,095	)	$	—	$	—	$	—	$	(46,095	)

Average Quarterly Balances of Outstanding Derivative Financial Instruments

Futures contracts:
Average notional value of contracts — long	$	2,882,623

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

SCHEDULE OF INVESTMENTS 9

Schedule of Investments  (continued) December 31, 2018 BlackRock Advantage U.S. Total Market V.I. Fund

Fair Value Hierarchy as of Period End

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

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

	Level 1			Level 2		Level 3		Total
Assets:
Investments:
Long-Term Investments:
Common Stocks(a)	$	223,953,904		$	—	$	—	$	223,953,904
Short-Term Securities		2,833,530			—		—		2,833,530
Subtotal	$	226,787,434		$	—	$	—	$	226,787,434
Investments valued at NAV(b)									6,092,252
Total Investments								$	232,879,686
Derivative Financial Instruments(c)
Liabilities:
Equity contracts	$	(48,471	)	$	—	$	—	$	(48,471	)

^(a)  See above Schedule of Investments for values in each industry.

^(b)  As of December 31, 2018, certain investments of the Fund were fair valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

^(c)  Derivative financial instruments are futures contracts which 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.

10 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Statement of Assets and Liabilities

December 31, 2018

	BlackRock Advantage U.S. Total Market V.I. Fund
ASSETS
Investments at value — unaffiliated (including securities loaned at value of $5,983,384) (cost — $240,143,792)	$	223,953,904
Investments at value — affiliated (cost — $8,926,001)		8,925,782
Cash pledged for futures contracts		122,000
Foreign currency at value (cost — $785)		714
Receivables:
Investments sold		2,389,273
Securities lending income — affiliated		1,053
Capital shares sold		13,517
Dividends — affiliated		4,268
Dividends — unaffiliated		394,169
Variation margin on futures contracts		17,831
Prepaid expenses		263
Total assets		235,822,774
LIABILITIES
Bank overdraft		4,479
Cash collateral on securities loaned at value		6,087,218
Payables:
Investments purchased		2,444,175
Capital shares redeemed		63,262
Distribution fees		1,485
Transfer agent fees		157,719
Board realignment and consolidation		10,160
Investment advisory fees		104,168
Directors’ and Officer’s fees		5,780
Other affiliates		568
Other accrued expenses		152,919
Total liabilities		9,031,933
NET ASSETS	$	226,790,841
NET ASSETS CONSIST OF
Paid-in capital	$	245,325,425
Accumulated loss		(18,534,584	)
NET ASSETS	$	226,790,841
NET ASSET VALUE
Class I — Based on net assets of $218,975,720 and 10,372,584 shares outstanding, 100 million shares authorized, $0.10 par value.	$	21.11
Class II — Based on net assets of $2,741,797 and 130,186 shares outstanding, 100 million shares authorized, $0.10 par value.	$	21.06
Class III — Based on net assets of $5,073,324 and 345,981 shares outstanding, 10 million shares authorized, $0.10 par value.	$	14.66

See notes to financial statements.

FINANCIAL STATEMENTS 11

Statement of Operations

Year Ended December 31, 2018

	BlackRock Advantage U.S. Total Market V.I. Fund
INVESTMENT INCOME
Dividends — affiliated	$	40,259
Dividends — unaffiliated		4,824,420
Securities lending income — affiliated — net		11,339
Foreign taxes withheld		(87	)
Total investment income		4,875,931
EXPENSES
Investment advisory		1,967,503
Transfer agent — class specific		462,380
Professional		76,698
Accounting services		63,436
Printing		44,894
Custodian		37,048
Distribution — class specific		18,682
Directors and Officer		15,892
Board realignment and consolidation		10,316
Transfer agent		5,001
Miscellaneous		30,865
Total expenses		2,732,715
Less:
Fees waived and/or reimbursed by the Manager		(798,948	)
Transfer agent fees waived and/or reimbursed — class specific		(462,378	)
Total expenses after fees waived and/or reimbursed		1,471,389
Net investment income		3,404,542
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — affiliated		(53	)
Investments — unaffiliated		19,944,299
Futures contracts		(26,076	)
		19,918,170
Net change in unrealized appreciation (depreciation) on:
Investments — affiliated		(149	)
Investments — unaffiliated		(37,914,172	)
Foreign currency translations		(62	)
Futures contracts		(46,095	)
		(37,960,478	)
Net realized and unrealized loss		(18,042,308	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(14,637,766	)

See notes to financial statements.

12 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Statements of Changes in Net Assets

	BlackRock Advantage U.S. Total Market V.I. Fund
	Year Ended December 31,
	2018			2017
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income	$	3,404,542		$	2,321,558
Net realized gain		19,918,170			47,664,838
Net change in unrealized appreciation (depreciation)		(37,960,478	)		(15,719,118	)
Net increase (decrease) in net assets resulting from operations		(14,637,766	)		34,267,278
DISTRIBUTIONS TO SHAREHOLDERS(a)(b)
Class I		(26,509,174	)		(52,422,650	)
Class II		(326,810	)		(639,246	)
Class III		(830,484	)		(1,372,126	)
Decrease in net assets resulting from distributions to shareholders		(27,666,468	)		(54,434,022	)
CAPITAL SHARE TRANSACTIONS
Net increase (decrease) in net assets derived from capital share transactions		(1,231,558	)		30,391,828
NET ASSETS(b)
Total increase (decrease) in net assets		(43,535,792	)		10,225,084
Beginning of year		270,326,633			260,101,549
End of year	$	226,790,841		$	270,326,633

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

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

See notes to financial statements.

FINANCIAL STATEMENTS 13

Financial Highlights  

(For a share outstanding throughout each period)

	BlackRock Advantage U.S. Total Market V.I. Fund
	Class I
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	25.63		$	27.93		$	23.24		$	26.96		$	27.48
Net investment income(a)		0.34			0.26	(b)		0.07			0.07			0.10
Net realized and unrealized gain (loss)		(2.00	)		3.60			5.43			(1.80	)		1.35
Net increase (decrease) from investment operations		(1.66	)		3.86			5.50			(1.73	)		1.45
Distributions(c)
From net investment income		(0.34	)		(0.27	)		(0.07	)		(0.07	)		(0.08	)
From net realized gain		(2.52	)		(5.89	)		(0.74	)		(1.92	)		(1.89	)
From return of capital		—			—			—			(0.00	)(d)		—
Total distributions		(2.86	)		(6.16	)		(0.81	)		(1.99	)		(1.97	)
Net asset value, end of year	$	21.11		$	25.63		$	27.93		$	23.24		$	26.96
Total Return(e)
Based on net asset value		(6.39	)%		14.05	%		23.65	%		(6.61	)%		5.22	%
Ratios to Average Net Assets
Total expenses		1.03	%		1.05	%		1.01	%		1.01	%		1.02	%
Total expenses after fees waived and/or reimbursed		0.55	%		0.71	%		0.92	%		0.90	%		0.90	%
Net investment income		1.31	%		0.91	%(b)		0.28	%		0.26	%		0.37	%
Supplemental Data
Net assets, end of year (000)	$	218,976		$	261,872		$	250,567		$	220,681		$	260,860
Portfolio turnover rate		150	%		179	%		78	%		61	%		57	%

^(a)  Based on average shares outstanding.

^(b)  Net investment income per share and the ratio of net investment income to average net assets includes $0.05 per share and 0.18%, respectively, resulting from a non-recurring dividend.

^(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, excludes insurance-related fees and expenses and assumes the reinvestment of distributions.

See notes to financial statements.

14 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Financial Highlights  (continued)

(For a share outstanding throughout each period)

	BlackRock Advantage U.S. Total Market V.I. Fund (continued)
	Class II
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	25.57		$	27.88		$	23.21		$	26.91		$	27.43
Net investment income(a)		0.30			0.20	(b)		0.03			0.02			0.05
Net realized and unrealized gain (loss)		(1.99	)		3.60			5.41			(1.77	)		1.34
Net increase (decrease) from investment operations		(1.69	)		3.80			5.44			(1.75	)		1.39
Distributions(c)
From net investment income		(0.30	)		(0.22	)		(0.03	)		(0.03	)		(0.02	)
From net realized gain		(2.52	)		(5.89	)		(0.74	)		(1.92	)		(1.89	)
From return of capital		—			—			—			(0.00	)(d)		—
Total distributions		(2.82	)		(6.11	)		(0.77	)		(1.95	)		(1.91	)
Net asset value, end of year	$	21.06		$	25.57		$	27.88		$	23.21		$	26.91
Total Return(e)
Based on net asset value		(6.53	)%		13.85	%		23.40	%		(6.76	)%		5.03	%
Ratios to Average Net Assets
Total expenses		1.22	%		1.22	%		1.20	%		1.18	%		1.19	%
Total expenses after fees waived and/or reimbursed		0.70	%		0.88	%		1.09	%		1.07	%		1.07	%
Net investment income		1.16	%		0.72	%(b)		0.10	%		0.08	%		0.20	%
Supplemental Data
Net assets, end of year (000)	$	2,742		$	3,131		$	3,351		$	3,120		$	3,764
Portfolio turnover rate		150	%		179	%		78	%		61	%		57	%

^(a)  Based on average shares outstanding.

^(b)  Net investment income per share and the ratio of net investment income to average net assets includes $0.05 per share and 0.17%, respectively, resulting from a non-recurring dividend.

^(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, excludes insurance-related fees and expenses and assumes the reinvestment of distributions.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 15

Financial Highlights  (continued)

(For a share outstanding throughout each period)

	BlackRock Advantage U.S. Total Market V.I. Fund (continued)
	Class III
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	18.74		$	21.89		$	18.36		$	21.73		$	22.50
Net investment income(a)		0.20			0.14	(b)		0.01			0.01			0.04
Net realized and unrealized gain (loss)		(1.46	)		2.82			4.29			(1.43	)		1.11
Net increase (decrease) from investment operations		(1.26	)		2.96			4.30			(1.42	)		1.15
Distributions(c)
From net investment income		(0.30	)		(0.22	)		(0.03	)		(0.03	)		(0.03	)
From net realized gain		(2.52	)		(5.89	)		(0.74	)		(1.92	)		(1.89	)
From return of capital		—			—			—			(0.00	)(d)		—
Total distributions		(2.82	)		(6.11	)		(0.77	)		(1.95	)		(1.92	)
Net asset value, end of year	$	14.66		$	18.74		$	21.89		$	18.36		$	21.73
Total Return(e)
Based on net asset value		(6.65	)%		13.83	%		23.41	%		(6.78	)%		5.07	%
Ratios to Average Net Assets
Total expenses		1.32	%		1.32	%		1.29	%		1.29	%		1.25	%
Total expenses after fees waived and/or reimbursed		0.80	%		0.95	%		1.11	%		1.09	%		1.09	%
Net investment income		1.06	%		0.65	%(b)		0.08	%		0.06	%		0.18	%
Supplemental Data
Net assets, end of year (000)	$	5,073		$	5,324		$	6,184		$	6,152		$	8,002
Portfolio turnover rate		150	%		179	%		78	%		61	%		57	%

^(a)  Based on average shares outstanding.

^(b)  Net investment income per share and the ratio of net investment income to average net assets includes $0.04 per share and 0.17%, respectively, resulting from a non-recurring dividend.

^(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, excludes insurance-related fees and expenses and assumes the reinvestment of distributions.

See notes to financial statements.

16 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements

1. ORGANIZATION

BlackRock Variable Series Funds, Inc. (the “Company”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as anopen-end management investment company. The Company is organized as a Maryland corporation that is comprised of 15 separate portfolios. The funds offer shares to insurance companies for their separate accounts to fund benefits under certain variable annuity and variable life insurance contracts. The financial statements presented are for BlackRock Advantage U.S. Total Market V.I. Fund (the “Fund”). The Fund is classified as diversified. Class I, Class II and Class III Shares have equal voting, dividend, liquidation and other rights, except that only shares of the respective classes are entitled to vote on matters concerning only that class. In addition, Class II and Class III Shares bear certain expenses related to the distribution of such shares.

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

2. SIGNIFICANT ACCOUNTING POLICIES

The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. The 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 Fund is 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, are recognized on an accrual basis.

Foreign Currency Translation: The 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.

The 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 Statement 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. The 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 the Fund enters into certain investments (e.g., futures contracts) that would be treated as “senior securities” for 1940 Act purposes, the Fund may segregate or designate on its books and records cash or liquid assets having a market value at least equal to the amount of its future obligations under such investments. Doing so allows the investment to be excluded from treatment as a “senior security.” Furthermore, if required by an exchange or counterparty agreement, the Fund 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 Fund are recorded on theex-dividend date. Distribution of capital gains are recorded on theex-dividend date and made at least annually. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP.

Recent Accounting Standards: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 Fund.

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

Other: Expenses directly related to the Fund or its classes are charged to the 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 Fund and other shared expenses prorated to the Fund are allocated daily to each class based on its relative net assets or other appropriate methods.

3. INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS

Investment Valuation Policies: The Fund’s 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 Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Fund determines the fair values of its financial instruments using various independent

NOTESTO FINANCIAL STATEMENTS 17

Notes to Financial Statements  (continued)

dealers or pricing services under policies approved by the Board of Directors of the Company (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 the Fund’s assets and liabilities:

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

Generally, trading in foreign instruments is substantially completed each day at various times prior to the close of trading on the NYSE. Occasionally, events affecting the values of such instruments may occur between the foreign market close and the close of trading on the NYSE that may not be reflected in the computation of the Fund’s net assets. Each business day, the Fund uses a pricing service to assist with the valuation of certain foreign exchange-traded equity securities and foreign exchange-traded andover-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 net asset value (“NAV”) each business day.

• The Fund values its investment in SL Liquidity Series, LLC, Money Market Series (the “Money Market Series”) at fair value, which is ordinarily based upon its pro rata ownership in the underlying fund’s net assets. The Money Market Series seeks current income consistent with maintaining liquidity and preserving capital. Although the Money Market Series is not registered under the 1940 Act, its investments may follow the parameters of investments by a money market fund that is subject to Rule2a-7 under the 1940 Act.

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

If events (e.g., a company announcement, market volatility or a natural disaster) occur that are expected to materially affect the value of such investments, or in the event that the application of these methods of valuation results in a price for an investment that is deemed not to be representative of the market value of such investment, or if a price is not available, the investment will be valued by the Global Valuation Committee, or its delegate, in accordance with a policy approved by the Board as reflecting fair value (“Fair Valued Investments”). The fair valuation approaches that may be used by the Global Valuation Committee will include market approach, income approach and cost approach. Valuation techniques such as discounted cash flow, use of market comparables and matrix pricing are types of valuation approaches and are typically used in determining fair value. When determining the price for Fair Valued Investments, the Global Valuation Committee, or its delegate, seeks to determine the price that the 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. The pricing of all Fair Valued Investments is subsequently reported to the Board or a committee thereof on a quarterly basis.

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 the Fund has the ability to access

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

• Level 3 — Unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the 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 privately held companies or funds. 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 the 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.

As of December 31, 2018, certain investments of the Fund were valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

18 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

4. SECURITIES AND OTHER INVESTMENTS

Securities Lending: The Fund may lend its securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received by the Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current market value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Fund and any additional required collateral is delivered to the Fund, or excess collateral returned by the Fund, on the next business day. During the term of the loan, the Fund is entitled to all distributions made on or in respect of the loaned securities, but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.

The market value of any securities on loan, all of which were classified as common stocks in the Fund’s Schedule of Investments, and the value of any related collateral are shown separately in the Statement of Assets and Liabilities as a component of investments at value — unaffiliated, and collateral on securities loaned at value, respectively. As of period end, any securities on loan were collateralized by cash and/or U.S. Government obligations. Cash collateral invested by the securities lending agent, BlackRock Investment Management, LLC (“BIM”), if any, is disclosed in the Schedule of Investments.

Securities lending transactions are entered into by the Fund under Master Securities Lending Agreements (each, an “MSLA”), which provide the right, in the event of default (including bankruptcy or insolvency), for thenon-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, the Fund, as lender, would offset the market value of the collateral received against the market value of the securities loaned. When the value of the collateral is greater than that of the market value of the securities loaned, the lender is left with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, absent an event of default, the borrower can resell orre-pledge the loaned securities, and the Fund can reinvest cash collateral received in connection with loaned securities. Upon an event of default, the parties’ obligations to return the securities or collateral to the other party are extinguished, and the parties can resell orre-pledge the loaned securities or the collateral received in connection with the loaned securities in order to satisfy the defaulting party’s net payment obligation for all transactions under the MSLA. The defaulting party remains liable for any deficiency.

As of period end, the following table is a summary of the Fund’s securities lending agreements by counterparty which are subject to offset under an MSLA:

Counterparty	Securities Loaned at Value		Cash Collateral Received (a)			Net Amount
Citigroup Global Markets, Inc.	$	4,194,316	$	(4,194,316	)	$	—
Credit Suisse Securities (USA) LLC		56,648		(56,648	)		—
Deutsche Bank Securities Inc.		496		(496	)		—
Fidelity Investments		3,911		(3,911	)		—
Goldman Sachs & Co.		19,968		(19,968	)		—
JP Morgan Securities LLC		942,950		(942,950	)		—
State Street Bank & Trust Co.		13,329		(13,329	)		—
UBS Securities LLC		751,766		(751,766	)		—
	$	5,983,384	$	(5,983,384	)	$	—

^(a)  Cash collateral with a value of $6,087,218 has been received in connection with securities lending agreements. Collateral received in excess of the value of securities loaned from the individual counterparty, if any, is not shown for financial reporting purposes in the table above.

The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Fund benefits from a borrower default indemnity provided by BIM. BIM’s indemnity allows for full replacement of the securities loaned if the collateral received does not cover the value on the securities loaned in the event of borrower default. The Fund could incur a loss if the value of an investment purchased with cash collateral falls below the market value of loaned securities or if the value of an investment purchased with cash collateral falls below the value of the original cash collateral received.

5. DERIVATIVE FINANCIAL INSTRUMENTS

The Fund engages in various portfolio investment strategies using derivative contracts both to increase the returns of the Fund and/or to manage its 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 Schedule of Investments. These contracts may be transacted on an exchange or OTC.

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

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

NOTESTO FINANCIAL STATEMENTS 19

Notes to Financial Statements  (continued)

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

6. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

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

For such services, the Fund pays the Manager a monthly fee at an annual rate equal to the following percentages of the average daily value of Fund’s net assets:

Average Daily Net Assets	Investment Advisory Fees
First $1 Billion		0.75	%
$1 Billion — $3 Billion		0.71
$3 Billion — $5 Billion		0.68
$5 Billion — $10 Billion		0.65
Greater than $10 Billion		0.64

Distribution Fees: The Company, on behalf of the Fund, entered into a Distribution Agreement and a Distribution Plan with BlackRock Investments, LLC (“BRIL”), an affiliate of the Manager. Pursuant to the Distribution Plan and in accordance with Rule12b-1 under the 1940 Act, the Fund pays BRIL ongoing distribution fees. The fees are accrued daily and paid monthly at annual rates of 0.15% and 0.25% based based upon the average daily net assets attributable to Class II and Class III, respectively.

BRIL and broker-dealers, pursuant tosub-agreements with BRIL, provide shareholder servicing and distribution services to the Fund. 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 distribution fees borne directly by each share class of the Fund:

	Class II		Class III		Total
Distribution Fees	$	4,653	$	14,029	$	18,682

Transfer Agent: On behalf of the Fund, the Manager entered into agreements with insurance companies and other financial intermediaries (“Service Organizations”), some of which may be affiliates. Pursuant to these agreements, the Service Organizations provide the Fund with administrative, networking, recordkeeping,sub-transfer agency and shareholder services tosub-accounts they service. For these services, the Service Organizations receive an annual fee per shareholder account, which will vary depending on share class and/or net assets of Fund shareholders serviced by the Service Organizations, which is shown as transfer agent — class specific. For the year ended December 31, 2018, the Fund did not pay any amounts to affiliates in return for these services.

In addition, the Fund pays the transfer agent, which is not an affiliate, a fee for issuance, transfer and redemption of shares and the opening and maintenance of shareholder accounts, which is included in transfer agent in the Statement of Operations.

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

Class I		Class II		Class III		Total
$	444,162	$	6,532	$	11,686	$462,380

Expense Limitations, Waivers and Reimbursements: With respect to the Fund, the Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees the 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. This amount is included in fees waived and/or reimbursed by the Manager in the Statement of Operations. For the year ended December 31, 2018, the amount waived was $1,683.

The Manager has contractually agreed to waive its investment advisory fee with respect to any portion of the 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. The contractual agreement may be terminated upon 90 days’ notice by a majority of the directors who are not “interested persons” of the Fund, as defined in the 1940 Act (“Independent Directors”), or by a vote of a majority of the outstanding voting securities of the Fund. For the year ended December 31, 2018, there were no fees waived by the Manager pursuant to this arrangement.

For the year ended December 31, 2018, the Fund reimbursed the Manager $3,673 for certain accounting services, which is included in accounting services in the Statement of Operations.

20 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

The Manager has contractually agreed to reimburse transfer agent fees in order to limit such expenses to a percentage of average daily net assets as follows:

Class I	0.07	%
Class II	0.09	%
Class III	0.01	%

The Manager has agreed not to reduce or discontinue this contractual reimbursement through April 30, 2019, unless approved by the Board, including a majority of the Independent Directors, or by a vote of a majority of the outstanding voting securities of the Fund.

These amounts waived and/or reimbursed are shown as transfer agent fees waived and/or reimbursed — class specific in the Statement of Operations. For the year ended December 31, 2018, class specific expense waivers and/or reimbursements are as follows:

	Class I		Class II		Class III		Total
Transfer Agent Fees Waived and/or Reimbursed	$	266,746	$	3,742	$	11,130	$	281,618

With respect to the 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 the Fund’s business (“expense limitation”). The expense limitations as a percentage of average daily net assets are as follows:

Class I		Class II		Class III
	0.55%		0.70%		0.80%

The Manager has agreed not to reduce or discontinue this contractual expense limitation through April 30, 2019, unless approved by the Board, including a majority of the Independent Directors, or by a vote of a majority of the outstanding voting securities of the Fund. For the year ended December 31, 2018, the Manager waived $797,265 and $180,760, which is included in fees waived and/or reimbursed by the Manager and transfer agent fees waived and/or reimbursed — class specific, respectively, in the Statement of Operations.

Securities Lending: The U.S. Securities and Exchange Commission (“SEC”) has issued an exemptive order which permits BIM, an affiliate of the Manager, to serve as securities lending agent for the Fund, subject to applicable conditions. As securities lending agent, BIM bears all operational costs directly related to securities lending. The Fund is responsible for expenses in connection with the investment of cash collateral received for securities on loan (the “collateral investment expenses”). The cash collateral is invested in a private investment company managed by the Manager or its affiliates. However, BIM has agreed to cap the collateral investment expenses of the private investment company to an annual rate of 0.04%. The investment adviser to the private investment company will not charge any advisory fees with respect to shares purchased by the Fund. The private investment company in which the cash collateral has been invested may, under certain circumstances, impose a liquidity fee of up to 2% of the value withdrawn or temporarily restrict withdrawals for up to 10 business days during a 90 day period, in the event that the private investment company’s weekly liquid assets fall below certain thresholds.

Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment expenses. The Fund retains a portion of securities lending income and remits a remaining portion to BIM as compensation for its services as securities lending agent.

Pursuant to a securities lending agreement, the Fund retains 71.5% of securities lending income, and this amount retained can never be less than 65% of the total of securities lending income plus the collateral investment expenses.

In addition, commencing the business day following the date that the aggregate securities lending income earned across the Equity-Bond Complex in a calendar year exceeds a specified threshold, the Fund, pursuant to the securities lending agreement, will retain for the remainder of that calendar year securities lending income in an amount equal to 75% of securities lending income, and this amount retained can never be less than 65% of the total of securities lending income plus the collateral investment expenses.

The share of securities lending income earned by the Fund is shown as securities lending income — affiliated — net in the Statement of Operations. For the year ended December 31, 2018, the Fund paid BIM $4,062 for securities lending agent services.

lnterfund Lending: In accordance with an exemptive order (the “Order”) from the SEC, the Fund may participate in a joint lending and borrowing facility for temporary purposes (the “lnterfund Lending Program”), subject to compliance with the terms and conditions of the Order, and to the extent permitted by the Fund’s investment policies and restrictions. The Fund is currently permitted to borrow under the lnterfund 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 lnterfund Lending Program. A borrowing BlackRock fund may not borrow through the lnterfund 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 Fund did not participate in the lnterfund Lending Program

Directors and Officers: Certain directors and/or officers of the Company are directors and/or officers of BlackRock or its affiliates. The Fund reimburses the Manager for a portion of the compensation paid to the Company’s Chief Compliance Officer, which is included in Directors and Officer in the Statement of Operations.

NOTESTO FINANCIAL STATEMENTS 21

Notes to Financial Statements  (continued)

7. PURCHASES AND SALES

For the year ended December 31, 2018, purchases and sales of investments, excluding short-term securities, were $388,306,894 and $413,881,112, respectively.

8. INCOME TAX INFORMATION

It is the 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.

The 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 the Fund’s U.S. federal tax returns generally remains open for each of the four years ended December 31, 2018. The statutes of limitations on the 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 Fund as of December 31, 2018, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the Fund’s financial statements.

The tax character of distributions paid was as follows:

	12/31/18		12/31/17
Ordinary income	$	20,324,901	$	20,827,050
Long term capital gains		7,341,567		33,606,972
	$	27,666,468	$	54,434,022

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

Undistributed ordinary income	$	102,588
Net unrealized losses(a)		(17,080,639	)
Qualified late-year losses(b)		(1,556,533	)
	$	(18,534,584	)

^(a)  The difference between book-basis and tax-basis net unrealized losses was attributable primarily to the tax deferral of losses on wash sales, the realization for tax purposes of unrealized gains/losses on certain futures contracts 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.

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:

Tax cost	$	250,001,559
Gross unrealized appreciation	$	5,272,779
Gross unrealized depreciation		(22,394,652	)
Net unrealized depreciation	$	(17,121,873	)

9. BANK BORROWINGS

The Company, on behalf of the Fund, 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 Fund may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Fund, 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. Prior to April 19, 2018, the aggregate commitment amount was $2.1 billion and the fee was 0.12% per annum. 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 Statement 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 Fund did not borrow under the credit agreement.

10. PRINCIPAL RISKS

In the normal course of business, the Fund invests in securities or other instruments and may enter into certain transactions, and such activities subject the 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. The Fund’s prospectus provides details of the risks to which the Fund is subject.

22 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

The Fund may be exposed to additional risks when reinvesting cash collateral in money market funds that do not seek to maintain a stable NAV per share of $1.00, and which may be subject to redemption gates or liquidity fees under certain circumstances.

Valuation Risk: The market values of equities, such as common stocks and preferred securities or equity related investments, such as futures and options, may decline due to general market conditions which are not specifically related to a particular company. They may also decline due to factors which affect a particular industry or industries. The Fund may invest in illiquid investments and may experience difficulty in selling those investments in a timely manner at the price that it believes the investments are worth. Prices may fluctuate widely over short or extended periods in response to company, market or economic news. Markets also tend to move in cycles, with periods of rising and falling prices. This volatility may cause the 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 the Fund may lose value, regardless of the individual results of the securities and other instruments in which the Fund invests.

Counterparty Credit Risk: The Fund 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 Fund manages 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 Fund to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Fund’s exposure to market, issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Statement of Assets and Liabilities, less any collateral held by the Fund.

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.

With exchange-traded futures, there is less counterparty credit risk to the Fund 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, the Fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency). Additionally, credit risk exists in exchange-traded futures with respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Fund.

11. CAPITAL SHARE TRANSACTIONS

Transactions in capital shares for each class were as follows:

	Year Ended 12/31/2018						Year Ended 12/31/2017
	Shares			Amount			Shares			Amount
Class I
Shares sold		305,871		$	8,001,770			289,177		$	8,303,261
Shares issued in reinvestment of distributions		1,251,143			26,509,174			2,015,232			52,422,649
Shares redeemed		(1,401,110	)		(36,805,116	)		(1,058,658	)		(30,166,900	)
Net increase (decrease)		155,904		$	(2,294,172	)		1,245,751		$	30,559,010
Class II
Shares sold		2,590		$	64,883			836		$	22,989
Shares issued in reinvestment of distributions		15,465			326,810			24,627			639,247
Shares redeemed		(10,312	)		(273,819	)		(23,204	)		(646,382	)
Net increase		7,743		$	117,874			2,259		$	15,854
Class III
Shares sold		55,977		$	1,051,459			20,673		$	458,121
Shares issued in reinvestment of distributions		56,279			830,484			71,553			1,372,125
Shares redeemed		(50,372	)		(937,203	)		(90,639	)		(2,013,282	)
Net increase (decrease)		61,884		$	944,740			1,587		$	(183,036	)
Total Net Increase (Decrease)		225,531		$	(1,231,558	)		1,249,597		$	30,391,828

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 Fund has adopted the amendments pertinent to RegulationS-X in this shareholder report. The amendments impacted certain disclosure presentation on the Statement 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.

NOTESTO FINANCIAL STATEMENTS 23

Notes to Financial Statements  (continued)

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

Share Class	Net Investment Income			Net Realized Gain
Class I	$	(2,278,683	)	$	(50,143,967	)
Class II		(22,476	)		(616,770	)
Class III		(48,843	)		(1,323,283	)

Undistributed net investment income as of December 31, 2017 was $35,495.

13. SUBSEQUENT EVENTS

Management has evaluated the impact of all subsequent events on the Fund 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.

24 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Report of Independent Registered Public Accounting Firm

To the Shareholders of BlackRock Advantage U.S. Total Market V.I. Fund and the Board of Directors of BlackRock Variable Series Funds, Inc.:

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying statement of assets and liabilities of BlackRock Advantage U.S. Total Market V.I. Fund of BlackRock Variable Series Funds, Inc. (the “Fund”), including the schedule of investments, as of December 31, 2018, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of December 31, 2018, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s 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 Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its 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 Fund’s 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 15, 2019

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

REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 25

Glossary of Terms Used in this Report

Portfolio Abbreviations
REIT	Real Estate Investment Trust
S&P	Standard & Poor’s

26 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

DECEMBER 31, 2018

ANNUAL REPORT

BlackRock Variable Series Funds, Inc.

^Ø  BlackRock Basic Value V.I. Fund

Not FDIC Insured • May Lose Value • No Bank Guarantee

Fund Summary  as of December 31, 2018 BlackRock Basic Value V.I. Fund

Investment Objective

BlackRock Basic Value V.I. Fund’s (the “Fund”) investment objective is to seek capital appreciation and, secondarily, income.

Portfolio Management Commentary

How did the Fund perform?

For the12-month period ended December 31, 2018, the Fund outperformed its benchmark, the Russell 1000^® Value Index.

What factors influenced performance?

Stock selection in the communication services sector was the leading contributor to relative performance during the period. Notably within the sector, positioning in the wireless telecommunication services (“telecom”) and diversified telecom industry groups contributed positively.

Among other positive contributors to relative performance was stock selection in utilities, where positions in independent power and electric utilities made notable contributions. Stock selection in information technology also contributed positively, especially within the communications equipment and hardware industry groups.

The largest detractor from relative performance over the period was stock selection in the consumer staples sector. In particular, positions in the food products and beverages industries were notably weak.

Stock selection in the financial sector, particularly among positions in the banking and insurance industries, also weighed on relative performance. Although overweight exposure to health care stocks added to relative returns, stock selection within the sector detracted, especially because of overweight positions in health care services and medical device stocks.

Describe recent portfolio activity.

During the period, a combination of market movement and trading activity increased the Fund’s allocation to the communication services and consumer staples sectors modestly, while reducing the Fund’s weights to financials and energy.

Describe portfolio positioning at period end.

Relative to the Russell 1000^® Value Index, the Fund ended the period with overweight exposures to the health care, communication services, consumer staples and utilities sectors. The Fund maintained underweight sector exposures to real estate, consumer discretionary, industrials and financials.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

Portfolio Information

SECTOR ALLOCATION

Sector	Percent of Net Assets
Financials		21	%
Health Care		19
Communication Services		11
Information Technology		10
Energy		9
Consumer Staples		9
Utilities		7
Industrials		5
Materials		3
Consumer Discretionary		2
Short-Term Securities		9
Liabilities in Excess of Other Assets		(5	)

For Fund compliance purposes, the Fund’s sector classifications refer to one or more of the sectorsub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine sector sub classifications for reporting ease.

2 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Fund Summary  as of December 31, 2018 (continued) BlackRock Basic Value V.I. Fund

TOTAL RETURN BASED ON A $10,000 INVESTMENT

^(a)  Assuming transaction costs, if any, and other operating expenses, including investment advisory fees. Does not include insurance-related fees and expenses.

^(b)  The Fund invests primarily in equity securities that Fund management believes are undervalued, which means that their prices are less than Fund management believes they are worth.

^(c)  An unmanaged index that is a subset of the Russell 1000^® Index that consists of those Russell 1000^® securities with lowerprice-to-book ratios and lower expected growth values.

Performance Summary for the Period Ended December 31, 2018

	6-Month			Average Annual Total Returns
	Total Returns (b)			1 Year (b)			5 Years (b)			10 Years (b)
Class I(a)		(8.08	)%		(7.85	)%		4.04	%		10.72	%
Class II(a)		(8.18	)		(8.06	)		3.86			10.54
Class III(a)		(8.17	)		(8.11	)		3.75			10.42
Russell 1000® Value Index		(6.69	)		(8.27	)		5.95			11.18

^(a)  Average annual and cumulative total returns are based on changes in net asset value for the periods shown, and assume reinvestment of all distributions at net asset value on theex-dividend date. Insurance-related fees and expenses are not reflected in these returns.

^(b)  For the portion of the period, the Fund’s investment adviser waived a portion of its fee. Without such waiver, the Fund’s performance would have been lower.

Past performance is not indicative of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

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

Expense Example

	Actual						Hypothetical (a)
	Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Annualized Expense Ratio
Class I	$	1,000.00	$	919.20	$	3.48	$	1,000.00	$	1,021.58	$	3.67		0.72	%
Class II		1,000.00		918.20		4.30		1,000.00		1,020.72		4.53		0.89
Class III		1,000.00		918.30		4.84		1,000.00		1,020.16		5.09		1.00

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

^(b)  For each class of the Fund, expenses are equal to annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect theone-half year period shown).

See “Disclosure of Expenses” on the following page for further information on how expenses were calculated.

FUND SUMMARY 3

Disclosure of Expenses BlackRock Basic Value V.I. Fund

Shareholders of the Fund may incur the following charges: (a) transactional expenses; and (b) operating expenses, including investment advisory fees, service and distribution fees, including12b-1 fees, acquired fund fees and expenses, and other fund expenses. The expense example on the previous page (which is based on a hypothetical investment of $1,000 invested on July 1, 2018 and held through December 31, 2018) is intended to assist shareholders both in calculating expenses based on an investment in the Fund and in comparing these expenses with similar costs of investing in other mutual funds.

The expense example provides 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 share class under the heading entitled “Expenses Paid During the Period.”

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

4 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments December 31, 2018 BlackRock Basic Value V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Common Stocks — 95.6%
Auto Components — 0.7%
Lear Corp.		22,514	$	2,766,070
Banks — 11.8%
Citigroup, Inc.		161,094		8,386,554
JPMorgan Chase & Co.		172,197		16,809,871
Regions Financial Corp.		416,209		5,568,876
Wells Fargo & Co.		329,338		15,175,895
				45,941,196
Beverages — 2.9%
Molson Coors Brewing Co., Class B		200,953		11,285,520
Biotechnology — 1.9%
Biogen, Inc.(a)		7,287		2,192,804
Gilead Sciences, Inc.		83,705		5,235,748
				7,428,552
Building Products — 0.9%
Masco Corp.		117,340		3,431,022
Capital Markets — 3.1%
E*TRADE Financial Corp.(a)		75,088		3,294,862
Morgan Stanley		129,176		5,121,828
Nasdaq, Inc.		9,362		763,658
State Street Corp.(b)		44,124		2,782,901
				11,963,249
Chemicals — 0.9%
Akzo Nobel NV, ADR		137,595		3,664,843
Communications Equipment — 4.3%
Cisco Systems, Inc.		389,007		16,855,673
Consumer Finance — 1.5%
Ally Financial, Inc.		80,655		1,827,642
Capital One Financial Corp.		39,770		3,006,214
SLM Corp.(a)(b)		114,808		954,055
				5,787,911
Diversified Telecommunication Services — 4.4%
Verizon Communications, Inc.		303,828		17,081,210
Electric Utilities — 4.7%
Exelon Corp.		212,930		9,603,143
FirstEnergy Corp.		225,116		8,453,106
				18,056,249
Electrical Equipment — 2.3%
ABB Ltd., ADR(b)		306,394		5,824,550
Hubbell, Inc.		29,083		2,889,105
				8,713,655
Food & Staples Retailing — 2.4%
Kroger Co. (The)		112,654		3,097,985
Walgreens Boots Alliance, Inc.		92,391		6,313,077
				9,411,062
Food Products — 3.6%
JM Smucker Co. (The)		62,318		5,826,110
Kellogg Co.(b)		144,382		8,231,218
				14,057,328
Health Care Equipment & Supplies — 7.5%
Baxter International, Inc.		82,549		5,433,375
Koninklijke Philips NV, NYRS(b)		170,485		5,985,728
Medtronic plc(b)		60,352		5,489,618
Zimmer Biomet Holdings, Inc.		119,394		12,383,546
				29,292,267

Security	Shares		Value
Health Care Providers & Services — 1.6%
Laboratory Corp. of America Holdings(a)		48,225	$	6,093,711
Independent Power and Renewable Electricity Producers — 2.8%
AES Corp.		742,576		10,737,649
Industrial Conglomerates — 0.2%
General Electric Co.		119,776		906,704
Insurance — 4.2%
American International Group, Inc.(b)		62,180		2,450,514
Assured Guaranty Ltd.		83,157		3,183,250
Brighthouse Financial, Inc.(a)		54,964		1,675,303
Hartford Financial Services Group, Inc. (The)		120,538		5,357,914
Lincoln National Corp.		72,968		3,743,988
				16,410,969
Media — 4.8%
Comcast Corp., Class A		292,538		9,960,919
DISH Network Corp., Class A(a)		110,590		2,761,432
Interpublic Group of Cos., Inc. (The)		289,814		5,978,863
				18,701,214
Metals & Mining — 1.6%
Freeport-McMoRan, Inc.		269,700		2,780,607
Nucor Corp.		64,223		3,327,394
				6,108,001
Multiline Retail — 0.9%
Dollar Tree, Inc.(a)		38,550		3,481,836
Oil, Gas & Consumable Fuels — 9.0%
BP plc, ADR		140,650		5,333,448
ConocoPhillips		113,024		7,047,046
Devon Energy Corp.		93,856		2,115,514
Marathon Oil Corp.(b)		69,307		993,862
Marathon Petroleum Corp.		47,474		2,801,441
Royal Dutch Shell plc, ADR, Class A(b)		45,443		2,647,964
Suncor Energy, Inc.		259,748		7,265,152
Williams Cos., Inc. (The)		304,369		6,711,336
				34,915,763
Pharmaceuticals — 8.5%
Elanco Animal Health, Inc.(a)(b)		21,990		693,345
Novartis AG, ADR		142,519		12,229,555
Pfizer, Inc.		459,786		20,069,659
				32,992,559
Road & Rail — 1.3%
Norfolk Southern Corp.		32,480		4,857,059
Semiconductors & Semiconductor Equipment — 3.3%
QUALCOMM, Inc.(b)		225,537		12,835,311
Software — 1.0%
Oracle Corp.		89,580		4,044,537
Specialty Retail — 0.6%
Lowe’s Cos., Inc.		23,460		2,166,765
Technology Hardware, Storage & Peripherals — 1.2%
Apple, Inc.		28,934		4,564,049
Wireless Telecommunication Services — 1.7%
Telephone & Data Systems, Inc.		185,626		6,040,270
United States Cellular Corp.(a)		12,647		657,265
				6,697,535
Total Common Stocks — 95.6% (Cost: $364,890,722)				371,249,469
Total Long-Term Investments — 95.6% (Cost: $364,890,722)				371,249,469

SCHEDULE OF INVESTMENTS 5

Schedule of Investments  (continued) December 31, 2018 BlackRock Basic Value V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Short-Term Securities — 9.0%(c)(e)
BlackRock Liquidity Funds,T-Fund, Institutional Class, 2.32%		16,423,075	$	16,423,075
SL Liquidity Series, LLC, Money Market Series, 2.57%(d)		18,439,265		18,437,421
Total Short-Term Securities — 9.0% (Cost: $34,860,510)				34,860,496
Total Investments — 104.6% (Cost: $399,751,232)				406,109,965
Liabilities in Excess of Other Assets — (4.6)%				(17,746,714	)
Net Assets — 100.0%			$	388,363,251

^(a)  Non-income producing security.

^(b)  Security, or a portion of the security, is on loan.

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

^(d)  Security was purchased with the cash collateral from loaned securities.

^(e)  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, 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		3,156,745		13,266,330			16,423,075	$	16,423,075	$	212,906		$	—	$	—
SL Liquidity Series, LLC, Money Market Series		28,837,798		(10,398,533	)		18,439,265		18,437,421		57,231	(b)		(6,581)		593
								$	34,860,496	$	270,137		$	(6,581)	$	593

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

^(b)  Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.

For Fund compliance purposes, the Fund’s industry classifications refer to one or more of the industrysub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such industrysub-classifications for reporting ease.

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments. For information about the Fund’s policy regarding valuation of investments, refer to the Notes to Financial Statements. The following table summarizes the Fund’s investments categorized in the disclosure hierarchy:

	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Long-Term Investments
Common Stocks(a)	$	371,249,469	$	—	$	—	$	371,249,469
Short-Term Securities		16,423,075		—		—		16,423,075
Subtotal	$	387,672,544	$	—	$	—	$	387,672,544
Investments valued at NAV(b)								18,437,421
Total Investments							$	406,109,965

^(a)  See above Schedule of Investments for values in each industry.

^(b)  As of December 31, 2018 certain investments of the Fund were fair valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

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

See notes to financial statements.

6 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Statement of Assets and Liabilities

December 31, 2018

	BlackRock Basic Value V.I. Fund
ASSETS
Investments at value — unaffiliated (including securities loaned at value of $18,135,407) (cost — $364,890,722)	$	371,249,469
Investments at value — affiliated (cost — $34,860,510)		34,860,496
Cash		47,499
Receivables:
Securities lending income — affiliated		3,208
Capital shares sold		1,003,307
Dividends — affiliated		22,970
Dividends — unaffiliated		308,098
Prepaid expenses		464
Total assets		407,495,511
LIABILITIES
Cash collateral on securities loaned at value		18,445,979
Payables:
Capital shares redeemed		18,537
Distribution fees		12,968
Transfer agent fees		296,519
Board realignment and consolidation		18,027
Investment advisory fees		244,675
Directors’ and Officer’s fees		6,379
Other affiliates		984
Other accrued expenses		88,192
Total liabilities		19,132,260
NET ASSETS	$	388,363,251
NET ASSETS CONSIST OF
Paid-in capital	$	386,379,290
Accumulated earnings		1,983,961
NET ASSETS	$	388,363,251
NET ASSET VALUE
Class I — Based on net assets of $326,873,430 and 26,386,682 shares outstanding, 300 million shares authorized, $0.10 par value.	$	12.39
Class II — Based on net assets of $3,828,707 and 310,035 shares outstanding, 100 million shares authorized, $0.10 par value.	$	12.35
Class III — Based on net assets of $57,661,114 and 4,692,961 shares outstanding, 100 million shares authorized, $0.10 par value.	$	12.29

See notes to financial statements.

FINANCIAL STATEMENTS 7

Statement of Operations

Year Ended December 31, 2018

	BlackRock Basic Value V.I. Fund
INVESTMENT INCOME
Dividends — affiliated	$	212,906
Dividends — unaffiliated		11,315,119
Securities lending income — affiliated — net		57,231
Foreign taxes withheld		(35,616	)
Total investment income		11,549,640
EXPENSES
Investment advisory		2,749,902
Transfer agent — class specific		879,194
Distribution — class specific		190,740
Professional		72,863
Accounting services		69,991
Printing		61,094
Directors and Officer		22,848
Board realignment and consolidation		18,302
Custodian		13,373
Transfer agent		5,834
Miscellaneous		21,340
Total expenses		4,105,481
Less:
Fees waived and/or reimbursed by the Manager		(9,130	)
Transfer agent fees waived and/or reimbursed — class specific		(581,425	)
Total expenses after fees waived and/or reimbursed		3,514,926
Net investment income		8,034,714
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — affiliated		(6,581	)
Investments — unaffiliated		39,518,799
		39,512,218
Net change in unrealized appreciation (depreciation) on:
Investments — affiliated		593
Investments — unaffiliated		(79,557,709	)
		(79,557,116	)
Net realized and unrealized loss		(40,044,898	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(32,010,184	)

See notes to financial statements.

8 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Statements of Changes in Net Assets

	BlackRock Basic Value V.I. Fund
	Year Ended December 31,
	2018			2017
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income	$	8,034,714		$	6,925,805
Net realized gain		39,512,218			20,230,521
Net change in unrealized appreciation (depreciation)		(79,557,116	)		10,057,649
Net increase (decrease) in net assets resulting from operations		(32,010,184	)		37,213,975
DISTRIBUTIONS TO SHAREHOLDERS(a)(b)
Class I		(45,856,103	)		(21,064,561	)
Class II		(533,180	)		(253,758	)
Class III		(8,023,231	)		(4,082,586	)
Decrease in net assets resulting from distributions to shareholders		(54,412,514	)		(25,400,905	)
CAPITALSHARE TRANSACTIONS
Net decrease in net assets derived from capital share transactions		(6,218,302	)		(59,465,107	)
NET ASSETS(b)
Total decrease in net assets		(92,641,000	)		(47,652,037	)
Beginning of year		481,004,251			528,656,288
End of year	$	388,363,251		$	481,004,251

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

^(b)  Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year RegulationS-X presentation changes. Refer to Note 11 for this prior year information.

See notes to financial statements.

FINANCIAL STATEMENTS 9

Financial Highlights

(For a share outstanding throughout each period)

	BlackRock Basic Value V.I. Fund
	Class I
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	15.60		$	15.21		$	13.36		$	16.42		$	17.44
Net investment income(a)		0.28			0.22			0.23			0.24			0.25
Net realized and unrealized gain (loss)		(1.51	)		1.03			2.19			(1.20	)		1.51
Net increase (decrease) from investment operations		(1.23	)		1.25			2.42			(0.96	)		1.76
Distributions(b)
From net investment income		(0.29	)		(0.25	)		(0.22	)		(0.25	)		(0.27	)
From net realized gain		(1.69	)		(0.61	)		(0.35	)		(1.85	)		(2.51	)
Total distributions		(1.98	)		(0.86	)		(0.57	)		(2.10	)		(2.78	)
Net asset value, end of year	$	12.39		$	15.60		$	15.21		$	13.36		$	16.42
Total Return(c)
Based on net asset value		(7.85	)%		8.24	%		18.19	%		(5.95	)%		9.93	%
Ratios to Average Net Assets(d)
Total expenses		0.85	%		0.85	%		0.84	%		0.86	%		0.85	%
Total expenses after fees waived and/or reimbursed		0.72	%		0.73	%		0.73	%		0.73	%		0.72	%
Net investment income		1.80	%		1.47	%		1.63	%		1.47	%		1.40	%
Supplemental Data
Net assets, end of year (000)	$	326,873		$	397,180		$	409,216		$	393,370		$	468,876
Portfolio turnover rate		32	%		41	%		45	%		50	%		39	%

^(a)  Based on average shares outstanding.

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

^(c)  Where applicable, excludes insurance-related fees and expenses and assumes the reinvestment of distributions.

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

	Year Ended December 31,
	2018			2017			2016			2015			2014
Investments in underlying funds		0.01	%		0.01	%		—	%		—	%		—	%

See notes to financial statements.

10 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Financial Highlights  (continued)

(For a share outstanding throughout each period)

	BlackRock Basic Value V.I. Fund (continued)
	Class II
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	15.56		$	15.16		$	13.33		$	16.38		$	17.40
Net investment income(a)		0.26			0.20			0.20			0.21			0.22
Net realized and unrealized gain (loss)		(1.52	)		1.03			2.18			(1.18	)		1.51
Net increase (decrease) from investment operations		(1.26	)		1.23			2.38			(0.97	)		1.73
Distributions(b)
From net investment income		(0.26	)		(0.22	)		(0.20	)		(0.23	)		(0.24	)
From net realized gain		(1.69	)		(0.61	)		(0.35	)		(1.85	)		(2.51	)
Total distributions		(1.95	)		(0.83	)		(0.55	)		(2.08	)		(2.75	)
Net asset value, end of year	$	12.35		$	15.56		$	15.16		$	13.33		$	16.38
Total Return(c)
Based on net asset value		(8.06	)%		8.15	%		17.88	%		(6.07	)%		9.75	%
Ratios to Average Net Assets(d)
Total expenses		1.02	%		1.02	%		1.02	%		1.02	%		1.02	%
Total expenses after fees waived and/or reimbursed		0.89	%		0.90	%		0.90	%		0.90	%		0.89	%
Net investment income		1.63	%		1.29	%		1.47	%		1.30	%		1.23	%
Supplemental Data
Net assets, end of year (000)	$	3,829		$	4,928		$	5,280		$	5,466		$	6,233
Portfolio turnover rate		32	%		41	%		45	%		50	%		39	%

^(a)  Based on average shares outstanding.

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

^(c)  Where applicable, excludes insurance-related fees and expenses and assumes the reinvestment of distributions.

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

	Year Ended December 31,
	2018			2017			2016			2015			2014
Investments in underlying funds		0.01	%		0.01	%		—	%		—	%		—	%

See notes to financial statements.

FINANCIAL HIGHLIGHTS 11

Financial Highlights  (continued)

(For a share outstanding throughout each period)

	BlackRock Basic Value V.I. Fund (continued)
	Class III
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	15.48		$	15.08		$	13.28		$	16.32		$	17.35
Net investment income(a)		0.24			0.18			0.18			0.19			0.20
Net realized and unrealized gain (loss)		(1.50	)		1.02			2.17			(1.17	)		1.50
Net increase (decrease) from investment operations		(1.26	)		1.20			2.35			(0.98	)		1.70
Distributions(b)
From net investment income		(0.24	)		(0.19	)		(0.20	)		(0.21	)		(0.22	)
From net realized gain		(1.69	)		(0.61	)		(0.35	)		(1.85	)		(2.51	)
Total distributions		(1.93	)		(0.80	)		(0.55	)		(2.06	)		(2.73	)
Net asset value, end of year	$	12.29		$	15.48		$	15.08		$	13.28		$	16.32
Total Return(c)
Based on net asset value		(8.11	)%		8.01	%		17.72	%		(6.15	)%		9.63	%
Ratios to Average Net Assets(d)
Total expenses		1.15	%		1.16	%		1.04	%		1.13	%		1.11	%
Total expenses after fees waived and/or reimbursed		1.00	%		1.01	%		1.00	%		1.01	%		1.00	%
Net investment income		1.52	%		1.16	%		1.25	%		1.19	%		1.11	%
Supplemental Data
Net assets, end of year (000)	$	57,661		$	78,896		$	114,160		$	45,197		$	54,394
Portfolio turnover rate		32	%		41	%		45	%		50	%		39	%

^(a)  Based on average shares outstanding.

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

^(c)  Where applicable, excludes insurance-related fees and expenses and assumes the reinvestment of distributions.

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

	Year Ended December 31,
	2018			2017			2016			2015			2014
Investments in underlying funds		0.01	%		0.01	%		—	%		—	%		—	%

See notes to financial statements.

12 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements

1. ORGANIZATION

BlackRock Variable Series Funds, Inc. (the “Company”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as anopen-end management investment company. The Company is organized as a Maryland corporation that is comprised of 15 separate portfolios. The funds offer shares to insurance companies for their separate accounts to fund benefits under certain variable annuity and variable life insurance contracts. The financial statements presented are for BlackRock Basic Value V.I. Fund (the “Fund”). The Fund is classified as diversified. Class I, Class II and Class III Shares have equal voting, dividend, liquidation and other rights, except that only shares of the respective classes are entitled to vote on matters concerning only that class. In addition, Class II and Class III Shares bear certain expenses related to the distribution of such shares.

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

2. SIGNIFICANT ACCOUNTING POLICIES

The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. The 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 Fund is 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. Income, expenses and realized and unrealized gains and losses are allocated daily to each class based on its relative net assets.

Distributions:Distributions paid by the Fund are recorded on theex-dividend date. Distributions of capital gains are recorded on theex-dividend date and made at least annually. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP.

Recent Accounting Standards: 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 Fund.

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

Other: Expenses directly related to the Fund or its classes are charged to the 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 Fund and other shared expenses prorated to the Fund are allocated daily to each class based on its relative net assets or other appropriate methods.

3. INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS

Investment Valuation Policies: The Fund’s investments are valued at fair value (also referred to as “market value” within the financial statements) as of the close of trading on the New York Stock Exchange (“NYSE”) (generally 4:00 p.m., Eastern time). U.S. GAAP defines fair value as the price the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Fund determines the fair values of its financial instruments using various independent dealers or pricing services under policies approved by the Board of Directors of the Company (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 the 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.

• Investments inopen-end U.S. mutual funds are valued at net asset value (“NAV”) each business day.

• The Fund values its investment in SL Liquidity Series, LLC, Money Market Series (the “Money Market Series”) at fair value, which is ordinarily based upon its pro rata ownership in the underlying fund’s net assets. The Money Market Series seeks current income consistent with maintaining liquidity and preserving capital. Although the Money Market Series is not registered under the 1940 Act, its investments may follow the parameters of investments by a money market fund that is subject to Rule2a-7 under the 1940 Act.

NOTESTO FINANCIAL STATEMENTS 13

Notes to Financial Statements  (continued)

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

Fair Value Hierarchy: Various inputs are used in determining the fair value of investments. 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 the Fund has the ability to access

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

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

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 privately held companies or funds. 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 the 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 is based on the pricing transparency of the investments and is not necessarily an indication of the risks associated with investing in those securities.

As of December 31, 2018, certain investments of the Fund were valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

4. SECURITIES AND OTHER INVESTMENTS

Securities Lending: The Fund may lend its securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received by the Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current market value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Fund and any additional required collateral is delivered to the Fund, or excess collateral returned by the Fund, on the next business day. During the term of the loan, the Fund is entitled to all distributions made on or in respect of the loaned securities, but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.

The market value of any securities on loan, all of which were classified as common stocks in the Fund’s Schedule of Investments, and the value of any related collateral are shown separately in the Statement of Assets and Liabilities as a component of investments at value — unaffiliated, and collateral on securities loaned at value, respectively. As of period end, any securities on loan were collateralized by cash and/or U.S. Government obligations. Cash collateral invested by the securities lending agent, BlackRock Investment Management, LLC (“BIM”), if any, is disclosed in the Schedule of Investments.

Securities lending transactions are entered into by the Fund under Master Securities Lending Agreements (each, an “MSLA”), which provide the right, in the event of default (including bankruptcy or insolvency), for thenon-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, the Fund, as lender, would offset the market value of the collateral received against the market value of the securities loaned. When the value of the collateral is greater than that of the market value of the securities loaned, the lender is left with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, absent an event of default, the borrower can resell orre-pledge the loaned securities, and the Fund can reinvest cash collateral received in connection with loaned securities. Upon an event of default, the parties’ obligations to return the securities or collateral to the other party are extinguished, and the parties can resell orre-pledge the loaned securities or the collateral received in connection with the loaned securities in order to satisfy the defaulting party’s net payment obligation for all transactions under the MSLA. The defaulting party remains liable for any deficiency.

14 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

As of period end, the following table is a summary of the Fund’s securities lending agreements by counterparty which are subject to offset under an MSLA:

Counterparty	Securities Loaned at Value		Cash Collateral Received (a)			Net Amount
Citigroup Global Markets, Inc.	$	1,581,632	$	(1,581,632	)	$	—
Credit Suisse Securities (USA) LLC		6,097,984		(6,097,984	)		—
JP Morgan Securities LLC		7,914,537		(7,914,537	)		—
Morgan Stanley & Co. LLC		2,434,005		(2,434,005	)		—
State Street Bank & Trust Co.		107,249		(107,249	)		—
	$	18,135,407	$	(18,135,407	)	$	—

^(a)  Cash collateral with a value of $18,445,979 has been received in connection with securities lending agreements. . Collateral received in excess of the value of securities loaned from the individual counterparty, if any, is not shown for financial reporting purposes in the table above.

The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Fund benefits from a borrower default indemnity provided by BIM. BIM’s indemnity allows for full replacement of the securities loaned if the collateral received does not cover the value on the securities loaned in the event of borrower default. The Fund could incur a loss if the value of an investment purchased with cash collateral falls below the market value of loaned securities or if the value of an investment purchased with cash collateral falls below the value of the original cash collateral received.

5. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

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

For such services, the Fund pays the Manager a monthly fee at an annual rate equal to the following percentages of the average daily value of the Fund’s net assets:

Average Daily Net Assets	Investment Advisory Fees
First $1 Billion		0.60	%
$1 Billion — $3 Billion		0.56
$3 Billion — $5 Billion		0.54
$5 Billion — $10 Billion		0.52
Greater than $10 Billion		0.51

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

	Class II			Class III
Distribution Fees		0.15	%		0.25	%

BRIL and broker-dealers, pursuant to sub-agreements with BRIL, provide shareholder servicing and distribution services to the Fund. 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 distribution fees borne directly by each share class of the Fund:

	Class II		Class III		Total
Distribution Fees	$	6,910	$	183,830	$	190,740

Transfer Agent: On behalf of the Fund, the Manager entered into agreements with insurance companies and other financial intermediaries (“Service Organizations”), some of which may be affiliates. Pursuant to these agreements, the Service Organizations provide the Fund with administrative, networking, recordkeeping,sub-transfer agency and shareholder services tosub-accounts they service. For these services, the Service Organizations receive an annual fee per shareholder account, which will vary depending on share class and/or net assets of Fund shareholders serviced by the Service Organizations which is shown as transfer agent – class specific. For the year ended December 31, 2018, the Fund did not pay any amounts to affiliates in return for this services.

In addition, the Fund pays the transfer agent, which is not an affiliate, a fee for the issuance, transfer and redemption of shares and the opening and maintenance of shareholder accounts, which is included in transfer agent in the Statement of Operations.

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

Class I		Class II		Class III		Total
$	698,465	$	9,639	$	171,090	$	879,194

Expense Limitations, Waivers and Reimbursements:With respect to the Fund, the Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees the Fund pays to the Manager indirectly through its investment in affiliated money market funds (the “affiliated money market fund waiver”). The

NOTESTO FINANCIAL STATEMENTS 15

Notes to Financial Statements  (continued)

amount of waivers and/or reimbursements of fees and expenses made pursuant to the expense limitation described below will be reduced by the amount of the affiliated money market fund waiver. This amount is included in fees waived and/or reimbursed by the Manager in the Statement of Operations. For the year ended December 31, 2018, the amount waived was $9,130.

The Manager has contractually agreed to waive its investment advisory fee with respect to any portion of the 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. The contractual agreement may be terminated upon 90 days’ notice by a majority of the directors who are not “interested persons” of the Fund, as defined in the 1940 Act (“Independent Directors”), or by a vote of a majority of the outstanding voting securities of the Fund. For the year ended December 31, 2018, there were no fees waived and/or reimbursed by the Manager pursuant to this arrangement.

For the year ended December 31, 2018, the Fund reimbursed the Manager $5,886 for certain accounting services, which is included in accounting services in the Statement of Operations.

The Manager has contractually agreed to reimburse transfer agent fees in order to limit such expenses to a percentage of average daily net assets as follows:

Class I	0.06	%
Class II	0.08	%
Class III	0.09	%

The Manager has agreed not to reduce or discontinue this contractual reimbursement through April 30, 2019, unless approved by the Board, including a majority of Independent Directors, or by a vote of a majority of the outstanding voting securities of the Fund.

These amounts waived and/or reimbursed are shown as transfer agent fees waived and/or reimbursed — class specific in the Statement of Operations. For the year ended December 31, 2018, class specific expense waivers and/or reimbursements were as follows:

	Class I		Class II		Class III		Total
Transfer Agent Fees Waived and/or Reimbursed	$	470,527	$	5,956	$	104,942	$	581,425

With respect to the 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 the Fund’s business (“expense limitation”). The expense limitations as a percentage of average daily net assets are as follows:

Class I		Class II		Class III
	1.25%		1.40%		1.50%

The Manager has agreed not to reduce or discontinue this contractual expense limitation through April 30, 2019, unless approved by the Board, including a majority of Independent Directors, or by a vote of a majority of the outstanding voting securities of the Fund. For the year ended December 31, 2018, there were no fees waived and/or reimbursed by the Manager.

Securities Lending: The U.S. Securities and Exchange Commission (“SEC”) has issued an exemptive order which permits BIM, an affiliate of the Manager, to serve as securities lending agent for the Fund, subject to applicable conditions. As securities lending agent, BIM bears all operational costs directly related to securities lending. The Fund is responsible for expenses in connection with the investment of cash collateral received for securities on loan (the “collateral investment expenses”). The cash collateral is invested in a private investment company managed by the Manager or its affiliates. However, BIM has agreed to cap the collateral investment expenses of the private investment company to an annual rate of 0.04%. The investment adviser to the private investment company will not charge any advisory fees with respect to shares purchased by the Fund. The private investment company in which the cash collateral has been invested may, under certain circumstances, impose a liquidity fee of up to 2% of the value withdrawn or temporarily restrict withdrawals for up to 10 business days during a 90 day period, in the event that the private investment company’s weekly liquid assets fall below certain thresholds.

Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment expenses. The Fund retains a portion of securities lending income and remits a remaining portion to BIM as compensation for its services as securities lending agent.

Pursuant to a securities lending agreement, the Fund retains 71.5% of securities lending income, and this amount retained can never be less than 65% of the total of securities lending income plus the collateral investment expenses.

In addition, commencing the business day following the date that the aggregate securities lending income earned across the Equity-Bond Complex in a calendar year exceeds a specified threshold, the Fund, pursuant to the securities lending agreement, will retain for the remainder of that calendar year securities lending income in an amount equal to 75% of securities lending income, and this amount retained can never be less than 65% of the total of securities lending income plus the collateral investment expenses.

The share of securities lending income earned by the Fund is shown as securities lending income — affiliated — net in the Statement of Operations. For the year ended December 31, 2018, the Fund paid BIM $20,446 for securities lending agent services.

Interfund Lending: In accordance with an exemptive order (the “Order”) from the SEC, the 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 the Fund’s investment policies and restrictions. The Fund is currently permitted to borrow under the Interfund Lending Program.

16 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

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 Fund did not participate in the Interfund Lending Program.

Directors and Officers: Certain directors and/or officers of the Company are directors and/or officers of BlackRock or its affiliates. The Fund reimburses the Manager for a portion of the compensation paid to the Company’s Chief Compliance Officer, which is included in Directors and Officer in the Statement of Operations.

6. PURCHASES AND SALES

For the year ended December 31, 2018, purchases and sales of investments, and excluding short-term securities, were $143,947,617 and $210,758,578, respectively.

7. INCOME TAX INFORMATION

It is the 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.

The 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 the Fund’s U.S. federal tax returns generally remains open for each of the four years ended December 31, 2018. The statutes of limitations on the 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 Fund 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 Fund’s financial statements.

The tax character of distributions paid was as follows:

	12/31/18		12/31/17
Ordinary income	$	8,462,291	$	10,837,279
Long term capital gains		45,950,223		14,563,626
	$	54,412,514	$	25,400,905

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

Undistributed ordinary income	$	94,473
Net unrealized gains(a)		4,361,582
Qualified late-year losses(b)		(2,472,094	)
	$	1,983,961

^(a)  The difference between book-basis and tax-basis net unrealized gains was attributable primarily to the tax deferral of losses on wash sales 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.

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

Tax cost	$	401,987,684
Gross unrealized appreciation	$	35,675,769
Gross unrealized depreciation		(31,553,488	)
Net unrealized appreciation	$	4,122,281

8. BANK BORROWINGS

The Company, on behalf of the Fund, 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 Fund may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Fund, 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. Prior to April 19, 2018, the aggregate commitment amount was $2.1 billion and the fee was 0.12% per annum. 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 Statement 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 Fund did not borrow under the credit agreement.

NOTESTO FINANCIAL STATEMENTS 17

Notes to Financial Statements  (continued)

9. PRINCIPAL RISKS

In the normal course of business, the Fund invests in securities or other instruments and may enter into certain transactions, and such activities subject the 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. The Fund’s prospectus provides details of the risks to which the Fund is subject.

The Fund may be exposed to additional risks when reinvesting cash collateral in money market funds that do not seek to maintain a stable NAV per share of $1.00, which may be subject to redemption gates or liquidity fees under certain circumstances.

Valuation Risk: The market values of equities, such as common stocks and preferred securities or equity related investments, such as futures and options, may decline due to general market conditions which are not specifically related to a particular company. They may also decline due to factors which affect a particular industry or industries. The Fund may invest in illiquid investments and may experience difficulty in selling those investments in a timely manner at the price that it believes the investments are worth. Prices may fluctuate widely over short or extended periods in response to company, market or economic news. Markets also tend to move in cycles, with periods of rising and falling prices. This volatility may cause the 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 the Fund may lose value, regardless of the individual results of the securities and other instruments in which the Fund invests.

Counterparty Credit Risk: The Fund 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 Fund manages 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 Fund to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Fund’s exposure to market, issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Statement of Assets and Liabilities, less any collateral held by the Fund.

10. CAPITAL SHARE TRANSACTIONS

Transactions in capital shares for each class were as follows:

	Year Ended 12/31/2018						Year Ended 12/31/2017
	Shares			Amount			Shares			Amount
Class I
Shares sold		687,102		$	10,527,059			654,115		$	9,987,597
Shares issued in reinvestment of distributions		3,655,080			45,856,103			1,355,509			21,064,561
Shares redeemed		(3,410,293	)		(53,890,776	)		(3,465,286	)		(53,113,894	)
Net increase (decrease)		931,889		$	2,492,386			(1,455,662	)	$	(22,061,736	)
Class II
Shares sold		2,419		$	34,701			5,727		$	86,583
Shares issued in reinvestment of distributions		42,597			533,180			16,392			253,758
Shares redeemed		(51,793	)		(824,168	)		(53,552	)		(815,043	)
Net decrease		(6,777	)	$	(256,287	)		(31,433	)	$	(474,702	)
Class III
Shares sold		275,061		$	3,963,788			805,717		$	12,136,647
Shares issued in reinvestment of distributions		643,024			8,023,231			265,245			4,082,586
Shares redeemed		(1,321,516	)		(20,441,420	)		(3,542,663	)		(53,147,902	)
Net decrease		(403,431	)	$	(8,454,401	)		(2,471,701	)	$	(36,928,669	)
Total Net Increase (Decrease)		521,681		$	(6,218,302	)		(3,958,796	)	$	(59,465,107	)

11. 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 Fund has adopted the amendments pertinent to RegulationS-X in this shareholder report. The amendments impacted certain disclosure presentation on the Statement 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.

18 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

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

Share Class	Net Investment Income			Net Realized Gain
Class I	$	(5,893,355	)	$	(15,171,206	)
Class II		(64,132	)		(189,626	)
Class III		(909,408	)		(3,173,178	)

Undistributed net investment income as of December 31, 2017 was $98,753.

12. SUBSEQUENT EVENTS

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

NOTESTO FINANCIAL STATEMENTS 19

Report of Independent Registered Public Accounting Firm

To the Shareholders of BlackRock Basic Value V.I. Fund and the Board of Directors of BlackRock Variable Series Funds, Inc.:

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying statement of assets and liabilities of BlackRock Basic Value V.I. Fund of BlackRock Variable Series Funds, Inc. (the “Fund”), including the schedule of investments, as of December 31, 2018, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of December 31, 2018, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s 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 Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its 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 Fund’s 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 15, 2019

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

20 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Glossary of Terms Used in this Report

Portfolio Abbreviations
ADR	American Depositary Receipt
NYRS	New York Registered Shares

GLOSSARYOF TERMS USEDINTHIS REPORT 21

DECEMBER 31, 2018

ANNUAL REPORT

BlackRock Variable Series Funds, Inc.

^Ø  BlackRock Capital Appreciation V.I. Fund

Not FDIC Insured • May Lose Value • No Bank Guarantee

Fund Summary  as of December 31, 2018 BlackRock Capital Appreciation V.I. Fund

Investment Objective

BlackRock Capital Appreciation V.I. Fund’s (the “Fund”) investment objective is to seek long-term growth of capital.

Portfolio Management Commentary

How did the Fund perform?

For the 12-month period ended December 31, 2018, the Fund outperformed its benchmark, the Russell 1000^® Growth Index, and the broad market S&P 500^® Index. The following discussion of relative performance pertains to the Russell 1000^® Growth Index.

What factors influenced performance?

On a sector basis, the largest contributor to relative performance was consumer discretionary where internet & direct marketing retail holdings had the most positive impact. Selection within hotels, restaurants & leisure and a lack of exposure to media also added value within the sector. Health care and industrials were additional sources of strength. Within health care, equipment & supplies and life sciences tools & services holdings drove gains, while positioning to machinery and zero exposure to air freight & logistics benefited performance in industrials.

The top individual contributors were Amazon.com Inc. and Netflix Inc. Amazon outperformed as the company delivered a series of strong earnings reports, with revenue acceleration in North America, International, Prime, Amazon Web Services (“AWS”) and advertising. In addition, Amazon’s operating margin expansion has been notable, driven by advertising, subscription services, AWS and shipping efficiencies. The investment adviser’s view remains that Amazon has many years of profitable growth ahead and, accordingly, the Fund maintains its overweight position. Netflix continued to outperform after a series of strong earnings reports. The company exceeded 23 million global net subscriber additions for 2017 and is on pace to exceed 28 million in 2018, ahead of our forecasts. Overall, the investment adviser’s thesis is playing out as the mutually reinforcing growth of content and subscribers is benefiting Netflix as it gains scale. The investment adviser continues to believe the stock is far from pricing in the company’s long-term growth and profitability potential.

Conversely, communication services detracted from performance with entertainment holdings hindering results. Consumer staples and materials also weighed on performance. Selection within beverages was a drag in consumer staples, while an overweight to construction materials was a weakness in materials (at period end the Fund had zero exposure to construction materials).

The top detractors over the annual period were Tencent Holdings Ltd. and Constellation Brands Inc. Tencent underperformed amid U.S./China trade tensions, weakness in the Chinese stock market, regulatory uncertainty and questions around timing of game launches and monetization. In addition, data showed a modest decline in Tencent’s share of mobile user time spent. The investment adviser’s view remains bullish as the company still dominates mobile time spent in China, enabling it to monetize along multiple channels, including gaming, advertising, payments and e-commerce among others. Constellation has underperformed on investor concerns over sales growth for its Mexican import beers and overall beer profit margin growth, as well over reinvestment risk in cannabis and hemp company Canopy Growth. Constellation announced a $4 billion investment in Canopy Growth during the second quarter. The investment adviser expects Constellation’s core fundamentals to stay on track, including high single digit volume growth for beer and continued beer margin expansion and are positive on the Canopy investment.

Describe recent portfolio activity.

Due to a combination of portfolio trading activity, market movement and sector reclassifications during the 12-month period, the portfolio’s weighting in the communication services sector increased, particularly within entertainment and interactive media & services. Health care exposure also increased, namely within equipment & supplies and pharmaceuticals. Exposure to information technology decreased, largely with respect to internet software & services. Consumer discretionary exposure, namely within specialty retail, declined as well.

Describe portfolio positioning at period end.

As of period end, the Fund’s largest overweight relative to the Russell 1000^® Growth Index was the health care sector, followed by communication services. Industrials was the largest sector underweight, followed by consumer staples.

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.

2 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Fund Summary  as of December 31, 2018 (continued) BlackRock Capital Appreciation V.I. Fund

TOTAL RETURN BASED ON A $10,000 INVESTMENT

^(a)  Assuming transaction costs, if any, and other operating expenses, including investment advisory fees. Does not include insurance-related fees and expenses. The returns for Class III Shares prior to June 15, 2010, the recommencement of operations of Class III Shares, are based upon the performance of the Fund’s Class I Shares, as adjusted to reflect the distribution and/or service(12b-1) fees applicable to the Class III Shares.

^(b)  The Fund invests primarily in a diversified portfolio consisting primarily of common stock of U.S. companies that the investment adviser believes have exhibited above-average growth rates in earnings over the long-term.

^(c)  An unmanaged index that measures the performance of the large cap growth segment of the U.S. equity universe and consists of those Russell 1000^® securities with higherprice-to-book ratios and higher forecasted growth values.

^(d) An unmanaged index that covers 500 leading companies and captures approximately 80% coverage of available market capitalization.

Performance Summary for the Period Ended December 31, 2018

	6-Month Total Returns (b)			Average Annual Total Returns
				1 Year (b)			5 Years (b)			10 Years (b)
Class I(a)		(10.97	)%		2.39	%		9.70	%		13.62	%
Class III(a)		(11.00	)		2.13			9.43			13.34	(c)
Russell 1000® Growth Index		(8.17	)		(1.51	)		10.40			15.29
S&P 500® Index		(6.85	)		(4.38	)		8.49			13.12

^(a) Average annual and cumulative total returns are based on changes in net asset value for the periods shown, and assume reinvestment of all distributions at net asset value on theex-dividend date. Insurance-related fees and expenses are not reflected in these returns.

^(b) For the portion of the period, the Fund’s investment adviser waived a portion of its fee. Without such waiver, the Fund’s performance would have been lower.

^(c) The returns for Class III Shares prior to June 15, 2010, the recommencement of operations of Class III Shares, are based upon the performance of the Fund’s Class I Shares, as adjusted to reflect the distribution(12b-1) fees applicable to Class III Shares.

Past performance is not indicative of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of

Fund shares.

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

Expense Example

	Actual						Hypothetical (a)
	Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Annualized Expense Ratio
Class I	$	1,000.00	$	890.30	$	3.91	$	1,000.00	$	1,021.07	$	4.18		0.82	%
Class III		1,000.00		890.00		5.14		1,000.00		1,019.76		5.50		1.08

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

^(b)  For each class of the Fund, expenses are equal to annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect theone-half year period shown).

See “Disclosure of Expenses” on the following page for further information on how expenses were calculated.

FUND SUMMARY 3

Fund Summary  as of December 31, 2018 (continued) BlackRock Capital Appreciation V.I. Fund

Portfolio Information

SECTOR ALLOCATION

Sector	Percent of Net Assets
Information Technology		32	%
Health Care		19
Consumer Discretionary		16
Communication Services		15
Industrials		6
Financials		5
Consumer Staples		2
Real Estate		2
Materials		1
Short-Term Securities		5
Liabilities in Excess of Other Assets		(3	)

For Fund compliance purposes, the Fund’s sector classifications refer to one or more of the sectorsub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine sector sub classifications for reporting ease.

Disclosure of Expenses

Shareholders of the Fund may incur the following charges: (a) transactional expenses; and (b) operating expenses, including investment advisory fees, service and distribution fees, including12b-1 fees, acquired fund fees and expenses, and other fund expenses. The expense example on the previous page (which is based on a hypothetical investment of $1,000 invested on July 1, 2018 and held through December 31, 2018) is intended to assist shareholders both in calculating expenses based on an investment in the Fund and in comparing these expenses with similar costs of investing in other mutual funds.

The expense example provides 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 share class under the heading entitled “Expenses Paid During the Period.”

The expense example also provides information about hypothetical account values and hypothetical expenses based on the 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 the Fund and other funds, compare the 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.

The expenses shown in the expense example are intended to highlight shareholders’ ongoing costs only and do not reflect any transactional expenses, such as sales charges, if any. Therefore, the hypothetical example is 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.

4 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments December 31, 2018 BlackRock Capital Appreciation V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Common Stocks — 96.4%
Automobiles — 0.8%
Tesla, Inc.(a)(b)		6,022	$	2,004,122
Banks — 0.6%
First Republic Bank(a)		17,184		1,493,290
Beverages — 1.8%
Constellation Brands, Inc., Class A		28,959		4,657,186
Biotechnology — 1.7%(b)
BioMarin Pharmaceutical, Inc.		13,061		1,112,144
Vertex Pharmaceuticals, Inc.		20,554		3,406,003
				4,518,147
Capital Markets — 3.4%
CME Group, Inc.(a)		20,737		3,901,045
S&P Global, Inc.		29,298		4,978,902
				8,879,947
Chemicals — 1.5%
Sherwin-Williams Co. (The)		10,185		4,007,390
Diversified Financial Services — 1.2%
Berkshire Hathaway, Inc., Class B(b)		15,896		3,245,645
Entertainment — 5.3%
Activision Blizzard, Inc.		44,463		2,070,642
Electronic Arts, Inc.(b)		60,078		4,740,755
Netflix, Inc.(b)		27,358		7,322,642
				14,134,039
Equity Real Estate Investment Trusts (REITs) — 1.7%
SBA Communications Corp.(b)		28,319		4,584,563
Health Care Equipment & Supplies — 7.5%
Align Technology, Inc.(b)		19,113		4,002,836
Becton Dickinson and Co.		24,784		5,584,331
Boston Scientific Corp.(a)(b)		171,169		6,049,112
Intuitive Surgical, Inc.(b)		8,993		4,306,927
				19,943,206
Health Care Providers & Services — 5.3%
Centene Corp.(b)		32,073		3,698,017
UnitedHealth Group, Inc.		41,321		10,293,887
				13,991,904
Hotels, Restaurants & Leisure — 1.0%
Domino’s Pizza, Inc.		10,820		2,683,252
Industrial Conglomerates — 1.0%
Roper Technologies, Inc.		9,933		2,647,343
Interactive Media & Services — 9.3%
Alphabet, Inc., Class A(b)		10,098		10,552,006
Facebook, Inc., Class A(b)		34,738		4,553,804
IAC/InterActiveCorp(b)		12,481		2,284,522
Tencent Holdings Ltd.		182,000		7,294,624
				24,684,956
Internet & Direct Marketing Retail — 12.9%
Amazon.com, Inc.(b)		15,454		23,211,444
Booking Holdings, Inc.(b)		3,906		6,727,773
MercadoLibre, Inc.		14,404		4,218,211
				34,157,428
IT Services — 10.3%
Mastercard, Inc., Class A		46,486		8,769,584
PayPal Holdings, Inc.(b)		57,148		4,805,575
Visa, Inc., Class A		104,368		13,770,314
				27,345,473

Security	Shares		Value
Life Sciences Tools & Services — 1.7%
Illumina, Inc.(b)		14,885	$	4,464,458
Machinery — 0.9%
Xylem, Inc.(a)		36,939		2,464,570
Pharmaceuticals — 2.6%
Novartis AG, ADR		50,394		4,324,309
Zoetis, Inc.		29,120		2,490,925
				6,815,234
Professional Services — 2.2%
CoStar Group, Inc.(b)		17,361		5,856,560
Road & Rail — 1.6%
Union Pacific Corp.		30,768		4,253,061
Semiconductors & Semiconductor Equipment — 3.0%
ASML Holding NV (Registered), NYRS		30,959		4,817,840
NVIDIA Corp.		23,126		3,087,321
				7,905,161
Software — 17.1%
Adobe, Inc.(b)		28,815		6,519,106
Autodesk, Inc.(b)		31,269		4,021,506
Intuit, Inc.		30,615		6,026,563
Microsoft Corp.		165,791		16,839,392
salesforce.com, Inc.(b)		57,698		7,902,895
ServiceNow, Inc.(b)		22,124		3,939,178
				45,248,640
Technology Hardware, Storage & Peripherals — 0.9%
Apple, Inc.		14,840		2,340,862
Textiles, Apparel & Luxury Goods — 1.1%
NIKE, Inc., Class B		40,571		3,007,934
Total Common Stocks — 96.4% (Cost: $206,338,338)				255,334,371
Preferred Stocks — 1.0%
Software — 1.0%
Palantir Technologies, Inc., Series I (Acquired 02/07/14, cost $2,858,020)(b)(c)(d)		466,235		2,522,331
Total Preferred Stocks — 1.0% (Cost: $2,858,021)				2,522,331
Total Long-Term Investments — 97.4% (Cost: $209,196,359)				257,856,702
Short-Term Securities — 5.4%(e)
BlackRock Liquidity Funds, T-Fund, Institutional Class, 2.32%(g)		5,520,889		5,520,889
JPMorgan US Treasury Plus Money Market Fund, Agency Class, 2.24%		145,721		145,721
SL Liquidity Series, LLC, Money Market Series, 2.57%(f)(g)		8,638,158		8,637,294
Total Short-Term Securities — 5.4% (Cost: $14,303,940)				14,303,904
Total Investments — 102.8% (Cost: $223,500,299)				272,160,606
Liabilities in Excess of Other Assets — (2.8)%				(7,381,836	)
Net Assets — 100.0%			$	264,778,770

SCHEDULE OF INVESTMENTS 5

Schedule of Investments  (continued) December 31, 2018 BlackRock Capital Appreciation V.I. Fund

^(a)  Security, or a portion of the security, is on loan.

^(b)  Non-income producing security.

^(c)  Restricted security as to resale, excluding 144A securities. The Fund held restricted securities with a current value of $2,522,331, representing 0.95% of its net assets as of period end, and an original cost of $2,858,020.

^(d)  Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy.

^(e)  Annualized 7-day yield as of period end.

^(f)  Security was purchased with the cash collateral from loaned securities.

^(g)  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, 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		2,708,926		2,811,963			5,520,889	$	5,520,889	$	44,192		$	—		$	—
SL Liquidity Series, LLC, Money Market Series		15,258,256		(6,620,098	)		8,638,158		8,637,294		35,863	(b)		(1,978	)		(36	)
								$	14,158,183	$	80,055		$	(1,978	)	$	(36	)

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

^(b)  Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.

For Fund compliance purposes, the Fund’s industry classifications refer to one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

Fair Value Hierarchy as of Period End

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

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

	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Long-Term Investments:
Common Stocks:
Automobiles	$	2,004,122	$	—	$	—	$	2,004,122
Banks		1,493,290		—		—		1,493,290
Beverages		4,657,186		—		—		4,657,186
Biotechnology		4,518,147		—		—		4,518,147
Capital Markets		8,879,947		—		—		8,879,947
Chemicals		4,007,390		—		—		4,007,390
Diversified Financial Services		3,245,645		—		—		3,245,645
Entertainment		14,134,039		—		—		14,134,039
Equity Real Estate Investment Trusts (REITs)		4,584,563		—		—		4,584,563
Health Care Equipment & Supplies		19,943,206		—		—		19,943,206
Health Care Providers & Services		13,991,904		—		—		13,991,904
Hotels, Restaurants & Leisure		2,683,252		—		—		2,683,252
Industrial Conglomerates		2,647,343		—		—		2,647,343
Interactive Media & Services		17,390,332		7,294,624		—		24,684,956
Internet & Direct Marketing Retail		34,157,428		—		—		34,157,428
IT Services		27,345,473		—		—		27,345,473
Life Sciences Tools & Services		4,464,458		—		—		4,464,458
Machinery		2,464,570		—		—		2,464,570
Pharmaceuticals		6,815,234		—		—		6,815,234
Professional Services		5,856,560		—		—		5,856,560
Road & Rail		4,253,061		—		—		4,253,061
Semiconductors & Semiconductor Equipment		7,905,161		—		—		7,905,161
Software		45,248,640		—		—		45,248,640
Technology Hardware, Storage & Peripherals		2,340,862		—		—		2,340,862
Textiles, Apparel & Luxury Goods		3,007,934		—		—		3,007,934
Preferred Stocks		—		—		2,522,331		2,522,331
Short-Term Securities		5,666,610		—		—		5,666,610
Subtotal	$	253,706,357	$	7,294,624	$	2,522,331	$	263,523,312
Investments valued at NAV(a)								8,637,294
Total Investments							$	272,160,606

^(a)  As of December 31, 2018, certain investments of the Fund were fair valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

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

See notes to financial statements.

6 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Statement of Assets and Liabilities

December 31, 2018

	BlackRock Capital Appreciation V.I. Fund
ASSETS
Investments at value — unaffiliated (including securities loaned at value of $8,510,486) (cost — $209,342,080)	$	258,002,423
Investments at value — affiliated (cost — $14,158,219)		14,158,183
Foreign currency at value (cost — $101)		101
Receivables:
Securities lending income — affiliated		1,209
Capital shares sold		2,650,352
Dividends — affiliated		6,972
Dividends — unaffiliated		41,332
From custodian		145,721
From the Manager		3,528
Prepaid expenses		301
Total assets		275,010,122
LIABILITIES
Cash collateral on securities loaned at value		8,638,095
Payables:
Investments purchased		1,064,978
Capital shares redeemed		12,546
Distribution fees		33,629
Transfer agent fees		184,182
Board realignment and consolidation		35,302
Investment advisory fees		179,952
Directors’ and Officer’s fees		5,926
Other affiliates		711
Other accrued expenses		76,031
Total liabilities		10,231,352
NET ASSETS	$	264,778,770
NET ASSETS CONSIST OF
Paid-in capital	$	213,795,661
Accumulated earnings		50,983,109
NET ASSETS	$	264,778,770
NET ASSET VALUE
Class I — Based on net assets of $119,220,254 and 16,439,386 shares outstanding, 100 million shares authorized, $0.10 par value.	$	7.25
Class III — Based on net assets of $145,558,516 and 20,420,825 shares outstanding, 100 million shares authorized, $0.10 par value.	$	7.13

See notes to financial statements.

FINANCIAL STATEMENTS 7

Statement of Operations

Year Ended December 31, 2018

	BlackRock Capital Appreciation V.I. Fund
INVESTMENT INCOME
Dividends — affiliated	$	44,192
Dividends — unaffiliated(a)		2,584,886
Securities lending income — affiliated — net		35,863
Total investment income		2,664,941
EXPENSES
Investment advisory		2,176,724
Transfer agent — class specific		686,897
Distribution — class specific		484,131
Printing		71,228
Accounting services		61,142
Professional		54,307
Board realignment and consolidation		35,488
Directors and Officer		21,565
Custodian		18,767
Transfer agent		5,001
Miscellaneous		8,451
Total expenses		3,623,701
Less:
Fees waived and/or reimbursed by the Manager		(2,240	)
Transfer agent fees waived and/or reimbursed — class specific		(433,119	)
Total expenses after fees waived and/or reimbursed		3,188,342
Net investment loss		(523,401	)
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — affiliated		(1,978	)
Investments — unaffiliated		76,934,207
Foreign currency transactions		(381	)
		76,931,848
Net change in unrealized appreciation (depreciation) on:
Investments — affiliated		(36	)
Investments — unaffiliated		(60,745,910	)
		(60,745,946	)
Net realized and unrealized gain		16,185,902
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	15,662,501

^(a)  Includesnon-recurring dividends in the amount of $656,405.

See notes to financial statements.

8 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Statements of Changes in Net Assets

	BlackRock Capital Appreciation V.I. Fund
	Year Ended December 31,
	2018			2017
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment loss	$	(523,401	)	$	(685,408	)
Net realized gain		76,931,848			48,210,072
Net change in unrealized appreciation (depreciation)		(60,745,946	)		62,728,743
Net increase in net assets resulting from operations		15,662,501			110,253,407
DISTRIBUTIONS TO SHAREHOLDERS(a)(b)
Class I		(37,800,468	)		(15,570,061	)
Class III		(46,900,915	)		(28,079,992	)
Decrease in net assets resulting from distributions to shareholders		(84,701,383	)		(43,650,053	)
CAPITAL SHARE TRANSACTIONS
Net decrease in net assets derived from capital share transactions		(68,397,301	)		(20,276,483	)
NET ASSETS(b)
Total increase (decrease) in net assets		(137,436,183	)		46,326,871
Beginning of year		402,214,953			355,888,082
End of year	$	264,778,770		$	402,214,953

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

^(b)  Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year RegulationS-X presentation changes. Refer to Note 11 for this prior year information.

See notes to financial statements.

FINANCIAL STATEMENTS 9

Financial Highlights

(For a share outstanding throughout each period)

	BlackRock Capital Appreciation V.I. Fund
	Class I
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	10.26		$	8.63		$	8.86		$	9.02		$	9.80
Net investment income (loss)(a)		0.00	(b)(c)		(0.00	)(d)(e)		(0.00	)(d)(f)		(0.01	)		(0.01	)
Net realized and unrealized gain		0.23			2.86			0.01			0.63			0.87
Net increase from investment operations		0.23			2.86			0.01			0.62			0.86
Distributions from net realized gain(g)		(3.24	)		(1.23	)		(0.24	)		(0.78	)		(1.64	)
Net asset value, end of year	$	7.25		$	10.26		$	8.63		$	8.86		$	9.02
Total Return(h)
Based on net asset value		2.39	%		33.22	%		0.10	%		6.73	%		9.02	%
Ratios to Average Net Assets
Total expenses		0.94	%(i)		0.92	%		0.92	%		0.93	%		0.91	%
Total expenses after fees waived and/or reimbursed		0.80	%(i)		0.79	%		0.80	%		0.79	%		0.79	%
Net investment income (loss)		0.01	%(c)(i)		(0.00	)%(e)(j)		(0.06	)%(f)		(0.15	)%		(0.10	)%
Supplemental Data
Net assets, end of year (000)	$	119,220		$	142,246		$	124,752		$	139,045		$	166,586
Portfolio turnover rate		45	%		48	%		89	%		70	%		102	%

^(a)  Based on average shares outstanding.

^(b)  Amount is less than $0.005 per share.

^(c)  Net investment income per share and the ratio of net investment income to average net assets includes $0.02 per share and 0.21%, respectively, resulting from a non-recurring dividend.

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

^(e)  Net investment income per share and the ratio of net investment income to average net assets includes $0.01 per share and 0.09%, respectively, resulting from a non-recurring dividend from TransDigm Group, Inc. in August 2017.

^(f)  Net investment income per share and the ratio of net investment income to average net assets includes $0.01 per share and 0.07%, respectively, resulting from a non-recurring dividend from TransDigm Group, Inc. in October 2016.

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

^(h)  Where applicable, excludes insurance-related fees and expenses and assumes the reinvestment of distributions.

⁽ⁱ⁾  Excludes expenses incurred indirectly as a result of investments in underlying funds of 0.01%.

^(j)  Amount is greater than (0.005)%.

See notes to financial statements.

10 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Financial Highlights  (continued)

(For a share outstanding throughout each period)

	BlackRock Capital Appreciation V.I. Fund (continued)
	Class III
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	10.17		$	8.56		$	8.81		$	8.97		$	9.76
Net investment loss(a)		(0.03	)(b)		(0.03	)(c)		(0.03	)(d)		(0.04	)		(0.03	)
Net realized and unrealized gain		0.23			2.84			0.02			0.63			0.86
Net increase (decrease) from investment operations		0.20			2.81			(0.01	)		0.59			0.83
Distributions from net realized gain(e)		(3.24	)		(1.20	)		(0.24	)		(0.75	)		(1.62	)
Net asset value, end of year	$	7.13		$	10.17		$	8.56		$	8.81		$	8.97
Total Return(f)
Based on net asset value		2.13	%		32.94	%		(0.13	)%		6.49	%		8.68	%
Ratios to Average Net Assets
Total expenses		1.19	%(g)		1.17	%		1.18	%		1.17	%		1.18	%
Total expenses after fees waived and/or reimbursed		1.06	%(g)		1.05	%		1.06	%		1.05	%		1.05	%
Net investment loss		(0.28	)%(b)(g)		(0.27	)%(c)		(0.32	)%(d)		(0.40	)%		(0.35	)%
Supplemental Data
Net assets, end of year (000)	$	145,559		$	259,969		$	231,136		$	233,706		$	233,723
Portfolio turnover rate		45	%		48	%		89	%		70	%		102	%

^(a)  Based on average shares outstanding.

^(b)  Net investment income per share and the ratio of net investment income to average net assets includes $0.02 per share and 0.19%, respectively, resulting from a non-recurring dividend.

^(c)  Net investment income per share and the ratio of net investment income to average net assets includes $0.01 per share and 0.09%, respectively, resulting from a non-recurring dividend from TransDigm Group, Inc. in August 2017.

^(d)  Net investment income per share and the ratio of net investment income to average net assets includes $0.00 per share and 0.07%, respectively, resulting from a non-recurring dividend from TransDigm Group, Inc. in October 2016.

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

^(f)  Where applicable, excludes insurance-related fees and expenses and assumes the reinvestment of distributions.

^(g)  Excludes expenses incurred indirectly as a result of investments in underlying funds of 0.01%.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 11

Notes to Financial Statements

1. ORGANIZATION

BlackRock Variable Series Funds, Inc. (the “Company”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as anopen-end management investment company. The Company is organized as a Maryland corporation that is comprised of 15 separate portfolios. The funds offer shares to insurance companies for their separate accounts to fund benefits under certain variable annuity and variable life insurance contracts. The financial statements presented are for BlackRock Capital Appreciation V.I. Fund (the “Fund”). The Fund is classified as diversified. Class I and Class III Shares have equal voting, dividend, liquidation and other rights, except that only shares of the respective classes are entitled to vote on matters concerning only that class. In addition, Class III Shares bear certain expenses related to the distribution of such shares.

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

2. SIGNIFICANT ACCOUNTING POLICIES

The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. The 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 Fund is 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. Income, expenses and realized and unrealized gains and losses are allocated daily to each class based on its relative net assets.

Foreign Currency Translation: The 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.

The 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 Statement 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. The 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.

Distributions: Distributions paid by the Fund are recorded on theex-dividend date. Distributions of capital gains are recorded on the ex-divdend date and made at least annually. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP.

Recent Accounting Standards: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 Fund.

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

Other: Expenses directly related to the Fund or its classes are charged to the 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 Fund and other shared expenses prorated to the Fund are allocated daily to each class based on its relative net assets or other appropriate methods.

3. INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS

Investment Valuation Policies: The Fund’s 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 Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Fund determines the fair values of its financial instruments using various independent dealers or pricing services under policies approved by the Board of Directors of the Company (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.

12 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

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

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

• Generally, trading in foreign instruments is substantially completed each day at various times prior to the close of trading on the NYSE. Occasionally, events affecting the values of such instruments may occur between the foreign market close and the close of trading on the NYSE that may not be reflected in the computation of the Fund’s net assets. Each business day, the Fund uses a pricing service to assist with the valuation of certain foreign exchange-traded equity securities and foreign exchange-traded andover-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 net asset value (“NAV”) each business day.

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 the 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.

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 the 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 the Fund. Typically, the most recently available information by a Private Company is as of a date that is earlier than the date the Fund is calculating its NAV. This factor may result in a difference between the value of the investment and the price the Fund could receive upon the sale of the investment.

Fair Value Hierarchy: Various inputs are used in determining the fair value of investments. 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 the 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)

NOTESTO FINANCIAL STATEMENTS 13

Notes to Financial Statements  (continued)

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

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 the 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 is based on the pricing transparency of the investments and is not necessarily an indication of the risks associated with investing in those securities.

As of December 31, 2018, certain investments of the Fund were valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

4. SECURITIES AND OTHER INVESTMENTS

Preferred Stocks: Preferred stock has a preference over common stock in liquidation (and generally in receiving dividends as well), but is subordinated to the liabilities of the issuer in all respects. As a general rule, the market value of preferred stock with a fixed dividend rate and no conversion element varies inversely with interest rates and perceived credit risk, while the market price of convertible preferred stock generally also reflects some element of conversion value. Because preferred stock is junior to debt securities and other obligations of the issuer, deterioration in the credit quality of the issuer will cause greater changes in the value of a preferred stock than in a more senior debt security with similar stated yield characteristics. Unlike interest payments on debt securities, preferred stock dividends are payable only if declared by the issuer’s board of directors. Preferred stock also may be subject to optional or mandatory redemption provisions.

Securities Lending: The Fund may lend its securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received by the Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current market value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Fund and any additional required collateral is delivered to the Fund, or excess collateral returned by the Fund, on the next business day. During the term of the loan, the Fund is entitled to all distributions made on or in respect of the loaned securities, but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.

The market value of any securities on loan, all of which were classified as common stocks in the Fund’s Schedule of Investments, and the value of any related collateral are shown separately in the Statement of Assets and Liabilities as a component of investments at value — unaffiliated, and collateral on securities loaned at value, respectively. As of period end, any securities on loan were collateralized by cash and/or U.S. Government obligations. Cash collateral invested by the securities lending agent, BlackRock Investment Management, LLC (“BIM”), if any, is disclosed in the Schedule of Investments.

Securities lending transactions are entered into by the Fund under Master Securities Lending Agreements (each, an “MSLA”), which provide the right, in the event of default (including bankruptcy or insolvency), for thenon-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, the Fund, as lender, would offset the market value of the collateral received against the market value of the securities loaned. When the value of the collateral is greater than that of the market value of the securities loaned, the lender is left with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, absent an event of default, the borrower can resell orre-pledge the loaned securities, and the Fund can reinvest cash collateral received in connection with loaned securities. Upon an event of default, the parties’ obligations to return the securities or collateral to the other party are extinguished, and the parties can resell orre-pledge the loaned securities or the collateral received in connection with the loaned securities in order to satisfy the defaulting party’s net payment obligation for all transactions under the MSLA. The defaulting party remains liable for any deficiency.

As of period end, the following table is a summary of the Fund’s securities lending agreements by counterparty which are subject to offset under an MSLA:

Counterparty	Securities Loaned at Value		Cash Collateral Received (a)			Net Amount
Citigroup Global Markets, Inc.	$	2,419,095	$	(2,419,095	)	$	—
Deutsche Bank Securities, Inc.		1,769,165		(1,769,165	)		—
JP Morgan Securities LLC		4,322,226		(4,322,226	)		—
	$	8,510,486	$	(8,510,486	)	$	—

^(a)  Cash collateral with a value of $ 8,638,095 has been received in connection with securities lending agreements. Collateral received in excess of the value of securities loaned from the individual counterparty, if any, is not shown for financial reporting purposes in the table above.

The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Fund benefits from a borrower default indemnity provided by BIM. BIM’s indemnity allows for full replacement of the securities loaned if the collateral

14 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

received does not cover the value on the securities loaned in the event of borrower default. The Fund could incur a loss if the value of an investment purchased with cash collateral falls below the market value of loaned securities or if the value of an investment purchased with cash collateral falls below the value of the original cash collateral received.

5. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

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

For such services, the Fund pays the Manager a monthly fee at an annual rate equal to the following percentages of the average daily value of the Fund’s net assets:

Average Daily Net Assets	Investment Advisory Fees
First $1 Billion		0.65	%
$1 Billion — $3 Billion		0.61
$3 Billion — $5 Billion		0.59
$5 Billion — $10 Billion		0.57
Greater than $10 Billion		0.55

Distribution Fees: The Company, on behalf of the Fund, entered into a Distribution Agreement and a Distribution Plan with BlackRock Investments, LLC (“BRIL”), an affiliate of the Manager. Pursuant to the Distribution Plan and in accordance with Rule12b-1 under the 1940 Act, the Fund pays BRIL ongoing distribution fees. The fees are accrued daily and paid monthly at an annual rate of 0.25% based upon the average daily net assets attributable to Class III.

BRIL and broker-dealers, pursuant tosub-agreements with BRIL, provide shareholder servicing and distribution services to the Fund. 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 class specific distribution fees borne directly by Class III were $484,131.

Transfer Agent: On behalf of the Fund, the Manager entered into agreements with insurance companies and other financial intermediaries (“Service Organizations”), some of which may be affiliates. Pursuant to these agreements, the Service Organizations provide the Fund with administrative, networking, recordkeeping,sub-transfer agency and shareholder services tosub-accounts they service. For these services, the Service Organizations receive an annual fee per shareholder account, which will vary depending on share class and/or net assets of Fund shareholders serviced by the Service Organizations which is shown as transfer agent – class specific. For the year ended December 31, 2018, the Fund did not pay any amounts to affiliates in return for these services/paid the following amounts to affiliates in return for these services.

In addition, the Fund pays the transfer agent, which is not an affiliate, a fee for the issuance, transfer and redemption of shares and the opening and maintenance of shareholder accounts, which is included in transfer agent in the Statement of Operations. For the year ended December 31, 2018, the following table shows the class specific transfer agent fees borne directly by each share class of the Fund:

Class I		Class III		Total
$	290,882	$	396,015	$	686,897

Expense Limitations, Waivers and Reimbursements:With respect to the Fund, the Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees the 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 will be reduced by the amount of the affiliated money market fund waiver. This amount is shown as fees waived and/or reimbursed by the Manager in the Statement of Operations. For the year ended December 31, 2018, the amount waived was $2,240.

The Manager has contractually agreed to waive its investment advisory fee with respect to any portion of the 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. The contractual agreement may be terminated upon 90 days’ notice by a majority of the directors who are not “interested persons” of the Fund, as defined in the 1940 Act (“Independent Directors”) or by a vote of a majority of the outstanding voting securities of the Fund. For the year ended December 31, 2018, there were no fees waived by the Manager pursuant to this arrangement.

For the year ended December 31, 2018, the Fund reimbursed the Manager $4,847 for certain accounting services, which is included in accounting services in the Statement of Operations.

The Manager has contractually agreed to reimburse transfer agent fees in order to limit such expenses to a percentage of average daily net assets as follows:

Class I	0.07	%
Class III	0.08

The Manager has agreed not to reduce or discontinue this contractual expense limitation through April 30, 2019, unless approved by the Board, including a majority of the Independent Directors, or by a vote of a majority of the outstanding voting securities of the Fund.

NOTESTO FINANCIAL STATEMENTS 15

Notes to Financial Statements  (continued)

These amounts waived and/or reimbursed are shown as transfer agent fees waived and/or reimbursed — class specific in the Statement of Operations. For the year ended December 31, 2018, class specific expense waivers and/or reimbursements were as follows:

	Class I		Class III		Total
Transfer Agent Fees Waived and/or Reimbursed	$	192,024	$	241,095	$	433,119

With respect to the 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 the Fund’s business (“expense limitation”). The expense limitations as a percentage of average daily net assets are as follows:

Class I		Class III
	1.25%	1.50%

The Manager has agreed not to reduce or discontinue this contractual expense limitation through April 30, 2019, unless approved by the Board, including a majority of the Independent Directors, or by a majority of the outstanding voting securities of the Fund. For the year ended December 31, 2018, there were no fees waived and/or reimbursed by the Manager.

Securities Lending: The U.S. Securities and Exchange Commission (“SEC”) has issued an exemptive order which permits BIM, an affiliate of the Manager, to serve as securities lending agent for the Fund, subject to applicable conditions. As securities lending agent, BIM bears all operational costs directly related to securities lending. The Fund is responsible for expenses in connection with the investment of cash collateral received for securities on loan (the “collateral investment expenses”). The cash collateral is invested in a private investment company managed by the Manager or its affiliates. However, BIM has agreed to cap the collateral investment expenses of the private investment company to an annual rate of 0.04%. The investment adviser to the private investment company will not charge any advisory fees with respect to shares purchased by the Fund. The private investment company in which the cash collateral has been invested may, under certain circumstances, impose a liquidity fee of up to 2% of the value withdrawn or temporarily restrict withdrawals for up to 10 business days during a 90 day period, in the event that the private investment company’s weekly liquid assets fall below certain thresholds.

Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment expenses. The Fund retains a portion of securities lending income and remits a remaining portion to BIM as compensation for its services as securities lending agent.

Pursuant to a securities lending agreement, the Fund retains 71.5% of securities lending income, and this amount retained can never be less than 65% of the total of securities lending income plus the collateral investment expenses.

In addition, commencing the business day following the date that the aggregate securities lending income earned across the Equity-Bond Complex in a calendar year exceeds a specified threshold, the Fund, pursuant to the securities lending agreement, will retain for the remainder of that calendar year securities lending income in an amount equal to 75% of securities lending income, and this amount retained can never be less than 65% of the total of securities lending income plus the collateral investment expenses.

The share of securities lending income earned by the Fund is shown as securities lending income — affiliated — net in the Statement of Operations. For the year ended December 31, 2018, the Fund paid BIM $13,641 for securities lending agent services.

lnterfund Lending: In accordance with an exemptive order (the “Order”) from the SEC, the Fund may participate in a joint lending and borrowing facility for temporary purposes (the “lnterfund Lending Program”), subject to compliance with the terms and conditions of the Order, and to the extent permitted by the Fund’s investment policies and restrictions. The Fund is currently permitted to borrow under the lnterfund 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 lnterfund Lending Program. A borrowing BlackRock fund may not borrow through the lnterfund 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 Fund did not participate in the lnterfund Lending Program.

Directors and Officers: Certain directors and/or officers of the Company are directors and/or officers of BlackRock or its affiliates. The Fund reimburses the Manager for a portion of the compensation paid to the Company’s Chief Compliance Officer, which is included in Directors and Officer in the Statement of Operations.

6. PURCHASES AND SALES

For the year ended December 31, 2018, purchases and sales of investments, excluding short-term securities, were $150,067,841 and $307,240,124, respectively.

7. INCOME TAX INFORMATION

It is the 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.

16 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

The 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 the Fund’s U.S. federal tax returns generally remains open for each of the four years ended December 31, 2018. The statutes of limitations on the 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 Fund as of December 31, 2018, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the Fund’s financial statements.

The tax character of distributions paid was as follows:

	12/31/18		12/31/17
Ordinary income	$	4,303,099	$	8,773,659
Long term capital gains		80,398,284		34,876,394
	$	84,701,383	$	43,650,053

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

Undistributed long-term capital gains	$	3,140,174
Net unrealized gains(a)		48,656,593
Qualified late-year losses(b)		(813,658	)
	$	50,983,109

^(a)  The difference between book-basis and tax-basis net unrealized gains was attributable primarily to the tax deferral of losses on wash sales and straddles, 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.

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

Tax cost . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	223,556,209
Gross unrealized appreciation . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . .	$	56,124,708
Gross unrealized depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . .		(7,520,311	)
Net unrealized appreciation	$	48,604,397

8. BANK BORROWINGS

The Company, on behalf of the Fund, 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 Fund may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Fund, 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. Prior to April 19, 2018, the aggregate commitment amount was $2.1 billion and the fee was 0.12% per annum. 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 Statement 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 Fund did not borrow under the credit agreement.

9. PRINCIPAL RISKS

In the normal course of business, the Fund invests in securities or other instruments and may enter into certain transactions, and such activities subject the 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. The Fund’s prospectus provides details of the risks to which the Fund is subject.

The Fund may be exposed to additional risks when reinvesting cash collateral in money market funds that do not seek to maintain a stable NAV per share of $1.00, which may be subject to redemption gates or liquidity fees under certain circumstances.

Valuation Risk: The market values of equities, such as common stocks and preferred securities or equity related investments, such as futures and options, may decline due to general market conditions which are not specifically related to a particular company. They may also decline due to factors which affect a particular industry or industries. The Fund may invest in illiquid investments and may experience difficulty in selling those investments in a timely manner at the price that it believes the investments are worth. Prices may fluctuate widely over short or extended periods in response to company, market or economic news. Markets also tend to move in cycles, with periods of rising and falling prices. This volatility may cause the 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 the Fund may lose value, regardless of the individual results of the securities and other instruments in which the Fund invests.

NOTESTO FINANCIAL STATEMENTS 17

Notes to Financial Statements  (continued)

The price the Fund could receive upon the sale of any particular portfolio investment may differ from the 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 the 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 the Fund, and the Fund could realize a greater than expected loss or lesser than expected gain upon the sale of the investment. The Fund’s ability to value its investments may also be impacted by technological issues and/or errors by pricing services or other third party service providers.

Counterparty Credit Risk: The Fund 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 Fund manages 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 Fund to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Fund’s exposure to market, issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Statement of Assets and Liabilities, less any collateral held by the Fund.

10. CAPITAL SHARE TRANSACTIONS

Transactions in capital shares for each class were as follows:

	Year Ended 12/31/2018						Year Ended 12/31/2017
	Shares			Amount			Shares			Amount
Class I
Shares sold		531,879		$	5,009,652			334,343		$	3,268,914
Shares issued in reinvestment of distributions		5,066,937			37,800,468			1,510,157			15,570,061
Shares redeemed		(3,020,879	)		(33,854,433	)		(2,438,122	)		(24,590,116	)
Net increase (decrease)		2,577,937		$	8,955,687			(593,622	)	$	(5,751,141	)
Class III
Shares sold		745,740		$	7,589,740			608,475		$	5,912,633
Shares issued in reinvestment of distributions		6,397,406			46,900,915			2,750,278			28,079,992
Shares redeemed		(12,295,769	)		(131,843,643	)		(4,789,157	)		(48,517,967	)
Net decrease		(5,152,623	)	$	(77,352,988	)		(1,430,404	)	$	(14,525,342	)
Total Net Decrease		(2,574,686	)	$	(68,397,301	)		(2,024,026	)	$	(20,276,483	)

11. 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 Fund has adopted the amendments pertinent to RegulationS-X in this shareholder report. The amendments impacted certain disclosure presentation on the Statement 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 Realized Gain
Class I	$	(15,570,061	)
Class III		(28,079,992	)

Undistributed net investment income as of December 31, 2017 was $62,282.

12. SUBSEQUENT EVENTS

Management has evaluated the impact of all subsequent events on the Fund 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.

18 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Report of Independent Registered Public Accounting Firm

To the Shareholders of BlackRock Capital Appreciation V.I. Fund and the Board of Directors of BlackRock Variable Series Funds, Inc.:

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying statement of assets and liabilities of BlackRock Capital Appreciation V.I. Fund of BlackRock Variable Series Funds, Inc. (the “Fund”), including the schedule of investments, as of December 31, 2018, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of December 31, 2018, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s 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 Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its 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 Fund’s 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 15, 2019

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

REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 19

Glossary of Terms Used in this Report

Portfolio Abbreviations
ADR	American Depositary Receipt
NYRS	New York Registered Shares
REITs	Real Estate Investment Trusts
S&P	Standard & Poor’s

20 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

DECEMBER 31, 2018

ANNUAL REPORT

BlackRock Variable Series Funds, Inc.

^Ø  BlackRock Equity Dividend V.I. Fund

Not FDIC Insured • May Lose Value • No Bank Guarantee

Fund Summary  as of December 31, 2018 BlackRock Equity Dividend V.I. Fund

Investment Objective

BlackRock Equity Dividend V.I. Fund’s (the “Fund”) investment objective is to seek long-term total return and current income.

Portfolio Management Commentary

How did the Fund perform?

For the12-month period ended December 31, 2018, the Fund outperformed its benchmark, the Russell 1000^® Value Index, and underperformed the broad-market S&P 500^® Index. The following discussion of relative performance pertains to the Russell 1000^® Value Index.

What factors influenced performance?

The largest contribution to relative performance for the12-month period came from an overweight position and stock selection within the health care sector. Notably, stock selection within and an overweight to the pharmaceuticals industry proved beneficial, as did an overweight to the health care providers & services industry. The Fund’s cash position, which averaged 5.6% during the12-month period, served as a mechanism to lower and control the Fund’s market risk relative to the Russell 1000^® Value Index and proved favorable amid falling U.S. equity prices. Within information technology (“IT”), a combination of stock selection and an overweight to the software industry boosted relative return, as did stock selection in the electronic equipment industry. Lastly, stock selection in communication services added to relative performance during the period.

The largest detractor from relative performance derived from a combination of stock selection and allocation decisions within financials. In particular, stock selection in the insurance and capital markets industries detracted, as did an overweight to banks and an underweight to the diversified financial services industry. Within utilities, stock selection in the electric utilities segment was particularly weak due to negative impacts on portfolio holdings from severe California wildfires. The Fund’s lack of exposure to real estate also hindered relative return as the sector outperformed the broader U.S. equity market. Lastly, an overweight to construction materials as well as stock selection in the containers & packaging industry constrained relative results within the materials sector.

Describe recent portfolio activity.

During the12-month period, a combination of portfolio trading activity and market price changes resulted in increased exposure to the communication services, health care and IT sectors. Conversely, exposures to financials, industrials and utilities were reduced.

Describe portfolio positioning at period end.

In terms of portfolio positioning, the Fund’s largest allocations were in the financials, health care and IT sectors. Relative to the Russell 1000 Value benchmark, the Fund’s largest overweight positions were in the health care, IT and energy sectors. Conversely, the Fund’s largest underweights were in the real estate, utilities and consumer discretionary sectors.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

Portfolio Information

SECTOR ALLOCATION

Sector	Percent of Net Assets
Financials		23	%
Health Care		21
Information Technology		11
Energy		11
Consumer Staples		7
Communication Services		6
Industrials		6
Utilities		4
Consumer Discretionary		2
Materials		2
Short-Term Securities		9
Liabilities in Excess of Other Assets		(2	)

For Fund compliance purposes, the Fund’s sector classifications refer to one or more of the sectorsub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine sector sub classifications for reporting ease.

2 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Fund Summary  as of December 31, 2018 (continued) BlackRock Equity Dividend V.I. Fund

TOTAL RETURN BASED ON A $10,000 INVESTMENT

^(a)  Assuming transaction costs, if any, and other operating expenses, including investment advisory fees. Does not include insurance-related fees and expenses. The returns for Class III Shares prior to July 1, 2011, the recommencement of operations of Class III Shares, are based upon the performance of the Fund’s Class I Shares, as adjusted to reflect the distribution(12b-1) fees applicable to Class III Shares.

^(b)  The Fund seeks to achieve its objective by investing primarily in a diversified portfolio of equity securities. Under normal circumstances, the Fund will invest in at least 80% of its assets in equity securities and at least 80% of its assets in dividend paying securities. The Fund’s total returns prior to October 1, 2010 are the returns of the Fund when it followed a different objective and different investment strategies under the name BlackRock Utilities & Telecommunications V.I. Fund.

^(c)  An unmanaged index that is a subset of the Russell 1000^® Index that consists of those Russell 1000^® securities with lowerprice-to-book ratios and lower expected growth values.

^(d)  An unmanaged index that covers 500 leading companies and captures approximately 80% coverage of available market capitalization.

Performance Summary for the Period Ended December 31, 2018

	6-Month Total Returns (b)			Average Annual Total Returns
				1 Year (b)			5 Years (b)			10 Years (b)
Class I(a)		(6.82	)%		(7.16	)%		6.51	%		9.90	%
Class III(a)		(6.94	)		(7.42	)		6.25			9.63	(c)
Russell 1000® Value Index		(6.69	)		(8.27	)		5.95			11.18
S&P 500® Index		(6.85	)		(4.38	)		8.49			13.12

^(a)  Average annual and cumulative total returns are based on changes in net asset value for the periods shown, and assume reinvestment of all distributions at net asset value on theex-dividend date. Insurance-related fees and expenses are not reflected in these returns. The Fund’s total returns prior to October 1, 2010 are the returns of the Fund when it followed a different objective and different investment strategies under the name BlackRock Utilities & Telecommunications V.I. Fund.

^(b)  For the portion of the period, the Fund’s investment adviser waived a portion of its fee. Without such waiver, the Fund’s performance would have been lower.

^(c)  The returns for Class III Shares prior to July 1, 2011, the recommencement of operations of Class III Shares, are based upon the performance of the Fund’s Class I Shares, as adjusted to reflect the distribution(12b-1) fees applicable to Class III Shares.

Past performance is not indicative of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

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

Expense Example

	Actual						Hypothetical (a)
	Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Annualized Expense Ratio
Class I	$	1,000.00	$	931.80	$	3.21	$	1,000.00	$	1,021.88	$	3.36		0.66	%
Class III		1,000.00		930.60		4.43		1,000.00		1,020.62		4.63		0.91

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

^(b)  For each class of the Fund, expenses are equal to annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect theone-half year period shown).

See “Disclosure of Expenses” on the following page for further information on how expenses were calculated.

FUND SUMMARY 3

Disclosure of Expenses BlackRock Equity Dividend V.I. Fund

Shareholders of the Fund may incur the following charges: (a) transactional expenses; and (b) operating expenses, including investment advisory fees, service and distribution fees, including12b-1 fees, acquired fund fees and expenses, and other fund expenses. The expense example on the previous page (which is based on a hypothetical investment of $1,000 invested on July 1, 2018 and held through December 31, 2018) is intended to assist shareholders both in calculating expenses based on an investment in the Fund and in comparing these expenses with similar costs of investing in other mutual funds.

The expense example provides 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 share class under the heading entitled “Expenses Paid During the Period.”

The expense example also provides information about hypothetical account values and hypothetical expenses based on the 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 the Fund and other funds, compare the 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.

The expenses shown in the expense example are intended to highlight shareholders’ ongoing costs only and do not reflect any transactional expenses, such as sales charges, if any. Therefore, the hypothetical example is 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.

4 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments   December 31, 2018 BlackRock Equity Dividend V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Common Stocks — 92.9%
Aerospace & Defense — 1.5%
BAE Systems plc		178,913	$	1,046,437
Lockheed Martin Corp.		4,825		1,263,378
Northrop Grumman Corp.		7,576		1,855,362
				4,165,177
Banks — 13.2%
Bank of America Corp.		321,521		7,922,278
Citigroup, Inc.		148,653		7,738,875
JPMorgan Chase & Co.		104,776		10,228,233
US Bancorp		35,392		1,617,414
Wells Fargo & Co.		208,370		9,601,691
				37,108,491
Beverages — 2.0%
Diageo plc		75,651		2,703,344
PepsiCo, Inc.		26,870		2,968,597
				5,671,941
Building Products — 1.0%
Johnson Controls International plc		73,736		2,186,272
Masco Corp.		24,612		719,655
				2,905,927
Capital Markets — 3.5%
Charles Schwab Corp. (The)		26,987		1,120,770
Goldman Sachs Group, Inc. (The)		14,339		2,395,330
Morgan Stanley		90,536		3,589,752
State Street Corp.		41,879		2,641,309
				9,747,161
Chemicals — 0.9%
DowDuPont, Inc.(a)		49,655		2,655,549
Communications Equipment — 1.6%
Cisco Systems, Inc.		39,363		1,705,599
Motorola Solutions, Inc.		24,619		2,832,170
				4,537,769
Construction Materials — 0.6%
CRH plc		62,233		1,647,426
Containers & Packaging — 0.3%
International Paper Co.		19,133		772,208
Diversified Financial Services — 0.6%
AXA Equitable Holdings, Inc.(a)		96,005		1,596,563
Diversified Telecommunication Services — 4.5%
BCE, Inc.		17,957		709,840
Verizon Communications, Inc.		214,454		12,056,604
				12,766,444
Electric Utilities — 2.9%
Edison International		4,239		240,648
FirstEnergy Corp.(a)		103,413		3,883,158
NextEra Energy, Inc.		13,807		2,399,933
PG&E Corp.(b)		67,524		1,603,695
				8,127,434
Electronic Equipment, Instruments & Components — 0.2%
CDW Corp.		8,042		651,804
Energy Equipment & Services — 0.2%
Baker Hughes a GE Co.		27,367		588,391
Food Products — 2.0%
Kellogg Co.		30,822		1,757,162
Mondelez International, Inc., Class A(a)		26,477		1,059,875
Nestle SA (Registered)		33,965		2,756,694
				5,573,731

Security	Shares		Value
Health Care Equipment & Supplies — 3.6%
Koninklijke Philips NV		164,195	$	5,756,594
Medtronic plc		48,365		4,399,281
				10,155,875
Health Care Providers & Services — 6.6%
Anthem, Inc.		28,521		7,490,470
Cardinal Health, Inc.		21,136		942,666
CVS Health Corp.		40,320		2,641,766
Humana, Inc.(a)		7,957		2,279,521
McKesson Corp.		18,783		2,074,958
UnitedHealth Group, Inc.		12,649		3,151,119
				18,580,500
Household Durables — 0.6%
Newell Brands, Inc.(a)		84,464		1,570,186
Household Products — 0.9%
Procter & Gamble Co. (The)		26,805		2,463,916
Industrial Conglomerates — 2.6%
3M Co.		9,844		1,875,676
General Electric Co.		180,255		1,364,530
Honeywell International, Inc.		21,176		2,797,773
Siemens AG (Registered)		10,575		1,180,187
				7,218,166
Insurance — 6.2%
American International Group, Inc.		104,204		4,106,680
Arthur J Gallagher & Co.		31,069		2,289,785
Marsh & McLennan Cos., Inc.		27,504		2,193,444
MetLife, Inc.		136,787		5,616,474
Travelers Cos., Inc. (The)		25,998		3,113,261
				17,319,644
IT Services — 0.7%
Cognizant Technology Solutions Corp., Class A		30,452		1,933,093
Leisure Products — 0.3%
Mattel, Inc.(a)(b)		74,683		746,083
Machinery — 0.2%
Pentair plc		18,197		687,483
Media — 1.5%
Comcast Corp., Class A		128,367		4,370,896
Multiline Retail — 0.8%
Dollar General Corp.		21,988		2,376,463
Multi-Utilities — 0.7%
Public Service Enterprise Group, Inc.		39,248		2,042,858
Oil, Gas & Consumable Fuels — 10.6%
Anadarko Petroleum Corp.		26,086		1,143,610
BP plc		847,301		5,356,373
Devon Energy Corp.		64,610		1,456,309
Enterprise Products Partners LP(a)		157,596		3,875,286
Hess Corp.(a)		34,137		1,382,548
Marathon Oil Corp.		60,035		860,902
Marathon Petroleum Corp.		53,609		3,163,467
ONEOK, Inc.		35,481		1,914,200
Suncor Energy, Inc.		205,487		5,747,471
TOTAL SA, ADR(a)		21,609		1,127,558
Williams Cos., Inc. (The)		164,873		3,635,450
				29,663,174
Personal Products — 0.6%
Unilever NV, NYRS(a)		34,073		1,833,127
Pharmaceuticals — 10.9%
AstraZeneca plc		77,751		5,803,800

SCHEDULE OF INVESTMENTS 5

Schedule of Investments  (continued) December 31, 2018 BlackRock Equity Dividend V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Pharmaceuticals (continued)
Bayer AG (Registered)		29,539	$	2,054,402
Merck & Co., Inc.		69,588		5,317,219
Novartis AG, ADR		39,519		3,391,125
Novo Nordisk A/S, ADR(a)		47,799		2,202,100
Pfizer, Inc.		268,702		11,728,842
				30,497,488
Road & Rail — 0.4%
Union Pacific Corp.		8,774		1,212,830
Semiconductors & Semiconductor Equipment — 1.9%
QUALCOMM, Inc.		62,182		3,538,778
Taiwan Semiconductor Manufacturing Co. Ltd., ADR		47,641		1,758,429
				5,297,207
Software — 5.5%
Constellation Software, Inc.		2,048		1,310,918
Microsoft Corp.		66,615		6,766,086
Oracle Corp.		162,316		7,328,567
				15,405,571
Specialty Retail — 0.8%
Lowe’s Cos., Inc.		23,529		2,173,138
Technology Hardware, Storage & Peripherals — 1.4%
Apple, Inc.		4,386		691,848
Lenovo Group Ltd.		1,212,000		818,752
Samsung Electronics Co. Ltd., GDR(c)		2,776		2,406,113
				3,916,713

Security	Shares		Value
Tobacco — 1.1%
Altria Group, Inc.		60,159	$	2,971,253
Total Common Stocks — 92.9% (Cost: $256,982,319)				260,951,680
Total Long-Term Investments — 92.9% (Cost: $256,982,319)				260,951,680
Short-Term Securities — 9.4%(d)(f)
BlackRock Liquidity Funds,T-Fund, Institutional Class, 2.32%		20,001,000		20,001,000
SL Liquidity Series, LLC, Money Market Series, 2.57%(e)		6,383,011		6,382,373
Total Short-Term Securities — 9.4% (Cost: $26,383,585)				26,383,373
Total Investments — 102.3% (Cost: $283,365,904)				287,335,053
Liabilities in Excess of Other Assets — (2.3)%				(6,425,704	)
Net Assets — 100.0%			$	280,909,349

^(a)  Security, or a portion of the security, is on loan.

^(b)  Non-income producing security.

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

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

^(e)  Security was purchased with the cash collateral from loaned securities.

^(f)  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, 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		14,132,925		5,868,075		20,001,000	$	20,001,000	$	287,367		$	—	$	—
SL Liquidity Series, LLC, Money Market Series		1,608,659		4,774,352		6,383,011		6,382,373		8,704	(b)		2,727		43
							$	26,383,373	$	296,071		$	2,727	$	43

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

^(b)  Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.

For Fund compliance purposes, the Fund’s industry classifications refer to one or more of the industrysub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such industrysub-classifications for reporting ease.

6 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Equity Dividend V.I. Fund

Fair Value Hierarchy as of Period End

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

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

	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Long-Term Investments:
Common Stocks:
Aerospace & Defense	$	3,118,740	$	1,046,437	$	—	$	4,165,177
Banks		37,108,491		—		—		37,108,491
Beverages		2,968,597		2,703,344		—		5,671,941
Building Products		2,905,927		—		—		2,905,927
Capital Markets		9,747,161		—		—		9,747,161
Chemicals		2,655,549		—		—		2,655,549
Communications Equipment		4,537,769		—		—		4,537,769
Construction Materials		—		1,647,426		—		1,647,426
Containers & Packaging		772,208		—		—		772,208
Diversified Financial Services		1,596,563		—		—		1,596,563
Diversified Telecommunication Services		12,766,444		—		—		12,766,444
Electric Utilities		8,127,434		—		—		8,127,434
Electronic Equipment, Instruments & Components		651,804		—		—		651,804
Energy Equipment & Services		588,391		—		—		588,391
Food Products		2,817,037		2,756,694		—		5,573,731
Health Care Equipment & Supplies		4,399,281		5,756,594		—		10,155,875
Health Care Providers & Services		18,580,500		—		—		18,580,500
Household Durables		1,570,186		—		—		1,570,186
Household Products		2,463,916		—		—		2,463,916
Industrial Conglomerates		6,037,979		1,180,187		—		7,218,166
Insurance		17,319,644		—		—		17,319,644
IT Services		1,933,093		—		—		1,933,093
Leisure Products		746,083		—		—		746,083
Machinery		687,483		—		—		687,483
Media		4,370,896		—		—		4,370,896
Multiline Retail		2,376,463		—		—		2,376,463
Multi-Utilities		2,042,858		—		—		2,042,858
Oil, Gas & Consumable Fuels		24,306,801		5,356,373		—		29,663,174
Personal Products		1,833,127		—		—		1,833,127
Pharmaceuticals		22,639,286		7,858,202		—		30,497,488
Road & Rail		1,212,830		—		—		1,212,830
Semiconductors & Semiconductor Equipment		5,297,207		—		—		5,297,207
Software		15,405,571		—		—		15,405,571
Specialty Retail		2,173,138		—		—		2,173,138
Technology Hardware, Storage & Peripherals		691,848		3,224,865		—		3,916,713
Tobacco		2,971,253		—		—		2,971,253
Short-Term Securities		20,001,000		—		—		20,001,000
Subtotal	$	249,422,558	$	31,530,122	$	—	$	280,952,680
Investments valued at NAV(a)							$	6,382,373
Total Investments							$	287,335,053

^(a)  As of December 31, 2018, certain investments of the Fund were fair valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

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

See notes to financial statements.

SCHEDULE OF INVESTMENTS 7

Statement of Assets and Liabilities

December 31, 2018

	BlackRock Equity Dividend V.I. Fund
ASSETS
Investments at value — unaffiliated (including securities loaned at value of $6,273,530) (cost — $256,982,319)	$	260,951,680
Investments at value — affiliated (cost — $26,383,585)		26,383,373
Foreign currency at value (cost — $1,713)		1,665
Receivables:
Investments sold		57,469
Securities lending income — affiliated		857
Capital shares sold		67,818
Dividends — affiliated		38,545
Dividends — unaffiliated		363,871
From the Manager		5,504
Prepaid expenses		325
Total assets		287,871,107
LIABILITIES
Bank overdraft		9,367
Cash collateral on securities loaned at value		6,381,287
Payables:
Investments purchased		15,599
Capital shares redeemed		15,742
Printing fees		28,802
Distribution fees		53,364
Transfer agent fees		225,684
Board realignment and consolidation		2,860
Investment advisory fees		193,295
Directors’ and Officer’s fees		5,958
Other affiliates		710
Other accrued expenses		29,090
Total liabilities		6,961,758
NET ASSETS	$	280,909,349
NET ASSETS CONSIST OF
Paid-in capital	$	274,674,630
Accumulated earnings		6,234,719
NET ASSETS	$	280,909,349
NET ASSET VALUE
Class I — Based on net assets of $30,654,772 and 3,013,609 shares outstanding, 100 million shares authorized, $0.10 par value.	$	10.17
Class III — Based on net assets of $250,254,577 and 24,650,835 shares outstanding, 100 million shares authorized, $0.10 par value.	$	10.15

See notes to financial statements.

8 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Statement of Operations

Year Ended December 31, 2018

	BlackRock Equity Dividend V.I. Fund
INVESTMENT INCOME
Dividends — affiliated	$	287,367
Dividends — unaffiliated		8,271,580
Securities lending income — affiliated — net		8,704
Foreign taxes withheld		(76,017	)
Total investment income		8,491,634
EXPENSES
Investment advisory		1,915,442
Distribution — class specific		707,515
Transfer agent — class specific		654,406
Accounting services		59,954
Professional		44,211
Printing		40,908
Directors and Officer		21,328
Custodian		20,860
Transfer agent		5,001
Board realignment and consolidation		3,052
Miscellaneous		7,267
Total expenses		3,479,944
Less:
Fees waived and/or reimbursed by the Manager		(13,052	)
Transfer agent fees waived and/or reimbursed — class specific		(654,406	)
Total expenses after fees waived and/or reimbursed		2,812,486
Net investment income		5,679,148
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — affiliated		2,727
Investments — unaffiliated		21,328,525
Foreign currency transactions		(4,327	)
		21,326,925
Net change in unrealized appreciation (depreciation) on:
Investments — affiliated		43
Investments — unaffiliated		(48,853,355	)
Foreign currency translations		(563	)
		(48,853,875	)
Net realized and unrealized loss		(27,526,950	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(21,847,802	)

See notes to financial statements.

FINANCIAL STATEMENTS 9

Statements of Changes in Net Assets

	BlackRock Equity Dividend V.I. Fund
	Year Ended December 31,
	2018			2017
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income	$	5,679,148		$	4,765,364
Net realized gain		21,326,925			18,274,738
Net change in unrealized appreciation (depreciation)		(48,853,875	)		22,925,712
Net increase (decrease) in net assets resulting from operations		(21,847,802	)		45,965,814
DISTRIBUTIONS TO SHAREHOLDERS(a)(b)
Class I		(3,195,948	)		(2,551,419	)
Class III		(25,079,326	)		(18,682,486	)
Decrease in net assets resulting from distributions to shareholders		(28,275,274	)		(21,233,905	)
CAPITALSHARE TRANSACTIONS
Net increase in net assets derived from capital share transactions		5,893,147			41,813,020
NET ASSETS(b)
Total increase (decrease) in net assets		(44,229,929	)		66,544,929
Beginning of year		325,139,278			258,594,349
End of year	$	280,909,349		$	325,139,278

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

^(b)  Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year RegulationS-X presentation changes. Refer to Note 11 for this prior year information.

See notes to financial statements.

10 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Financial Highlights

(For a share outstanding throughout each period)

	BlackRock Equity Dividend V.I. Fund
	Class I
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	12.14		$	11.15		$	10.04		$	10.90		$	10.78
Net investment income(a)		0.24			0.22			0.21			0.19			0.20
Net realized and unrealized gain (loss)		(1.09	)		1.62			1.42			(0.25	)		0.80
Net increase (decrease) from investment operations		(0.85	)		1.84			1.63			(0.06	)		1.00
Distributions(b)
From net investment income		(0.24	)		(0.21	)		(0.19	)		(0.18	)		(0.20	)
From net realized gain		(0.88	)		(0.64	)		(0.33	)		(0.62	)		(0.68	)
Total distributions		(1.12	)		(0.85	)		(0.52	)		(0.80	)		(0.88	)
Net asset value, end of year	$	10.17		$	12.14		$	11.15		$	10.04		$	10.90
Total Return(c)
Based on net asset value		(7.16	)%		16.74	%		16.40	%		(0.61	)%		9.34	%
Ratios to Average Net Assets(d)
Total expenses		0.87	%		0.89	%		0.89	%		1.00	%		0.99	%
Total expenses after fees waived and/or reimbursed		0.66	%		0.68	%		0.70	%		0.79	%		0.78	%
Net investment income		2.00	%		1.82	%		1.98	%		1.79	%		1.81	%
Supplemental Data
Net assets, end of year (000)	$	30,655		$	37,525		$	35,256		$	30,527		$	35,694
Portfolio turnover rate		37	%		37	%		23	%		25	%		18	%

^(a)  Based on average shares outstanding.

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

^(c)  Where applicable, excludes insurance-related fees and expenses and assumes the reinvestment of distributions.

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

	Year Ended December 31,
	2018			2017			2016			2015			2014
Investments in underlying funds		0.01	%		0.01	%		0.01	%		—	%		—	%

See notes to financial statements.

FINANCIAL HIGHLIGHTS 11

Financial Highlights  (continued)

(For a share outstanding throughout each period)

	BlackRock Equity Dividend V.I. Fund (continued)
	Class III
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	12.12		$	11.13		$	10.03		$	10.89		$	10.77
Net investment income(a)		0.21			0.19			0.18			0.17			0.17
Net realized and unrealized gain (loss)		(1.09	)		1.62			1.42			(0.25	)		0.80
Net increase (decrease) from investment operations		(0.88	)		1.81			1.60			(0.08	)		0.97
Distributions(b)
From net investment income		(0.21	)		(0.18	)		(0.17	)		(0.16	)		(0.17	)
From net realized gain		(0.88	)		(0.64	)		(0.33	)		(0.62	)		(0.68	)
Total distributions		(1.09	)		(0.82	)		(0.50	)		(0.78	)		(0.85	)
Net asset value, end of year	$	10.15		$	12.12		$	11.13		$	10.03		$	10.89
Total Return(c)
Based on net asset value		(7.42	)%		16.49	%		16.06	%		(0.82	)%		9.07	%
Ratios to Average Net Assets(d)
Total expenses		1.12	%		1.16	%		1.13	%		1.16	%		1.24	%
Total expenses after fees waived and/or reimbursed		0.91	%		0.93	%		0.95	%		1.03	%		1.03	%
Net investment income		1.75	%		1.57	%		1.73	%		1.59	%		1.56	%
Supplemental Data
Net assets, end of year (000)	$	250,255		$	287,615		$	223,338		$	85,163		$	22,619
Portfolio turnover rate		37	%		37	%		23	%		25	%		18	%

^(a)  Based on average shares outstanding.

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

^(c)  Where applicable, excludes insurance-related fees and expenses and assumes the reinvestment of distributions.

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

	Year Ended December 31,
	2018			2017			2016			2015			2014
Investments in underlying funds		0.01	%		0.01	%		0.01	%		—	%		—	%

See notes to financial statements.

12 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements

1. ORGANIZATION

BlackRock Variable Series Funds, Inc. (the “Company”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as anopen-end management investment company. The Company is organized as a Maryland corporation that is comprised of 15 separate portfolios. The funds offer shares to insurance companies for their separate accounts to fund benefits under certain variable annuity and variable life insurance contracts. The financial statements presented are for BlackRock Equity Dividend V.I. Fund (the “Fund”). The Fund is classified as diversified. Class I and Class III Shares have equal voting, dividend, liquidation and other rights, except that only shares of the respective classes are entitled to vote on matters concerning only that class. In addition, Class III Shares bear certain expenses related to the distribution of such shares.

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

2. SIGNIFICANT ACCOUNTING POLICIES

The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. The 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 Fund is 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. Income, expenses and realized and unrealized gains and losses are allocated daily to each class based on its relative net assets.

Foreign Currency Translation: The 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.

The 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 Statement 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. The 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.

Distributions: Distributions paid by the Fund are recorded on theex-dividend date. Distributions of capital gains are recorded on the ex-dividend date and made at least annually. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP.

Recent Accounting Standards: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 Fund.

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

Other: Expenses directly related to the Fund or its classes are charged to the 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 Fund and other shared expenses prorated to the Fund are allocated daily to each class based on its relative net assets or other appropriate methods.

3. INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS

Investment Valuation Policies: The Fund’s 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 Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Fund determines the fair values of its financial instruments using various independent dealers or pricing services under policies approved by the Board of Directors of the Company (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.

NOTESTO FINANCIAL STATEMENTS 13

Notes to Financial Statements  (continued)

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

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

Generally, trading in foreign instruments is substantially completed each day at various times prior to the close of trading on the NYSE. Occasionally, events affecting the values of such instruments may occur between the foreign market close and the close of trading on the NYSE that may not be reflected in the computation of the Fund’s net assets. Each business day, the Fund uses a pricing service to assist with the valuation of certain foreign exchange-traded equity securities and foreign exchange-traded andover-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 net asset value (“NAV”) each business day.

• The Fund values its investment in SL Liquidity Series, LLC, Money Market Series (the “Money Market Series”) at fair value, which is ordinarily based upon its pro rata ownership in the underlying fund’s net assets. The Money Market Series seeks current income consistent with maintaining liquidity and preserving capital. Although the Money Market Series is not registered under the 1940 Act, its investments may follow the parameters of investments by a money market fund that is subject to Rule2a-7 under the 1940 Act.

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

Fair Value Hierarchy: Various inputs are used in determining the fair value of investments. 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 the Fund has the ability to access

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

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

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 privately held companies or funds. 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 the 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 is based on the pricing transparency of the investments and is not necessarily an indication of the risks associated with investing in those securities.

As of December 31, 2018, certain investments of the Fund were valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

4. SECURITIES AND OTHER INVESTMENTS

Securities Lending: The Fund may lend its securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received by the Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current market value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Fund and any additional required collateral is delivered to the Fund, or excess collateral returned by the Fund, on the next business day. During the term of the loan, the Fund is entitled to all distributions made on or in respect of the loaned securities, but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.

14 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

The market value of any securities on loan, all of which were classified as common stocks in the Fund’s Schedule of Investments, and the value of any related collateral are shown separately in the Statement of Assets and Liabilities as a component of investments at value — unaffiliated, and collateral on securities loaned at value, respectively. As of period end, any securities on loan were collateralized by cash and/or U.S. Government obligations. Cash collateral invested by the securities lending agent, BlackRock Investment Management, LLC (“BIM”), if any, is disclosed in the Schedule of Investments.

Securities lending transactions are entered into by the Fund under Master Securities Lending Agreements (each, an “MSLA”), which provide the right, in the event of default (including bankruptcy or insolvency), for thenon-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, the Fund, as lender, would offset the market value of the collateral received against the market value of the securities loaned. When the value of the collateral is greater than that of the market value of the securities loaned, the lender is left with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, absent an event of default, the borrower can resell orre-pledge the loaned securities, and the Fund can reinvest cash collateral received in connection with loaned securities. Upon an event of default, the parties’ obligations to return the securities or collateral to the other party are extinguished, and the parties can resell orre-pledge the loaned securities or the collateral received in connection with the loaned securities in order to satisfy the defaulting party’s net payment obligation for all transactions under the MSLA. The defaulting party remains liable for any deficiency.

As of period end, the following table is a summary of the Fund’s securities lending agreements by counterparty which are subject to offset under an MSLA:

Counterparty	Securities Loaned at Value		Cash Collateral Received (a)			Net Amount
Citigroup Global Markets, Inc.	$	698,984	$	(698,984	)	$	—
Credit Suisse Securities (USA) LLC		486,340		(486,340	)		—
Deutsche Bank Securities Inc.		629,460		(629,460	)		—
Fidelity Investments		276,593		(276,593	)		—
JP Morgan Securities LLC		2,556,545		(2,556,545	)		—
Morgan Stanley & Co. LLC		1,000,350		(1,000,350	)		—
State Street Bank & Trust Co.		625,258		(625,258	)		—
	$	6,273,530	$	(6,273,530	)	$	—

^(a)  Cash collateral with a value of $6,381,287 has been received in connection with securities lending agreements. Collateral received in excess of the value of securities loaned from the individual counterparty, if any, is not shown for financial reporting purposes in the table above.

The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Fund benefits from a borrower default indemnity provided by BIM. BIM’s indemnity allows for full replacement of the securities loaned if the collateral received does not cover the value on the securities loaned in the event of borrower default. The Fund could incur a loss if the value of an investment purchased with cash collateral falls below the market value of loaned securities or if the value of an investment purchased with cash collateral falls below the value of the original cash collateral received.

5. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

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

For such services, the Fund pays the Manager a monthly fee at an annual rate equal to the following percentages of the average daily value of the Fund’s net assets:

Average Daily Net Assets	Investment Advisory Fees
First $1 Billion		0.60	%
$1 Billion — $3 Billion		0.56
$3 Billion — $5 Billion		0.54
$5 Billion — $10 Billion		0.52
Greater than $10 Billion		0.51

Distribution Fees: The Company, on behalf of the Fund, entered into a Distribution Agreement and a Distribution Plan with BlackRock Investments, LLC (“BRIL”), an affiliate of the Manager. Pursuant to the Distribution Plan and in accordance with Rule12b-1 under the 1940 Act, the Fund pays BRIL ongoing distribution fees. The fees are accrued daily and paid monthly at annual rate 0.25% based upon the average daily net assets attributable to Class III.

BRIL and broker-dealers, pursuant tosub-agreements with BRIL, provide shareholder servicing and distribution services to the Fund. 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 class specific distribution fees borne directly by class III were $707,515.

Transfer Agent: On behalf of the Fund, the Manager entered into agreements with insurance companies and other financial intermediaries (“Service Organizations”), some of which may be affiliates. Pursuant to these agreements, the Service Organizations provide the Fund with administrative, networking, recordkeeping,sub-transfer agency and shareholder services tosub-accounts they service. For these services, the Service Organizations receive an annual fee per shareholder account, which will vary depending on share class and/or net assets of Fund shareholders serviced by the Service Organizations which is shown as transfer agent – class specific. For the year ended December 31, 2018, the Fund did not pay any amounts to affiliates in return for these services.

NOTESTO FINANCIAL STATEMENTS 15

Notes to Financial Statements  (continued)

In addition, the Fund pays the transfer agent, which is not an affiliate, a fee for the issuance, transfer and redemption of shares and the opening and maintenance of shareholder accounts, which is included in transfer agent in the Statement of Operations.

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

Class I		Class III		Total
$	74,854	$	579,552	$	654,406

Expense Limitations, Waivers and Reimbursements: With respect to the Fund, the Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees the 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. This amount is included in as fees waived and/or reimbursed by the Manager in the Statement of Operations. For the year ended December 31 2018, the amount waived was $13,052.

The Manager has contractually agreed to waive its investment advisory fee with respect to any portion of the 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. The contractual agreement may be terminated upon 90 days’ notice by a majority of the directors who are not “interested persons” of the Fund, as defined in the 1940 Act (“Independent Directors”), or by a vote of a majority of the outstanding voting securities of the Fund. For the year ended December 31, 2018, there were no fees waived and/or reimbursed by the Manager pursuant to this arrangement.

For the year ended December 31, 2018, the Fund reimbursed the Manager $4,292 for certain accounting services, which is included in accounting services in the Statement of Operations.

The Manager has contractually agreed to reimburse all transfer agent fees for Class I and III. The Manager has agreed not to reduce or discontinue this contractual reimbursement through April 30, 2019, unless approved by the Board, including a majority of the Independent Directors, or by a vote of a majority of the outstanding voting securities of the Fund.

These amounts waived and/or reimbursed are shown as transfer agent fees waived and/or reimbursed — class specific in the Statement of Operations. For the year ended December 31, 2018, class specific waivers and/or reimbursements were as follows:

	Class I		Class III		Total
Transfer Agent Fees Waived and/or Reimbursed	$	74,854	$	579,552	$	654,406

With respect to the 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 the Fund’s business (“expense limitation”). The expense limitations as a percentage of average daily net assets are as follows:

Class I		Class III
	1.25%	1.50%

The Manager has agreed not to reduce or discontinue this contractual expense limitation through April 30, 2019, unless approved by the Board, including a majority of the Independent Directors, or by a vote of a majority of the outstanding voting securities of the Fund. For the year ended December 31, 2018, there were no fees waived and/or reimbursed by the Manager.

Securities Lending: The U.S. Securities and Exchange Commission (“SEC”) has issued an exemptive order which permits BIM, an affiliate of the Manager, to serve as securities lending agent for the Fund, subject to applicable conditions. As securities lending agent, BIM bears all operational costs directly related to securities lending. The Fund is responsible for expenses in connection with the investment of cash collateral received for securities on loan (the “collateral investment expenses”). The cash collateral is invested in a private investment company managed by the Manager or its affiliates. However, BIM has agreed to cap the collateral investment expenses of the private investment company to an annual rate of 0.04%. The investment adviser to the private investment company will not charge any advisory fees with respect to shares purchased by the Fund. The private investment company in which the cash collateral has been invested may, under certain circumstances, impose a liquidity fee of up to 2% of the value withdrawn or temporarily restrict withdrawals for up to 10 business days during a 90 day period, in the event that the private investment company’s weekly liquid assets fall below certain thresholds.

Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment expenses. The Fund retains a portion of securities lending income and remits a remaining portion to BIM as compensation for its services as securities lending agent.

Pursuant to a securities lending agreement, the Fund retains 71.5% of securities lending income, and this amount retained can never be less than 65% of the total of securities lending income plus the collateral investment expenses.

In addition, commencing the business day following the date that the aggregate securities lending income earned across the Equity-Bond Complex in a calendar year exceeds a specified threshold, the Fund, pursuant to the securities lending agreement, will retain for the remainder of that calendar year securities lending income in an amount equal to 75% of securities lending income, and this amount retained can never be less than 65% of the total of securities lending income plus the collateral investment expenses.

The share of securities lending income earned by the Fund is shown as securities lending income — affiliated — net in the Statement of Operations. For the year ended December 31, 2018, the Fund paid BIM $3,186 for securities lending agent services.

16 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

Interfund Lending: In accordance with an exemptive order (the “Order”) from the SEC, the 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 the Fund’s investment policies and restrictions. The Fund is currently permitted to borrow under the Interfund Lending Program.

A lending BlackRock fund may lend in aggregate up to 15% of its net assets, but may not lend more than 5% of its net assets to any one borrowing fund through the Interfund Lending Program. A borrowing BlackRock fund may not borrow through the Interfund Lending Program or from any other source more than 33 1/3% of its total assets (or any lower threshold provided for by the fund’s investment restrictions). If a borrowing BlackRock fund’s total outstanding borrowings exceed 10% of its total assets, each of its outstanding interfund loans will be subject to collateralization of at least 102% of the outstanding principal value of the loan. All interfund loans are for temporary or emergency purposes and the interest rate to be charged will be the average of the highest current overnight repurchase agreement rate available to a lending fund and the bank loan rate, as calculated according to a formula established by the Board.

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

Directors and Officers: Certain directors and/or officers of the Company are directors and/or officers of BlackRock or its affiliates. The Fund reimburses the Manager for a portion of the compensation paid to the Company’s Chief Compliance Officer, which is included in Directors and Officer in the Statement of Operations.

Other Transactions: The Fund may purchase securities from, or sell securities to, an affiliated fund provided the affiliation is due solely to having a common investment adviser, common officers, or common directors. For the year ended December 31, 2018, the purchase and sale transactions and any net realized gains (losses) with affiliated funds in compliance with Rule17a-7 under the 1940 Act were as follows:

Purchases	$	662,262
Sales		—
Net Realized Gain (Loss)		—

6. PURCHASES AND SALES

For the year ended December 31, 2018, purchases and sales of investments, excluding short-term securities, were $110,845,115 and $132,522,298, respectively.

7. INCOME TAX INFORMATION

It is the 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.

The 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 the Fund’s U.S. federal tax returns generally remains open for each of the four years ended December 31, 2018. The statutes of limitations on the 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 Fund 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 Fund’s financial statements.

The tax character of distributions paid was as follows:

	12/31/18		12/31/17
Ordinary income	$	8,234,625	$	7,150,173
Long term capital gains		20,040,649		14,083,732
	$	28,275,274	$	21,233,905

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

Undistributed long-term capital gains	$	3,221,139
Net unrealized gains(a)		3,013,580
	$	6,234,719

^(a)  The difference between book-basis and tax-basis net unrealized gains was attributable primarily to the tax deferral of losses on wash sales and the timing and recognition of partnership income.

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

Tax cost . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	284,359,997
Gross unrealized appreciation . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . .	$	26,550,315
Gross unrealized depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . .		(23,575,259	)
Net unrealized appreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	2,975,056

NOTESTO FINANCIAL STATEMENTS 17

Notes to Financial Statements  (continued)

8. BANK BORROWINGS

The Company, on behalf of the Fund, 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 Fund may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Fund, 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. Prior to April 19, 2018, the aggregate commitment amount was $2.1 billion and the fee was 0.12% per annum. 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 Statement 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 Fund did not borrow under the credit agreement.

9. PRINCIPAL RISKS

In the normal course of business, the Fund invests in securities or other instruments and may enter into certain transactions, and such activities subject the 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. The Fund’s prospectus provides details of the risks to which the Fund is subject.

The Fund may be exposed to additional risks when reinvesting cash collateral in money market funds that do not seek to maintain a stable NAV per share of $1.00, which may be subject to redemption gates or liquidity fees under certain circumstances.

Valuation Risk: The market values of equities, such as common stocks and preferred securities or equity related investments, such as futures and options, may decline due to general market conditions which are not specifically related to a particular company. They may also decline due to factors which affect a particular industry or industries. The Fund may invest in illiquid investments and may experience difficulty in selling those investments in a timely manner at the price that it believes the investments are worth. Prices may fluctuate widely over short or extended periods in response to company, market or economic news. Markets also tend to move in cycles, with periods of rising and falling prices. This volatility may cause the 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 the Fund may lose value, regardless of the individual results of the securities and other instruments in which the Fund invests.

Counterparty Credit Risk: Similar to issuer credit risk, the Fund 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 Fund manages 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 Fund to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Fund’s exposure to market, issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Statement of Assets and Liabilities, less any collateral held by the Fund.

10. CAPITAL SHARE TRANSACTIONS

Transactions in capital shares for each class were as follows:

	Year Ended 12/31/2018						Year Ended 12/31/2017
	Shares			Amount			Shares			Amount
Class I
Shares sold		328,463		$	3,936,049			305,267		$	3,599,163
Shares issued in reinvestment of distributions		301,112			3,195,948			211,779			2,551,419
Shares redeemed		(707,195	)		(8,566,862	)		(588,300	)		(6,980,961	)
Net decrease		(77,620	)	$	(1,434,865	)		(71,254	)	$	(830,379	)
Class III
Shares sold		2,172,331		$	26,271,559			4,790,801		$	55,321,887
Shares issued in reinvestment of distributions		2,377,041			25,079,326			1,552,013			18,682,485
Shares redeemed		(3,636,671	)		(44,022,873	)		(2,671,545	)		(31,360,973	)
Net increase		912,701		$	7,328,012			3,671,269		$	42,643,399
Total Net Increase		835,081		$	5,893,147			3,600,015		$	41,813,020

11. 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 Fund has adopted the amendments pertinent to RegulationS-X in this shareholder report. The amendments impacted certain disclosure presentation on the Statement of Assets and Liabilities, Statements of Changes in Net Assets and Notes to the Financial Statements.

18 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

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
Class I	$	(645,417	)	$	(1,906,002	)
Class III		(4,129,646	)		(14,552,840	)

Undistributed net investment income as of December 31, 2017 was $12,724.

12. SUBSEQUENT EVENTS

Management has evaluated the impact of all subsequent events on the Fund 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.

NOTESTO FINANCIAL STATEMENTS 19

Report of Independent Registered Public Accounting Firm

To the Shareholders of BlackRock Equity Dividend V.I. Fund and the Board of Directors of BlackRock Variable Series Funds, Inc.:

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying statement of assets and liabilities of BlackRock Equity Dividend V.I. Fund of BlackRock Variable Series Funds, Inc. (the “Fund”), including the schedule of investments, as of December 31, 2018, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of December 31, 2018, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s 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 Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its 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 Fund’s 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 15, 2019

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

20 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Glossary of Terms Used in this Report

Portfolio Abbreviations
ADR	American Depositary Receipt
GDR	Global Depositary Receipts
NYRS	New York Registered Shares

GLOSSARYOF TERMS USEDINTHIS REPORT 21

DECEMBER 31, 2018

ANNUAL REPORT

BlackRock Variable Series Funds, Inc.

^Ø  BlackRock Global Allocation V.I. Fund

Not FDIC Insured • May Lose Value • No Bank Guarantee

Fund Summary  as of December 31, 2018 BlackRock Global Allocation V.I. Fund

Investment Objective

BlackRock Global Allocation V.I. Fund’s (the “Fund”) investment objective is to seek high total investment return.

Portfolio Management Commentary

How did the Fund perform?

For the12-month period ended December 31, 2018, the Fund underperformed its Reference Benchmark and outperformed the broad-basedall-equity benchmark, the FTSE World Index. The Reference Benchmark is comprised as follows: 36% S&P 500^® Index; 24% FTSE World(ex-U.S.) Index; 24% ICE BofAML Current5-Year U.S. Treasury Index; and 16% FTSE Non-U.S. Dollar World Government Bond Index. The Fund invests in both equities and bonds, and therefore, Fund management believes that the Reference Benchmark provides a more accurate representation of the Fund’s composition and a more comparable means for measurement. The following discussion of relative performance pertains to the Reference Benchmark. The following commentary (and referenced allocation percentages) are based on the economic exposures of the Fund, which reflect adjustments for futures, swaps and options (except with respect to fixed income securities), and convertible bonds, and may vary relative to the market value.

What factors influenced performance?

Within equities, an overweight to Japan and underweight to the United States detracted from performance. In Europe, exposure to financials negatively influenced returns. From a sector perspective, an overweight to and stock selection within energy weighed on returns, as did stock selection within information technology (“IT”), health care, consumer discretionary, materials and real estate. Broadly speaking, an underweight to fixed income negatively impacted returns. Within fixed income, an overweight stance with respect to U.S. duration (and corresponding sensitivity to interest rate changes) weighed on performance, as did exposure to select emerging market government bonds. Exposure to commodity-related securities detracted as well. In terms of currency management, an overweight to the Indian rupee negatively impacted performance.

Within equities, an overweight to India positively impacted returns. From a sector perspective, overweights to health care and IT and underweights to consumer staples, financials and industrials contributed to performance. Stock selection within utilities and industrials was additive. The Fund’s performance also benefited from exposure to cash and cash equivalents. With respect to currency exposure, an underweight to the euro and an overweight to the U.S. dollar contributed to performance.

The Fund uses derivatives, which may include options, futures, swaps, and forward contracts both to seek to enhance returns of the Fund and to hedge (or protect) against adverse movements in currency exchange rates, interest rates, and movements in the securities markets. During the period, the Fund’s use of derivatives detracted from its performance.

Describe recent portfolio activity.

During the12-month period, the Fund’s overall equity allocation decreased from 62% to 58% of net assets. Within equities, the Fund decreased exposure to Europe, notably the United Kingdom, Germany and France, and increased exposure to Canada and Brazil. From a sector perspective, the Fund decreased exposure to IT, financials, industrials and consumer discretionary, and increased exposure to health care, consumer staples and communication services.

The Fund’s overall allocation to fixed income increased from 30% to 31% of net assets. Within fixed income, the Fund increased exposure to government bonds and corporate credit.

The Fund’s allocation to commodity-related securities decreased from 4% to 2% of net assets.

Reflecting the above changes, the Fund’s holdings of cash and cash equivalents increased from 4% to 9% of net assets. During the12-month period, the Fund’s cash position helped mitigate portfolio volatility and served as a source of funds for new investments and redemptions.

Describe portfolio positioning at period end.

Relative to its Reference Benchmark, the Fund was underweight in equities and fixed income, and overweight in commodity-related securities and cash equivalents. Within equities, the Fund was overweight in Asia and underweight in the United States and Europe. Within Asia, the Fund was overweight in Japan, China and India, and underweight in Australia. Within Europe, the Fund was overweight in the Netherlands and underweight in the United Kingdom, Germany and Switzerland. From a sector perspective, the Fund was overweight in communication services, energy and health care, and was underweight in financials, IT, industrials and consumer discretionary. Within fixed income, the Fund was underweight in developed market government bonds and overweight in corporate debt. With respect to currency exposure, the Fund was overweight in the U.S. dollar, Indian rupee and Hong Kong dollar, and underweight in the euro, Australian dollar, Swiss franc and British pound.

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.

2 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Fund Summary  as of December 31, 2018 (continued) BlackRock Global Allocation V.I. Fund

TOTAL RETURN BASED ON A $10,000 INVESTMENT

^(a) Assuming transaction costs, if any, and other operating expenses, including investment advisory fees. Does not include insurance-related fees and expenses.

^(b) The Fund invests in a portfolio of U.S. and foreign equity securities, debt and money market securities, the combination of which will be varied from time to time with respect to types of securities and markets in response to changing markets and economic trends.

^(c)  This unmanaged capitalization-weighted index is comprised of 2,602 equities from 35 countries in 4 regions, including the United States.

^(d)  The Reference Benchmark is an unmanaged weighted index comprised as follows: 36% S&P 500^® Index; 24% FTSE World (ex U.S.) Index; 24% ICE BofAML Current5-Year U.S. Treasury Index; and 16% FTSENon-U.S. Dollar World Government Bond Index.

Performance Summary for the Period Ended December 31, 2018

	6-Month Total Returns (b)			Average Annual Total Returns
				1 Year (b)			5 Years (b)			10 Years (b)
Class I(a)		(5.92	)%		(7.34	)%		2.18	%		6.15	%
Class II(a)		(5.99	)		(7.52	)		2.02			5.98
Class III(a)		(6.06	)		(7.58	)		1.94			5.88
FTSE World Index		(8.72	)		(8.77	)		4.91			10.13
Reference Benchmark		(4.47	)		(4.68	)		3.87			7.35
U.S. Stocks: S&P 500® Index(c)		(6.85	)		(4.38	)		8.49			13.12
Non-U.S. Stocks: FTSE World(ex-U.S.) Index(d)		(10.68	)		(13.81	)		1.08			7.05
U.S. Bonds: ICE BofAML Current5-Year U.S. Treasury Index(e)		2.56			1.46			1.42			2.09
Non U.S. Bonds: FTSENon-U.S. Dollar World Government Bond Index(f)		(0.91	)		(1.82	)		0.28			1.27

^(a) Average annual and cumulative total returns are based on changes in net asset value for the periods shown and assume reinvestment of all distributions at net asset value on theex-dividend. Insurance-related fees and expenses are not reflected in these returns.

^(b)  For a portion of the period, the Fund’s investment adviser waived a portion of its fees. Without such waiver, the Fund’s performance would have been lower.

^(c)  This unmanaged index covers 500 leading companies and captures approximately 80% coverage of available market capitalization.

^(d) This unmanaged capitalization-weighted index is comprised of 1,979 equities from 34 countries, excluding the United States.

^(e) This unmanaged index is designed to track the total return of the current coupon five-year U.S. Treasury bond.

^(f) This unmanaged market capitalization-weighted index tracks 22 government bond indexes, excluding the United States.

Past performance is not indicative of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

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

FUND SUMMARY 3

Fund Summary  as of December 31, 2018 (continued) BlackRock Global Allocation V.I. Fund

Expense Example

	Actual								Hypothetical (a)
					Including Dividend Expense and Broker Fees and Expenses on Short Sales		Excluding Dividend Expense and Broker Fees and Expenses on Short Sales				Including Dividend Expense and Broker Fees and Expenses on Short Sales				Excluding Dividend Expense and Broker Fees and Expenses on Short Sales
	Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Expenses Paid During the Period (c)		Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Ending Account Value (12/31/18)		Expenses Paid During the Period (c)
Class I	$	1,000.00	$	940.80	$	3.67	$	3.62	$	1,000.00	$	1,021.42	$	3.82	$	1,021.48	$	3.77
Class II		1,000.00		940.10		4.40		4.35		1,000.00		1,020.67		4.58		1,020.72		4.53
Class III		1,000.00		939.40		4.89		4.84		1,000.00		1,020.16		5.09		1,020.21		5.04

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

^(b)  For each class of the Fund, expenses are equal to the annualized expense ratio for the class (0.75% for Class I, 0.90% for Class II and 1.00% for Class III), multiplied by the average account value over the period, multiplied by 184/365 (to reflect theone-half year period shown).

^(c)  For each class of the Fund, expenses are equal to the annualized expense ratio for the class (0.74% for Class I, 0.89% for Class II and 0.99% for Class III), multiplied by the average account value over the period, multiplied by 184/365 (to reflect theone-half year period shown).

See “Disclosure of Expenses” on the following page for further information on how expenses were calculated.

Overall Asset Exposure

	Percent of Fund’s Net Assets (a)						Reference Benchmark (b) Percentage
Portfolio Composition	12/31/2018			12/31/2017
U.S. Equities		32	%		32	%		35	%
European Equities		9			15			12
Asia Pacific Equities		14			14			10
Other Equities		3			1			3
Total Equities		58			62			60
U.S Dollar Denominated Fixed Income Securities		29			22			24
U.S. Issuers		27			19			—
Non-U.S. Issuers		2			3			—
Non-U.S Dollar Denominated Fixed Income Securities		2			8			16
Total Fixed Income Securities		31			30			40
Commodity-Related Securities		2			4
Cash & Short-Term Securities		9			4			—

^(a)  Exposure based on market value and adjusted for the economic value of futures, swaps and options (except with respect to fixed income securities), and convertible bonds.

^(b) The Reference Benchmark is an unmanaged weighted index comprised as follows: 36% of the S&P 500 Index^®; 24% FTSE World (ex U.S.) Index; 24% ICE BofA Merrill Current5-Year U.S. Treasury Index; and 16% FTSENon-U.S. Dollar World Government Bond Index. Descriptions of these indexes are found on page 5 of this report to shareholders in the “Performance Summary” section.

4 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Disclosure of Expenses

Shareholders of the Fund may incur the following charges: (a) transactional expenses; and (b) operating expenses, including investment advisory fees, service and distribution fees, including12b-1 fees, acquired fund fees and expenses, and other fund expenses. The expense example shown on the previous page (which is based on a hypothetical investment of $1,000 invested on July 1, 2018 and held through December 31, 2018 is intended to assist shareholders both in calculating expenses based on an investment in the Fund and in comparing these expenses with similar costs of investing in other mutual funds.

The expense example provides 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 share class under the heading entitled “Expenses Paid During the Period.”

The expense example also provides information about hypothetical account values and hypothetical expenses based on the 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 the Fund and other funds, compare the 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.

The expenses shown in the expense example are intended to highlight shareholders’ ongoing costs only and do not reflect any transactional expenses, such as sales charges, if any. Therefore, the hypothetical example is 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 Fund 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 Fund’s 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 the Fund can realize on an investment and/or may result in lower distributions paid to shareholders. The Fund’s investments in these instruments, if any, are discussed in detail in the Notes to Consolidated Financial Statements.

DISCLOSUREOF EXPENSES / DERIVATIVE FINANCIAL INSTRUMENTS 5

Consolidated Schedule of Investments   December 31, 2018 BlackRock Global Allocation V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Common Stocks — 58.2%
Australia — 0.2%
AGL Energy Ltd.		80,629	$	1,170,912
BHP Group Ltd.		10,269		248,213
Coles Group Ltd.(a)		11,952		98,832
Newcrest Mining Ltd.		308,906		4,747,599
Quintis HoldCo Pty. Ltd. (Acquired 10/22/18, cost $5,761,227)(a)(b)(c)(t)		10,892,000		5,830,553
Rio Tinto Ltd.		7,796		431,477
Stockland		135,455		336,036
Telstra Corp. Ltd.		10,439		20,950
Woolworths Group Ltd.		25,287		524,554
				13,409,126
Belgium — 0.2%
Anheuser-Busch InBev SA		319,046		21,018,441
Brazil — 0.7%
Azul SA, ADR(a)(d)		1,184,374		32,795,316
Banco do Brasil SA(a)		49,947		599,119
Banco Santander Brasil SA		14,265		157,161
Hapvida Participacoes e Investimentos SA(a)(e)		1,417,332		11,409,600
Notre Dame Intermedica Participacoes SA(a)		2,525,034		18,945,492
Petrobras Distribuidora SA		15,751		104,444
Suzano Papel e Celulose SA		13,612		133,741
TIM Participacoes SA(a)		31,551		96,466
				64,241,339
Canada — 1.5%
Canadian Natural Resources Ltd.		6,822		164,603
Canadian Pacific Railway Ltd.		1,978		350,975
Enbridge, Inc.		1,312,870		40,784,366
Encana Corp.(d)		1,583,747		9,154,058
Goldcorp, Inc.		3,819		37,401
Husky Energy, Inc.		41,674		430,721
Imperial Oil Ltd.		17,560		444,917
Manulife Financial Corp.		66,259		940,109
Nutrien Ltd.(d)		17,479		820,945
Rogers Communications, Inc., Class B		12,223		626,371
Suncor Energy, Inc.		1,214,878		33,931,510
Teck Resources Ltd., Class B		22,757		489,912
TransCanada Corp.(d)		1,107,986		39,565,131
Wheaton Precious Metals Corp.		145,186		2,834,169
				130,575,188
China — 1.5%
Agile Group Holdings Ltd.		312,000		368,070
Agricultural Bank of China Ltd., Class H		579,000		253,600
Alibaba Group Holding Ltd., ADR(a)		144,808		19,848,833
Angang Steel Co. Ltd., Class H		364,000		251,103
Angel Yeast Co. Ltd., Class A		1,053,512		3,885,367
Anhui Conch Cement Co. Ltd., Class H		84,500		408,623
BAIC Motor Corp. Ltd., Class H(a)(e)		40,000		21,160
Baidu, Inc., ADR(a)		2,600		412,360
Bank of China Ltd., Class H		168,000		72,425
Beijing Capital International Airport Co. Ltd., Class H		4,212,000		4,470,304
Beijing Enterprises Holdings Ltd.		86,000		456,010
China CITIC Bank Corp. Ltd., Class H		687,000		416,794
China Communications Construction Co. Ltd., Class H		22,000		20,742
China Construction Bank Corp., Class H		284,000		232,554
China Mobile Ltd.		104,500		1,011,204
China National Building Material Co. Ltd., Class H		212,000		145,063
China Petroleum & Chemical Corp., Class H		1,658,000		1,181,839
China Resources Beer Holdings Co. Ltd.		84,000		293,680
China Resources Cement Holdings Ltd.		814,000		734,012
China Resources Gas Group Ltd.		84,000		332,856
China Shenhua Energy Co. Ltd., Class H		282,000		615,027

Security	Shares		Value
China (continued)
CITIC Ltd.		500,000	$	784,590
CNOOC Ltd.		771,000		1,187,589
Country Garden Holdings Co. Ltd.		190,000		230,718
Country Garden Services Holdings Co. Ltd.(a)		147,321		233,245
Dongfeng Motor Group Co. Ltd., Class H		140,000		127,244
Fosun International Ltd.		473,000		689,324
Guangzhou Automobile Group Co. Ltd., Class H		274,400		273,568
Industrial & Commercial Bank of China Ltd., Class H		1,786,000		1,270,310
Jiangsu Expressway Co. Ltd., Class H		64,000		89,332
Jiangsu Yanghe Brewery Joint-Stock Co. Ltd., Class A		252,400		3,496,490
Kweichow Moutai Co. Ltd., Class A		146,300		12,632,424
Luzhou Laojiao Co. Ltd., Class A		638,200		3,788,628
Meituan Dianping, Class B(d)		353,916		1,983,587
Momo, Inc., ADR(a)		3,583		85,096
New Oriental Education & Technology Group, Inc., ADR(a)		6,761		370,570
PetroChina Co. Ltd., Class H		136,000		84,388
Ping An Healthcare and Technology Co. Ltd.(a)(d)(e)		2,408,070		8,466,531
Ping An Insurance Group Co. of China Ltd., Class H		12,500		110,275
SINA Corp.(a)		14,102		756,431
Sinopec Shanghai Petrochemical Co. Ltd., Class H		1,304,000		570,812
Tencent Holdings Ltd.		1,257,000		50,381,001
Tingyi Cayman Islands Holding Corp.		142,000		190,182
Tsingtao Brewery Co. Ltd., Class H		28,000		113,008
Want Want China Holdings Ltd.		4,399,000		3,077,846
Wuliangye Yibin Co. Ltd., Class A		476,600		3,542,784
Yanzhou Coal Mining Co. Ltd., Class H		232,000		187,372
Yum China Holdings, Inc.		77,498		2,598,508
Zhejiang Expressway Co. Ltd., Class H		308,000		267,203
Zijin Mining Group Co. Ltd., Class H		406,000		153,861
				133,174,543
Czech Republic — 0.0%
CEZ A/S		162,870		3,882,525
Denmark — 0.1%
Carlsberg A/S, Class B		13,547		1,441,118
Danske Bank A/S		21,774		432,267
Novo Nordisk A/S, Class B		135,135		6,206,356
				8,079,741
Finland — 0.0%
Nokia OYJ		144,158		836,855
France — 2.7%
AXA SA		760,547		16,414,057
Cie de Saint-Gobain		25,367		842,096
Cie Generale des Etablissements Michelin SCA		8,041		791,451
Danone SA		974,113		68,658,039
Dassault Aviation SA		10,457		14,497,140
Eiffage SA		76,232		6,373,547
Engie SA		53,392		767,133
EssilorLuxottica SA		201,986		25,144,376
Eutelsat Communications SA		188,320		3,710,122
Kering SA		3,604		1,688,361
L’Oreal SA		4,126		944,130
Publicis Groupe SA		14,516		828,234
Safran SA		305,947		36,693,756
Sanofi		66,211		5,743,800
Societe Generale SA		40,545		1,285,461
Sodexo SA(d)		443,696		45,503,448
TOTAL SA, ADR		14,070		734,173
Unibail-Rodamco-Westfield		81,678		12,639,226
				243,258,550

6 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Germany — 1.3%
adidas AG		807	$	168,654
Allianz SE (Registered)		8,324		1,672,752
Bayer AG (Registered)		556,561		38,708,144
Evonik Industries AG		48,511		1,210,891
Fresenius SE & Co. KGaA		894,308		43,225,590
Knorr-Bremse AG(a)		317,212		28,574,096
Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen (Registered)		1,477		322,132
SAP SE		8,485		842,134
Vonovia SE		50,121		2,259,401
				116,983,794
Hong Kong — 0.9%
CK Asset Holdings Ltd.		18,500		135,357
CK Infrastructure Holdings Ltd.		537,500		4,067,641
CLP Holdings Ltd.		425,000		4,802,881
Hang Lung Properties Ltd.		2,381,000		4,525,626
HKT Trust & HKT Ltd.(f)		2,011,000		2,896,907
Hongkong Land Holdings Ltd.		106,400		670,760
I-CABLE Communications Ltd.(a)		379,342		5,694
Jardine Matheson Holdings Ltd.		86,400		6,015,924
Link REIT		447,500		4,536,632
Nine Dragons Paper Holdings Ltd.		69,000		63,739
Power Assets Holdings Ltd.		165,500		1,149,795
Sino Land Co. Ltd.		1,338,000		2,292,369
Sun Hung Kai Properties Ltd.		3,113,583		44,435,890
Swire Pacific Ltd., Class A		288,000		3,040,703
WH Group Ltd.(e)		1,404,500		1,078,722
Wharf Real Estate Investment Co. Ltd.		440,000		2,631,603
				82,350,243
India — 1.2%
Coal India Ltd.		1,027,821		3,543,394
HCL Technologies Ltd.		22,307		308,246
Hero MotoCorp Ltd.		72,985		3,243,117
Hindustan Petroleum Corp. Ltd.		173,877		631,805
Housing Development Finance Corp. Ltd.		1,044,829		29,437,316
Infosys Ltd.		37,055		350,108
JSW Steel Ltd.		30,945		135,838
Maruti Suzuki India Ltd.		100,753		10,765,735
Oil & Natural Gas Corp. Ltd.		1,060,999		2,277,610
Reliance Industries Ltd.		2,947,847		47,310,159
State Bank of India(a)		2,249,243		9,525,648
Tata Consultancy Services Ltd.		15,000		406,723
				107,935,699
Indonesia — 0.0%
Bank Central Asia Tbk. PT		1,819,300		3,290,112
Italy — 0.5%
Enel SpA		3,949,616		22,896,897
Eni SpA		50,864		803,509
RAI Way SpA(e)		1,952,885		9,699,640
Snam SpA		1,667,970		7,302,980
Telecom Italia SpA(a)		14,163,354		7,840,963
Telecom Italia SpA		705,729		338,483
UniCredit SpA		13,450		152,347
				49,034,819
Japan — 7.7%
Aeon Co. Ltd.		8,700		170,051
Ajinomoto Co., Inc.		1,893,000		33,636,892
Alfresa Holdings Corp.		103,500		2,638,176
Alps Electric Co. Ltd.		52,632		1,020,555
Asahi Kasei Corp.		1,010,000		10,366,013
Astellas Pharma, Inc.		1,884,665		24,079,668
Canon Marketing Japan, Inc.		91,500		1,630,798

Security	Shares		Value
Japan (continued)
Daicel Corp.		369,100	$	3,789,045
Daikin Industries Ltd.		134,800		14,323,235
Daiwa House Industry Co. Ltd.		7,900		251,998
Denso Corp.		930,020		41,169,835
Dowa Holdings Co. Ltd.		52,600		1,574,360
East Japan Railway Co.		549,451		48,522,097
Eisai Co. Ltd.		10,700		828,392
Exedy Corp.		63,400		1,548,652
Fujitsu Ltd.		5,700		355,316
GS Yuasa Corp.		122,800		2,504,399
Hino Motors Ltd.		172,000		1,619,642
Hitachi Chemical Co. Ltd.		135,500		2,038,425
Hitachi Ltd.		52,600		1,394,439
Hoya Corp.		468,974		28,279,152
Japan Airlines Co. Ltd.		1,407,700		49,890,408
Japan Aviation Electronics Industry Ltd.		176,800		2,034,629
JFE Holdings, Inc.		10,600		168,840
Kajima Corp.		17,200		231,049
Kamigumi Co. Ltd.		89,900		1,839,242
KDDI Corp.		136,500		3,261,657
Keyence Corp.		6,700		3,386,487
Kinden Corp.		360,500		5,836,968
Koito Manufacturing Co. Ltd.		533,600		27,530,317
Kuraray Co. Ltd.		136,200		1,915,590
Kyowa Hakko Kirin Co. Ltd.		17,600		332,571
Kyudenko Corp.		48,900		1,853,212
Mabuchi Motor Co. Ltd.		97,600		2,989,774
Maeda Road Construction Co. Ltd.		92,000		1,905,961
Medipal Holdings Corp.		119,400		2,554,467
Mitsubishi Electric Corp.		3,052,400		33,660,636
Mitsubishi Estate Co. Ltd.		168,900		2,657,390
Mitsubishi Heavy Industries Ltd.		18,900		678,177
Mitsubishi Tanabe Pharma Corp.		5,500		79,396
Mitsubishi UFJ Financial Group, Inc.		38,600		189,435
Mitsui & Co. Ltd.		3,300		50,699
Mitsui Fudosan Co. Ltd.		21,500		477,556
Murata Manufacturing Co. Ltd.		228,228		30,753,683
Nexon Co. Ltd.(a)		6,600		85,203
Nichias Corp.		103,400		1,763,317
Nippo Corp.(d)		85,200		1,630,087
Nippon Telegraph & Telephone Corp.		69,660		2,842,081
Nippon Television Holdings, Inc.		224,900		3,310,922
Nitto Denko Corp.		694,800		34,847,296
NTT Docomo, Inc.		8,100		182,001
Okumura Corp.		109,750		3,197,804
Olympus Corp.		3,800		116,222
Ono Pharmaceutical Co. Ltd.		11,000		224,628
Oracle Corp.		8,400		533,214
Otsuka Holdings Co. Ltd.		5,800		237,013
Panasonic Corp.		61,700		554,277
Rohm Co. Ltd.		269,253		17,185,076
Seino Holdings Co. Ltd.		127,200		1,665,351
Seven & i Holdings Co. Ltd.		46,900		2,038,045
Shimamura Co. Ltd.		19,200		1,470,251
Shin-Etsu Chemical Co. Ltd.		427,834		32,871,698
Shionogi & Co. Ltd.		1,000		57,075
Shiseido Co. Ltd.		12,300		770,324
Sony Corp.		20,000		964,192
Stanley Electric Co. Ltd.		58,500		1,636,512
Subaru Corp.		1,835,864		39,220,252
Sumitomo Chemical Co. Ltd.		135,000		653,766
Suzuken Co. Ltd.		49,300		2,510,486
Suzuki Motor Corp.		884,089		44,568,201
Sysmex Corp.		6,800		322,939

CONSOLIDATED SCHEDULE OF INVESTMENTS 7

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Japan (continued)
Taisei Corp.		3,300	$	141,334
Toagosei Co. Ltd.		285,300		3,144,407
Toda Corp.		459,796		2,865,453
Tokyo Gas Co. Ltd.		1,279,114		32,351,555
Tokyo Steel Manufacturing Co. Ltd.		472,100		3,823,972
Toray Industries, Inc.		2,119,500		14,985,116
Toshiba Corp.(a)		31,900		900,758
Toyota Industries Corp.		500,377		23,042,288
TV Asahi Holdings Corp.		163,600		2,945,522
Ube Industries Ltd.		745,034		15,067,084
Unicharm Corp.		13,700		443,085
Yamato Kogyo Co. Ltd.		69,500		1,624,406
				692,812,497
Macau — 0.0%
Galaxy Entertainment Group Ltd.		40,000		252,666
Sands China Ltd.		10,400		45,355
				298,021
Malaysia — 0.0%
Malaysia Airports Holdings Bhd.		765,900		1,551,458
Mexico — 0.0%
America Movil SAB de CV		540,174		384,548
Cemex SAB de CV(a)		365,750		176,810
Grupo Financiero Banorte SAB de CV, Class O		7,061		34,468
				595,826
Netherlands — 2.3%
ABN AMRO Group NV, CVA(e)		669,321		15,750,365
ASML Holding NV		985		154,310
Koninklijke Ahold Delhaize NV		21,564		544,754
Koninklijke Philips NV		2,101,737		73,685,844
NXP Semiconductors NV(a)		12,263		898,633
Royal Dutch Shell plc, Class A		2,612,877		77,013,297
Royal Dutch Shell plc, Class B		31,058		928,556
Royal Dutch Shell plc, ADR, Class A(d)		578,766		33,724,695
				202,700,454
Norway — 0.0%
Equinor ASA		10,092		214,073
Peru — 0.0%
Southern Copper Corp.		2,236		68,802
Poland — 0.0%
Polski Koncern Naftowy ORLEN SA		5,059		146,578
Polskie Gornictwo Naftowe i Gazownictwo SA(a)		56,756		104,940
				251,518
Portugal — 0.1%
Jeronimo Martins SGPS SA		169,406		2,007,547
NOS SGPS SA		1,251,221		7,587,327
				9,594,874
Singapore — 0.6%
CapitaLand Ltd.		17,236,450		39,306,504
ComfortDelGro Corp. Ltd.		1,958,200		3,093,065
Genting Singapore Ltd.		1,154,900		826,699
Singapore Telecommunications Ltd.		1,583,500		3,408,064
United Overseas Bank Ltd.		155,300		2,809,375
				49,443,707
South Africa — 0.0%
Anglo American plc(d)		18,395		411,325
Aspen Pharmacare Holdings Ltd.		26,347		246,548
Kumba Iron Ore Ltd.		1,348		26,510
MTN Group Ltd.		20,215		124,954

Security	Shares		Value
South Africa (continued)
Naspers Ltd., Class N		213	$	42,646
Old Mutual Ltd.		297,290		461,914
				1,313,897
South Korea — 0.7%
Coway Co. Ltd.		41,486		2,755,075
Doosan Bobcat, Inc.(a)		281,238		7,962,473
E-MART, Inc.		2,366		386,392
Hana Financial Group, Inc.		20,713		673,645
Industrial Bank of Korea		33,232		418,526
KB Financial Group, Inc.		8,102		337,990
KT&G Corp.		287,987		26,220,237
LG Chem Ltd.(d)		14,168		4,416,434
LG Electronics, Inc.		904		50,690
Lotte Chemical Corp.		130		32,322
NCSoft Corp.		6,948		2,912,396
POSCO		19,030		4,162,465
Samsung Electro-Mechanics Co. Ltd.(a)		250		23,305
Samsung Electronics Co. Ltd.		38,336		1,334,542
Samsung SDS Co. Ltd.		1,464		267,926
Shinhan Financial Group Co. Ltd.		33,538		1,189,127
SK Innovation Co. Ltd.		301		48,315
SK Telecom Co. Ltd.		16,085		3,880,986
S-Oil Corp.		30,950		2,699,642
Woori Bank		28,424		397,478
				60,169,966
Spain— 0.4%
Banco Bilbao Vizcaya Argentaria SA		236,647		1,257,026
Cellnex Telecom SA(d)(e)		1,192,892		30,506,419
				31,763,445
Sweden— 0.0%
Sandvik AB		33,984		486,932
Telefonaktiebolaget LM Ericsson, Class B		104,967		929,164
				1,416,096
Switzerland— 0.9%
Nestle SA (Registered)		989,245		80,289,881
Roche Holding AG		4,666		1,158,376
Swiss Re AG		7,597		698,926
				82,147,183
Taiwan— 0.9%
Cathay Financial Holding Co. Ltd.		2,638,000		4,038,332
Cheng Shin Rubber Industry Co. Ltd.		1,241,323		1,651,147
Chunghwa Telecom Co. Ltd.		5,979,000		21,830,313
Far EasTone Telecommunications Co. Ltd.(a)		3,621,000		8,994,439
Formosa Chemicals & Fibre Corp.		848,000		2,901,044
Formosa Petrochemical Corp.(a)		673,000		2,388,156
Formosa Plastics Corp.		948,000		3,116,069
Fubon Financial Holding Co. Ltd.		3,150,000		4,833,035
Globalwafers Co. Ltd.		12,000		110,010
Hon Hai Precision Industry Co. Ltd.(a)		1,551,960		3,571,738
MediaTek, Inc.		29,000		215,832
Nan Ya Plastics Corp.		1,190,000		2,926,621
Nanya Technology Corp.		240,000		429,796
Taiwan Cooperative Financial Holding Co. Ltd.		1,260		724
Taiwan Mobile Co. Ltd.		2,890,000		10,008,347
Taiwan Semiconductor Manufacturing Co. Ltd.		780,000		5,663,762
Uni-President Enterprises Corp.		1,948,000		4,419,345
Yageo Corp.		20,000		207,157
				77,305,867
Thailand— 0.2%
Advanced Info Service PCL		799,000		4,237,084
Intouch Holdings PCL, Class F		2,181,800		3,199,702

8 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Thailand (continued)
PTT Global Chemical PCL		1,830,300	$	4,010,362
Siam Cement PCL (The)		269,800		3,614,357
Thai Oil PCL		1,225,700		2,491,075
				17,552,580
Turkey— 0.0%
Eregli Demir ve Celik Fabrikalari TAS		11,156		15,167
Turk Hava Yollari AO(a)		103,169		313,111
Turkiye Is Bankasi A/S, Class C		81,630		69,667
				397,945
United Arab Emirates— 0.4%
NMC Health plc		981,513		34,256,024
United Kingdom— 1.6%
Barclays plc		316,146		604,873
Berkeley Group Holdings plc		69,594		3,086,710
Experian plc		11,133		269,885
GlaxoSmithKline plc		77,085		1,469,088
GW Pharmaceuticals plc, ADR(a)		36,528		3,557,462
HSBC Holdings plc		3,975,986		32,800,840
Kingfisher plc		7,803,669		20,518,124
Liberty Global plc, Class A(a)		810,731		17,301,000
Liberty Global plc, Class C(a)		27,493		567,455
National Grid plc		152,644		1,493,366
SSE plc		30,324		418,762
Vodafone Group plc		32,500,668		63,190,727
				145,278,292
United States— 31.6%
Abbott Laboratories		33,139		2,396,944
AbbVie, Inc.		33,533		3,091,407
Accenture plc, Class A		10,921		1,539,970
Adobe, Inc.(a)		9,568		2,164,664
AES Corp.		43,311		626,277
Agilent Technologies, Inc.		8,090		545,751
Air Products & Chemicals, Inc.		388,787		62,225,359
Allergan plc		6,167		824,281
Alliance Data Systems Corp.		2,297		344,734
Ally Financial, Inc.		17,290		391,791
Alphabet, Inc., Class A(a)		1,502		1,569,530
Alphabet, Inc., Class C(a)		130,677		135,330,408
Altria Group, Inc.		985,488		48,673,252
Amazon.com, Inc.(a)		56,968		85,564,227
American Airlines Group, Inc.		13,079		419,967
American International Group, Inc.		3,076		121,225
American Tower Corp.		14,871		2,352,443
Ameriprise Financial, Inc.		14,662		1,530,273
Amgen, Inc.		15,826		3,080,847
Anadarko Petroleum Corp.		842,234		36,923,539
Anthem, Inc.		326,348		85,708,775
Apple, Inc.		826,962		130,444,986
AT&T, Inc.		272,086		7,765,334
Autodesk, Inc.(a)		2,713		348,919
Automatic Data Processing, Inc.		3,666		480,686
Bank of America Corp.		1,372,772		33,825,102
Bank of New York Mellon Corp. (The)		16,137		759,569
Baxter International, Inc.		34,662		2,281,453
Berkshire Hathaway, Inc., Class B(a)		27,697		5,655,173
Biogen, Inc.(a)		72,482		21,811,283
Boeing Co. (The)		9,485		3,058,912
Booking Holdings, Inc.(a)		541		931,829
Bristol-Myers Squibb Co.		31,922		1,659,306
Capital One Financial Corp.		7,404		559,668
Carnival Corp.		2,075		102,297
Caterpillar, Inc.		11,476		1,458,255
Celgene Corp.(a)		6,272		401,972

Security	Shares		Value
United States (continued)
CenterPoint Energy, Inc.		17,534	$	494,985
CH Robinson Worldwide, Inc.		31,095		2,614,779
Charles Schwab Corp. (The)(d)		889,469		36,939,648
Charter Communications, Inc., Class A(a)		261,305		74,464,086
Chevron Corp.(d)		18,010		1,959,308
Chubb Ltd.(d)		204,285		26,389,536
Cisco Systems, Inc.		67,226		2,912,903
Citigroup, Inc.		512,311		26,670,911
Cloudera, Inc.(a)		1,544,221		17,079,084
Cognizant Technology Solutions Corp., Class A		17,390		1,103,917
Colgate-Palmolive Co.		903,618		53,783,343
Comcast Corp., Class A(g)		2,966,304		101,002,651
Conagra Brands, Inc.		14,298		305,405
ConocoPhillips		5,195		323,908
Constellation Brands, Inc., Class A		2,559		411,538
Corning, Inc.		36,476		1,101,940
Costco Wholesale Corp.		4,329		881,861
CSX Corp.		34,485		2,142,553
Cummins, Inc.		3,297		440,611
CVS Health Corp.		991,955		64,992,892
DaVita, Inc.(a)		431,016		22,180,083
Dell Technologies, Inc., Class C(a)(d)		2,771		135,435
Delta Air Lines, Inc.		16,862		841,414
Discover Financial Services		12,050		710,709
Dollar General Corp.		7,815		844,645
Dollar Tree, Inc.(a)		429,968		38,834,710
Domo, Inc., Class B(a)		338,616		6,647,032
Domo, Inc., Class B (Acquired04/01/15-04/12/17, cost $469,893)(a)(b)		186,575		3,662,468
Dover Corp.		299,517		21,250,731
DowDuPont, Inc.		747,408		39,971,380
Dropbox, Inc., Class A(a)(d)		1,315,525		26,876,184
DXC Technology Co.		10,334		549,459
Eaton Corp. plc		18,843		1,293,760
eBay, Inc.(a)		32,762		919,629
Edgewell Personal Care Co.(a)(d)		372,817		13,924,715
Edwards Lifesciences Corp.(a)		3,979		609,463
Eli Lilly & Co.		3,568		412,889
Equity Residential		235,435		15,541,064
Exelon Corp.		23,104		1,041,990
Expedia Group, Inc.		6,789		764,781
Exxon Mobil Corp.		1,215,123		82,859,237
Facebook, Inc., Class A(a)		428,834		56,215,849
Fieldwood Energy, Inc.(a)(c)		86,636		3,292,168
Fifth Third Bancorp		35,313		830,915
FleetCor Technologies, Inc.(a)		209,148		38,842,967
Fortune Brands Home & Security, Inc.		46,274		1,757,949
General Electric Co.		86,401		654,056
General Motors Co.		20,255		677,530
Gilead Sciences, Inc.		668,904		41,839,945
Global Payments, Inc.		17,244		1,778,374
Goldman Sachs Group, Inc. (The)		11,779		1,967,682
Halfmoon Parent, Inc.		3,860		733,169
Hartford Financial Services Group, Inc. (The)		54,479		2,421,592
HCA Healthcare, Inc.		195,351		24,311,432
Helmerich & Payne, Inc.		12,474		598,004
Hewlett Packard Enterprise Co.		61,075		806,801
Home Depot, Inc. (The)		13,033		2,239,330
HP, Inc.		29,010		593,545
Humana, Inc.		2,537		726,800
Huntsman Corp.		22,829		440,371
Illumina, Inc.(a)		3,628		1,088,146
Intel Corp.		77,217		3,623,794
International Business Machines Corp.		15,803		1,796,327
Intuit, Inc.		12,666		2,493,302

CONSOLIDATED SCHEDULE OF INVESTMENTS 9

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
United States (continued)
Intuitive Surgical, Inc.(a)		1,263	$	604,876
Jawbone Health Hub, Inc. (Acquired 01/24/17, cost $0)(a)(b)(c)		333,860		3
Johnson & Johnson		897,176		115,780,563
JPMorgan Chase & Co.		327,142		31,935,602
Kinder Morgan, Inc.		10,738		165,150
KLA-Tencor Corp.		7,957		712,072
Kohl’s Corp.		10,684		708,777
Kroger Co. (The)		28,609		786,747
Las Vegas Sands Corp.		18,383		956,835
Lear Corp.		3,543		435,293
Liberty Broadband Corp., Class A(a)		62,817		4,510,889
Liberty Broadband Corp., Class C(a)		260,865		18,790,106
Liberty Media Corp.-Liberty SiriusXM, Class A(a)		217,656		8,009,741
Liberty Media Corp.-Liberty SiriusXM, Class C(a)		364,715		13,487,160
Lookout, Inc. (Acquired 03/04/15, cost $936,169)(a)(b)(c)		81,954		1,639
Lowe’s Cos., Inc.		53,526		4,943,661
Marathon Petroleum Corp.		474,145		27,979,296
Marsh & McLennan Cos., Inc.(d)		725,753		57,878,802
Masco Corp.		157,330		4,600,329
Mastercard, Inc., Class A		18,623		3,513,229
McDonald’s Corp.		7,643		1,357,167
McKesson Corp.		7,367		813,832
Medtronic plc		34,739		3,159,859
Merck & Co., Inc.		71,080		5,431,223
MetLife, Inc.		31,510		1,293,801
MGM Resorts International(d)		714,549		17,334,959
Micron Technology, Inc.(a)		32,625		1,035,191
Microsoft Corp.		1,275,282		129,530,393
Mondelez International, Inc., Class A		67,856		2,716,276
Morgan Stanley		928,860		36,829,299
Newmont Mining Corp.(d)		753,832		26,120,279
NextEra Energy Partners LP(d)		325,461		14,011,096
NextEra Energy, Inc.		419,509		72,919,054
NIKE, Inc., Class B		9,276		687,723
Norfolk Southern Corp.		6,531		976,646
Northrop Grumman Corp.		1,905		466,534
NRG Energy, Inc.		17,859		707,216
Occidental Petroleum Corp.		15,113		927,636
Omnicom Group, Inc.(d)		45,898		3,361,570
Oracle Corp.		227,710		10,281,106
Packaging Corp. of America		8,294		692,217
Paychex, Inc.		14,944		973,602
PayPal Holdings, Inc.(a)		7,629		641,523
PepsiCo, Inc.		39,164		4,326,839
Pfizer, Inc.		1,780,495		77,718,607
PG&E Corp.(a)		18,133		430,659
Philip Morris International, Inc.		474,406		31,671,345
Phillips 66		24,720		2,129,628
Procter & Gamble Co. (The)		426,285		39,184,117
Prudential Financial, Inc.		7,906		644,734
Pure Storage, Inc., Class A(a)(d)		783,496		12,598,616
PVH Corp.		6,054		562,719
QUALCOMM, Inc.		553,482		31,498,661
Raytheon Co.		117,669		18,044,541
Red Hat, Inc.(a)		4,965		872,053
Reinsurance Group of America, Inc.		7,045		987,920
Rockwell Automation, Inc.		9,358		1,408,192
Ross Stores, Inc.		10,315		858,208
Royal Caribbean Cruises Ltd.		6,579		643,360
Schlumberger Ltd.		213,583		7,706,075
Sempra Energy(d)		176,103		19,052,584
Sprint Corp.(a)		4,037		23,495
St Joe Co. (The)(a)		131,390		1,730,406

Security		Shares		Value
United States (continued)
Starbucks Corp.			469,083	$	30,208,945
State Street Corp.			5,738		361,896
Stryker Corp.			19,293		3,024,178
SunTrust Banks, Inc.			529,288		26,697,287
Symantec Corp.			3,221		60,861
Sysco Corp.			8,769		549,466
Target Corp.			9,307		615,100
Tenet Healthcare Corp.(a)			186,990		3,205,009
Thermo Fisher Scientific, Inc.			14,365		3,214,743
Travelers Cos., Inc. (The)			30,751		3,682,432
Union Pacific Corp.			5,679		785,008
United Continental Holdings, Inc.(a)			371,668		31,119,762
United Technologies Corp.			264,696		28,184,830
UnitedHealth Group, Inc.			41,147		10,250,541
US Bancorp			19,827		906,094
Valero Energy Corp.			22,830		1,711,565
VeriSign, Inc.(a)			7,945		1,178,164
Verizon Communications, Inc.			606,991		34,125,034
VF Corp.			3,803		271,306
Visa, Inc., Class A			31,217		4,118,771
Vistra Energy Corp.(a)			188,730		4,320,030
VMware, Inc., Class A(a)			6,555		898,887
Vornado Realty Trust			12,685		786,851
Walgreens Boots Alliance, Inc.			1,769		120,876
Walmart, Inc.			24,880		2,317,572
Walt Disney Co. (The)			9,984		1,094,746
Waste Management, Inc.			4,694		417,719
Wells Fargo & Co.			1,628,658		75,048,561
Western Digital Corp.			634,141		23,444,193
Weyerhaeuser Co.			33,432		730,824
Williams Cos., Inc. (The)(d)			3,245,222		71,557,145
Wyndham Destinations, Inc.			17,042		610,785
Xcel Energy, Inc.			9,486		467,375
Yum! Brands, Inc.			14,451		1,328,336
Zoetis, Inc.			8,789		751,811
Zynga, Inc., Class A(a)			4,748,402		18,661,220
					2,839,577,747
Total Common Stocks— 58.2% (Cost: $5,417,381,989)					5,226,781,247
		Par (000)
Corporate Bonds — 4.7%
Australia— 0.4%
Quintis Australia Pty. Ltd.(c)(e)(h)(t):
7.50% (7.50% Cash or 8.00% PIK), 10/01/26	USD		17,908		17,625,011
12.00% (0.00% Cash or 0.00% PIK), 10/01/28	USD		21,237		21,236,520
					38,861,531
Belgium— 0.1%
Anheuser-Busch InBev Worldwide, Inc.:
3.50%, 01/12/24	USD		4,114		4,024,091
4.00%, 04/13/28	USD		6,778		6,483,384
					10,507,475
Chile— 0.0%
Inversiones Alsacia SA, 8.00%, 12/31/18(a)(e)(i)	USD		7,767		155,734
China— 0.1%
Baidu, Inc., 4.38%, 05/14/24	USD		5,410		5,443,878
China Milk Products Group Ltd., 0.00%, 01/05/12(a)(i)(j)(k)	USD		4,800		48,000
					5,491,878

10 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation V.I. Fund (Percentages shown are based on Net Assets)

Security		Par (000)		Value
France — 0.1%
Danone SA, 2.59%, 11/02/23(e)	USD		7,310	$	6,949,544
Germany — 0.1%
Bayer Capital Corp. BV, 5.63%, 11/22/19(e)(j)	EUR		14,600		12,792,031
India — 0.0%
REI Agro Ltd.(a)(c)(i)(j):
5.50%, 11/13/14(e)	USD		6,148		1
5.50%, 11/13/14	USD		2,291		—
					1
Italy — 0.1%
Telecom Italia SpA, 5.30%, 05/30/24(e)	USD		4,066		3,862,700
Japan — 0.3%
Sumitomo Mitsui Financial Group, Inc., 3.94%, 10/16/23	USD		21,106		21,477,029
Takeda Pharmaceutical Co. Ltd., 3.80%, 11/26/20(e)	USD		5,065		5,095,555
					26,572,584
Luxembourg — 0.0%
Intelsat Jackson Holdings SA, 8.00%, 02/15/24(e)	USD		1,933		1,990,990
Netherlands — 0.1%
Cooperatieve Rabobank UA, 3.95%, 11/09/22	USD		1,986		1,979,521
ING Groep NV, 4.10%, 10/02/23	USD		9,865		9,859,007
					11,838,528
Singapore — 0.1%
CapitaLand Ltd., 1.95%, 10/17/23(e)(j)	SGD		7,250		5,151,907
Switzerland — 0.1%
UBS Group Funding Switzerland AG, 4.13%, 09/24/25(e)	USD		4,688		4,670,666
Turkey — 0.0%
Bio City Development Co. BV, 8.00%, 07/06/20(a)(c)(e)(i)(j)	USD		21,400		3,317,000
United Kingdom — 0.1%
HSBC Holdings plc, (LIBOR USD 3 Month + 1.06%), 3.26%, 03/13/23(l)	USD		6,852		6,705,761
United States — 3.1%
Allergan Funding SCS, 3.45%, 03/15/22	USD		6,517		6,413,006
Allergan Sales LLC, 5.00%, 12/15/21(e)	USD		3,225		3,318,200
American Express Co., 3.70%, 08/03/23	USD		14,692		14,734,484
Apple, Inc.:
3.35%, 02/09/27	USD		11,988		11,681,001
3.20%, 05/11/27	USD		11,520		11,117,711
AT&T, Inc., 3.60%, 02/17/23	USD		14,312		14,223,312
AvalonBay Communities, Inc., 3.50%, 11/15/24	USD		1,436		1,427,398
Bank of America Corp.:
(LIBOR USD 3 Month + 0.66%), 2.37%, 07/21/21(l)	USD		2,995		2,941,403
3.30%, 01/11/23	USD		6,864		6,760,073
4.00%, 01/22/25	USD		3,669		3,574,142
Becton Dickinson and Co.:
3.13%, 11/08/21	USD		6,655		6,563,539
2.89%, 06/06/22	USD		5,486		5,313,301
3.36%, 06/06/24	USD		2,924		2,808,435
BP Capital Markets America, Inc., 3.79%, 02/06/24	USD		5,775		5,837,309
Capital One Financial Corp.:
3.20%, 01/30/23	USD		4,939		4,806,245
3.30%, 10/30/24	USD		2,159		2,041,867

Security		Par (000)		Value
United States (continued)
Citigroup, Inc., 2.45%, 01/10/20	USD		6,616	$	6,562,871
Comcast Corp.:
3.45%, 10/01/21	USD		5,479		5,534,552
2.75%, 03/01/23	USD		6,879		6,695,142
3.70%, 04/15/24	USD		13,595		13,677,996
CVS Health Corp., 3.70%, 03/09/23	USD		21,094		20,868,191
DowDuPont, Inc., 3.77%, 11/15/20	USD		5,445		5,497,202
eBay, Inc., 2.75%, 01/30/23	USD		3,683		3,540,799
Edgewell Personal Care Co.:
4.70%, 05/19/21	USD		3,352		3,301,720
4.70%, 05/24/22	USD		3,367		3,240,738
Enterprise Products Operating LLC:
3.35%, 03/15/23	USD		3,673		3,622,827
3.90%, 02/15/24	USD		2,154		2,172,253
Gilead Sciences, Inc., 3.25%, 09/01/22	USD		6,868		6,851,855
Goldman Sachs Group, Inc. (The), (LIBOR USD 3 Month + 1.05%), 2.91%, 06/05/23(l)	USD		6,866		6,591,292
Halfmoon Parent, Inc.(e):
3.40%, 09/17/21	USD		9,310		9,288,824
3.75%, 07/15/23	USD		7,927		7,900,603
Hughes Satellite Systems Corp., 7.63%, 06/15/21	USD		1,213		1,258,488
Northrop Grumman Corp., 2.55%, 10/15/22	USD		6,863		6,641,002
Philip Morris International, Inc.:
2.50%, 11/02/22	USD		1,324		1,272,499
3.60%, 11/15/23	USD		2,753		2,759,314
QUALCOMM, Inc.:
2.60%, 01/30/23	USD		3,457		3,326,751
2.90%, 05/20/24	USD		4,117		3,920,195
Sempra Energy, 2.88%, 10/01/22	USD		1,932		1,863,276
Sherwin-Williams Co. (The), 2.25%, 05/15/20	USD		1,289		1,269,265
Simon Property Group LP, 2.75%, 06/01/23	USD		2,747		2,661,962
Starbucks Corp., 3.10%, 03/01/23	USD		6,881		6,777,460
UnitedHealth Group, Inc.:
3.50%, 06/15/23	USD		6,857		6,916,122
3.50%, 02/15/24	USD		4,175		4,201,721
Verizon Communications, Inc., 3.13%, 03/16/22	USD		7,144		7,096,379
Walgreen Co., 3.10%, 09/15/22	USD		7,007		6,835,340
Wells Fargo & Co., 3.07%, 01/24/23	USD		1,431		1,393,685
Wells Fargo Bank NA, 3.55%, 08/14/23	USD		9,002		8,963,939
Williams Cos., Inc. (The), 3.70%, 01/15/23	USD		3,457		3,372,339
					279,438,028
Total Corporate Bonds — 4.7% (Cost: $464,883,361)					418,306,358
Floating Rate Loan Interests — 0.2%(m)
United States — 0.2%
Fieldwood Energy LLC, 2nd Lien Term Loan, (LIBOR USD 1 Month + 7.25%), 9.77%, 04/11/23	USD		2,958		2,570,864
Fieldwood Energy LLC, Term Loan, (LIBOR USD 1 Month + 5.25%), 7.77%, 04/11/22	USD		2,191		2,042,140
Hilton Worldwide Finance LLC, 1st Lien Term Loan B2, (LIBOR USD 1 Month + 1.75%), 4.26%, 10/25/23	USD		11,442		11,013,301
					15,626,305
Total Floating Rate Loan Interests — 0.2% (Cost: $14,489,682)					15,626,305

CONSOLIDATED SCHEDULE OF INVESTMENTS 11

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation V.I. Fund (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Foreign Government Obligations — 2.8%
Argentina — 0.8%
Republic of Argentina:
3.38%, 01/15/23	EUR		8,170	$	7,418,416
6.88%, 01/26/27	USD		28,817		21,900,920
5.88%, 01/11/28	USD		41,668		29,844,705
5.25%, 01/15/28	EUR		1,282		1,053,901
7.82%, 12/31/33	EUR		16,600		15,871,442
					76,089,384
Australia — 0.2%
Commonwealth of Australia, 3.00%, 03/21/47	AUD		29,274		21,332,955
Canada — 0.2%
Canadian Government Bond, 0.75%, 03/01/21	CAD		22,991		16,443,314
Germany — 0.9%
Federal Republic of Germany, 0.50%, 02/15/28	EUR		65,186		76,872,495
Mexico — 0.7%
United Mexican States:
6.50%, 06/10/21	MXN		6,562		31,854,750
8.00%, 12/07/23	MXN		6,274		31,144,439
					62,999,189
Total Foreign Government Obligations — 2.8% (Cost: $277,482,283)					253,737,337
		Shares
Investment Companies — 1.3%
iShares Gold Trust(a)(n)(t)			5,628,395		69,172,974
SPDR Gold Shares(a)(g)(n)			297,007		36,012,099
VanEck Vectors Gold Miners ETF(d)			520,099		10,968,888
Total Investment Companies — 1.3% (Cost: $120,982,118)					116,153,961
Preferred Securities — 2.4%
		Par (000)
Capital Trusts — 1.0%
Netherlands — 0.0%
ING Groep NV, 6.00%(m)(o)	USD		3,377		3,280,418
United Kingdom — 0.4%(m)(o)
HSBC Holdings plc, 6.37%	USD		13,297		12,366,210
Lloyds Bank plc, 13.00%	GBP		7,484		15,313,566
					27,679,776
United States — 0.6%
American Express Co., Series C, 4.90%(m)(o)	USD		4,528		4,335,560
Citigroup, Inc.(m)(o):
Series O, 5.87%	USD		15,431		14,890,915
Series Q, 5.95%	USD		6,252		6,033,180
Goldman Sachs Group, Inc. (The), Series M, 5.38%(m)(o)	USD		7,289		7,043,142
Morgan Stanley, Series H, 5.45%(m)(o)	USD		5,144		5,003,157
NBCUniversal Enterprise, Inc., 5.25%(e)(o)	USD		5,270		5,335,875
Prudential Financial, Inc.(m):
5.63%, 06/15/43	USD		2,604		2,550,175
5.87%, 09/15/42	USD		3,919		3,958,190
USB Capital IX, 3.50%(m)(o)	USD		1,901		1,406,740
					50,556,934
Total Capital Trusts — 1.0% (Cost: $84,674,126)					81,517,128

Security		Shares		Value
Preferred Stocks — 1.0%
Brazil — 0.0%
Braskem SA (Preference), 0.00%			8,921	$	109,057
Itau Unibanco Holding SA (Preference), 0.00%			519,866		4,761,717
Petroleo Brasileiro SA (Preference), 0.00%(a)			17,036		99,691
					4,970,465
South Korea — 0.0%
Samsung Electronics Co. Ltd. (Preference), 0.00%(a)			21,974		627,878
United States — 1.0%
Grand Rounds, Inc., Series C (Acquired 03/31/15, cost $5,939,231), 0.00%(a)(b)(c)			2,139,107		5,240,812
Grand Rounds, Inc., Series D (Acquired 05/01/18, cost $3,180,966), 0.00%(a)(b)(c)			1,312,469		3,176,175
Lookout, Inc., Series F (Acquired09/19/14-10/22/14, cost $10,936,522), 0.00%(a)(b)(c)			957,404		5,782,720
Palantir Technologies, Inc., Series I (Acquired 02/11/14, cost $11,447,321), 0.00%(a)(b)(c)			1,867,426		10,102,775
Uber Technologies, Inc., Series D (Acquired 06/06/14, cost $17,574,548), 0.00%(a)(b)(c)			1,132,888		50,945,973
Wells Fargo & Co., Series L, 7.50%(j)(o)			2,965		3,741,741
Welltower, Inc., Series I, 6.50%(d)(j)(o)			125,874		7,948,943
					86,939,139
Total Preferred Stocks — 1.0% (Cost: $63,624,365)					92,537,482
Trust Preferreds — 0.4%
China — 0.2%
Mandatory Exchangeable Trust, 5.75%, 06/01/19(e)(j)			138,193		21,327,326
United States — 0.2%(m)
Citigroup Capital XIII, 8.89%, 10/30/40			319,725		8,450,332
GMAC Capital Trust I, Series 2, 8.40%, 02/15/40			351,212		8,903,224
					17,353,556
Total Trust Preferreds — 0.4% (Cost: $30,358,349)					38,680,882
Total Preferred Securities — 2.4% (Cost: $178,656,840)					212,735,492
		Par (000)
U.S. Treasury Obligations — 22.6%
U.S. Treasury Inflation Linked Notes, 0.63%, 04/15/23	USD		74,231		72,997,361
U.S. Treasury Notes:
1.50%, 11/30/19(n)	USD		22,253		22,023,120
2.75%, 08/31/23	USD		221,786		224,272,834
2.88%, 09/30/23 - 11/30/25	USD		775,424		788,364,077
2.88%, 10/31/23(p)	USD		614,853		625,084,637
3.00%, 10/31/25(p)	USD		289,851		297,357,176
Total U.S. Treasury Obligations — 22.6% (Cost: $1,987,445,134)					2,030,099,205
Total Long-Term Investments — 92.2% (Cost: $8,461,321,407)					8,273,439,905

12 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation V.I. Fund (Percentages shown are based on Net Assets)

Short-Term Securities — 10.1%
Security		Par (000)		Value
Foreign Government Obligations — 2.0%(q)
Japan — 2.0%
Japan Treasury Bills:
(0.32)%, 01/28/19	JPY		5,673,500	$	51,768,636
(0.34)%, 02/04/19	JPY		5,669,100		51,730,247
(0.25)%, 03/04/19	JPY		5,857,950		53,460,067
(0.16)%, 03/25/19	JPY		2,495,950		22,780,312
					179,739,262
Total Foreign Government Obligations — 2.0% (Cost: $175,441,056)					179,739,262
		Shares
Money Market Funds — 2.6%(r)(t)
BlackRock Liquidity Funds,T-Fund, Institutional Class, 2.32%	USD		22,471,516		22,471,516
SL Liquidity Series, LLC, Money Market Series, 2.57%(s)			209,527,510		209,506,557
Total Money Market Funds — 2.6% (Cost: $231,985,653)					231,978,073
Time Deposits — 0.0%
Canada — 0.0%
Royal Bank Of Canada, 0.84%, 01/02/19	CAD		322		236,037
Europe — 0.0%
Citibank NA, (0.57)%, 01/02/19	EUR		1,309		1,499,576
Hong Kong — 0.0%
Brown Brothers Harriman & Co., 1.52%, 01/02/19	HKD		107		13,615
United Kingdom — 0.0%
Brown Brothers Harriman & Co., 0.37%, 01/02/19	GBP		12		15,203
United States — 0.0%
JPMorgan Chase & Co., 2.42%, 01/02/19	USD		39		38,774
Total Time Deposits — 0.0% (Cost: $1,803,205)					1,803,205
		Par (000)
U.S. Treasury Obligations — 5.5%
U.S. Treasury Bills:(q)
2.20%, 01/08/19	USD		108,000		107,959,545
2.23%, 01/03/19	USD		8,000		7,999,500
2.25%, 01/02/19	USD		18,000		18,000,000
2.30%, 01/15/19	USD		178,000		177,853,848
2.32%, 01/22/19	USD		125,250		125,089,958
2.33%, 02/05/19	USD		60,000		59,864,496
Total U.S. Treasury Obligations — 5.5% (Cost: $496,738,136)					496,767,347
Total Short-Term Securities — 10.1% (Cost: $905,968,050)					910,287,887
Total Options Purchased — 0.2% (Cost: $49,554,079)					21,948,987
Total Investments Before Options Written and Investments Sold Short — 102.5% (Cost: $9,416,843,536)					9,205,676,779
Total Options Written — (0.7)% (Premiums Received — $44,813,654)					(69,631,015	)

Investments Sold Short — (0.2)%
Security	Shares		Value
Common Stocks — (0.2)%
France — (0.1)%
Pernod Ricard SA		30,757	$	(5,047,857	)
Japan — (0.1)%
SUMCO Corp.		502,000		(5,590,773	)
Yaskawa Electric Corp.		244,800		(5,983,933	)
				(11,574,706	)
United States — 0.0%
LyondellBasell Industries NV, Class A		37,873		(3,149,519	)
Total Common Stocks — (0.2)% (Proceeds: $25,194,044)				(19,772,082	)
Total Investments Sold Short — (0.2)% (Proceeds: $25,194,044)				(19,772,082	)
Total Investments Net of Options Written and Investments Sold Short — 101.6% (Cost: $9,346,835,838)				9,116,273,682
Liabilities in Excess of Other Assets — (1.6)%				(141,162,241	)
Net Assets — 100.0%			$	8,975,111,441

^(a)  Non-income producing security.

^(b) Restricted security as to resale, excluding 144A securities. The Fund held restricted securities with a current value of $84,743,118, representing 0.94% of its net assets as of period end, and an original cost of $79,372,879.

^(c) Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy.

^(d) Security, or a portion of the security, is on loan.

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

^(f) A security contractually bound to one or more other securities to form a single saleable unit which cannot be sold separately.

^(g)  All or a portion of the security has been pledged and/or segregated as collateral in connection with outstanding exchange-traded options written.

^(h) Payment-in-kind security which may pay interest/dividends in additional par/shares and/or in cash. Rates shown are the current rate and possible payment rates.

⁽ⁱ⁾ Issuer filed for bankruptcy and/or is in default.

^(j) Convertible security.

^(k)  Zero-coupon bond.

^(l)  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.

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

⁽ⁿ⁾  All or a portion of the security is held by a wholly-owned subsidiary. See Note 1 of the Notes to Consolidated Financial Statements for details on the wholly-owned subsidiary.

^(o)  Perpetual security with no stated maturity date.

^(p)  All or a portion of the security has been pledged in connection with outstanding centrally cleared swaps.

^(q)  Rates are discount rates or a range of discount rates as of period end.

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

^(s)  Security was purchased with the cash collateral from loaned securities.

CONSOLIDATED SCHEDULE OF INVESTMENTS 13

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation V.I. Fund

^(t)  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:

Affiliated 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 (Depreciation)
BlackRock Liquidity Funds,T-Fund, Institutional Class		10,574,106		11,897,410	(b)		—			22,471,516	$	22,471,516	$	183,739		$	20	$	—
SL Liquidity Series, LLC, Money Market Series		235,838,442		—			(26,310,932	)(c)		209,527,510		209,506,557		1,088,546	(d)		24,463		7,113
iShares Gold Trust		2,098,037		3,530,358			—			5,628,395		69,172,974		—			—		(2,635,865	)
Quintis Australia Pty. Ltd. 12.00% 10/01/28		—		21,236,520			—			21,236,520		21,236,520		—			—		(2,196,211	)
Quintis Australia Pty. Ltd. 7.50% 10/01/26		—		17,907,552			—			17,907,552		17,625,011		—			—		(251,901	)
Quintis HoldCo Pty. Ltd.		—		10,892,000			—			10,892,000		5,830,553		—			—		69,326
											$	345,843,131	$	1,272,285		$	24,483	$	(5,007,538	)

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

^(b)  Represents net shares purchased.

^(c)  Represents net shares sold.

^(d)  Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.

Derivative Financial Instruments Outstanding as of Period End    

Futures Contracts

Description	Number of Contracts		Expiration Date		Notional Amount (000)		Value/ Unrealized Appreciation (Depreciation)
Short Contracts
Yen Denominated Nikkei 225 Index		164		03/07/19		14,824	$	761,684
EURO STOXX 50 Index		5,362		03/15/19		182,708		5,122,115
NASDAQ 100E-mini Index		178		03/15/19		22,546		529,817
S&P 500E-Mini Index		227		03/15/19		28,434		(38,040	)
Canada 10 Year Bond		765		03/20/19		76,640		(929,678	)
							$	5,445,898

Forward Foreign Currency Exchange Contracts    

Currency Purchased		Currency Sold		Counterparty	Settlement Date		Unrealized Appreciation (Depreciation)
JPY	820,000	USD	7,426	UBS AG		01/04/19	$	57
JPY	25,196,807	USD	228,224	UBS AG		01/07/19		1,748
JPY	5,271,036,592	USD	47,468,000	JPMorgan Chase Bank NA		01/25/19		711,335
USD	15,682,692	AUD	22,171,000	JPMorgan Chase Bank NA		01/25/19		59,161
JPY	5,253,071,000	USD	47,033,441	Citibank NA		01/31/19		1,004,443
JPY	8,022,490,000	USD	71,353,200	JPMorgan Chase Bank NA		02/14/19		2,086,054
EUR	20,772,000	USD	23,732,394	Goldman Sachs International		02/15/19		154,796
EUR	20,569,000	USD	23,405,212	Morgan Stanley & Co. International plc		02/28/19		272,510
JPY	3,200,699,453	USD	28,338,000	Morgan Stanley & Co. International plc		03/07/19		1,008,583
EUR	20,243,000	USD	23,024,864	Morgan Stanley & Co. International plc		03/14/19		305,732
SEK	421,527,639	EUR	40,783,000	Goldman Sachs International		03/21/19		824,983
								6,429,402
GBP	32,502,000	USD	42,430,584	JPMorgan Chase Bank NA		01/11/19		(987,165	)
EUR	20,625,000	USD	23,701,654	Morgan Stanley & Co. International plc		01/25/19		(24,769	)
USD	51,186,127	JPY	5,673,500,000	Morgan Stanley & Co. International plc		01/28/19		(684,170	)
NOK	155,980,000	USD	18,819,263	JPMorgan Chase Bank NA		02/01/19		(753,945	)
USD	50,680,858	JPY	5,669,100,000	Goldman Sachs International		02/04/19		(1,177,251	)
GBP	36,838,000	USD	48,222,592	JPMorgan Chase Bank NA		02/15/19		(1,167,194	)
USD	23,883,966	EUR	20,772,000	Morgan Stanley & Co. International plc		02/15/19		(3,224	)
GBP	19,207,000	USD	25,144,260	JPMorgan Chase Bank NA		02/21/19		(603,394	)
USD	23,606,424	EUR	20,569,000	Deutsche Bank AG		02/28/19		(71,298	)
USD	26,050,532	BRL	101,558,000	Deutsche Bank AG		03/01/19		(40,977	)
USD	52,565,295	JPY	5,857,950,000	Goldman Sachs International		03/04/19		(1,129,706	)
USD	23,212,278	EUR	20,243,000	Morgan Stanley & Co. International plc		03/14/19		(118,319	)
ZAR	403,941,000	USD	28,202,918	Bank of America NA		03/14/19		(363,332	)
USD	22,680,999	JPY	2,495,950,000	JPMorgan Chase Bank NA		03/25/19		(243,219	)
								(7,367,963	)
	Net Unrealized Depreciation						$	(938,561	)

14 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation V.I. Fund

OTC Options Purchased    

Description	Counterparty	Number of Contracts		Expiration Date		Exercise Price			Notional Amount (000)			Value
Call
Chevron Corp.	UBS AG		275,840		01/18/19		USD	125.00		USD	30,009	$	9,654
Exxon Mobil Corp.	UBS AG		187,537		01/18/19		USD	95.00		USD	12,788		2,813
Schlumberger Ltd.	UBS AG		271,460		01/18/19		USD	90.00		USD	9,794		1,357
SPDR Gold Shares(a)	JPMorgan Chase Bank NA		146,449		02/15/19		USD	120.00		USD	17,757		418,112
TOPIX Index	Morgan Stanley & Co. International plc		1,994,050		03/08/19		JPY	1,785.00		JPY	2,979,290		15,108
KOSPI 200 Index	Goldman Sachs International		125		03/14/19		USD	302.50		USD	256		22,898
Russell 2000 Index	Bank of America NA		27,781		03/15/19		USD	1,700.00		USD	37,464		7,640
SPDR Gold Shares(a)	Societe Generale SA		261,876		03/15/19		USD	121.00		USD	31,752		831,323
SPDR Gold Shares(a)	Societe Generale SA		274,300		04/18/19		USD	123.00		USD	33,259		836,615
GBP Currency	UBS AG		—		05/15/19		USD	1.32		GBP	145,768		3,447,545
SPDR Gold Shares(a)	Morgan Stanley & Co. International plc		148,146		05/17/19		USD	120.00		USD	17,963		629,355
BP plc	UBS AG		886,818		06/21/19		USD	52.00		USD	33,628		75,371
ConocoPhillips Co.	UBS AG		463,986		06/21/19		USD	75.00		USD	28,930		577,663
Occidental Petroleum Corp.	UBS AG		412,376		06/21/19		USD	92.50		USD	25,312		83,077
Royal Dutch Shell plc	UBS AG		506,206		06/21/19		USD	77.00		USD	29,497		81,003
SPDR Gold Shares(a)	Societe Generale SA		261,876		06/21/19		USD	124.00		USD	31,752		1,063,267
Suncor Energy, Inc.	UBS AG		598,975		06/21/19		USD	45.00		USD	16,753		14,974
Facebook, Inc.	UBS AG		286,382		09/20/19		USD	165.00		USD	37,542		1,595,477
TOTAL SA	UBS AG		619,803		09/20/19		USD	70.00		USD	32,341		79,360
TOPIX Banks Index	Bank of America NA		6,922,824		12/13/19		JPY	191.28		JPY	1,015,786		93,669
TOPIX Banks Index	Morgan Stanley & Co. International plc		13,094,289		12/13/19		JPY	191.28		JPY	1,921,325		177,167
Alphabet, Inc.	JPMorgan Chase Bank NA		16,662		01/17/20		USD	1,225.00		USD	17,255		962,698
Anadarko Petroleum Corp.	Credit Suisse International		175,142		01/17/20		USD	67.50		USD	7,678		278,476
BP plc	Nomura International plc		802,900		01/17/20		USD	43.50		USD	30,446		1,254,804
CVS Health Corp.	JPMorgan Chase Bank NA		123,179		01/17/20		USD	78.50		USD	8,071		456,466
Halliburton Co.	Citibank NA		339,940		01/17/20		USD	50.00		USD	9,036		57,790
Johnson & Johnson	Bank of America NA		124,966		01/17/20		USD	155.00		USD	16,127		323,037
JPMorgan Chase & Co.	Citibank NA		123,264		01/17/20		USD	114.50		USD	12,033		410,261
Schlumberger Ltd.	UBS AG		281,709		01/17/20		USD	70.00		USD	10,164		33,805
Sumitomo Mitsui Financial Group, Inc.	Morgan Stanley & Co. International plc		360,617		03/13/20		JPY	4,756.33		JPY	1,314,449		148,633
TOPIX Banks Index	BNP Paribas SA		9,345,369		03/13/20		JPY	194.04		JPY	1,371,246		151,515
TOPIX Banks Index	Morgan Stanley & Co. International plc		8,316,020		04/10/20		JPY	192.04		JPY	1,220,210		155,991
Sumitomo Mitsui Financial Group, Inc.	Morgan Stanley & Co. International plc		291,273		09/11/20		JPY	4,816.24		JPY	1,061,690		153,972
Sumitomo Mitsui Financial Group, Inc.	Morgan Stanley & Co. International plc		291,267		12/11/20		JPY	4,894.87		JPY	1,061,668		153,169
EURO STOXX Bank Index	Barclays Bank plc		162,397		03/19/21		EUR	136.97		EUR	48,904		161,783
EURO STOXX Bank Index	UBS AG		167,445		06/18/21		EUR	134.92		EUR	50,424		171,715
													14,937,563
Put
S&P 500 Index	Barclays Bank plc		3,651		01/18/19		USD	2,350.00		USD	9,153		48,741
S&P 500 Index	Barclays Bank plc		4,413		01/18/19		USD	2,400.00		USD	11,063		88,481
S&P 500 Index	Barclays Bank plc		34,477		01/18/19		USD	2,700.00		USD	86,429		6,633,375
S&P 500 Index	Barclays Bank plc		3,660		01/31/19		USD	2,400.00		USD	9,175		114,192
													6,884,789
												$	21,822,352

^(a)  All or a portion of the security is held by a wholly-owned subsidiary. See Note 1 of the Notes to Consolidated Financial Statements for details on the wholly-owned subsidiary.    

OTC Interest Rate Swaptions Purchased    

Description

Paid by the Fund

Received by the Fund

Counterparty

Expiration Date

Exercise Rate

Notional Amount (000)

Value

Rate

Frequency

Rate

Frequency

Put

5-Year Interest Rate Swap

3.00

%

Semi-Annual

3 month LIBOR

Quarterly

Nomura International plc

03/04/19

3.00

%

USD

292,589

$

126,635

CONSOLIDATED SCHEDULE OF INVESTMENTS 15

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation V.I. Fund

Exchange-Traded Options Written

Description	Number of Contracts		Expiration Date		Exercise Price		Notional Amount (000)		Value
Call
Adobe, Inc.		8		01/18/19	USD	260.00	USD	181	$	(372	)
Intuit, Inc.		8		01/18/19	USD	220.00	USD	157		(220	)
McDonald’s Corp.		44		01/18/19	USD	185.00	USD	781		(3,872	)
VeriSign, Inc.		16		01/18/19	USD	170.00	USD	237		(624	)
Amazon.com, Inc.		81		02/15/19	USD	1,790.00	USD	12,166		(124,335	)
Amazon.com, Inc.		81		02/15/19	USD	1,800.00	USD	12,166		(112,185	)
Amazon.com, Inc.		81		02/15/19	USD	1,780.00	USD	12,166		(140,130	)
									$	(381,738	)

OTC Options Written

Description	Counterparty	Number of Contracts		Expiration Date		Exercise Price			Notional Amount (000)			Value
Call
Apple, Inc.	Barclays Bank plc		69,668		01/18/19		USD	160.00		USD	10,989	$	(294,347	)
Microsoft Corp.	Barclays Bank plc		123,473		01/18/19		USD	90.00		USD	12,541		(1,487,850	)
United Continental Holdings, Inc.	Deutsche Bank AG		90,361		01/18/19		USD	75.00		USD	7,566		(831,321	)
TOPIX Index	Morgan Stanley & Co. International plc		1,994,050		03/08/19		JPY	1,950.00		JPY	2,979,290		(3,639	)
KOSPI 200 Index	Goldman Sachs International		125		03/14/19		USD	327.50		USD	256		(1,639	)
ConocoPhillips Co.	UBS AG		463,986		06/21/19		USD	85.00		USD	28,930		(106,717	)
TOTAL SA	UBS AG		619,803		09/20/19		USD	75.00		USD	32,341		(118,444	)
TOPIX Banks Index	Bank of America NA		6,922,824		12/13/19		JPY	221.29		JPY	1,015,786		(26,746	)
TOPIX Banks Index	Morgan Stanley & Co. International plc		13,094,289		12/13/19		JPY	221.29		JPY	1,921,325		(50,598	)
Alphabet, Inc.	JPMorgan Chase Bank NA		16,662		01/17/20		USD	1,350.00		USD	17,255		(488,068	)
Anadarko Petroleum Corp.	Credit Suisse International		175,142		01/17/20		USD	76.00		USD	7,678		(150,277	)
Comcast Corp.	Citibank NA		306,484		01/17/20		USD	37.50		USD	10,436		(729,432	)
CVS Health Corp.	JPMorgan Chase Bank NA		123,179		01/17/20		USD	87.50		USD	8,071		(183,537	)
Facebook, Inc.	UBS AG		669,867		01/17/20		USD	220.00		USD	87,813		(887,574	)
Johnson & Johnson	Bank of America NA		124,966		01/17/20		USD	170.00		USD	16,127		(110,595	)
JPMorgan Chase & Co.	Citibank NA		123,264		01/17/20		USD	125.50		USD	12,033		(182,454	)
Sumitomo Mitsui Financial Group, Inc.	Morgan Stanley & Co. International plc		360,617		03/13/20		JPY	5,679.90		JPY	1,314,449		(37,766	)
TOPIX Banks Index	BNP Paribas SA		9,345,369		03/13/20		JPY	237.47		JPY	1,371,246		(33,128	)
TOPIX Banks Index	Morgan Stanley & Co. International plc		8,316,020		04/10/20		JPY	233.87		JPY	1,220,210		(37,028	)
													(5,761,160	)
Put
S&P 500 Index	Barclays Bank plc		3,651		01/18/19		USD	2,200.00		USD	9,153		(12,596	)
S&P 500 Index	Barclays Bank plc		4,413		01/18/19		USD	2,250.00		USD	11,063		(24,271	)
S&P 500 Index	Barclays Bank plc		3,660		01/31/19		USD	2,250.00		USD	9,175		(38,796	)
TOPIX Index	Morgan Stanley & Co. International plc		1,994,050		03/08/19		JPY	1,600.00		JPY	2,979,290		(2,283,229	)
KOSPI 200 Index	Goldman Sachs International		125		03/14/19		USD	270.00		USD	256		(1,717,209	)
S&P 500 Index	Bank of America NA		14,617		03/15/19		USD	2,600.00		USD	36,643		(2,067,575	)
SPDR Gold Shares(a)	Morgan Stanley & Co. International plc		74,073		05/17/19		USD	113.00		USD	8,981		(19,499	)
TOPIX Banks Index	Bank of America NA		6,922,824		12/13/19		JPY	156.59		JPY	1,015,786		(1,397,969	)
TOPIX Banks Index	Morgan Stanley & Co. International plc		13,094,289		12/13/19		JPY	156.59		JPY	1,921,325		(2,644,011	)
Alphabet, Inc.	JPMorgan Chase Bank NA		16,662		01/17/20		USD	860.00		USD	17,255		(755,622	)
Anadarko Petroleum Corp.	Credit Suisse International		175,142		01/17/20		USD	46.00		USD	7,678		(1,527,895	)
BP plc	Nomura International plc		802,900		01/17/20		USD	28.00		USD	30,446		(863,117	)
CVS Health Corp.	JPMorgan Chase Bank NA		123,179		01/17/20		USD	56.00		USD	8,071		(485,785	)
Facebook, Inc.	UBS AG		669,867		01/17/20		USD	155.00		USD	87,813		(20,581,664	)
Halliburton Co.	Citibank NA		339,940		01/17/20		USD	35.00		USD	9,036		(3,246,427	)
Johnson & Johnson	Bank of America NA		124,966		01/17/20		USD	109.00		USD	16,127		(576,091	)
JPMorgan Chase & Co.	Citibank NA		123,264		01/17/20		USD	87.25		USD	12,033		(775,954	)
Schlumberger Ltd.	UBS AG		281,709		01/17/20		USD	52.50		USD	10,164		(4,943,993	)
Sumitomo Mitsui Financial Group, Inc.	Morgan Stanley & Co. International plc		360,617		03/13/20		JPY	3,832.77		JPY	1,314,449		(1,768,609	)
TOPIX Banks Index	BNP Paribas SA		9,345,369		03/13/20		JPY	155.80		JPY	1,371,246		(2,024,026	)
TOPIX Banks Index	Morgan Stanley & Co. International plc		8,316,020		04/10/20		JPY	157.82		JPY	1,220,210		(1,956,302	)
Sumitomo Mitsui Financial Group, Inc.	Morgan Stanley & Co. International plc		194,182		09/11/20		JPY	3,820.96		JPY	707,793		(1,197,331	)
Sumitomo Mitsui Financial Group, Inc.	Morgan Stanley & Co. International plc		194,178		12/11/20		JPY	3,786.60		JPY	707,779		(1,155,278	)
EURO STOXX Bank Index	Barclays Bank plc		108,265		03/19/21		EUR	110.23		EUR	32,603		(4,424,188	)
EURO STOXX Bank Index	UBS AG		110,158		06/18/21		EUR	106.38		EUR	33,173		(4,422,605	)
													(60,910,042	)
												$	(66,671,202	)

^(a)  All or a portion of the security is held by a wholly-owned subsidiary. See Note 1 of the Notes to Consolidated Financial Statements for details on the wholly-owned subsidiary.    

16 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation V.I. Fund

OTC Interest Rate Swaptions Written    

Description

Paid by the Fund

Received by the Fund

Counterparty

Expiration Date

Exercise Rate

Notional Amount (000)

Value

Rate

Frequency

Rate

Frequency

Call

5-Year Interest Rate Swap

3 month LIBOR

Quarterly

2.70

%

Semi-Annual

Nomura International plc

03/04/19

2.70

%

USD

292,589

$

(2,578,075

)

Centrally Cleared Credit Default Swaps — Buy Protection

Reference Obligation/Index	Financing Rate Paid by the Fund			Payment Frequency		Termination Date		Notional Amount (000)		Value			Upfront Premium Paid (Received)			Unrealized Appreciation (Depreciation)
CDX.NA.HY.30.V1		5.00	%		Quarterly		06/20/23	USD	6,607	$	(214,019	)	$	(428,074	)	$	214,055

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
3 month LIBOR	Quarterly	2.97%	Semi-Annual		07/20/20	(a)		07/18/25	USD	317,049	$	5,433,869		$	—	$	5,433,869
0.84%	Annual	6 month EURIBOR	Semi-Annual		N/A			02/15/28	EUR	34,348		(633,712	)		—		(633,712	)
0.84%	Annual	6 month EURIBOR	Semi-Annual		N/A			02/15/28	EUR	37,591		(694,362	)		—		(694,362	)
3 month LIBOR	Quarterly	3.20%	Semi-Annual		N/A			10/29/28	USD	248,165		10,988,976			—		10,988,976
0.99%	Annual	6 month EURIBOR	Semi-Annual		N/A			10/29/28	EUR	196,586		(4,682,054	)		—		(4,682,054	)
2.99%	Semi-Annual	3 month LIBOR	Quarterly		07/20/20	(a)		07/18/50	USD	71,247		(1,718,255	)		—		(1,718,255	)
											$	8,694,462		$	—	$	8,694,462

^(a)  Forward Swaps.

OTC Total Return Swaps

Reference Entity	Fixed Amount Paid / (Received) by the Fund (a)				Counterparty		Termination Date		Notional Amount (000)			Value		Upfront Premium Paid (Received)		Unrealized Appreciation (Depreciation)
EURO STOXX Banks Net Return Index		EUR	(14,281,341	)		BNP Paribas SA		04/30/19		EUR	14,281	$	1,520,142	$	—	$	1,520,142
S&P 500 Index Annual Dividend Future December 2020		USD	2,914,481			Goldman Sachs International		12/18/20		USD	2,914		517,894		—		517,894
Nikkei Dividend Future December 2020		JPY	384,120,000			BNP Paribas SA		04/01/21		JPY	384,120		406,460		—		406,460
Nikkei Dividend Future December 2020		JPY	143,310,000			BNP Paribas SA		04/01/21		JPY	143,310		35,674		—		35,674
Nikkei Dividend Future December 2020		JPY	191,375,000			BNP Paribas SA		04/01/21		JPY	191,375		229,232		—		229,232
S&P 500 Index Annual Dividend Future December 2021		USD	3,726,213			BNP Paribas SA		12/17/21		USD	3,726		640,862		—		640,862
Nikkei Dividend Future December 2021		JPY	144,840,000			BNP Paribas SA		04/01/22		JPY	144,840		25,127		—		25,127
Nikkei Dividend Future December 2021		JPY	199,250,000			BNP Paribas SA		04/01/22		JPY	199,250		162,401		—		162,401
Nikkei Dividend Future December 2021		JPY	389,070,000			BNP Paribas SA		04/01/22		JPY	389,070		371,233		—		371,233
Nikkei Dividend Future December 2021		JPY	198,750,000			BNP Paribas SA		04/01/22		JPY	198,750		166,963		—		166,963
												$	4,075,988	$	—	$	4,075,988

^(a)  At termination, the fixed amount paid (received) will be exchanged for the total return of the reference entity.

CONSOLIDATED SCHEDULE OF INVESTMENTS 17

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation V.I. Fund

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		Citibank NA		02/24/23 - 02/27/23	$	(17,068,123	)	$	(544,715	)(b)	$	(17,644,584	)		0.2	%
		JP Morgan Chase Bank NA		02/08/23		(22,487,970	)		845,999	(c)		(21,693,899	)		0.3
								$	301,284		$	(39,338,483	)

^(a)  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 of18-245 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:

Intercontinental Exchange LIBOR USD 1 Month

United States Overnight Bank Funding Rate

^(b)  Amount includes $31,746 of net dividends and financing fees.

^(c)  Amount includes $51,928 of net dividends and financing fees.

The following reference rates, and their values as of period end, are used for security descriptions:

Reference Index		Reference rate
3 month LIBOR	London Interbank Offered Rate		2.81	%
6 month EURIBOR	Euro Interbank Offered Rate		(0.24	%)

Balances Reported in the Consolidated Statement of Assets and Liabilities for Centrally Cleared Swaps, OTC Swaps and Options Written

	Swap Premiums Paid		Swap Premiums Received			Unrealized Appreciation		Unrealized Depreciation			Value
Centrally Cleared Swaps(a)	$	—	$	(428,074	)	$	16,636,900	$	(7,728,383	)	$	—
OTC Swaps		—		—			4,921,987		(544,715	)		—
Options Written		N/A		N/A			16,014,973		(40,832,334	)		(69,631,015	)

^(a)  Includes cumulative appreciation (depreciation) on centrally cleared swaps, as reported in the Consolidated Schedule of Investments. Only current day’s variation margin is reported within the Consolidated Statement 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 Consolidated Statement 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)	$	—	$	—	$	6,413,616	$	—	$	—	$	—	$	6,413,616
Forward foreign currency exchange contracts
Unrealized appreciation on forward foreign currency exchange contracts		—		—		—		6,429,402		—		—		6,429,402
Options purchased
Investments at value — unaffiliated(b)		—		—		18,374,807		3,447,545		126,635		—		21,948,987
Swaps — centrally cleared
Net unrealized appreciation(a)		—		214,055		—		—		16,422,845		—		16,636,900
Swaps — OTC
Unrealized appreciation on OTC swaps; Swap premiums paid		—		—		4,921,987		—		—		—		4,921,987
	$	—	$	214,055	$	29,710,410	$	9,876,947	$	16,549,480	$	—	$	56,350,892

18 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation V.I. Fund

	Commodity Contracts		Credit Contracts		Equity Contracts		Foreign Currency Exchange Contracts		Interest Rate Contracts		Other Contracts		Total
Liabilities — Derivative Financial Instruments
Futures contracts
Net unrealized depreciation(a)	$	—	$	—	$	38,040	$	—	$	929,678	$	—	$	967,718
Forward foreign currency exchange contracts
Unrealized depreciation on forward foreign currency exchange contracts		—		—		—		7,367,963		—		—		7,367,963
Options written
Options written, at value		—		—		67,052,940		—		2,578,075		—		69,631,015
Swaps — centrally cleared
Net unrealized depreciation(a)		—		—		—		—		7,728,383		—		7,728,383
Swaps — OTC
Unrealized depreciation on OTC swaps; Swap premiums received		—		—		544,715		—		—		—		544,715
	$	—	$	—	$	67,635,695	$	7,367,963	$	11,236,136	$	—	$	86,239,794

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

^(b)  Includes options purchased at value as reported in the Consolidated Schedule of Investments.    

For the year ended December 31, 2018, the effect of derivative financial instruments in the Consolidated Statement of Operations were 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	$	—	$	—		$	(1,357,682	)	$	—		$	—		$	—	$	(1,357,682	)
Forward foreign currency exchange contracts		—		—			—			(13,975,279	)		—			—		(13,975,279	)
Options purchased(a)		—		—			10,272,037			(10,696,472	)		(5,726,882	)		—		(6,151,317	)
Options written		—		—			11,728,438			4,490,388			(4,657,759	)		—		11,561,067
Swaps		—		(1,679,419	)		21,568,296			2,860,184			(14,191,105	)		—		8,557,956
	$	—	$	(1,679,419	)	$	42,211,089		$	(17,321,179	)	$	(24,575,746	)	$	—	$	(1,365,255	)
Net Change in Unrealized Appreciation (Depreciation) on:
Futures contracts	$	—	$	—		$	6,766,587		$	—		$	(929,678	)	$	—	$	5,836,909
Forward foreign currency exchange contracts		—		—			—			(7,735,636	)		—			—		(7,735,636	)
Options purchased(b)		—		—			(34,577,381	)		(4,078,197	)		4,538,590			—		(34,116,988	)
Options written		—		—			(29,091,987	)		(2,426,159	)		(5,124,751	)		—		(36,642,897	)
Swaps		—		1,498,941			(18,642,390	)		—			70,952			—		(17,072,497	)
	$	—	$	1,498,941		$	(75,545,171	)	$	(14,239,992	)	$	(1,444,887	)	$	—	$	(89,731,109	)

^(a) Options purchased are included in net realized gain (loss) from investments — unaffiliated.    

^(b) Options purchased are included in net change in unrealized appreciation (depreciation) on investments — unaffiliated.    

CONSOLIDATED SCHEDULE OF INVESTMENTS 19

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation V.I. Fund

Average Quarterly Balances of Outstanding Derivative Financial Instruments

Futures contracts:
Average notional value of contracts — long	$	17,060,306
Average notional value of contracts — short	$	220,282,053
Forward foreign currency exchange contracts:
Average amounts purchased — in USD	$	336,811,782
Average amounts sold — in USD	$	537,280,549
Options:
Average value of option contracts purchased	$	27,921,728
Average value of option contracts written	$	44,397,518
Average notional value of swaption contracts purchased	$	1,199,406,863
Average notional value of swaption contracts written	$	759,110,351
Credit default swaps:
Average notional value — buy protection	$	6,175,952
Interest rate swaps:
Average notional value — pays fixed rate	$	467,934,385
Average notional value — receives fixed rate	$	491,718,746
Currency swaps:
Average notional value — pays	$	47,643,700
Average notional value — receives	$	50,793,381
Total return swaps:
Average notional value	$	66,127,226

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

Derivative Financial Instruments — Offsetting as of Period End

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

	Assets			Liabilities
Derivative Financial Instruments:
Futures contracts	$	192,609		$	3,737,779
Forward foreign currency exchange contracts		6,429,402			7,367,963
Options(a)		21,948,987			69,631,015
Swaps — Centrally cleared		1,135,739			—
Swaps — OTC(b)		4,921,987			544,715
Total derivative assets and liabilities in the Consolidated Statement of Assets and Liabilities	$	34,628,724		$	81,281,472
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)		(1,328,348	)		(4,119,517	)
Total derivative assets and liabilities subject to an MNA	$	33,300,376		$	77,161,955

^(a)  Includes options purchased at value which is included in Investments at value – unaffiliated in the Consolidated Statement of Assets and Liabilities and reported in the Consolidated Schedule of Investments.

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

20 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation V.I. Fund

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

Counterparty	Derivative Assets Subject to an MNA by Counterparty		Derivatives Available for Offset (a)			Non-cash Collateral Received (b)			Cash Collateral Received (b)			Net Amount of Derivative Assets  (c)(f)
Bank of America NA	$	424,346	$	(424,346	)	$	—		$	—		$	—
Barclays Bank plc		7,046,572		(6,282,048	)		(764,524	)		—			—
BNP Paribas SA		3,709,609		(2,057,154	)		—			(1,652,455	)		—
Citibank NA		1,472,494		(1,472,494	)		—			—			—
Credit Suisse International		278,476		(278,476	)		—			—			—
Goldman Sachs International		1,520,571		(1,520,571	)		—			—			—
JPMorgan Chase Bank NA		5,121,713		(5,121,713	)		—			—			—
JPMorgan Chase Bank NA(g)		418,112		—			—			—			418,112
Morgan Stanley & Co. International plc		2,390,865		(2,390,865	)		—			—			—
Morgan Stanley & Co. International plc(g)		629,355		(19,499	)		—			(470,000	)		139,856
Nomura International plc		1,381,439		(1,381,439	)		—			—			—
Societe Generale SA(g)		2,731,205		—			—			(2,390,000	)		341,205
UBS AG		6,175,619		(6,175,619	)		—			—			—
	$	33,300,376	$	(27,124,224	)	$	(764,524	)	$	(4,512,455	)	$	899,173
Counterparty	Derivative Liabilities Subject to an MNA by Counterparty		Derivatives Available for Offset (a)			Non-cash Collateral Pledged (d)			Cash Collateral Pledged			Net Amount of Derivative Liabilities  (e)(f)
Bank of America NA	$	4,542,308	$	(424,346	)	$	(4,117,962	)	$	—		$	—
Barclays Bank plc		6,282,048		(6,282,048	)		—			—			—
BNP Paribas SA		2,057,154		(2,057,154	)		—			—			—
Citibank NA		5,478,982		(1,472,494	)		(4,006,488	)		—			—
Credit Suisse International		1,678,172		(278,476	)		(1,375,800	)		—			23,896
Deutsche Bank AG		943,596		—			(789,107	)		—			154,489
Goldman Sachs International		4,025,805		(1,520,571	)		(1,301,832	)		—			1,203,402
JPMorgan Chase Bank NA		5,667,929		(5,121,713	)		—			—			546,216
Morgan Stanley & Co. International plc		11,964,273		(2,390,865	)		(9,573,408	)		—			—
Morgan Stanley & Co. International plc(g)		19,499		(19,499	)		—			—			—
Nomura International plc		3,441,192		(1,381,439	)		(1,254,493	)		—			805,260
UBS AG		31,060,997		(6,175,619	)		(24,543,876	)		—			341,502
	$	77,161,955	$	(27,124,224	)	$	(46,962,966	)	$	—		$	3,074,765

^(a)  The amount of derivatives available for offset is limited to the amount of derivative assets and/or liabilities that are subject to an MNA.

^(b)  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 the counterparty in the event of default.

^(f)  Net amount may also include forward foreign currency exchange contracts that are not required to be collateralized.

^(g)  Represents derivatives owned by the BlackRock Cayman Global Allocation V.I. Fund I, Ltd., a wholly-owed subsidiary of the Fund. See Note 1.

CONSOLIDATED SCHEDULE OF INVESTMENTS 21

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation V.I. Fund

Fair Value Hierarchy as of Period End

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

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

	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Long-Term Investments:
Common Stocks:
Australia	$	98,832	$	7,479,741	$	5,830,553	$	13,409,126
Belgium		—		21,018,441		—		21,018,441
Brazil		64,241,339		—		—		64,241,339
Canada		130,575,188		—		—		130,575,188
China		24,071,798		109,102,745		—		133,174,543
Czech Republic		—		3,882,525		—		3,882,525
Denmark		—		8,079,741		—		8,079,741
Finland		—		836,855		—		836,855
France		40,375,689		202,882,861		—		243,258,550
Germany		28,574,096		88,409,698		—		116,983,794
Hong Kong		—		82,350,243		—		82,350,243
India		—		107,935,699		—		107,935,699
Indonesia		—		3,290,112		—		3,290,112
Italy		9,699,640		39,335,179		—		49,034,819
Japan		—		692,812,497		—		692,812,497
Macau		—		298,021		—		298,021
Malaysia		—		1,551,458		—		1,551,458
Mexico		595,826		—		—		595,826
Netherlands		34,623,328		168,077,126		—		202,700,454
Norway		—		214,073		—		214,073
Peru		68,802		—		—		68,802
Poland		—		251,518		—		251,518
Portugal		—		9,594,874		—		9,594,874
Singapore		—		49,443,707		—		49,443,707
South Africa		—		1,313,897		—		1,313,897
South Korea		2,755,075		57,414,891		—		60,169,966
Spain		—		31,763,445		—		31,763,445
Sweden		—		1,416,096		—		1,416,096
Switzerland		—		82,147,183		—		82,147,183
Taiwan		—		77,305,867		—		77,305,867
Thailand		—		17,552,580		—		17,552,580
Turkey		—		397,945		—		397,945
United Arab Emirates		—		34,256,024		—		34,256,024
United Kingdom		21,425,917		123,852,375		—		145,278,292
United States		2,832,621,469		3,662,468		3,293,810		2,839,577,747
Corporate Bonds:
Australia		—		—		38,861,531		38,861,531
Belgium		—		10,507,475		—		10,507,475
Chile		—		155,734		—		155,734
China		—		5,491,878		—		5,491,878
France		—		6,949,544		—		6,949,544
Germany		—		12,792,031		—		12,792,031
India		—		—		1		1
Italy		—		3,862,700		—		3,862,700
Japan		—		26,572,584		—		26,572,584
Luxembourg		—		1,990,990		—		1,990,990
Netherlands		—		11,838,528		—		11,838,528
Singapore		—		5,151,907		—		5,151,907
Switzerland		—		4,670,666		—		4,670,666
Turkey		—		—		3,317,000		3,317,000
United Kingdom		—		6,705,761		—		6,705,761
United States		—		279,438,028		—		279,438,028
Floating Rate Loan Interests		—		15,626,305		—		15,626,305
Foreign Government Obligations		—		253,737,337		—		253,737,337
Investment Companies		116,153,961		—		—		116,153,961

22 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation V.I. Fund

	Level 1			Level 2			Level 3		Total
Preferred Securities:
Brazil	$	4,970,465		$	—		$	—	$	4,970,465
China		—			21,327,326			—		21,327,326
Netherlands		—			3,280,418			—		3,280,418
South Korea		—			627,878			—		627,878
United Kingdom		—			27,679,776			—		27,679,776
United States		29,044,240			50,556,934			75,248,455		154,849,629
U.S. Treasury Obligations		—			2,030,099,205			—		2,030,099,205
Short-Term Securities:
Foreign Government Obligations		—			179,739,262			—		179,739,262
Money Market Funds		22,471,516			—			—		22,471,516
Time Deposits		—			1,803,205			—		1,803,205
U.S. Treasury Obligations		—			496,767,347			—		496,767,347
Options Purchased:
Equity contracts		—			18,374,807			—		18,374,807
Foreign currency exchange contracts		—			3,447,545			—		3,447,545
Interest rate contracts		—			126,635			—		126,635
Liabilities:
Investment Sold Short
Common Stocks:
France		—			(5,047,857	)		—		(5,047,857	)
Japan		—			(11,574,706	)		—		(11,574,706	)
United States		(3,149,519	)		—			—		(3,149,519	)
Subtotal	$	3,359,217,662		$	5,490,629,128		$	126,551,350	$	8,976,398,140
Investments valued at NAV(a)										209,506,557
Total Investments									$	9,185,904,697
Derivative Financial Instruments(b)
Assets:
Credit contracts	$	—		$	214,055		$	—	$	214,055
Equity contracts		6,413,616			4,921,987			—		11,335,603
Foreign currency exchange contracts		—			6,429,402			—		6,429,402
Interest rate contracts		—			16,422,845			—		16,422,845
Liabilities:
Equity contracts		(419,778	)		(67,215,917	)		—		(67,635,695	)
Foreign currency exchange contracts		—			(7,367,963	)		—		(7,367,963	)
Interest rate contracts		(929,678	)		(10,306,458	)		—		(11,236,136	)
	$	5,064,160		$	(56,902,049	)	$	—	$	(51,837,889	)

^(a) Certain investments of the Fund were fair valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

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

Transfers between Level 1 and Level 2 were as follows:

	Transfers Out of Level 1 (a)		Transfers Into Level 2 (a)
Assets:
Investments:
Common Stocks:
Czech Republic	$	4,441,567	$	4,441,567
Hong Kong		10,213,986		10,213,986
India		71,154		71,154
Japan		317,914		317,914
Poland		56,071		56,071
Portugal		10,624,858		10,624,858
South Korea		23,756,634		23,756,634
Taiwan		18,624,022		18,624,022
Thailand		7,689,365		7,689,365
United Arab Emirates		39,994,489		39,994,489
United Kingdom		16,163,464		16,163,464
	$	131,953,524	$	131,953,524

^(a) External pricing service used to reflect any significant market movements between the time the Fund valued such foreign securities and the earlier closing of foreign markets. See Notes to Consolidated Financial Statements.

CONSOLIDATED SCHEDULE OF INVESTMENTS 23

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation V.I. Fund

A reconciliation of Level 3 investments is presented when the Fund had a significant amount of Level 3 investments at the beginning and/or end of the year in relation to net assets. The following table is a reconciliation of Level 3 investments for which significant unobservable inputs were used in determining fair value:

	Common Stocks			Corporate Bonds			Preferred Securities			Warrants			Total
Investments:
Assets:
Opening Balance, as of December 31, 2017	$	472,461		$	8,403,598		$	101,952,816		$	29		$	110,828,904
Transfers into Level 3		—			—			—			—			—
Transfers out of Level 3		—			(24,000	)		(38,984,160	)		—			(39,008,160	)
Accrued discounts/premiums		—			(155,945	)		—			—			(155,945	)
Net realized gain (loss)		—			(46,910,658	)		—			—			(46,910,658	)
Net change in unrealized appreciation (depreciation)(a)(b)		(3,530,581	)		41,640,722			9,098,833			(29	)		47,208,945
Purchases		12,182,483			41,439,419			3,180,966			—			56,802,868
Sales		—			(2,214,604	)		—			—			(2,214,604	)
Closing Balance, as of December 31, 2018	$	9,124,363		$	42,178,532		$	75,248,455		$	—		$	126,551,350
Net change in unrealized appreciation (depreciation) on investments still held at December 31, 2018(b)	$	(3,530,581	)	$	(4,458,011	)	$	9,098,833		$	—		$	1,110,241

^(a)  Included in the related net change in unrealized appreciation (depreciation) in the Consolidated Statement of Operations.

^(b)  Any difference between net change in unrealized appreciation (depreciation) and net change in unrealized appreciation (depreciation) on investments still held at December 31, 2018 is generally due to investments no longer held or categorized as Level 3 at period end.

The Fund’s investments that are categorized as Level 3 were valued utilizing third party pricing information without adjustment. Such valuations are based on unobservable inputs. A significant change in third party information could result in a significantly lower or higher value of such Level 3 investments.

The following table summarizes the valuation approaches used and unobservable inputs utilized by the BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) to determine the value of certain of the Fund’s Level 3 investments as of period end. The table does not include Level 3 investments with values based upon unadjusted third party pricing information in the amount of $3,292,172. A significant change in the third party information could result in a significantly lower or higher value of such Level 3 investments.

	Value		Valuation Approach		Unobservable Inputs	Range of Unobservable Inputs Utilized		Weighted Average of Unobservable Inputs
Common Stocks	$	5,832,192		Market	Revenue Multiple(a)		3.50x		—
					Time to Exit(a)		0.5 years		—
					Volatility(a)		44%		—
				Income	Discount Rate(b)		15%		—
Corporate Bonds		42,178,531		Income	Discount Rate(b)		15%-38%		17	%
Preferred Stocks’(c)		75,248,455		Market	Recent Transactions(a)		—		—
					Revenue Multiple(a)		3.50x-14.25x		7.41x
					Time to Exit(b)		0.5 years		—
					Volatility(b)		44%		—
	$	123,259,178

^(a) Increase in unobservable input may result in a significant increase to value, while a decrease in unobservable input may result in a significant decrease to value.

^(b) Decrease in unobservable input may result in a significant increase to value, while an increase in unobservable input may result in a significant decrease to value.

^(c) For the year ended December 31, 2018, the valuation technique for investments classified as preferred stocks amounting to $50,945,973 changed to Current Value. The investments were previously valued utilizing Transaction Price. The change was due to consideration of the information that was available at the time the investments were valued.

See notes to consolidated financial statements.

24 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Consolidated Statement of Assets and Liabilities

December 31, 2018

	BlackRock Global Allocation V.I. Fund
ASSETS
Investments at value — unaffiliated (including securities loaned at value of $205,459,274) (cost — $9,063,221,168)	$	8,859,833,648
Investments at value — affiliated (cost — $353,622,368)		345,843,131
Cash		31,298,459
Cash pledged:
Futures contracts		18,916,000
Centrally cleared swaps		12,226,000
Foreign currency at value (cost — $1,193,490)		1,195,877
Receivables:
Investments sold		18,394,966
Securities lending income — affiliated		66,507
Swaps		1,022,303
Capital shares sold		10,043,281
Dividends — affiliated		30,722
Dividends — unaffiliated		9,238,458
Interest — unaffiliated		21,384,348
Variation margin on futures contracts		192,609
Variation margin on centrally cleared swaps		1,135,739
Unrealized appreciation on:
Forward foreign currency exchange contracts		6,429,402
OTC swaps		4,921,987
Prepaid expenses		10,103
Total assets		9,342,183,540
LIABILITIES
Investments sold short, at value (proceeds $25,194,044)		19,772,082
Cash received as collateral for OTC derivatives		6,870,000
Cash collateral on securities loaned at value		209,469,852
Options written at value (premium received $44,813,654)		69,631,015
Payables:
Investments purchased		29,517,035
Capital shares redeemed		5,461,896
Deferred foreign capital gain tax		728,665
Distribution fees		1,485,538
Transfer agent fees		4,780,400
Variation margin on futures contracts		3,737,779
Board realignment and consolidation		270,279
Investment advisory fees		4,862,376
Directors’ and Officer’s fees		35,711
Other affiliates		25,128
Other accrued expenses		2,511,665
Unrealized depreciation on:
Forward foreign currency exchange contracts		7,367,963
OTC swaps		544,715
Total liabilities		367,072,099
NET ASSETS	$	8,975,111,441
NET ASSETS CONSIST OF
Paid-in capital	$	9,168,250,066
Accumulated loss		(193,138,625	)
NET ASSETS	$	8,975,111,441
NET ASSET VALUE
Class I — Based on net assets of $2,091,196,784 and 137,678,992 shares outstanding, 400 million shares authorized, $0.10 par value.	$	15.19
Class II — Based on net assets of $213,919,086 and 14,129,808 shares outstanding, 200 million shares authorized, $0.10 par value.	$	15.14
Class III — Based on net assets of $6,669,995,571 and 514,907,688 shares outstanding, 1.5 billion shares authorized, $0.10 par value.	$	12.95

See notes to consolidated financial statements.

CONSOLIDATED FINANCIAL STATEMENTS 25

Consolidated Statement of Operations

Year Ended December 31, 2018

	BlackRock Global Allocation V.I. Fund
INVESTMENT INCOME
Dividends — affiliated	$	183,739
Dividends — unaffiliated		137,581,514
Interest — unaffiliated		100,230,307
Securities lending income — affiliated — net		1,088,546
Foreign taxes withheld		(7,508,404	)
Total investment income		231,575,702
EXPENSES
Investment advisory		64,073,510
Distribution — class specific		19,558,159
Transfer agent — class specific		18,525,655
Custodian		1,441,462
Professional		746,595
Printing		569,081
Accounting services		561,900
Board realignment and consolidation		276,370
Directors and Officer		127,406
Transfer agent		4,941
Miscellaneous		212,718
Total expenses excluding dividend expense		106,097,797
Dividends expense — unaffiliated		795,187
Total expenses		106,892,984
Less:
Fees waived and/or reimbursed by the Manager		(425,060	)
Transfer agent fees waived and/or reimbursed — class specific		(11,392,661	)
Total expenses after fees waived and/or reimbursed		95,075,263
Net investment income		136,500,439
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — affiliated		24,463
Investments — unaffiliated (net of $501,091 foreign capital gain tax)		369,737,006
Capital gain distributions from investment companies — affiliated		20
Forward foreign currency exchange contracts		(13,975,279	)
Foreign currency transactions		11,407,034
Futures contracts		(1,357,682	)
Options written		11,561,067
Short sales — unaffiliated		4,309,534
Swaps . . . . .		8,557,956
		390,264,119
Net change in unrealized appreciation (depreciation) on:
Investments — affiliated		(5,007,538	)
Investments — unaffiliated (net of $394,615 foreign capital gain tax)		(1,215,253,198	)
Forward foreign currency exchange contracts		(7,735,636	)
Foreign currency translations		(111,161	)
Futures contracts		5,836,909
Options written		(36,642,897	)
Short sales — unaffiliated		5,421,962
Swaps . . . . .		(17,072,497	)
		(1,270,564,056	)
Net realized and unrealized loss		(880,299,937	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(743,799,498	)

See notes to consolidated financial statements.

26 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Consolidated Statements of Changes in Net Assets

	BlackRock Global Allocation V.I. Fund
	Year Ended December 31,
	2018			2017
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income	$	136,500,439		$	126,982,603
Net realized gain		390,264,119			414,074,260
Net change in unrealized appreciation (depreciation)		(1,270,564,056	)		831,654,996
Net increase (decrease) in net assets resulting from operations		(743,799,498	)		1,372,711,859
DISTRIBUTIONS TO SHAREHOLDERS(a)(b)
Class I		(107,089,999	)		(52,222,959	)
Class II		(10,743,144	)		(5,499,573	)
Class III		(383,334,181	)		(197,591,823	)
Decrease in net assets resulting from distributions to shareholders		(501,167,324	)		(255,314,355	)
CAPITALSHARE TRANSACTIONS
Net decrease in net assets derived from capital share transactions		(578,134,925	)		(795,038,529	)
NET ASSETS(b)
Total increase (decrease) in net assets		(1,823,101,747	)		322,358,975
Beginning of year		10,798,213,188			10,475,854,213
End of year	$	8,975,111,441		$	10,798,213,188

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

^(b)  Prior year distribution character information and 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 consolidated financial statements.

CONSOLIDATED FINANCIAL STATEMENTS 27

Consolidated Financial Highlights

(For a share outstanding throughout each period)

	BlackRock Global Allocation V.I. Fund
	Class I
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	17.26		$	15.51		$	15.09		$	16.26		$	17.61
Net investment income(a)		0.26			0.22			0.22			0.22			0.29
Net realized and unrealized gain (loss)		(1.52	)		1.92			0.40			(0.35	)		0.12
Net increase (decrease) from investment operations		(1.26	)		2.14			0.62			(0.13	)		0.41
Distributions:(b)
From net investment income		(0.17	)		(0.22	)		(0.20	)		(0.19	)		(0.39	)
From net realized gain		(0.64	)		(0.17	)		—			(0.84	)		(1.37	)
From return of capital		—			—			—			(0.01	)		—
Total distributions		(0.81	)		(0.39	)		(0.20	)		(1.04	)		(1.76	)
Net asset value, end of year	$	15.19		$	17.26		$	15.51		$	15.09		$	16.26
Total Return(c)
Based on net asset value		(7.34	)%		13.86	%		4.11	%		(0.89	)%		2.30	%
Ratios to Average Net Assets(d)
Total expenses		0.75	%		0.72	%		0.74	%		0.75	%		0.74	%
Total expenses after fees waived and/or reimbursed		0.74	%		0.72	%		0.74	%		0.73	%		0.72	%
Total expenses after fees waived and/or reimbursed and excluding dividend expense, interest expense and broker fees and expenses on short sales		0.73	%		0.70	%		0.73	%		0.73	%		0.72	%
Net investment income		1.53	%		1.32	%		1.47	%		1.32	%		1.64	%
Supplemental Data
Net assets, end of year (000)	$	2,091,197		$	2,306,034		$	2,107,145		$	1,994,371		$	1,708,903
Portfolio turnover rate		144	%		118	%		135	%		90	%(e)		72	%

^(a)  Based on average shares outstanding.

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

^(c)  Where applicable, excludes insurance-related fees and expenses and assumes the reinvestments of distributions.

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

	Year Ended December 31,
	2018			2017			2016			2015			2014
Investments in underlying funds		0.01	%		0.01	%		—	%		—	%		—	%

^(e)  Includes mortgage dollar roll transactions (“MDRs”). Excluding these transactions the portfolio turnover would have been 88%.

See notes to consolidated financial statements.

28 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Consolidated Financial Highlights  (continued)

(For a share outstanding throughout each period)

	BlackRock Global Allocation V.I. Fund (continued)
	Class II
		Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	17.21		$	15.46		$	15.04		$	16.21		$	17.56
Net investment income(a)		0.23			0.19			0.20			0.19			0.25
Net realized and unrealized gain (loss)		(1.52	)		1.93			0.40			(0.35	)		0.14
Net increase (decrease) from investment operations		(1.29	)		2.12			0.60			(0.16	)		0.39
Distributions:(b)
From net investment income		(0.14	)		(0.20	)		(0.18	)		(0.16	)		(0.37	)
From net realized gain		(0.64	)		(0.17	)		—			(0.84	)		(1.37	)
From return of capital		—			—			—			(0.01	)		—
Total distributions		(0.78	)		(0.37	)		(0.18	)		(1.01	)		(1.74	)
Net asset value, end of year	$	15.14		$	17.21		$	15.46		$	15.04		$	16.21
Total Return(c)
Based on net asset value		(7.52	)%		13.74	%		3.96	%		(1.05	)%		2.16	%
Ratios to Average Net Assets(d)
Total expenses		1.04	%		1.00	%		1.02	%		1.02	%		1.01	%
Total expenses after fees waived and/or reimbursed		0.89	%		0.87	%		0.89	%		0.88	%		0.88	%
Total expenses after fees waived and/or reimbursed and excluding dividend expense, interest expense and broker fees and expenses on short sales		0.88	%		0.85	%		0.88	%		0.88	%		0.87	%
Net investment income		1.34	%		1.17	%		1.33	%		1.17	%		1.39	%
Supplemental Data
Net assets, end of year (000)	$	213,919		$	258,564		$	229,492		$	256,964		$	260,312
Portfolio turnover rate		144	%		118	%		135	%		90	%(e)		72	%

^(a)  Based on average shares outstanding.

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

^(c)  Where applicable, excludes insurance-related fees and expenses and assumes the reinvestments of distributions.

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

	Year Ended December 31,
	2018			2017			2016			2015			2014
Investments in underlying funds		0.01	%		0.01	%		—	%		—	%		—	%

^(e)  Includes mortgage dollar roll transactions (“MDRs”). Excluding these transactions the portfolio turnover would have been 88%.

See notes to consolidated financial statements.

CONSOLIDATED FINANCIAL HIGHLIGHTS 29

Consolidated Financial Highlights  (continued)

(For a share outstanding throughout each period)

	BlackRock Global Allocation V.I. Fund (continued)
	Class III
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	14.84		$	13.37		$	13.04		$	14.19		$	15.58
Net investment income(a)		0.19			0.17			0.16			0.15			0.21
Net realized and unrealized gain (loss)		(1.31	)		1.66			0.34			(0.30	)		0.12
Net increase (decrease) from investment operations		(1.12	)		1.83			0.50			(0.15	)		0.33
Distributions:(b)
From net investment income		(0.13	)		(0.19	)		(0.17	)		(0.15	)		(0.35	)
From net realized gain		(0.64	)		(0.17	)		—			(0.84	)		(1.37	)
From return of capital		—			—			—			(0.01	)		—
Total distributions		(0.77	)		(0.36	)		(0.17	)		(1.00	)		(1.72	)
Net asset value, end of year	$	12.95		$	14.84		$	13.37		$	13.04		$	14.19
Total Return(c)
Based on net asset value		(7.58	)%		13.71	%		3.81	%		(1.14	)%		2.08	%
Ratios to Average Net Assets(d)
Total expenses		1.14	%		1.13	%		1.12	%		1.12	%		1.11	%
Total expenses after fees waived and/or reimbursed		0.99	%		1.00	%		0.99	%		0.98	%		0.98	%
Total expenses after fees waived and/or reimbursed and excluding dividend expense, interest expense and broker fees and expenses on short sales		0.98	%		0.98	%		0.98	%		0.98	%		0.97	%
Net investment income		1.28	%		1.15	%		1.22	%		1.07	%		1.32	%
Supplemental Data
Net assets, end of year (000)	$	6,669,996		$	8,233,615		$	8,139,218		$	8,869,288		$	9,780,007
Portfolio turnover rate		144	%		118	%		135	%		90	%(e)		72	%

^(a)  Based on average shares outstanding.

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

^(c)  Where applicable, excludes insurance-related fees and expenses and assumes the reinvestments of distributions.

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

	Year Ended December 31,
	2018			2017			2016			2015			2014
Investments in underlying funds		0.01	%		0.01	%		—	%		—	%		—	%

^(e)  Includes mortgage dollar roll transactions (“MDRs”). Excluding these transactions the portfolio turnover would have been 88%.

See notes to consolidated financial statements.

30 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Consolidated Financial Statements

1. ORGANIZATION

BlackRock Variable Series Funds, Inc. (the “Company”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as anopen-end management investment company. The Company is organized as a Maryland corporation that is comprised of 15 separate portfolios. The portfolios offer shares to insurance companies for their separate accounts to fund benefits under certain variable annuity and variable life insurance contracts. The consolidated financial statements presented are for BlackRock Global Allocation V.I. Fund (the “Fund”). The Fund is classified as diversified. Class I, Class II and Class III Shares have equal voting, dividend, liquidation and other rights, except that only shares of the respective classes are entitled to vote on matters concerning only that class. In addition, Class II and Class III Shares bear certain expenses related to the distribution of such shares.

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

Basis of Consolidation: The accompanying consolidated financial statements of the Fund include the accounts of BlackRock Cayman Global Allocation V.I. Fund I, Ltd. (the “Subsidiary”), which is a wholly-owned subsidiary of the Fund and primarily invests in commodity-related instruments. The Subsidiary enables the Fund to hold these commodity-related instruments and satisfy regulated investment company tax requirements. The Fund may invest up to 25% of its total assets in the Subsidiary. The net assets of the Subsidiary as of period end were $128,137,378, which is 1.4% of the Fund’s consolidated net assets. Intercompany accounts and transactions, if any, have been eliminated. The Subsidiary is subject to the same investment policies and restrictions that apply to the Fund, except that the Subsidiary may invest without limitation in commodity-related instruments.

2. SIGNIFICANT ACCOUNTING POLICIES

The consolidated 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 consolidated financial statements, disclosure of contingent assets and liabilities at the date of the consolidated 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. The 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 Fund is 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. 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: The 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.

The 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 Consolidated Statement 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. The 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 the Fund enters into certain investments (e.g., futures contracts, forward foreign currency exchange contracts, options written, swaps and short sales) that would be treated as “senior securities” for 1940 Act purposes, the Fund may segregate or designate on its books and records cash or liquid assets having a market value at least equal to the amount of its future obligations under such investments. Doing so allows the investment to be excluded from treatment as a “senior security.” Furthermore, if required by an exchange or counterparty agreement, the Fund 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 Fund are recorded on theex-dividend date. Distributions of capital gains are recorded on the ex-dividend date and made at least annually. Distributions of capital gains are recorded on the ex-dividend date and made at least annually. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP.

Net income and realized gains from investments held by the Subsidiary are treated as ordinary income for tax purposes. If a net loss is realized by the Subsidiary in any taxable year, the loss will generally not be available to offset the Fund’s ordinary income and/or capital gains for that year.

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 Fund.

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 Fund.

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS 31

Notes to Consolidated Financial Statements  (continued)

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

Other: Expenses directly related to the Fund or its classes are charged to the 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 Fund and other shared expenses prorated to the Fund are allocated daily to each class based on its relative net assets or other appropriate methods.

The Fund has an arrangement with its custodian whereby credits are earned on uninvested cash balances, which could be used to reduce custody fees and/or overdraft charges. The Fund may incur charges on certain uninvested cash balances and overdrafts, subject to certain conditions.

3. INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS

Investment Valuation Policies: The Fund’s investments are valued at fair value (also referred to as “market value” within the consolidated 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 Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Fund determines the fair values of its financial instruments using various independent dealers or pricing services under policies approved by the Board of Directors of the Company (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 the 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 Fund’s net assets. Each business day, the Fund uses 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 net asset value (“NAV”) each business day.

• The Fund values its investment in SL Liquidity Series, LLC, Money Market Series (the “Money Market Series”) at fair value, which is ordinarily based upon its pro rata ownership in the underlying fund’s net assets. The Money Market Series seeks current income consistent with maintaining liquidity and preserving capital. Although the Money Market Series is not registered under the 1940 Act, its investments may follow the parameters of investments by a money market fund that is subject to Rule2a-7 under the 1940 Act.

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

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

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

• Swap agreements are valued utilizing quotes received daily by the Fund’s 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.

32 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Consolidated Financial Statements  (continued)

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 the 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.

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 the 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 the Fund. Typically, the most recently available information by a Private Company is as of a date that is earlier than the date the Fund is calculating its NAV. This factor may result in a difference between the value of the investment and the price the 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 the Fund has the ability to access

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

• Level 3 — Unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the 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 the 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.

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS 33

Notes to Consolidated Financial Statements  (continued)

As of December 31, 2018, certain investments of the Fund were valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

4. SECURITIES AND OTHER INVESTMENTS

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 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 Consolidated Statement 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.

Zero-Coupon Bonds: Zero-coupon bonds are normally issued at a significant discount from face value and do not provide for periodic interest payments. These bonds may experience greater volatility in market value than other debt obligations of similar maturity which provide for regular interest payments.

Capital Securities and Trust Preferred Securities: Capital securities, including trust preferred securities, are typically issued by corporations, generally in the form of interest-bearing notes with preferred securities characteristics. In the case of trust preferred securities, an affiliated business trust of a corporation issues these securities, generally in the form of beneficial interests in subordinated debentures or similarly structured securities. The securities can be structured with either a fixed or adjustable coupon that can have either a perpetual or stated maturity date. For trust preferred securities, the issuing bank or corporation pays interest to the trust, which is then distributed to holders of these securities as a dividend. Dividends can be deferred without creating an event of default or acceleration, although maturity cannot take place unless all cumulative payment obligations have been met. The deferral of payments does not affect the purchase or sale of these securities in the open market. These securities generally are rated below that of the issuing company’s senior debt securities and are freely callable at the issuer’s option.

Preferred Stocks: Preferred stock has a preference over common stock in liquidation (and generally in receiving dividends as well) but is subordinated to the liabilities of the issuer in all respects. As a general rule, the market value of preferred stock with a fixed dividend rate and no conversion element varies inversely with interest rates and perceived credit risk, while the market price of convertible preferred stock generally also reflects some element of conversion value. Because preferred stock is junior

34 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Consolidated Financial Statements  (continued)

to debt securities and other obligations of the issuer, deterioration in the credit quality of the issuer will cause greater changes in the value of a preferred stock than in a more senior debt security with similar stated yield characteristics. Unlike interest payments on debt securities, preferred stock dividends are payable only if declared by the issuer’s board of directors. Preferred stock also may be subject to optional or mandatory redemption provisions.

Floating Rate Loan Interests: Floating rate loan interests are typically issued to companies (the “borrower”) by banks, other financial institutions, or privately and publicly offered corporations (the “lender”). Floating rate loan interests are generallynon-investment grade, often involve borrowers whose financial condition is troubled or uncertain and companies that are highly leveraged or in bankruptcy proceedings. In addition, transactions in floating rate loan interests may settle on a delayed basis, which may result in proceeds from the sale not being readily available for a fund to make additional investments or meet its redemption obligations. Floating rate loan interests may include fully funded term loans or revolving lines of credit. Floating rate loan interests are typically senior in the corporate capital structure of the borrower. Floating rate loan interests generally pay interest at rates that are periodically determined by reference to a base lending rate plus a premium. Since the rates reset only periodically, changes in prevailing interest rates (and particularly sudden and significant changes) can be expected to cause some fluctuations in the NAV of a fund to the extent that it invests in floating rate loan interests. The base lending rates are generally the lending rate offered by one or more European banks, such as the London Interbank Offered Rate (“LIBOR”), the prime rate offered by one or more U.S. banks or the certificate of deposit rate. Floating rate loan interests may involve foreign borrowers, and investments may be denominated in foreign currencies. These investments are treated as investments in debt securities for purposes of a fund’s investment policies.

When a fund purchases a floating rate loan interest, it may receive a facility fee and when it sells a floating rate loan interest, it may pay a facility fee. On an ongoing basis, a fund may receive a commitment fee based on the undrawn portion of the underlying line of credit amount of a floating rate loan interest. Facility and commitment fees are typically amortized to income over the term of the loan or term of the commitment, respectively. Consent and amendment fees are recorded to income as earned. Prepayment penalty fees, which may be received by a fund upon the prepayment of a floating rate loan interest by a borrower, are recorded as realized gains. A fund may invest in multiple series or tranches of a loan. A different series or tranche may have varying terms and carry different associated risks.

Floating rate loan interests are usually freely callable at the borrower’s option. A fund may invest in such loans in the form of participations in loans (“Participations”) or assignments (“Assignments”) of all or a portion of loans from third parties. Participations typically will result in a fund having a contractual relationship only with the lender, not with the borrower. A fund has the right to receive payments of principal, interest and any fees to which it is entitled only from the lender selling the Participation and only upon receipt by the lender of the payments from the borrower. In connection with purchasing Participations, a fund generally will have no right to enforce compliance by the borrower with the terms of the loan agreement, nor any rights of offset against the borrower. A fund may not benefit directly from any collateral supporting the loan in which it has purchased the Participation. As a result, a fund assumes the credit risk of both the borrower and the lender that is selling the Participation. A fund’s investment in loan participation interests involves the risk of insolvency of the financial intermediaries who are parties to the transactions. In the event of the insolvency of the lender selling the Participation, a fund may be treated as a general creditor of the lender and may not benefit from any offset between the lender and the borrower. Assignments typically result in a fund having a direct contractual relationship with the borrower, and a fund may enforce compliance by the borrower with the terms of the loan agreement.

Short Sale Transactions: In short sale transactions, a fund sells a security it does not hold in anticipation of a decline in the market price of that security. When a fund makes a short sale, it will borrow the security sold short from a broker/counterparty and deliver the security to the purchaser. To close out a short position, a fund delivers the same security to the broker and records a liability to reflect the obligation to return the security to the broker. The amount of the liability is subsequentlymarked-to-market to reflect the market value of the short sale. A fund maintains a segregated account of securities or deposits cash with the broker-dealer as collateral for the short sales. Cash deposited with the broker is recorded as an asset in the Consolidated Statement of Assets and Liabilities. Securities segregated as collateral are denoted in the Consolidated Schedule of Investments. A fund may pay a financing fee for the difference between the market value of the short position and the cash collateral deposited with the broker which would be recorded as interest expense. A fund is required to repay the counterparty any dividends received on the security sold short, which, if applicable, is shown as dividend expense in the Consolidated Statement of Operations. A fund may pay a fee on the assets borrowed from the counterparty, which, if applicable, is shown as broker fees and expenses on short sales in the Consolidated Statement of Operations. A fund is exposed to market risk based on the amount, if any, that the market value of the security increases beyond the market value at which the position was sold. Thus, a short sale of a security involves the risk that instead of declining, the price of the security sold short will rise. The short sale of securities involves the possibility of an unlimited loss since there is an unlimited potential for the market price of the security sold short to increase. A gain is limited to the price at which a fund sold the security short. A realized gain or loss is recognized upon the termination of a short sale if the market price is either less than or greater than the proceeds originally received. There is no assurance that a fund will be able to close out a short position at a particular time or at an acceptable price.

Securities Lending: The Fund may lend its securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received by the Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current market value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Fund and any additional required collateral is delivered to the Fund, or excess collateral returned by the Fund, on the next business day. During the term of the loan, the Fund is entitled to all distributions made on or in respect of the loaned securities, but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.

The market value of any securities on loan, all of which were classified as common or preferred stocks in the Fund’s Consolidated Schedule of Investments, and the value of any related collateral are shown separately in the Consolidated Statement of Assets and Liabilities as a component of investments at value — unaffiliated, and collateral on securities loaned at value, respectively. As of period end, any securities on loan were collateralized by cash and/or U.S. Government obligations. Cash collateral invested by the securities lending agent, BlackRock Investment Management, LLC (“BIM”), if any, is disclosed in the Consolidated Schedule of Investments.

Securities lending transactions are entered into by the Fund under Master Securities Lending Agreements (each, an “MSLA”), which provide the right, in the event of default (including bankruptcy or insolvency), for thenon-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS 35

Notes to Consolidated Financial Statements  (continued)

collateral. In the event that a borrower defaults, the Fund, as lender, would offset the market value of the collateral received against the market value of the securities loaned. When the value of the collateral is greater than that of the market value of the securities loaned, the lender is left with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, absent an event of default, the borrower can resell orre-pledge the loaned securities, and the Fund can reinvest cash collateral received in connection with loaned securities. Upon an event of default, the parties’ obligations to return the securities or collateral to the other party are extinguished, and the parties can resell orre-pledge the loaned securities or the collateral received in connection with the loaned securities in order to satisfy the defaulting party’s net payment obligation for all transactions under the MSLA. The defaulting party remains liable for any deficiency.

As of period end, the following table is a summary of the Fund’s securities lending agreements by counterparty which are subject to offset under an MSLA:

Counterparty	Securities Loaned at Value		Cash Collateral Received (a)			Net Amount (b)
Citigroup Global Markets Inc.	$	15,461,491	$	(15,461,491	)	$	—
Credit Suisse Securities (USA) LLC		43,500,825		(43,500,825	)		—
Deutsche Bank Securities Inc.		320,485		(320,485	)		—
Goldman Sachs & Co.		3,582,871		(3,582,871	)		—
JP Morgan Securities LLC		88,387,709		(88,387,709	)		—
Merrill Lynch, Pierce, Fenner & Smith		8,243,881		(8,124,662	)		119,219
Morgan Stanley & Co. LLC		24,607,058		(24,607,058	)		—
Nomura Securities International Inc.		18,667,251		(18,667,251	)		—
State Street Bank & Trust Co.		929,753		(929,753	)		—
UBS Securities LLC		1,757,950		(1,757,950	)		—
	$	205,459,274	$	(205,340,055	)	$	119,219

^(a)  Cash collateral with a value of $209,469,852 has been received in connection with securities lending agreements. Collateral received in excess of the value of securities loaned from the individual counterparty, if any, is not shown for financial reporting purposes in the table above.

^(b)  The market value of the loaned securities is determined as of December 31, 2018. Additional collateral is delivered to the Fund on the next business day in accordance with the MSLA. The net amount would be subject to the borrower default indemnity in the event of default by the counterparty.

The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Fund benefits from a borrower default indemnity provided by BIM. BIM’s indemnity allows for full replacement of the securities loaned if the collateral received does not cover the value on the securities loaned in the event of borrower default. The Fund could incur a loss if the value of an investment purchased with cash collateral falls below the market value of loaned securities or if the value of an investment purchased with cash collateral falls below the value of the original cash collateral received.

5. DERIVATIVE FINANCIAL INSTRUMENTS

The Fund engages in various portfolio investment strategies using derivative contracts both to increase the returns of the Fund and/or to manage its 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 Consolidated Schedule of Investments. These contracts may be transacted on an exchange or OTC.

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

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

Securities deposited as initial margin are designated in the Consolidated Schedule of Investments and cash deposited, if any, are shown as cash pledged for futures contracts in the Consolidated Statement of Assets and Liabilities. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in market value of the contract (“variation margin”). Variation margin is recorded as unrealized appreciation (depreciation) and, if any, shown as variation margin receivable (or payable) on futures contracts in the Consolidated Statement of Assets and Liabilities. When the contract is closed, a realized gain or loss is recorded in the Consolidated Statement 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 Fund are denominated and in some cases, may be used to obtain exposure to a particular market.

36 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Consolidated Financial Statements  (continued)

The contract ismarked-to-market daily and the change in market value is recorded as unrealized appreciation (depreciation) in the Consolidated Statement of Assets and Liabilities. When a contract is closed, a realized gain or loss is recorded in the Consolidated Statement 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 on the Consolidated Statement of Assets and Liabilities.

Options: The Fund purchases and writes call and put options to increase or decrease its 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 Consolidated Statement 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 Consolidated Statement 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 Consolidated Statement of Operations to the extent the cost of the closing transaction exceeds the premiums received or paid. When the Fund writes a call option, such option is typically “covered,” meaning that it holds the underlying instrument subject to being called by the option counterparty. When the Fund writes 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 on the Consolidated Statement of Assets and Liabilities.

• Swaptions — The Fund purchases and writes options on swaps (“swaptions”) primarily to preserve a return or spread on a particular investment or portion of the Fund’s holdings, as a duration management technique or to protect against an increase in the price of securities it anticipates purchasing at a later date. The purchaser and writer of a swaption is buying or granting the right to enter into a previously agreed upon interest rate or credit default swap agreement (interest rate risk and/or credit risk) at any time before the expiration of the option.

• Foreign currency options — The Fund purchases and writes foreign currency options, foreign currency futures and options on foreign currency futures to gain or reduce exposure to foreign currencies (foreign currency exchange rate risk). Foreign currency options give the purchaser the right to buy from or sell to the writer a foreign currency at any time before the expiration of the option.

In purchasing and writing options, the Fund bears the risk of an unfavorable change in the value of the underlying instrument or the risk that it may not be able to enter into a closing transaction due to an illiquid market. Exercise of a written option could result in the Fund 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 Fund 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 Consolidated Statement of Assets and Liabilities and amortized over the term of the contract. The daily fluctuation in market value is recorded as unrealized appreciation (depreciation) on OTC Swaps in the Consolidated Statement of Assets and Liabilities. Payments received or paid are recorded in the Consolidated Statement of Operations as realized gains or losses, respectively. When an OTC swap is terminated, a realized gain or loss is recorded in the Consolidated Statement of Operations equal to the difference between the proceeds from (or cost of) the closing transaction and the Fund’s 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 Fund’s counterparty on the swap agreement becomes the CCP. The Fund is required to interface with the CCP through the broker. Upon entering into a centrally cleared swap, the Fund is required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on the size and risk profile of the particular swap. Securities deposited as initial margin are designated in the Consolidated Schedule of Investments and cash deposited is shown as cash pledged for centrally cleared swaps in the Consolidated Statement of Assets and Liabilities. Amounts pledged, which are considered restricted cash, are included in cash pledged for centrally cleared swaps on the Consolidated Statement of Assets and Liabilities. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in market value of the contract (“variation margin”). Variation margin is recorded as unrealized appreciation (depreciation) and shown as variation margin receivable (or payable) on centrally cleared swaps in the Consolidated Statement of Assets and Liabilities. Payments received from (paid to) the counterparty, including at termination, are recorded as realized gains (losses) in the Consolidated Statement 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 its 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 Fund 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 Fund 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

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS 37

Notes to Consolidated Financial Statements  (continued)

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 Fund 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 in exchange for fixed or floating rate interest payments. If the total return of the instrument or index underlying the transaction exceeds or falls short of the offsetting fixed or floating interest rate obligation, the Fund receives payment from or makes a payment to the counterparty.

• 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.

• Forward swaps — The Fund enters into forward interest rate swaps and forward total return swaps. In a forward swap, the Fund and the counterparty agree to make periodic net payments beginning on a specified date or a net payment at termination.

Swap transactions involve, to varying degrees, elements of interest rate, credit and market risk in excess of the amounts recognized in the Consolidated Statement 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 its contractual rights and to secure rights that will help it mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its counterparties. An ISDA Master Agreement is a bilateral agreement between the 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, the Fund may, under certain circumstances, offset with the counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of default including the bankruptcy or insolvency of the counterparty. Bankruptcy or insolvency laws of a particular jurisdiction may restrict or prohibit the right of offset in bankruptcy, insolvency or other events.

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 Fund and cash collateral received from the counterparty, if any, is reported separately on the Consolidated Statement of Assets and Liabilities as cash pledged as collateral and cash received as collateral, respectively.Non-cash collateral pledged by the Fund, if any, is noted in the Consolidated Schedule 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 Fund. Any additional required collateral is delivered to/pledged by the Fund on the next business day. Typically, the counterparty is not permitted to sell,re-pledge or use cash andnon-cash collateral it receives. The 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 Fund from its counterparties are not fully collateralized, it bears the risk of loss from counterpartynon-performance. Likewise, to the extent the Fund has delivered collateral to a counterparty and stands ready to perform under the terms of its agreement with such counterparty, it bears the risk of loss from a counterparty in the amount of the value of the collateral in the event the counterparty fails to return such collateral. Based on the terms of agreements, collateral may not be required for all derivative contracts.

For financial reporting purposes, the Fund does not offset derivative assets and derivative liabilities that are subject to netting arrangements, if any, in the Consolidated Statement of Assets and Liabilities.

6. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

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

38 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Consolidated Financial Statements  (continued)

For such services, the Fund pays the Manager a monthly fee at an annual rate equal to the following percentages of the average daily value of the Fund’s net assets:

Average Daily Net Assets	Investment Advisory Fees
First $6 Billion		0.65	%
$6 Billion — $8 Billion		0.61
$8 Billion — $10 Billion		0.59
$10 Billion — $15 Billion		0.57
Greater than $15 Billion		0.55

The Manager provides investment management and other services to the Subsidiary. The Manager does not receive separate compensation from the Subsidiary for providing investment management or administrative services. However, the Fund pays the Manager based on the Fund’s net assets, which includes the assets of the Subsidiary.

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

	Class II			Class III
Distribution Fees		0.15	%		0.25	%

BRIL and broker-dealers, pursuant tosub-agreements with BRIL, provide shareholder servicing and distribution services to the Fund. 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 distribution fees borne directly by each share class of the Fund:

	Class II		Class III		Total
Distribution Fees	$	366,653	$	19,191,506	$	19,558,159

Transfer Agent: On behalf of the Fund, the Manager entered into agreements with insurance companies and other financial intermediaries (“Service Organizations”), some of which may be affiliates. Pursuant to these agreements, the Service Organizations provide the Fund with administrative, networking, recordkeeping,sub-transfer agency and shareholder services tosub-accounts they service. For these services, the Service Organizations receive an annual fee per shareholder account, which will vary depending on share class and/or net assets of Fund shareholders serviced by the Service Organizations which is shown as transfer agent – class specific. For the year ended December 31, 2018, the Fund did not pay any amounts to affiliates in return for these services.

In addition, the Fund pays the transfer agent, which is not an affiliate, a fee for the issuance, transfer and redemption of shares and the opening and maintenance of shareholder accounts, which is included in transfer agent in the Consolidated Statement of Operations.

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

Class I		Class II	Class III	Total
$	1,742,824	$520,894	$16,261,937		$18,525,655

Expense Limitations, Waivers and Reimbursements: With respect to the Fund, the Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees the 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. This amount is included in fees waived and/or reimbursed by the Manager in the Consolidated Statement of Operations. For the year ended December 31, 2018, the amount waived was $7,767.

The Manager has contractually agreed to waive its investment advisory fee with respect to any portion of the 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. The contractual agreement may be terminated upon 90 days’ notice by a majority of the directors who are not “interested persons” of the Fund, as defined in the 1940 Act (“Independent Directors”), or by a vote of a majority of the outstanding voting securities of the Fund. This amount is included in fees waived and/or reimbursed by the Manager in the Consolidated Statement of Operations. For the year ended December 31, 2018, the Fund waived $417,293 in investment advisory fees pursuant to this arrangement.

For the year ended December 31, 2018, the Fund reimbursed the Manager $107,664 for certain accounting services, which is included in accounting services in the Consolidated Statement of Operations.

The Manager has contractually agreed to reimburse transfer agent fees in order to limit such expenses to a percentage of average daily net assets as follows:

Class I	0.07	%
Class II	0.07
Class III	0.07

The Manager has agreed not to reduce or discontinue this contractual expense limitation through April 30, 2019, unless approved by the Board, including a majority of the Independent Directors, or by a vote of a majority of the outstanding voting securities of the Fund.

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS 39

Notes to Consolidated Financial Statements  (continued)

These amounts waived and/or reimbursed are shown as transfer agent fees waived and/or reimbursed — class specific in the Consolidated Statement of Operations. For the year ended December 31, 2018, class specific expense waivers and/or reimbursements are as follows:

	Class I		Class II		Class III		Total
Transfer Agent Fees Waived and/or Reimbursed	$	152,036	$	349,849	$	10,890,776	$	11,392,661

With respect to the 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 the Fund’s business (“expense limitation”). The expense limitations as a percentage of average daily net assets are as follows:

Class I		Class II		Class III
	1.25%		1.40%		1.50%

The Manager has agreed not to reduce or discontinue this contractual expense limitation through April 30, 2019, unless approved by the Board, including a majority of the Independent Directors, or by a vote of a majority of the outstanding voting securities of the Fund. For the year ended December 31, 2018, there were no fees waived and/or reimbursed by the Manager.

Securities Lending: The U.S. Securities and Exchange Commission (“SEC”) has issued an exemptive order which permits BIM, an affiliate of the Manager, to serve as securities lending agent for the Fund, subject to applicable conditions. As securities lending agent, BIM bears all operational costs directly related to securities lending. The Fund is responsible for expenses in connection with the investment of cash collateral received for securities on loan (the “collateral investment expenses”). The cash collateral is invested in a private investment company managed by the Manager or its affiliates. However, BIM has agreed to cap the collateral investment expenses of the private investment company to an annual rate of 0.04%. The investment adviser to the private investment company will not charge any advisory fees with respect to shares purchased by the Fund. The private investment company in which the cash collateral has been invested may, under certain circumstances, impose a liquidity fee of up to 2% of the value withdrawn or temporarily restrict withdrawals for up to 10 business days during a 90 day period, in the event that the private investment company’s weekly liquid assets fall below certain thresholds.

Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment expenses. The Fund retains a portion of securities lending income and remits a remaining portion to BIM as compensation for its services as securities lending agent.

Pursuant to a securities lending agreement, the Fund retains 80% of securities lending income, and this amount retained can never be less than 70% of the total of securities lending income plus the collateral investment expenses.

In addition, commencing the business day following the date that the aggregate securities lending income earned across the Equity-Bond Complex in a calendar year exceeds a specified threshold, the Fund, pursuant to the securities lending agreement, will retain for the remainder of that calendar year securities lending income in an amount equal to 85% of securities lending income, and this amount retained can never be less than 70% of the total of securities lending income plus the collateral investment expenses.

The share of securities lending income earned by the Fund is shown as securities lending income — affiliated — net in the Consolidated Statement of Operations. For the year ended December 31, 2018, the Fund paid BIM $245,137 for securities lending agent services.

Interfund Lending: In accordance with an exemptive order (the “Order”) from the SEC, the 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 the Fund’s investment policies and restrictions. The Fund is currently permitted to borrow under the Interfund Lending Program.

A lending BlackRock fund may lend in aggregate up to 15% of its net assets, but may not lend more than 5% of its net assets to any one borrowing fund through the Interfund Lending Program. A borrowing BlackRock fund may not borrow through the Interfund Lending Program or from any other source more than 33 1/3% of its total assets (or any lower threshold provided for by the fund’s investment restrictions). If a borrowing BlackRock fund’s total outstanding borrowings exceed 10% of its total assets, each of its outstanding interfund loans will be subject to collateralization of at least 102% of the outstanding principal value of the loan. All interfund loans are for temporary or emergency purposes and the interest rate to be charged will be the average of the highest current overnight repurchase agreement rate available to a lending fund and the bank loan rate, as calculated according to a formula established by the Board.

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

Directors and Officers: Certain directors and/or officers of the Company are directors and/or officers of BlackRock or its affiliates. The Fund reimburses the Manager for a portion of the compensation paid to the Company’s Chief Compliance Officer, which is included in Directors and Officer in the Consolidated Statement of Operations.

Other Transactions: The Fund may purchase securities from, or sell securities to, an affiliated fund provided the affiliation is due solely to having a common investment adviser, common officers, or common directors. For the year ended December 31, 2018, the purchase and sale transactions and any net realized gains (losses) with affiliated funds in compliance with Rule17a-7 under the 1940 Act were as follows:

Purchases	$	3,428,103
Sales		8,896,743
Net Realized Gain		227,062

40 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Consolidated Financial Statements  (continued)

7. PURCHASES AND SALES

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

	Purchases		Sales
Non-U.S. Government Securities	$	4,626,472,232	$	5,708,553,584
U.S. Government Securities		8,744,460,876		8,298,293,914

8. INCOME TAX INFORMATION

It is the 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.

The 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 the Fund’s U.S. federal tax returns generally remains open for each of the four years ended December 31, 2018. The statutes of limitations on the 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 Fund 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 Fund’s 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 difference was attributable to the characterization of expenses and income recognized from a wholly owned subsidiary were reclassified to the following accounts:

Paid-in capital	$	(12,703,801	)
Accumulated loss	$	12,703,801

The tax character of distributions paid was as follows:

	12/31/2018		12/31/2017
Ordinary income	$	91,433,239	$	237,849,708
Long-term capital gains		409,734,085		17,464,647
	$	501,167,324	$	255,314,355

As of period end, the tax components of accumulated net earning (losses) were as follows:

Undistributed ordinary income	$	6,395,417
Undistributed long-term capital gains		87,204,750
Net unrealized losses(a)		(286,738,792	)
	$	(193,138,625	)

^(a)  The difference between book-basis and tax-basis net unrealized gains was attributable primarily to the tax deferral of losses on wash sales and straddles, the realization for tax purposes of unrealized gains on investments in passive foreign investment companies, the realization for tax purposes of unrealized gains / losses on certain futures and foreign currency contracts, the timing and recognition of partnership income, the accounting for swap agreements, the classification of investments, investment in a wholly owned subsidiary and dividends recognized for tax purposes.

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:

Tax cost	$	9,456,779,853
Gross unrealized appreciation	$	509,377,710
Gross unrealized depreciation		(766,199,172	)
Net unrealized depreciation	$	(256,821,462	)

9. BANK BORROWINGS

The Company, on behalf of the Fund, 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 Fund may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Fund, 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. Prior to April 19, 2018, the aggregate commitment amount was $2.1 billion and the fee was 0.12% per annum. 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

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS 41

Notes to Consolidated Financial Statements  (continued)

expenses in the Consolidated Statement 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 Fund did not borrow under the credit agreement.

10. PRINCIPAL RISKS

In the normal course of business, the Fund invests in securities or other instruments and may enter into certain transactions, and such activities subject the 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. The Fund’s prospectus provides details of the risks to which the Fund is subject.

The Fund 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 the Fund to reinvest in lower yielding securities. The Fund may also be exposed to reinvestment risk, which is the risk that income from the Fund’s portfolio will decline if the Fund invests the proceeds from matured, traded or called fixed-income securities at market interest rates that are below the Fund portfolio’s current earnings rate.

The Fund may be exposed to additional risks when reinvesting cash collateral in money market funds that do not seek to maintain a stable NAV per share of $1.00, which may be subject to redemption gates or liquidity fees under certain circumstances.

Valuation Risk: The market values of equities, such as common stocks and preferred securities or equity related investments, such as futures and options, may decline due to general market conditions which are not specifically related to a particular company. They may also decline due to factors which affect a particular industry or industries. The Fund may invest in illiquid investments and may experience difficulty in selling those investments in a timely manner at the price that it believes the investments are worth. Prices may fluctuate widely over short or extended periods in response to company, market or economic news. Markets also tend to move in cycles, with periods of rising and falling prices. This volatility may cause the 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 the Fund may lose value, regardless of the individual results of the securities and other instruments in which the Fund invests.

The price the Fund could receive upon the sale of any particular portfolio investment may differ from the 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 the 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 the Fund, and the Fund could realize a greater than expected loss or lesser than expected gain upon the sale of the investment. The Fund’s ability to value its investments may also be impacted by technological issues and/or errors by pricing services or other third party service providers.

Counterparty Credit Risk:The Fund 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 Fund manages 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 Fund to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Fund’s exposure to market, issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Consolidated Statement of Assets and Liabilities, less any collateral held by the Fund.

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.

The 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 the Fund.

For OTC options purchased, the Fund bears the risk of loss of the amount of the premiums paid plus the positive change in market values net of any collateral held by the Fund should the counterparty fail to perform under the contracts. Options written by the Fund do not typically give rise to counterparty credit risk, as options written generally obligate the Fund, and not the counterparty, to perform. The Fund may be exposed to counterparty credit risk with respect to options written to the extent the 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 Fund 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, the Fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency). Additionally, credit risk exists in exchange-traded futures and centrally cleared swaps with respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Fund.

Concentration Risk: The Fund invests a significant portion of its assets in fixed-income securities and/or uses 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 Fund may be subject to a greater risk of rising interest rates due to the current

42 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Consolidated Financial Statements  (continued)

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.

The Fund invests a significant portion of its assets in securities of issuers located in Europe or with significant exposure to European issuers or countries. The European financial markets have recently experienced volatility and adverse trends due to concerns about economic downturns in, or rising government debt levels of, several European countries. These events may spread to other countries in Europe and may affect the value and liquidity of certain of the Fund’s investments.

The United Kingdom is scheduled to withdraw from the European Union in March 2019, which may introduce significant new uncertainties and instability in the financial markets across Europe.

As of period end, the Fund’s investments had the following industry classifications:

Industry	Percent of Long-Term Investments
Diversified Financial Services		27	%
Oil, Gas & Consumable Fuels		7
Banks		6
Health Care Providers & Services		5
Other(a)		55

^(a)  All other industries held was less than 5% of long-term investments.

11. CAPITAL SHARE TRANSACTIONS

Transactions in capital shares for each class were as follows:

	Year Ended 12/31/2018						Year Ended 12/31/2017
	Shares			Amount			Shares			Amount
Class I
Shares sold		10,941,451		$	185,931,630			8,584,248		$	143,679,674
Shares issued in reinvestment of distributions		6,174,089			95,191,192			2,672,740			46,050,926
Shares redeemed		(13,006,417	)		(221,542,400	)		(13,573,580	)		(224,416,668	)
Net increase (decrease)		4,109,123		$	59,580,422			(2,316,592	)	$	(34,686,068	)
Class II
Shares sold		764,329		$	13,069,294			1,384,696		$	23,128,223
Shares issued in reinvestment of distributions		698,218			10,743,143			320,419			5,499,573
Shares redeemed		(2,359,206	)		(39,963,707	)		(1,525,356	)		(25,239,075	)
Net increase (decrease)		(896,659	)	$	(16,151,270	)		179,759		$	3,388,721
Class III
Shares sold		7,408,038		$	108,800,864			10,049,191		$	144,899,286
Shares issued in reinvestment of distributions		29,081,385			383,334,183			13,347,588			197,591,823
Shares redeemed		(76,302,859	)		(1,113,699,124	)		(77,304,864	)		(1,106,232,291	)
Net decrease		(39,813,436	)	$	(621,564,077	)		(53,908,085	)	$	(763,741,182	)
Total Net Decrease		(36,600,972	)	$	(578,134,925	)		(56,044,918	)	$	(795,038,529	)

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 Fund has adopted the amendments pertinent to RegulationS-X in this shareholder report. The amendments impacted certain disclosure presentation on the Consolidated Statement of Assets and Liabilities, Consolidated Statements of Changes in Net Assets and Notes to Consolidated Financial Statements.

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

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS 43

Notes to Consolidated Financial Statements  (continued)

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

Share Class	Net Investment Income			Net Realized Gain
I		(29,375,286	)		(22,847,673	)
II		(2,933,651	)		(2,565,922	)
III		(102,989,429	)		(94,602,394	)

Distributions in excess of net investment income as of December 31, 2017 was $(47,766,850).

13. SUBSEQUENT EVENTS

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

44 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Report of Independent Registered Public Accounting Firm

To the Shareholders of BlackRock Global Allocation V.I. Fund and the Board of Directors of BlackRock Variable Series Funds, Inc.:

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying consolidated statement of assets and liabilities of BlackRock Global Allocation V.I. Fund of BlackRock Variable Series Funds, Inc. and subsidiary (the “Fund”), including the consolidated schedule of investments, as of December 31, 2018, the related consolidated statement of operations for the year then ended, the consolidated statements of changes in net assets for each of the two years in the period then ended, the consolidated financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of December 31, 2018, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s 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 Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its 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 Fund’s 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, agent banks and brokers; when replies were not received from agent banks or brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

Deloitte & Touche LLP

Boston, Massachusetts

February 15, 2019

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

REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 45

Glossary of Terms Used in this Report

Currency
AUD	Australian Dollar
BRL	Brazilian Real
CAD	Canadian Dollar
EUR	Euro
GBP	British Pound
JPY	Japanese Yen
MXN	Mexican Peso
NOK	Norwegian Krone
SEK	Swedish Krona
SGD	Singapore Dollar
USD	United States Dollar
ZAR	South African Rand
Portfolio Abbreviations
ADR	American Depositary Receipt
CDX	Credit Default Swap Index
CVA	Certification Van Aandelon (Dutch Certificate)
ETF	Exchange-Traded Fund
LIBOR	London Interbank Offered Rate
EURIBOR	Euro Interbank Offered Rate
NASDAQ	National Association of Securities Dealers Automated
OTC	Over-The-Counter
PCL	Public Company Limited
REIT	Real Estate Investment Trust
S&P	Standard & Poor’s
SPDR	S&P Depository Receipt

46 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

DECEMBER 31, 2018

ANNUAL REPORT

BlackRock Variable Series Funds, Inc

^Ø  BlackRock Government Money Market V.I. Fund

Not FDIC Insured • May Lose Value • No Bank Guarantee

Money Market Overview  For the12-Month Period Ended December 31, 2018

Noteworthy market conditions during 2018 included the continued steady removal of monetary accommodation by the Federal Open Market Committee (“FOMC”), the ongoing gradual reduction of the Fed’s balance sheet, increased Treasury bill issuance and various geopolitical events including trade-tariffs, the Italian elections, and Brexit uncertainty. 2018 was generally a strong year for cash as an asset class in terms of return and flows, but a volatile year for the overall financial markets.

The FOMC continued on their path to normalize monetary policy by hiking the federal funds rate four times during 2018, bringing the target range to 2.25-2.50%. In the final statement of the year released by the FOMC at their December meeting, the FOMC’s assessments of economic growth, labor market conditions, and inflation were largely unchanged. As was generally expected, the “forward guidance” part of their statement was altered to signifying greater emphasis on a more “data dependent” approach to monetary policy. In another significant change, at the last FOMC meeting of the year, the FOMC’s interest rate forecast was revised to reflect just two hikes in 2019 (as compared with three hikes projected in the prior forecast in September). The outlook included one additional hike for 2020, while the median “longer run” rate forecast came down 0.25% to 2.75%.

In an effort to promote trading in the federal funds market at rates that are comfortably within the target range, the interest on overnight excess reserves rate (“IOER”) was raised just 0.20% to 2.40% at the June 2018 meeting. This move was widely viewed as a “technical adjustment” by the FOMC. As was the case with the technical adjustment in June, the FOMC followed the same action in December when they hiked the IOER by 0.20% and the federal funds range by 0.25%. To conclude the year, the Fed’s Summary of Economic Projections was updated to reflect modest declines in the near-term outlook for economic growth, while the unemployment rate was left unchanged.

U.S. Treasury bill supply during the year was robust, hitting record levels for net new issuance of $384 billion. Furthermore in October, the U.S. Treasury introduced the two-month Treasury bill to the market with a $25 billion initial offering while moving the auctions for four-week and eight-week Treasury bills to Thursdays. This move helped the Treasury to ladder maturing debt. Also of note, government agencies issued floating rate notes indexed to the Secured Overnight Financing Rate (“SOFR”), which is a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities, and is the reference rate eventually expected to replace the London Inter-Bank Offered Rate (“LIBOR”). In addition to the agency notes referenced to SOFR, some large financial institutions also issued certificates of deposit and commercial paper linked to this index, and demand for such obligations was generally strong.

Credit spreads were periodically elevated in 2018 for a multitude of reasons including the surge in Treasury bill issuance, a lack of clarity about repatriation related flows early in the year, and bank balance sheet and funding pressures toward the end of the period. For example, credit spreads as evidenced by the three-month LIBOR and overnight indexed swaps widened out to 0.60% in April. This measure later contracted to around 0.17% by early October, before subsequently rising to a high of 0.43% later in the fourth quarter.

In our view, the FOMC’s interest rate normalization campaign appears closer to winding down, although a few additional interest rate hikes remain possible in 2019, subject to further declines in the unemployment rate, upward pressure on inflation, and an easing in financial conditions. That said, we believe the bar for further action has materially risen. We also surmise that the timing of any additional hikes has become less certain and could occur outside of the quarterly meeting cycle that market participants have generally been accustomed to, given the FOMC’s emphasis on “data-dependence.” The implementation of a press conference after every FOMC meeting reinforces to us this possibility. The net new supply of Treasury bills is expected to contract during the first quarter of 2019 as the U.S. Treasury reduces its cash balance in advance of the expiration of the suspension of the debt ceiling in early March. In the event that Congress does not address the debt ceiling in a timely fashion, we anticipate that extraordinary measures would be used to provide additional borrowing authority until around the third quarter of 2019.

Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.

2 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Fund Summary  as of December 31, 2018 BlackRock Government Money Market V.I. Fund

Investment Objective

BlackRock Government Money Market V.I. Fund’s (the “Fund”) investment objective is to seek to preserve capital, maintain liquidity and achieve the highest possible current income consistent with the foregoing.

On November 14, 2017, the Board of Directors of the Company (the “Board”) and, on May 23, 2018, the Board of Trustees of State Farm Variable Product Trust each approved a reorganization of the State Farm Money Market Fund (the “Target Fund”), with and into the Fund. At a special shareholder meeting on September 14, 2018, the shareholders of the Target Fund approved the reorganization, which was completed on October 29, 2018.

Fund Information

CURRENTSEVEN-DAY YIELDS

	7-Day SEC Yield			7-Day Yield
BlackRock Government Money Market V.I. Fund		2.21	%		2.21	%

The7-Day SEC Yield may differ from the7-Day Yield shown above due to the fact that the7-Day SEC Yield excludes distributed capital gains.

Past performance is not indicative of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

PORTFOLIO COMPOSITION

Asset Type	Percent of Net Assets
Repurchase Agreements		41	%
U.S. Government Sponsored Agency Obligations		38
U.S. Treasury Obligations		18
Other Assets Less Liabilities		3

Disclosure of Expenses

Shareholders of the Fund may incur the following charges: (a) transactional expenses, and (b) operating expenses, including investment advisory fees, service and distribution fees, and other fund expenses. The expense example shown below (which is based on a hypothetical investment of $1,000 invested on July 1, 2018 and held through December 31, 2018) is intended to assist shareholders both in calculating expenses based on an investment in the Fund and in comparing these expenses with similar costs of investing in other mutual funds.

The expense example provides 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 share class under the heading entitled “Expenses Paid During the Period.”

The expense example also provides information about hypothetical account values and hypothetical expenses based on the 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 the Fund 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 example are intended to highlight shareholders’ ongoing costs only and do not reflect any transactional expenses, such as sales charges, if any. Therefore, the hypothetical example is 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.

Expense Example

	Actual						Hypothetical (a)
	Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Annualized Expense Ratio
Class I	$	1,000.00	$	1,009.40	$	1.52	$	1,000.00	$	1,023.69	$	1.53		0.30	%

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

^(b)  Expenses are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect theone-half year period shown).

FUND SUMMARY 3

Schedule of Investments December 31, 2018 BlackRock Government Money Market V.I. Fund (Percentages shown are based on Net Assets)

Security	Par (000)			Value
U.S. Government Sponsored Agency Obligations — 37.8%
Federal Farm Credit Bank Discount Notes(a):
2.17%, 01/04/19		USD	745	$	744,867
2.09%, 01/15/19			1,880		1,878,333
2.30%, 02/04/19			735		733,466
2.31%, 02/08/19			175		174,607
2.39%, 03/11/19			885		881,234
2.40%, 03/19/19			885		880,779
2.44%, 04/12/19			215		213,661
2.50%, 06/17/19			730		721,873
2.51%, 06/28/19			505		498,982
2.52%, 07/22/19			640		630,950
2.52%, 07/23/19			1,145		1,128,774
2.52%, 07/29/19			5,630		5,545,483
2.55%, 08/15/19			660		650,056
2.56%, 09/12/19			465		456,437
Federal Farm Credit Bank Variable Rate Notes(b):
(LIBOR USD 1 Month - 0.05%), 2.33%, 02/07/20			1,900		1,899,979
(LIBOR USD 1 Month + 0.00%), 2.47%, 06/19/20			1,000		1,000,683
(LIBOR USD 1 Month + 0.00%), 2.51%, 06/26/20			1,000		999,957
(LIBOR USD 1 Month - 0.04%), 2.36%, 09/11/20			510		509,974
(LIBOR USD 1 Month + 0.03%), 2.47%, 12/14/20			1,025		1,024,918
Federal Home Loan Bank Discount Notes(a):
2.15%, 01/04/19			485		484,914
2.29%, 01/09/19			1,785		1,784,096
2.31%, 01/11/19			2,430		2,428,437
2.11%, 01/16/19			4,750		4,745,410
2.21%, 01/23/19			640		639,083
2.30%, 02/05/19			650		648,518
2.31%, 02/06/19			965		962,732
2.32%, 02/11/19			1,975		1,969,682
2.33%, 02/12/19			480		478,662
2.33%, 02/13/19			2,700		2,692,359
2.33%, 02/15/19			1,200		1,196,448
2.35%, 02/20/19			555		553,165
2.40%, 03/20/19			1,250		1,243,714
2.41%, 03/27/19			7,750		7,705,589
2.50%, 06/21/19			1,145		1,131,458
Federal Home Loan Bank Variable Rate Notes(b):
(LIBOR USD 1 Month - 0.09%), 2.42%, 01/25/19			750		750,000
(LIBOR USD 1 Month - 0.13%), 2.38%, 01/28/19			595		595,000
(LIBOR USD 1 Month - 0.13%), 2.22%, 02/01/19			795		795,000
(LIBOR USD 1 Month - 0.12%), 2.39%, 02/25/19			960		960,000
(LIBOR USD 1 Month - 0.12%), 2.39%, 03/25/19			1,800		1,800,000
(LIBOR USD 3 Month - 0.21%), 2.42%, 05/16/19			1,100		1,100,000
(LIBOR USD 3 Month - 0.16%), 2.62%, 06/12/19			420		419,952
(LIBOR USD 1 Month - 0.05%), 2.46%, 06/20/19			225		225,000
(LIBOR USD 3 Month - 0.16%), 2.63%, 06/20/19			1,000		1,000,000
(Secured Overnight Funding Rate + 0.4), 2.50%, 06/21/19			345		345,000
(LIBOR USD 1 Month - 0.05%), 2.46%, 06/24/19			1,355		1,355,000
(LIBOR USD 1 Month - 0.05%), 2.46%, 06/28/19			435		435,000
(LIBOR USD 1 Month - 0.05%), 2.46%, 06/28/19			225		225,000
(LIBOR USD 1 Month - 0.11%), 2.36%, 07/19/19			1,960		1,960,000
(LIBOR USD 1 Month - 0.08%), 2.43%, 08/27/19			1,190		1,190,000
(LIBOR USD 1 Month - 0.09%), 2.30%, 09/09/19			1,565		1,565,000
(LIBOR USD 1 Month - 0.07%), 2.39%, 09/17/19			2,000		2,000,000
(LIBOR USD 1 Month - 0.06%), 2.45%, 09/27/19			1,000		1,000,000
(LIBOR USD 3 Month - 0.14%), 2.66%, 12/19/19			535		535,000
(LIBOR USD 1 Month - 0.06%), 2.44%, 02/24/20			1,085		1,085,000
(LIBOR USD 1 Month - 0.04%), 2.41%, 04/17/20			1,940		1,939,773
(LIBOR USD 3 Month - 0.13%), 2.67%, 12/21/20			1,350		1,350,000
Federal Home Loan Mortgage Corp. Variable Rate Notes, (LIBOR USD 1 Month - 0.10%), 2.29%, 08/08/19(b)			1,500		1,499,554

Security	Par (000)			Value
U.S. Government Sponsored Agency Obligations (continued)
Federal National Mortgage Association Discount Notes, 2.24%, 01/09/19(a)		USD	1,325	$	1,324,340
Federal National Mortgage Association Notes, 0.88%, 08/02/19			665		658,319
Total U.S. Government Sponsored Agency Obligations — 37.8% (Cost: $75,351,218)					75,351,218
U.S. Treasury Obligations — 18.1%
U.S. Treasury Bills(a):
2.05%, 01/17/19			7,000		6,993,342
2.29%, 01/29/19			895		893,361
2.28%, 02/07/19			1,955		1,950,620
2.31%, 02/21/19			890		887,245
2.42%, 04/04/19			12,600		12,522,531
U.S. Treasury Notes:
1.13%, 01/31/19			50		49,957
1.25%, 01/31/19			50		49,962
(US Treasury 3 Month Bill Money Market Yield + 0.14%), 2.57%, 01/31/19(b)			3,775		3,775,000
1.50%, 02/28/19			3,000		2,996,376
(US Treasury 3 Month Bill Money Market Yield + 0.03%), 2.46%, 04/30/20(b)			3,000		2,999,893
(US Treasury 3 Month Bill Money Market Yield + 0.05%), 2.47%, 10/31/20(b)			3,000		2,994,274
Total U.S. Treasury Obligations — 18.1% (Cost: $36,112,561)					36,112,561
Total Repurchase Agreements — 41.2% (Cost: $82,145,000)					82,145,000
Total Investments — 97.1% (Cost: $193,608,779)(c)					193,608,779
Other Assets Less Liabilities — 2.9%					5,830,684
Net Assets — 100.0%				$	199,439,463

^(a)  Rates are discount rates or a range of discount rates as of period end.

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

^(c)  Cost for U.S. federal income tax purposes.

4 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Government Money Market V.I. Fund

Repurchase Agreements

	Repurchase Agreements												Collateral
Counterparty	Coupon Rate			Purchase Date		Maturity Date		Par (000)		At Value (000)		Proceeds Including Interest	Position	Original Par	Position Received, At Value
Bank of Montreal		2.90	%		12/31/18		01/02/19	$	8,300	$	8,300	$8,301,337	U.S. Government Sponsored Agency Obligations, 2.50% to 5.50%, due 08/01/20 to 08/01/48	$46,213,406	$8,549,001
BNP Paribas SA		3.00			12/31/18		01/02/19		14,000		14,000	14,002,333	U.S. Government Sponsored Agency Obligations, 3.00% to 6.00%, due 01/15/29 to 11/20/48	18,996,939	14,280,000
Goldman Sachs & Co. LLC		2.67			12/31/18		01/07/19		4,000		4,000	4,002,077	U.S. Government Sponsored Agency Obligations, 3.50% to 5.00%, due 02/01/24 to 01/01/49	6,644,754	4,120,000
JP Morgan Securities LLC		2.67	(a)		12/31/18		02/06/19		3,500		3,500	3,509,614	U.S. Government Sponsored Agency Obligations, 0.44% to 4.19%, due 06/25/22 to 03/16/53	178,193,996	3,675,000
		2.95			12/31/18		01/02/19		15,000		15,000	15,002,458	U.S. Treasury Obligations, 0.00% to 1.38%, due 02/15/19 to 02/15/42	18,547,985	15,300,000
Total JP Morgan Securities LLC										$	18,500				$18,975,000
Merrill Lynch, Pierce, Fenner & Smith, Inc.		2.65			12/31/18		01/07/19		1,500		1,500	1,500,773	U.S. Government Sponsored Agency Obligation, 4.00%, due 08/01/48	1,539,963	1,545,000
		3.00			12/31/18		01/02/19		10,000		10,000	10,001,667	U.S. Government Sponsored Agency Obligation, 4.50%, due 08/20/48	9,690,300	10,200,000
Total Merrill Lynch, Pierce, Fenner & Smith, Inc.										$	11,500				$11,745,000
Mizuho Securities USA LLC		2.95			12/31/18		01/02/19		10,000		10,000	10,001,639	U.S. Treasury Obligation, 2.63%, due 12/31/23	10,152,500	10,200,095
Societe Generale SA		2.95			12/31/18		01/02/19		14,000		14,000	14,002,295	U.S. Treasury Obligations, 0.00% to 2.00%, due 02/15/22 to 02/15/23	14,396,983	14,280,000
Wells Fargo Securities LLC		2.50			12/26/18		01/02/19		1,845		1,845	1,845,897	U.S. Government Sponsored Agency Obligations, 1.38% to 6.50%, due 02/26/21 to 12/01/48	3,180,505	1,892,458
										$	82,145				$84,041,554

^(a)  Variable rate security. Rate as of period end and maturity is the date the principal owed can be recovered through demand.

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:
Short-Term Securities(a)	$	—	$	193,608,779	$	—	$	193,608,779

^(a)  See above Schedule of Investments for values in each security type.

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

See notes to financial statements.

SCHEDULE OF INVESTMENTS 5

Statement of Assets and Liabilities

December 31, 2018

	BlackRock Government Money Market V.I. Fund
ASSETS
Investments at value — unaffiliated (cost — $111,463,779)	$	111,463,779
Cash		6,065,586
Repurchase agreements at value (cost — $82,145,000)		82,145,000
Receivables:
Capital shares sold		89,272
Interest — unaffiliated		96,194
From the Manager		13,121
Prepaid expenses		203
Total assets		199,873,155
LIABILITIES
Payables:
Capital shares redeemed		299,526
Printing fees		53,904
Professional fees		21,272
Investment advisory fees		29,576
Board realignment and consideration		13,121
Directors’ and Officer’s fees		5,338
Other affiliates		194
Other accrued expenses		10,761
Total liabilities		433,692
NET ASSETS	$	199,439,463
NET ASSETS CONSIST OF
Paid-in capital	$	199,424,743
Accumulated earnings		14,720
NET ASSETS	$	199,439,463
Class I — Based on net assets of $199,439,463 and 199,438,211 shares outstanding, 3.3 billion shares authorized, $0.10 par value.	$	1.00

See notes to financial statements.

6 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Statement of Operations

Year Ended December 31, 2018

	BlackRock Government Money Market V.I. Fund
INVESTMENT INCOME
Interest — unaffiliated	$	2,834,953
Total investment income		2,834,953
EXPENSES
Investment advisory		744,566
Reorganization		118,913
Transfer agent		110,856
Professional		80,385
Printing		39,723
Accounting services		38,935
Directors and Officer		18,154
Board realignment and consolidation		13,121
Custodian		11,877
Registration		2,512
Miscellaneous		6,709
Total expenses		1,185,751
Less:
Fees waived and/or reimbursed by the Manager		(633,155	)
Transfer agent fees waived and/or reimbursed		(105,855	)
Total expenses after fees waived and/or reimbursed		446,741
Net investment income		2,388,212
REALIZED GAIN
Net realized gain from investments		6,346
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	2,394,558

See notes to financial statements.

FINANCIAL STATEMENTS 7

Statements of Changes in Net Assets

	BlackRock Government Money Market V.I. Fund
	Year Ended December 31,
	2018			2017
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income	$	2,388,212		$	915,448
Net realized gain		6,346			475
Net increase in net assets resulting from operations		2,394,558			915,923
DISTRIBUTIONS TO SHAREHOLDERS(a)(b)
Decrease in net assets resulting from distributions to shareholders		(2,388,212	)		(915,925	)
CAPITAL SHARE TRANSACTIONS
Net proceeds from sale of shares		163,742,133			110,014,964
Reinvestments of distributions		2,388,212			916,673
Cost of shares redeemed		(178,847,247	)		(126,795,881	)
Shares issued in reorganization		76,491,419			—
Net increase (decrease) in net assets derived from capital share transactions		63,774,517			(15,864,244	)
NET ASSETS
Total increase (decrease) in net assets		63,780,863			(15,864,246	)
Beginning of year		135,658,600			151,522,846
End of year	$	199,439,463		$	135,658,600

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

^(b)  Prior year distribution character information has been modified or removed to conform with current year RegulationS-X presentation changes. Refer to Note 9 for this prior year information.

See notes to financial statements.

8 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Financial Highlights

(For a share outstanding throughout each period)

	BlackRock Government Money Market V.I. Fund
	Class I
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Net investment income		0.0160			0.0064			0.0013			0.0000	(a)		0.0000	(a)
Net realized gain (loss)		(0.0001	)		0.0000	(a)		0.0000	(a)		0.0001			0.0001
Net increase from investment operations		0.0159			0.0064			0.0013			0.0001			0.0001
Distributions(b)
From net investment income		(0.0159	)		(0.0064	)		(0.0013	)		(0.0000	)(c)		(0.0000	)(c)
From net realized gain		—			(0.0000	)(c)		(0.0000	)(c)		(0.0001	)		(0.0001	)
Total distributions		(0.0159	)		(0.0064	)		(0.0013	)		(0.0001	)		(0.0001	)
Net asset value, end of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total Return(d)
Based on net asset value		1.61	%		0.65	%		0.13	%		0.01	%		0.01	%
Ratios to Average Net Assets
Total expenses		0.80	%(e)		0.72	%		0.62	%		0.61	%		0.61	%
Total expenses after fees waived and/or reimbursed		0.30	%(e)		0.30	%		0.30	%		0.18	%		0.17	%
Net investment income		1.60	%		0.63	%		0.13	%		0.00	%		0.00	%
Supplemental Data
Net assets, end of year (000)	$	199,439		$	135,659		$	151,523		$	152,118		$	228,241

^(a)  Amount is less than $0.00005 per share.

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

^(c)  Amount is greater than $(0.00005) per share.

^(d)  Where applicable, excludes insurance-related fees and expenses and assumes the reinvestment of distributions.

^(e)  Includes reorganization costs associated with the Fund’s reorganization. Without these costs, total expenses and total expenses after fees waived and/or reimbursed would have been 0.72% and 0.29%, respectively.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 9

Notes to Financial Statements

1. ORGANIZATION

BlackRock Variable Series Funds, Inc. (the “Company”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as anopen-end management investment company. The Company is organized as a Maryland corporation that is comprised of 15 separate portfolios. The funds offer shares to insurance companies for their separate accounts to fund benefits under certain variable annuity and variable life insurance contracts. The financial statements presented are for BlackRock Government Money Market V.I. Fund (the “Fund”). The Fund is classified as diversified.

The Fund operates as a “government money market fund” under Rule2a-7 under the 1940 Act. The Fund is not subject to liquidity fees or temporary suspensions of redemptions due to declines in the Fund’s weekly liquid assets.

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

Reorganization:The Board of Directors of the Company and the Board of Trustees of State Farm Variable Product Trust and shareholders of the Target Fund approved the reorganization of the Target Fund into the Fund. As a result, the Fund acquired substantially all of the assets and assumed substantially all of the liabilities of the Target Fund in exchange for an equal aggregate value of newly-issued Class I Shares of the Fund.

Each shareholder of the Target Fund received shares of the 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 October 26, 2018, less the costs of the Target Fund’s reorganization.

The reorganization was accomplished by atax-free exchange of shares of the Fund in the following amount and at the following conversion ratio:

Target Fund	Shares Prior to Reorganization		Conversion Ratio		Government Money Market V.I. Fund’s Share Class		Shares of Government Money Market V.I. Fund
State Farm Money Market Fund		76,492,521		1.00		Class I		76,492,521

The Target Fund’s net assets and composition of net assets on October 26, 2018, the valuation date of the reorganization were as follows:

Target Fund	Net Assets		Paid-In Capital		Accumulated Earnings
State Farm Money Market Fund	$	76,491,419	$	76,491,419	$	—

For financial reporting purposes, assets received and shares issued by the 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 Fund realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes.

The net assets of the Fund before the acquisition were $124,850,847. The aggregate net assets of the Fund immediately after the acquisition amounted to $201,342,266. The Target Fund’s fair value and cost of investments prior to the reorganization were as follows:

Target Fund	Fair Value of Investments		Cost of Investments
State Farm Money Market Fund	$	76,881,766	$	76,881,766

The purpose of the transaction was to combine the assets of the Target Fund with the assets of the Fund. The reorganization was a tax-free event and closed on October 29, 2018.

Assuming the acquisition had been completed on January 1, 2018, the beginning of the fiscal reporting period of the Fund, the pro forma results of operations for the year ended December 31, 2018, are as follows:

• Net investment income: $2,749,789

• Net realized gain on investments: $6,346

• Net increase in net assets resulting from operations: $2,756,135

Because the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of the Fund that have been included in the Fund’s Statement of Operations since October 29, 2018.

Reorganization costs incurred by the Fund in connection with the reorganization were expensed by the Fund. The Manager reimbursed the Fund $110,686, which is included in fees waived and/or reimbursed by the Manager in the Statement 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

10 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

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. The 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. Interest income, including amortization and accretion of premiums and discounts on debt securities are recognized on an accrual basis.

Distributions: Distributions from net investment income are declared daily and paid monthly. Distributions of capital gains are recorded on theex-dividend date and made at least annually. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP.

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 Fund.

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 Fund.

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

Other: Expenses directly related to the Fund are charged to the Fund. Other operating expenses shared by several funds, including other funds managed by the Manager, are prorated among those funds on the basis of relative net assets or other appropriate methods.

3. INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS

Investment Valuation Policies: U.S. GAAP defines fair value as the price the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Fund’s investments are valued under the amortized cost method which approximates current market value in accordance with Rule2a-7 under the 1940 Act. Under this method, investments are valued at cost when purchased and, thereafter, a constant proportionate accretion of discounts and amortization of premiums are recorded until the maturity of the security. The Fund seeks to maintain its NAV per share at $1.00, although there is no assurance that it will be able to do so on a continuing basis.

Fair Value Hierarchy: Various inputs are used in determining the fair value of investments. 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 the Fund has the ability to access

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

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

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.

Changes in valuation techniques may result in transfers into or out of an assigned level within the hierarchy. In accordance with the 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 is based on the pricing transparency of the investments is not necessarily an indication of the risks associated with investing in those securities.

4. SECURITIES AND OTHER INVESTMENTS

Repurchase Agreements: Repurchase agreements are commitments to purchase a security from a counterparty who agrees to repurchase the same security at a mutually agreed upon date and price. On a daily basis, the counterparty is required to maintain collateral subject to the agreement and in value no less than the agreed upon repurchase amount. Pursuant to the custodial undertaking associated with atri-party repurchase arrangement, an unaffiliated third party custodian maintains accounts to hold collateral for a fund and its counterparties. Typically, a fund and counterparty are not permitted to sell,re-pledge or use the collateral absent a default by the counterparty or a fund, respectively.

NOTESTO FINANCIAL STATEMENTS 11

Notes to Financial Statements  (continued)

In the event the counterparty defaults and the fair value of the collateral declines, a fund could experience losses, delays and costs in liquidating the collateral.

Repurchase agreements are entered into by a fund under Master Repurchase Agreements (each, an “MRA”). The MRA permits a fund, under certain circumstances including an event of default (such as bankruptcy or insolvency), to offset payables and/or receivables with collateral held by and/or posted to the counterparty. As a result, one single net payment is created. Bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of the MRA counterparty’s bankruptcy or insolvency. Based on the terms of the MRA, a fund receives securities as collateral with a market value in excess of the repurchase price at maturity. Upon a bankruptcy or insolvency of the MRA counterparty, a fund would recognize a liability with respect to such excess collateral. The liability reflects a fund’s obligation under bankruptcy law to return the excess to the counterparty.

5. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

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

For such services, the Fund pays the Manager a monthly fee at an annual rate equal to the following percentages of the average daily value of the Fund’s net assets.

Average Daily Net Assets	Investment Advisory Fee
First $1 Billion		0.500	%
$1 Billion — $2 Billion		0.450
$2 Billion — $3 Billion		0.400
$3 Billion — $4 Billion		0.375
$4 Billion — $7 Billion		0.350
$7 Billion — $10 Billion		0.325
$10 Billion — $15 Billion		0.300
Greater than $15 Billion		0.290

Distribution Fees: The Company, on behalf of the Fund, entered into a Distribution Agreement with BlackRock Investments, LLC (“BRIL”), an affiliate of the Manager.

Transfer Agent: On behalf of the Fund, the Manager entered into agreements with insurance companies and other financial intermediaries (“Service Organizations”), some of which may be affiliates. Pursuant to these agreements, the Service Organizations provide the Fund with administrative, networking, recordkeeping,sub-transfer agency and shareholder services tosub-accounts they service. For these services, the Service Organizations receive an annual fee per shareholder account, which will vary depending on share class and/or net assets of Fund shareholders serviced by the Service Organizations which is shown as transfer agent in the Statement of Operations. For the year ended December 31, 2018, the Fund did not pay any amounts to affiliates in return for these services.

Expense Limitations, Waivers and Reimbursements: The Manager voluntarily agreed to waive a portion of the investment advisory fees to enable the Fund to maintain minimum levels of daily net investment income. The Manager may discontinue this waiver and/or reimbursement at any time without notice. For the year ended December 31, 2018, there were no fees waived and/or reimbursed by the Manager.

For the year ended December 31, 2018, the Fund reimbursed the Manager $1,578 for certain accounting services, which is included in accounting services in the Statement of Operations.

With respect to the 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 the Fund’s business (“expense limitation”), to 0.30% of average daily net assets of Class I Shares. The Manager has agreed not to reduce or discontinue this contractual expense limitation through April 30, 2021, unless approved by the Board, including a majority of the directors who are not “interested persons” of the Fund, as defined in the 1940 Act (“Independent Directors”), or by a vote of a majority of the outstanding voting securities of the Fund. For the year ended December 31, 2018, the Manager waived $509,348 and reimbursed $105,855, which is shown as fees waived and/or reimbursed by the Manager and transfer agent fees waived and/or reimbursed, respectively, in the Statement of Operations.

The Fund has begun to incur expenses in connection with a proposed realignment and consolidation of the boards of directors of certain BlackRock-advised funds, including the Fund. The Manager has voluntarily agreed to reimburse the Fund for all or a portion of such expenses, which amounts are included in fees waived and/or reimbursed by the Manager in the Statement of Operations. For the year ended December 31, 2018, the amount reimbursed was $13,121.

Directors and Officers: Certain directors and/or officers of the Company are directors and/or officers of BlackRock or its affiliates. The Fund reimburses the Manager for a portion of the compensation paid to the Company’s Chief Compliance Officer, which is included in Directors and Officer in the Statement of Operations.

6. INCOME TAX INFORMATION

It is the 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.

The 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 the Fund’s U.S. federal tax returns generally remains open for each of the four years ended December 31, 2018. The statutes of limitations on the Fund’s state and local tax returns may remain open for an additional year depending upon the jurisdiction.

12 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

Management has analyzed tax laws and regulations and their application to the Fund 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 Fund’s financial statements.

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

Paid-in capital	$	(8,227	)
Accumulated earnings		8,227

The tax character of distributions paid was as follows:

	12/31/2018		12/31/2017
Ordinary income	$	2,388,212	$	915,604
Long term capital gains		—		321
	$	2,388,212	$	915,925

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

Undistributed ordinary income $ 14,720

7. PRINCIPAL RISKS

In the normal course of business, the Fund invests in securities or other instruments and may enter into certain transactions, and such activities subject the 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. The Fund’s prospectus provides details of the risks to which the Fund is subject.

Counterparty Credit Risk: The Fund 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 Fund manages 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 Fund to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Fund’s exposure to market, issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Statement of Assets and Liabilities, less any collateral held by the Fund.

8. CAPITAL SHARE TRANSACTIONS

Transactions in capital shares were as follows:

	Year Ended 12/31/2018						Year Ended 12/31/2017
	Shares			Amount			Shares			Amount
Class I
Shares sold		163,742,133		$	163,742,133			110,014,964		$	110,014,964
Shares issued in reinvestment of distributions		2,388,212			2,388,212			916,673			916,673
Shares redeemed		(178,847,247	)		(178,847,247	)		(126,795,881	)		(126,795,881	)
Shares issued in reorganization		76,492,521			76,491,419			—			—
Net increase (decrease)		63,775,619		$	63,774,517			(15,864,244	)	$	(15,864,244	)

9. 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 Fund has adopted the amendments pertinent to RegulationS-X in this shareholder report. The amendments impacted certain disclosure presentation on the Statement of Assets and Liabilities, Statements of Changes in Net Assets and Notes to the Financial Statements.

Prior year distribution information 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
Class I	$	(915,448	)	$	(477	)

10. SUBSEQUENT EVENTS

Management has evaluated the impact of all subsequent events on the Fund 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.

NOTESTO FINANCIAL STATEMENTS 13

Report of Independent Registered Public Accounting Firm

To the Shareholders of BlackRock Government Money Market V.I. Fund and the Board of Directors of BlackRock Variable Series Funds, Inc.:

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying statement of assets and liabilities of BlackRock Government Money Market V.I. Fund of BlackRock Variable Series Funds, Inc. (the “Fund”), including the schedule of investments, as of December 31, 2018, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of December 31, 2018, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s 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 Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its 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 Fund’s 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 15, 2019

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

14 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Glossary of Terms Used in this Report

Currency
USD	United States Dollar
Portfolio Abbreviations
LIBOR	London Interbank Offered Rate

GLOSSARYOF TERMS USEDINTHIS REPORT 15

DECEMBER 31, 2018

ANNUAL REPORT

BlackRock Variable Series Funds, Inc.

^Ø  BlackRock International V.I. Fund

Not FDIC Insured • May Lose Value • No Bank Guarantee

Fund Summary  as of December 31, 2018 BlackRock International V.I. Fund

Investment Objective

BlackRock International V.I. Fund’s (the “Fund”) investment objective is long-term capital growth.

Portfolio Management Commentary

How did the Fund perform?

For the12-month period ended December 31, 2018, the Fund underperformed its benchmark, the MSCI All Country World (ACWI) ex-USA Index.

What factors influenced performance?

From a sector perspective, negative stock selection in the consumer staples sector detracted the most from the Fund’s performance during the period, particularly within the tobacco industry. Negative stock selection in the reconstituted communication services sector, specifically interactive home entertainment, also detracted. The largest individual detractors included U.K. tobacco company British American Tobacco PLC, Canadian aerospace manufacturer Bombardier Inc., and Chinese interactiveonline-game specialist NetEase, Inc. British American in particular performed poorly as investors have become less certain about the long-term value of tobacco businesses more broadly.

By contrast, positive stock selection in the consumer discretionary sector, particularly in consumer electronics, was the primary contributor to the Fund’s relative performance for the period. Positive stock selection in financials, such as banks, also contributed, as did the Fund’s cash allocation. The most significant individual contributor to performance was Japanese consumer discretionary company Sony Corp., which continued to deliver strong fundamental business performance that exceeded expectations. Other notable individual contributors were Brazil’s Itau Unibanco Holding S.A. and India’s ICICI Bank Ltd.

Describe recent portfolio activity.

The largest change to the Fund’s positioning in the period was a decrease in exposure to consumer staples, moving from significantly overweight to modestly underweight as all three tobacco positions were sold during the period. In contrast, the Fund increased its positioning in the materials sector from meaningfully underweight to modestly overweight following the purchase of two new chemicals companies. The Fund’s real estate exposure also increased, moving from meaningfully underweight to meaningfully overweight after the purchase of a data-center focused real estate investment trust and a Japanese real estate developer.

Describe portfolio positioning at period end.

As of period end, the Fund’s largest sector overweight positions were to real estate, materials and utilities. The largest underweight exposures were to industrials, energy and consumer staples. On a regional basis, the largest overweight exposures were to the United States, China and France, while the largest underweight allocations were to Japan, Australia and the United Kingdom.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions.

These views are not intended to be a forecast of future events and are no guarantee of future results.

Portfolio Information

GEOGRAPHIC ALLOCATION

Country	Percent of Net Assets
France		13	%
China		13
Japan		12
Switzerland		7
Spain		7
United States		7
Netherlands		6
United Kingdom		6
Mexico		5
Canada		4
India		3
Italy		3
Germany		3
Russia		3
Thailand		2
Luxembourg		2
Portugal		1
Short-Term Securities		3
Liabilities in Excess of Other Assets		—	(a)

^(a) Representing less than 1% of the Fund’s net assets.

2 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Fund Summary  as of December 31, 2018 (continued) BlackRock International V.I. Fund

TOTAL RETURN BASED ON A $10,000 INVESTMENT

^(a)  Assuming transaction costs, if any, and other operating expenses, including investment advisory fees. Does not include insurance-related fees and expenses.

^(b)  The Fund invests primarily in stocks of companies located outside the U.S. The Fund’s total returns prior to October 1, 2011 are the returns of the Fund when it followed different investment strategies under the name “BlackRock International Value V.I. Fund.”

^(c)  A free float-adjusted market capitalization index designed to measure the combined equity market performance of developed and emerging countries, excluding the United States.

Performance Summary for the Period Ended December 31, 2018

	6-Month Total Returns (b)			Average Annual Total Returns
				1 Year (b)			5 Years (b)			10 Years (b)
Class I(a)		(17.21	)%		(21.82	)%		(1.05	)%		4.82	%
MSCI ACWI ex-USA Index		(10.84	)		(14.20	)		0 .68			6.57

^(a)  Average annual and cumulative total returns are based on changes in net asset value (“NAV”) for the periods shown, and assume reinvestment of all distributions at NAV on the ex-dividend date. Insurance-related fees and expenses are not reflected in these returns. The Fund’s total returns prior to October 1, 2011 are the returns of the Fund when it followed different investment strategies under the name “BlackRock International Value V.I. Fund.”

^(b)  For a portion of the period, the Fund’s investment adviser waived a portion of its fee. Without such waiver, the Fund’s performance would have been lower.

Past performance is not indicative of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

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

Expense Example

	Actual						Hypothetical (a)
	Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Annualized Expense Ratio
Class I	$	1,000.00	$	827.90	$	4.98	$	1,000.00	$	1,019.76	$	5.50		1.08	%

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

^(b)  Expenses are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period shown).

See “Disclosure of Expenses” on the following page for further information on how expenses were calculated.

FUND SUMMARY 3

Disclosure of Expenses BlackRock International V.I. Fund

Shareholders of the Fund may incur the following charges: (a) transactional expenses; 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 example on the previous page (which is based on a hypothetical investment of $1,000 invested on July 1,2018 and held through December 31, 2018) is intended to assist shareholders both in calculating expenses based on an investment in the Fund and in comparing these expenses with similar costs of investing in other mutual funds.

The expense example provides 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 share class under the heading entitled “Expenses Paid During the Period.”

The expense example also provides information about hypothetical account values and hypothetical expenses based on the 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 the Fund and other funds, compare the 5% hypothetical example with the 5% hypothetical example that appears in shareholder reports of other funds.

The expenses shown in the expense example are intended to highlight shareholders’ ongoing costs only and do not reflect any transactional expenses, such as sales charges, if any. Therefore, the hypothetical example is 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.

4 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments December 31, 2018 BlackRock International V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Common Stocks — 97.1%
Canada — 4.3%
Suncor Energy, Inc.		127,703	$	3,566,742
China — 13.0%
Baidu, Inc., ADR(a)		20,355		3,228,303
Bank of China Ltd., Class H		4,960,000		2,138,268
China Molybdenum Co. Ltd., Class H		4,548,000		1,674,818
Ping An Insurance Group Co. of China Ltd., Class H		413,500		3,647,904
				10,689,293
France — 13.3%
Arkema SA		35,858		3,078,345
AXA SA		139,660		3,014,129
Engie SA		337,058		4,842,828
				10,935,302
Germany — 2.8%
Knorr-Bremse AG(a)		25,616		2,307,460
India — 3.2%
ICICI Bank Ltd.		500,242		2,581,309
Italy — 3.0%
Intesa Sanpaolo SpA		1,087,945		2,422,443
Japan — 11.8%
Mitsui Fudosan Co. Ltd.		110,400		2,452,194
Omron Corp.		79,300		2,874,775
Sony Corp.		53,200		2,564,752
Trend Micro, Inc.		33,900		1,831,805
				9,723,526
Luxembourg — 1.6%
SES SA, FDR		66,966		1,282,139
Mexico — 4.6%
Fomento Economico Mexicano SAB de CV		434,456		3,735,768
Netherlands — 6.1%
ASML Holding NV		7,850		1,229,778
Koninklijke DSM NV		47,068		3,818,427
				5,048,205
Portugal — 1.5%
Banco Comercial Portugues SA, Class R(a)		4,757,929		1,251,477
Russia — 2.6%
Sberbank of Russia PJSC, ADR		196,888		2,156,154
Spain — 7.1%
Banco Bilbao Vizcaya Argentaria SA		545,912		2,899,785
Industria de Diseno Textil SA		114,285		2,917,090
				5,816,875
Switzerland — 7.4%
Cie Financiere Richemont SA (Registered)		27,170		1,752,129
Roche Holding AG		17,466		4,336,089
				6,088,218
Thailand — 2.0%
Sea Ltd., ADR(a)(b)		141,604		1,602,957
United Kingdom — 5.9%
Associated British Foods plc		90,785		2,366,179
Burberry Group plc		114,457		2,513,364
				4,879,543

Security	Shares				Value
United States — 6.9%
BioMarin Pharmaceutical, Inc.(a)			27,015		$	2,300,327
Equinix, Inc.			9,617			3,390,570
						5,690,897
Total Common Stocks — 97.1% (Cost: $88,625,254)						79,778,308
Total Long-Term Investments — 97.1% (Cost: $88,625,254)						79,778,308
Short-Term Securities — 3.3%
Money Market Funds — 3.3%(c)(f)
BlackRock Liquidity Funds, T-Fund, Institutional Class, 2.32%			2,487,119			2,487,119
SL Liquidity Series, LLC, Money Market Series, 2.57%(d)			239,214			239,190
Total Money Market Funds — 3.3% (Cost: $2,726,309)						2,726,309
	Par (000)
Time Deposits — 0.0%
Canada — 0.0%
Royal Bank Of Canada, 0.84%, 01/02/19		CAD	39			28,644
Norway — 0.0%
Brown Brothers Harriman & Co., 0.24%, 01/02/19		NOK	—	(e)		1
South Africa — 0.0%
Brown Brothers Harriman & Co., 4.84%, 01/02/19		ZAR	—	(e)		—
Switzerland — 0.0%
Brown Brothers Harriman & Co., (1.46)%, 01/03/19		CHF	—	(e)		15
United Kingdom — 0.0%
Brown Brothers Harriman & Co., 0.37%, 01/02/19		GBP	—	(e)		1
Total Time Deposits — 0.0% (Cost: $28,661)						28,661
Total Short-Term Securities — 3.3% (Cost: $2,754,970)						2,754,970
Total Investments — 100.4% (Cost: $91,380,224)						82,533,278
Liabilities in Excess of Other Assets — (0.4)%						(300,490	)
Net Assets — 100.0%					$	82,232,788

^(a)  Non-income producing security.

^(b) Security, or a portion of the security, is on loan.

^(c)  Annualized 7-day yield as of period end.

^(d)  Security was purchased with the cash collateral from loaned securities.

^(e)  Amount is less than $500.

SCHEDULE OF INVESTMENTS 5

Schedule of Investments  (continued) December 31, 2018 BlackRock International V.I. Fund

^(f)  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, 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		3,135,204		(648,085	)		2,487,119	$	2,487,119	$	55,135		$	—		$	—
SL Liquidity Series, LLC, Money Market Series		6,216,364		(5,977,150	)		239,214		239,190		14,652	(b)		(335	)		274
								$	2,726,309	$	69,787		$	(335	)	$	274

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

^(b)  Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.

For Fund compliance purposes, the Fund’s industry classifications refer to one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment advisor. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

Fair Value Hierarchy as of Period End

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

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

	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Long-Term Investments
Common Stocks:
Canada	$	3,566,742	$	—	$	—	$	3,566,742
China		3,228,303		7,460,990		—		10,689,293
France		—		10,935,302		—		10,935,302
Germany		2,307,460		—		—		2,307,460
India		—		2,581,309		—		2,581,309
Italy		—		2,422,443		—		2,422,443
Japan		—		9,723,526		—		9,723,526
Luxembourg		—		1,282,139		—		1,282,139
Mexico		3,735,768		—		—		3,735,768
Netherlands		—		5,048,205		—		5,048,205
Portugal		—		1,251,477		—		1,251,477
Russia		—		2,156,154		—		2,156,154
Spain		—		5,816,875		—		5,816,875
Switzerland		—		6,088,218		—		6,088,218
Thailand		1,602,957		—		—		1,602,957
United Kingdom		—		4,879,543		—		4,879,543
United States		5,690,897		—		—		5,690,897
Short-Term Securities:
Money Market Funds		2,487,119		—		—		2,487,119
Time Deposits		—		28,661		—		28,661
Subtotal	$	22,619,246	$	59,674,842	$	—	$	82,294,088
Investments valued at NAV(a)								239,190
Total Investments							$	82,533,278

^(a)  As of December 31, 2018, certain investments of the Fund were fair valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

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

See notes to financial statements.

6 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Statement of Assets and Liabilities

December 31, 2018

	BlackRock International V.I. Fund
ASSETS
Investments at value — unaffiliated (including securities loaned at value of $235,456) (cost — $88,653,915)	$	79,806,969
Investments at value — affiliated (cost — $2,726,309)		2,726,309
Foreign currency at value (cost — $154)		18
Receivables:
Securities lending income — affiliated		268
Capital shares sold		168,374
Dividends — affiliated		7,103
Dividends — unaffiliated		166,163
Prepaid expenses		97
Total assets		82,875,301
LIABILITIES
Bank overdraft		419
Cash collateral on securities loaned at value		241,690
Payables:
Capital shares redeemed		29,507
Deferred foreign capital gain tax		51,486
Printing fees		30,408
Professional fees		79,251
Transfer agent fees		97,926
Board realignment and consolidation		8,811
Investment advisory fees		53,799
Directors’ and Officer’s fees		5,269
Other affiliates		269
Other accrued expenses		43,678
Total liabilities		642,513
NET ASSETS	$	82,232,788
NET ASSETS CONSIST OF
Paid-in capital	$	93,857,758
Accumulated loss		(11,624,970	)
NET ASSETS	$	82,232,788
Class I — Based on net assets of $82,232,788 and 8,937,413 shares outstanding, 100 million shares authorized, $0.10 par value.	$	9.20

See notes to financial statements.

FINANCIAL STATEMENTS 7

Statement of Operations

Year Ended December 31, 2018

	BlackRock International V.I. Fund
INVESTMENT INCOME
Dividends — affiliated	$	55,135
Dividends — unaffiliated(a)		2,865,109
Securities lending income — affiliated — net		14,652
Foreign taxes withheld		(252,171	)
Total investment income		2,682,725
EXPENSES
Investment advisory		789,770
Transfer agent		224,619
Professional		105,167
Accounting services		45,300
Custodian		44,492
Directors and Officer		18,813
Printing		14,676
Board realignment and consolidation		8,874
Miscellaneous		10,490
Total expenses		1,262,201
Less:
Fees waived and/or reimbursed by the Manager		(2,508	)
Transfer agent fees waived and/or reimbursed		(135,519	)
Total expenses after fees waived and/or reimbursed		1,124,174
Net investment income		1,558,551
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — affiliated		(335	)
Investments — unaffiliated (net of $19 foreign capital gain tax)		38,448
Foreign currency transactions		(27,768	)
		10,345
Net change in unrealized appreciation (depreciation) on:
Investments — affiliated		274
Investments — unaffiliated (net of $74,084 foreign capital gain tax)		(25,215,127	)
Foreign currency translations		(4,166	)
		(25,219,019	)
Net realized and unrealized loss		(25,208,674	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(23,650,123	)

^(a)  Includes non-recurring dividends in the amount of $330,186.

See notes to financial statements.

8 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Statement of Changes in Net Assets

	BlackRock International V.I. Fund
	Year Ended December 31,
	2018			2017
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income	$	1,558,551		$	1,434,265
Net realized gain		10,345			9,173,925
Net change in unrealized appreciation (depreciation)		(25,219,019	)		17,210,656
Net increase (decrease) in net assets resulting from operations		(23,650,123	)		27,818,846
DISTRIBUTIONS TO SHAREHOLDERS(a)(b)
Decrease in net assets resulting from distributions to shareholders		(5,532,493	)		—
CAPITAL SHARE TRANSACTIONS
Shares sold		7,398,984			8,733,286
Shares issued in reinvestment of distributions		5,532,493			—
Shares redeemed		(16,948,689	)		(17,320,222	)
Net decrease in net assets derived from capital share transactions		(4,017,212	)		(8,586,936	)
NET ASSETS(b)
Total increase (decrease) in net assets		(33,199,828	)		19,231,910
Beginning of year		115,432,616			96,200,706
End of year	$	82,232,788		$	115,432,616

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

^(b)  Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 11 for this prior year information.

See notes to financial statements.

FINANCIAL STATEMENTS 9

Financial Highlights

(For a share outstanding throughout each period)

	BlackRock International V.I. Fund
	Class I
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	12.56		$	9.58		$	9.71		$	10.10		$	10.87
Net investment income(a)		0.17	(b)		0.15			0.15			0.14			0.13
Net realized and unrealized gain (loss)		(2.88	)		2.83			(0.11	)		(0.42	)		(0.69	)
Net increase (decrease) from investment operations		(2.71	)		2.98			0.04			(0.28	)		(0.56	)
Distributions(c)
From net investment income		(0.32	)		—			(0.17	)		(0.11	)		(0.21	)
From net realized gain		(0.33	)		—			—			—			—
From return of capital		—			—			(0.00	)(d)		—			—
Total distributions		(0.65	)		—			(0.17	)		(0.11	)		(0.21	)
Net asset value, end of year	$	9.20		$	12.56		$	9.58		$	9.71		$	10.10
Total Return(e)
Based on net asset value		(21.82	)%		31.11	%		0.39	%		(2.76	)%		(5.19	)%
Ratios to Average Net Assets(f)
Total expenses		1.20	%		1.24	%		1.15	%		1.09	%		1.11	%
Total expenses after fees waived and/or reimbursed		1.07	%		1.11	%		1.04	%		0.98	%		0.99	%
Net investment income		1.48	%(b)		1.37	%		1.57	%		1.35	%		1.21	%
Supplemental Data
Net assets, end of year (000)	$	82,233		$	115,433		$	96,201		$	107,942		$	125,144
Portfolio turnover rate		100	%		103	%		82	%		112	%		129	%

^(a) Based on average shares outstanding.

^(b)  Net investment income per share and the ratio of net investment income to average net assets includes $0.04 per share and 0.31%, respectively, resulting from non-recurring dividends.

^(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, excludes insurance-related fees and expenses and assumes the reinvestment of distributions.

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

	Year Ended December 31,
	2018			2017			2016			2015			2014
Investments in underlying funds		0.01	%		0.01	%		—	%		—	%		—	%

See notes to financial statements.

10 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements

1. ORGANIZATION

BlackRock Variable Series Funds, Inc. (the “Company”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as anopen-end management investment company. The Company is organized as a Maryland corporation that is comprised of 15 separate portfolios. The funds offer shares to insurance companies for their separate accounts to fund benefits under certain variable annuity and variable life insurance contracts. The financial statements presented are for BlackRock International V.I. Fund (the “Fund”). The Fund is classified as diversified.

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

2. SIGNIFICANT ACCOUNTING POLICIES

The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. The 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 and is recorded on theex-dividend date. Dividends from foreign securities where theex-dividend date may have passed are subsequently recorded when the Fund is 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.

Foreign Currency Translation: The 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.

The 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 Statement 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. The 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.

Distributions: Distributions paid by the Fund are recorded on theex-dividend date. Distributions of capital gains are recorded on theex-dividend date and made at least annually. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP.

Recent Accounting Standards: 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 Fund.

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

Other: Expenses directly related to the Fund are charged to the Fund. 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.

The Fund has an arrangement with its custodian whereby credits are earned on uninvested cash balances, which could be used to reduce custody fees and/or overdraft charges. The Fund may incur charges on certain uninvested cash balances and overdrafts, subject to certain conditions.

3. INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS

Investment Valuation Policies: The Fund’s 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 Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Fund determines the fair values of its financial instruments using various independent dealers or pricing services under policies approved by the Board of Directors of the Company (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.

NOTESTO FINANCIAL STATEMENTS 11

Notes to Financial Statements  (continued)

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

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

• Generally, trading in foreign instruments is substantially completed each day at various times prior to the close of trading on the NYSE. Occasionally, events affecting the values of such instruments may occur between the foreign market close and the close of trading on the NYSE that may not be reflected in the computation of the Fund’s net assets. Each business day, the Fund uses a pricing service to assist with the valuation of certain foreign exchange-traded equity securities and foreign exchange-traded andover-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 net asset value (“NAV”) each business day.

• The Fund values its investment in SL Liquidity Series, LLC, Money Market Series (the “Money Market Series”) at fair value, which is ordinarily based upon its pro rata ownership in the underlying fund’s net assets. The Money Market Series seeks current income consistent with maintaining liquidity and preserving capital. Although the Money Market Series is not registered under the 1940 Act, its investments may follow the parameters of investments by a money market fund that is subject to Rule2a-7 under the 1940 Act.

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

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 the Fund has the ability to access

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

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

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 privately held companies or funds. 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 the 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 is based on the pricing transparency of the investments and is not necessarily an indication of the risks associated with investing in those securities.

As of December 31, 2018, certain investments of the Fund were valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

4. SECURITIES AND OTHER INVESTMENTS

Securities Lending: The Fund may lend its securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received by the Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current market value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Fund and any additional required collateral is delivered to the Fund, or excess collateral returned by the Fund, on the next business day. During the term of the loan, the Fund is entitled to all distributions made on or in respect of the loaned

12 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

securities, but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.

The market value of any securities on loan, all of which were classified as common stocks in the Fund’s Schedule of Investments, and the value of any related collateral are shown separately in the Statement of Assets and Liabilities as a component of investments at value – unaffiliated, and collateral on securities loaned at value, respectively. As of period end, any securities on loan were collateralized by cash and/or U.S. Government obligations. Cash collateral invested by the securities lending agent, BlackRock Investment Management, LLC (“BIM”), if any, is disclosed in the Schedule of Investments.

Securities lending transactions are entered into by the Fund under Master Securities Lending Agreements (each, an “MSLA”), which provide the right, in the event of default (including bankruptcy or insolvency), for thenon-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, the Fund, as lender, would offset the market value of the collateral received against the market value of the securities loaned. When the value of the collateral is greater than that of the market value of the securities loaned, the lender is left with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, absent an event of default, the borrower can resell orre-pledge the loaned securities, and the Fund can reinvest cash collateral received in connection with loaned securities. Upon an event of default, the parties’ obligations to return the securities or collateral to the other party are extinguished, and the parties can resell orre-pledge the loaned securities or the collateral received in connection with the loaned securities in order to satisfy the defaulting party’s net payment obligation for all transactions under the MSLA. The defaulting party remains liable for any deficiency.

As of period end, the following table is a summary of the Fund’s securities lending agreements by counterparty which are subject to offset under an MSLA:

Counterparty	Securities Loaned at Value		Cash Collateral Received (a)			Net Amount
JP Morgan Securities LLC	$	235,456	$	(235,456	)	$	—

^(a)  Cash collateral with a value of $ 241,690 has been received in connection with securities lending agreements. Collateral received in excess of the value of securities loaned from the individual counterparty, if any, is not shown for financial reporting purposes in the table above.

The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Fund benefits from a borrower default indemnity provided by BIM. BIM’s indemnity allows for full replacement of the securities loaned if the collateral received does not cover the value on the securities loaned in the event of borrower default. The Fund could incur a loss if the value of an investment purchased with cash collateral falls below the market value of loaned securities or if the value of an investment purchased with cash collateral falls below the value of the original cash collateral received.

5. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

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

For such services, the Fund pays the Manager a monthly fee at an annual rate equal to the following percentages of the average daily value of the Fund’s net assets:

Average Daily Net Assets	Investment Advisory Fees
First $1 Billion		0.75	%
$1 Billion — $3 Billion		0.71
$3 Billion — $5 Billion		0.68
$5 Billion — $10 Billion		0.65
Greater than $10 Billion		0.64

With respect to the Fund, the Manager entered into asub-advisory agreement with BlackRock International Limited (“BIL”), an affiliate of the Manager. The Manager pays BIL, for services it provides, a monthly fee that is a percentage of the investment advisory fees paid by the Fund to the Manager.

Distribution Fees: The Company, on behalf of the Fund, entered into a Distribution Agreement and a Distribution Plan with BlackRock Investments, LLC (“BRIL”), an affiliate of the Manager. Pursuant to the Distribution Plan and in accordance with Rule12b-1 under the 1940 Act, the Fund pays BRIL ongoing service and distribution fees. The fees are accrued daily and paid monthly at annual rates based upon the average daily net assets of the relevant share class of the Fund. For the year ended December 31, 2018 the Fund had no distribution fees.

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

Transfer Agent: On behalf of the Fund, the Manager entered into agreements with insurance companies and other financial intermediaries (“Service Organizations”), some of which may be affiliates. Pursuant to these agreements, the Service Organizations provide the Fund with administrative, networking, recordkeeping,sub-transfer agency and shareholder services tosub-accounts they service. For these services, the Service Organizations receive an annual fee per shareholder account, which will vary depending on share class and/or net assets of Fund shareholders serviced by the Service Organizations which is shown as transfer agent. For the year ended December 31, 2018, the Fund did not pay any amounts to affiliates in return for these services.

NOTESTO FINANCIAL STATEMENTS 13

Notes to Financial Statements  (continued)

In addition, the Fund pays the transfer agent, which is not an affiliate, a fee for the issuance, transfer and redemption of shares and the opening and maintenance of shareholder accounts, which is included in transfer agent in the Statement of Operations. For the year ended December 31, 2018, the Fund had no class specific transfer agent fees.

Expense Limitations, Waivers and Reimbursements: With respect to the Fund, the Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees the 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. This amount is included in fees waived and/or reimbursed by the Manager in the Statement of Operations. For the year ended December 31, 2018, the amount waived was $2,508.

The Manager has contractually agreed to waive its investment advisory fee with respect to any portion of the 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. The contractual agreement may be terminated upon 90 days’ notice by a majority of the directors who are not “interested persons” of the Fund, as defined in the 1940 Act (“Independent Directors”), or by a vote of a majority of the outstanding voting securities of the Fund. For the year ended December 31, 2018, there were no fees waived by the Manager pursuant to this arrangement .

For the year ended December 31, 2018, the Fund reimbursed the Manager $1,202 for certain accounting services, which is included in accounting services in the Statement of Operations.

The Manager contractually agreed to reimburse transfer agent fees in order to limit such expenses at 0.08% of average daily net assets. The Manager has agreed not to reduce or discontinue this contractual expense limitation through April 30, 2019, unless approved by the Board, including a majority of the Independent Directors, or by a vote of a majority of the outstanding voting securities of the Fund. This amount is shown as transfer agent fees waived and/or reimbursed — class specific in the Statement of Operations. For the year ended December 31, 2018, class specific waivers and/or reimbursements were $135,519.

With respect to the 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 the Fund’s business (“expense limitation”). The expense limitation as a percentage of average daily net assets is 1.25% for Class I.

The Manager has agreed not to reduce or discontinue this contractual expense limitation through April 30, 2019, unless approved by the Board, including a majority of the Independent Directors, or by a vote of a majority of the outstanding voting securities of the Fund. For the year ended December 31, 2018, there were no fees waived and/or reimbursed by the Manager.

Securities Lending:The U.S. Securities and Exchange Commission (“SEC”) has issued an exemptive order which permits BIM, an affiliate of the Manager, to serve as securities lending agent for the Fund, subject to applicable conditions. As securities lending agent, BIM bears all operational costs directly related to securities lending. The Fund is responsible for expenses in connection with the investment of cash collateral received for securities on loan (the “collateral investment expenses”). The cash collateral is invested in a private investment company managed by the Manager or its affiliates. However, BIM has agreed to cap the collateral investment expenses of the private investment company to an annual rate of 0.04%. The investment adviser to the private investment company will not charge any advisory fees with respect to shares purchased by the Fund. The private investment company in which the cash collateral has been invested may, under certain circumstances, impose a liquidity fee of up to 2% of the value withdrawn or temporarily restrict withdrawals for up to 10 business days during a 90 day period, in the event that the private investment company’s weekly liquid assets fall below certain thresholds.

Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment expenses. The Fund retains a portion of securities lending income and remits a remaining portion to BIM as compensation for its services as securities lending agent.

Pursuant to a securities lending agreement, the Fund retains 80% of securities lending income, and this amount retained can never be less than 70% of the total of securities lending income plus the collateral investment expenses.

In addition, commencing the business day following the date that the aggregate securities lending income earned across the Equity-Bond Complex in a calendar year exceeds a specified threshold, the Fund, pursuant to the securities lending agreement, will retain for the remainder of that calendar year securities lending income in an amount equal to 85% of securities lending income, and this amount retained can never be less than 70% of the total of securities lending income plus the collateral investment expenses.

The share of securities lending income earned by the Fund is shown as securities lending income — affiliated — net in the Statement of Operations. For the year ended December 31, 2018, the Fund paid BIM $3,288 for securities lending agent services.

Interfund Lending: In accordance with an exemptive order (the “Order”) from the SEC, the 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 the Fund’s investment policies and restrictions. The 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.

14 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

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

Directors and Officers: Certain directors and/or officers of the Company are directors and/or officers of BlackRock or its affiliates. The Fund reimburses the Manager for a portion of the compensation paid to the Company’s Chief Compliance Officer, which is included in Directors and Officer in the Statement of Operations.

6. PURCHASES AND SALES

For the year ended December 31, 2018, purchases and sales of investments, and excluding short-term securities, were $101,447,471 and $108,911,204, respectively.

7. INCOME TAX INFORMATION

It is the 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.

The 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 the Fund’s U.S. federal tax returns generally remains open for each of the four years ended December 31, 2018. The statutes of limitations on the 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 Fund 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 Fund’s financial statements.

The tax character of distributions paid was as follows:

	12/31/2018		12/31/2017
Ordinary income	$	2,774,782	$	—
Long-term capital gains		2,757,711		—
	$	5,532,493	$	—

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

Undistributed ordinary income	$	51,998
Net unrealized losses(a)		(8,938,009	)
Qualified late-year losses(b)		(2,738,959	)
	$	(11,624,970	)

^(a)  The difference between book-basis and tax-basis net unrealized gains was attributable primarily to the tax deferral of losses on wash sales 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.

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

Tax cost	$	91,424,028
Gross unrealized appreciation	$	1,885,822
Gross unrealized depreciation		(10,776,572	)
Net unrealized depreciation	$	(8,890,750	)

8. BANK BORROWINGS

The Company, on behalf of the Fund, 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 Fund may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Fund, 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. Prior to April 19, 2018, the aggregate commitment amount was $2.1 billion and the fee was 0.12% per annum. 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 Statement 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 Fund did not borrow under the credit agreement.

9. PRINCIPAL RISKS

In the normal course of business, the Fund invests in securities or other instruments and may enter into certain transactions, and such activities subject the 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. The Fund’s prospectus provides details of the risks to which the Fund is subject.

NOTESTO FINANCIAL STATEMENTS 15

Notes to Financial Statements  (continued)

The Fund may be exposed to additional risks when reinvesting cash collateral in money market funds that do not seek to maintain a stable NAV per share of $1.00, which may be subject to redemption gates or liquidity fees under certain circumstances.

Valuation Risk: The market values of equities, such as common stocks and preferred securities or equity related investments, such as futures and options, may decline due to general market conditions which are not specifically related to a particular company. They may also decline due to factors which affect a particular industry or industries. The Fund may invest in illiquid investments and may experience difficulty in selling those investments in a timely manner at the price that it believes the investments are worth. Prices may fluctuate widely over short or extended periods in response to company, market or economic news. Markets also tend to move in cycles, with periods of rising and falling prices. This volatility may cause the 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 the Fund may lose value, regardless of the individual results of the securities and other instruments in which the Fund invests.

Counterparty Credit Risk: The Fund 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 Fund manages 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 Fund to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Fund’s exposure to market, issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Statement of Assets and Liabilities, less any collateral held by the Fund.

Concentration Risk: As of period end, the Fund invested a significant portion of its assets in securities in the financials sector. Changes in economic conditions affecting such sector would have a greater impact on the Fund and could affect the value, income and/or liquidity of positions in such securities.

The Fund invests a substantial amount of its assets in issuers located in a single country or a limited number of countries. When the Fund concentrates its investments in this manner, it assumes the risk that economic, political and social conditions in those countries may have a significant impact on their investment performance. Foreign issuers may not be subject to the same uniform accounting, auditing and financial reporting standards and practices as used in the United States. Foreign securities markets may also be less liquid, more volatile, and less subject to governmental supervision not typically associated with investing in U.S. securities. Investment percentages in specific countries are presented in the Schedule of Investments.

The Fund invests a significant portion of its assets in securities of issuers located in Europe or with significant exposure to European issuers or countries. The European financial markets have recently experienced volatility and adverse trends due to concerns about economic downturns in, or rising government debt levels of, several European countries. These events may spread to other countries in Europe and may affect the value and liquidity of certain of the Fund’s investments.

The United Kingdom (the “UK”) is scheduled to withdraw from the European Union in March 2019, which may introduce significant new uncertainties and instability in the financial markets across Europe.

The Fund invest a significant portion of its assets in securities of issuers located in Asia or with significant exposure to Asian issuers or countries. The Asian financial markets have recently experienced volatility and adverse trends due to concerns in several Asian countries regarding monetary policy, government intervention in the markets, rising government debt levels or economic downturns. These events may spread to other countries in Asia and may affect the value and liquidity of certain of the Fund’s investments.

10. CAPITAL SHARE TRANSACTIONS

Transactions in capital shares were as follows:

	Year Ended 12/31/2018						Year Ended 12/31/2017
	Shares			Amount			Shares			Amount
Class I
Shares sold		604,450		$	7,398,984			766,286		$	8,733,286
Shares issued in reinvestment of distributions		570,051			5,532,493			—			—
Shares redeemed		(1,430,661	)		(16,948,689	)		(1,613,860	)		(17,320,222	)
Net decrease		(256,160	)	$	(4,017,212	)		(847,574	)	$	(8,586,936	)

11. 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 Fund has adopted the amendments pertinent to RegulationS-X in this shareholder report. The amendments impacted certain disclosure presentation on the Statement 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.

Undistributed net investment income as of December 31, 2017 was $1,301,053

12. SUBSEQUENT EVENTS

Management has evaluated the impact of all subsequent events on the Fund 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.

16 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Report of Independent Registered Public Accounting Firm

To the Shareholders of BlackRock International V.I. Fund and the Board of Directors of BlackRock Variable Series Funds, Inc.:

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying statement of assets and liabilities of BlackRock International V.I. Fund of BlackRock Variable Series Funds, Inc. (the “Fund”), including the schedule of investments, as of December 31, 2018, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of December 31, 2018, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s 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 Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its 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 Fund’s 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 15, 2019

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

REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 17

Glossary of Terms Used in this Report

Currency
CAD	Canadian Dollar
CHF	Swiss Franc
GBP	British Pound
NOK	Norwegian Krone
ZAR	South African Rand
Portfolio Abbreviations
ADR	American Depositary Receipt
FDR	Fixed Deposit Receipt

18 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

DECEMBER 31, 2018

ANNUAL REPORT

BlackRock Variable Series Funds, Inc.

^Ø  BlackRock International Index V.I. Fund

Not FDIC Insured • May Lose Value • No Bank Guarantee

Fund Summary  as of December 31, 2018 BlackRock International Index V.I. Fund

Investment Objective

The investment objective of theBlackRock International Index V.I. Fund (the “Fund”) is to seek to match the performance of the MSCI EAFE Index (Europe, Australasia, Far East) (the “MSCI EAFE Index” or the “Underlying Index”) in U.S. dollars with net dividends as closely as possible before the deduction of Fund expenses.

On November 14, 2017, the Board of Directors of the Company (the “Board”) and, on May 23, 2018, the Board of Trustees of State Farm Variable Product Trust each approved a reorganization of the International Equity Index Fund (the “Predecessor Fund”), with and into the Fund. At a special shareholder meeting on September 14, 2018, the shareholders of the Predecessor Fund approved the reorganization, which was completed on October 29, 2018.

Portfolio Management Commentary

How did the Fund perform?

For the 12-month period ended December 31, 2018, the Fund’s Class I Shares returned (13.70)%. The MSCI EAFE Index and the MSCI EAFE Free Index both returned (13.79)% for the same period. Both the MSCI EAFE Index and the MSCI EAFE Free Index, the benchmark for the Predecessor Fund, are free-float adjusted, market-capitalization weighted indexes designed to measure equity performance of developed markets, excluding the United States and Canada.

Describe the market environment.

In the first quarter of 2018, European equity markets fell in-line with the broader market amid increased market volatility and trade protectionism worries. From a single country standpoint, the United Kingdom detracted the most from the index’s total return. In the Eurozone, Italy contributed the highest amount to the MSCI EAFE Index’s total return out of other Eurozone members, after the Italian elections did not meaningfully impact risk-sentiment.

In Asia-Pacific, Japan contributed the most to the MSCI EAFE Index’s total return (in U.S. dollar terms) during the first quarter. However, this was due to local currency appreciation, as the yen rallied over 6% against the U.S. dollar amid a flurry of safe haven bids, and as the Bank of Japan announced a slight reduction in long-end bond purchasing. Internationally, U.S. protectionism weighed on Japanese sentiment, as fears of a slowdown in global trade weighed heavily on export sensitive names. Domestically, the Moritomo Gakuen land sale controversy resurfaced, pushing Prime Minister Abe’s approval rating to all-time lows.

Throughout the second quarter of 2018, the uncertainty stemming from U.S. trade protectionism weighed on developed market equity markets. The fluid headlines regarding the acrimonious G7 summit in Quebec, the U.S. imposition of steel and aluminum imports, and the U.S. withdrawal from the Iranian nuclear deal all increased trade war fears. Elsewhere, European fragmentation remained an important risk factor throughout the second quarter. Additionally, a stronger U.S. dollar — attributed to increased trade tensions, interest rate differentials, and favorable U.S. growth conditions — also weighed on unhedged developed market equity returns in the quarter.

From a sector standpoint, energy shares outperformed, as Brent crude remained in a high trading range throughout the second quarter. Commodities rallied approximately +13% in the quarter, as the U.S. announcement of their departure from the Iran nuclear deal and re-imposition of Iranian sanctions provided an upside surprise. Separately, shares of companies in the financial sector underperformed amid subdued European rates, uncertainty stemming from anti-eurozone populism, and regulatory concerns weighed on sentiment.

From a single country standpoint, Australia contributed the most to the index’s total return over the second quarter of 2018. Shares of the firms in the materials and energy sectors outperformed, as the country was spared from the U.S. steel and aluminum tariffs. The United Kingdom also contributed significantly to the index’s total return over the second quarter, with the energy sector in the lead. From a pure performance perspective, Israeli equities outperformed, as a large jump in shares of an Israeli multinational pharmaceutical company contributed meaningfully to the country’s equity market. Less positively, Japanese equities weighed the most on MSCI EAFE Index’s total return, as cyclicals and export sensitive names were particularly hit by U.S. protectionism headlines.

In the third quarter of 2018, risk sentiment was elevated, as steady corporate earnings and economic growth supported developed markets generally in the face of rising U.S. protectionism. In Japan, equities rallied 3.7% and added 0.9% to the MSCI EAFE Index’s total return, as a 2.5% depreciation in the yen helped export names. Switzerland provided the second largest boost to the MSCI EAFE Index, as the country rallied 6.2% and contributed +0.5% to the index’s total return. The impressive price action was the result of strength in Swiss biotech names. Elsewhere, the United Kingdom retracted the most from the MSCI EAFE Index’s total return in the third quarter, declining 1.7%, equating to a loss of 0.3% for the index. Continued Brexit uncertainty weighed on the market, influencing a-1.5% decline in sterling. Italy also weighed on the overall MSCI EAFE complex, as a rift between the populist government and the European Union regarding the country’s budget plans was a source of investor concern.

By the fourth quarter of 2018, developed markets faced considerable headwinds from tightening global financial conditions, slowing growth, and heightened macroeconomic uncertainty throughout the year. The Western European region fell 12.8% and contributed to 63% of the MSCI EAFE Index’s quarterly decline. Slowing economic activity, broad-market risk-off behavior, and political uncertainty marred the region.

In Asia-Pacific, Japan fell-14.3% in the fourth quarter of 2018. A roughly +3.5% jump in the yen against the dollar weighed on the export-orientated equity market broadly. Elsewhere, Australian equities fell-9.7% as the slowdown in China weighed on the country’s domestic growth prospects.

From a sector perspective, financials(-19.64%) had the most negative return in the MSCI EAFE Index in 2018. Decreases were seen across almost all sectors for the year (with the exception of utilities, which returned 1.60%), with notable detraction in materials(-17.17%) and consumer discretionary(-16.21%).

Describe recent portfolio activity.

During the 12-month period, as changes were made to the composition of the MSCI EAFE Index, the Fund purchased and sold securities to maintain its objective of matching the risks and return of the Underlying Index.

2 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Fund Summary  as of December 31, 2018 BlackRock International Index V.I. Fund

Describe portfolio positioning at period end.

The Fund remains positioned to match the risk characteristics of the Underlying Index, irrespective of the market’s future direction.

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.

TOTAL RETURN BASED ON A $10,000 INVESTMENT

^(a)  Assuming transaction costs, if any, and other operating expenses, including investment advisory fees. Does not include insurance-related fees and expenses.

^(b)  Under normal circumstances, the Fund invests at least 90% of its assets in securities or other financial instruments that are components of or have economic characteristics similar to the securities included in the MSCI EAFE Index.

^(c)  Both the MSCI EAFE Index and the MSCI EAFE Free Index are free-float adjusted, market-capitalization weighted indexes designed to measure equity performance of developed markets, excluding the United States and Canada.

^(d)  The MSCI EAFE Index has replaced the MSCI EAFE Free Index, which was the Predecessor Fund’s benchmark, as the Fund’s benchmark. During the 10-year period ending December 31, 2018, the total return and performance for the MSCI EAFE Index and the MSCI EAFE Free Index are identical.

Performance Summary for the Period Ended December 31, 2018

	6-Month Total Returns (b)			Average Annual Total Returns
				1 Year (b)			5 Years (b)			10 Years (b)
Class I(a)		(11.21	)%		(13.70	)%		0.32	%		5.70	%
MSCI EAFE Index		(11.35	)		(13.79	)		0.53			6.32

^(a) Average annual and cumulative total returns are based on changes in net asset value (“NAV”) for the periods shown, and assume reinvestment of all distributions at NAV on theex-dividend date. Insurance-related fees and expenses are not reflected in these returns.

^(b)  For a portion of the period, the Fund’s investment adviser waived a portion of its fee. Without such waiver, the Fund’s performance would have been lower.

On October 29, 2018, the Fund acquired all of the assets and assumed certain stated liabilities of the International Equity Index Fund (the “Predecessor Fund”), a series of State Farm Variable Product Trust, through a tax-free reorganization (the “Reorganization”). The Predecessor Fund is the performance and accounting survivor of the Reorganization; accordingly, the Fund assumed the performance and financial history of the Predecessor Fund upon completion of the Reorganization.

Past performance is not indicative of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

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

Expense Example

	Actual						Hypothetical (a)
	Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Annualized Expense Ratio
Class I	$	1,000.00	$	887.90	$	1.19	$	1,000.00	$	1,023.95	$	1.28		0.25	%

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

^(b)  Expenses are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect theone-half year period shown).

See “Disclosure of Expenses” on the following page for further information on how expenses were calculated.

FUND SUMMARY 3

Fund Summary  as of December 31, 2018 (continued) BlackRock International Index V.I. Fund

Portfolio Information

GEOGRAPHIC ALLOCATION

Country	Percent of Net Assets
Japan		24	%
United Kingdom		14
France		11
Switzerland		9
Germany		9
Australia		8
Netherlands		5
Hong Kong		3
Spain		3
Sweden		2
Italy		2
Denmark		2
Singapore		1
Finland		1
Other(a)		5
Short-Term Securities		—	(b)
Other Assets Less Liabilities		1

^(a) Includes holdings within countries that are 1% or less of net assets. Please refer to the Schedule of Investments for such countries.

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

Disclosure of Expenses

Shareholders of the Fund may incur the following charges: (a) transactional expenses; and (b) operating expenses, including investment advisory fees, service and distribution fees, including12b-1 fees, acquired fund fees and expenses, and other fund expenses. The expense example shown on the previous page (which is based on a hypothetical investment of $1,000 invested on July 1, 2018 and held through December 31, 2018) is intended to assist shareholders both in calculating expenses based on an investment in the Fund and in comparing these expenses with similar costs of investing in other mutual funds.

The expense example provides 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 share class under the heading entitled “Expenses Paid During the Period.”

The expense example also provides information about hypothetical account values and hypothetical expenses based on the 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 the Fund and other funds, compare the 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.

The expenses shown in the expense example are intended to highlight shareholders’ ongoing costs only and do not reflect any transactional expenses, such as sales charges, if any. Therefore, the hypothetical example is 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 Fund 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 Fund’s 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 the Fund can realize on an investment and/or may result in lower distributions paid to shareholders. The Fund’s investments in these instruments, if any, are discussed in detail in the Notes to Financial Statements.

4 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments December 31, 2018 BlackRock International Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Common Stocks— 98.3%
Australia— 7.6%
AGL Energy Ltd.		8,720	$	126,634
Alumina Ltd.		32,547		52,720
Amcor Ltd.		15,433		144,105
AMP Ltd.		38,804		66,986
APA Group(a)		15,688		93,973
Aristocrat Leisure Ltd.		8,116		124,936
ASX Ltd.		2,574		108,764
Aurizon Holdings Ltd.		26,460		79,830
AusNet Services		24,028		26,333
Australia & New Zealand Banking Group Ltd.		38,689		668,495
Bank of Queensland Ltd.		5,283		36,110
Bendigo & Adelaide Bank Ltd.		6,467		49,136
BHP Group Ltd.		39,702		959,640
BHP Group plc		28,567		603,650
BlueScope Steel Ltd.		7,315		56,429
Boral Ltd.		15,587		54,243
Brambles Ltd.		22,411		160,343
Caltex Australia Ltd.		3,468		62,221
Challenger Ltd.		7,310		48,872
CIMIC Group Ltd.		1,293		39,540
Coca-Cola Amatil Ltd.		6,738		38,862
Cochlear Ltd.		765		93,734
Coles Group Ltd.(b)		15,349		126,922
Commonwealth Bank of Australia		23,803		1,214,136
Computershare Ltd.		6,136		74,364
Crown Resorts Ltd.		5,035		42,079
CSL Ltd.		6,119		799,251
Dexus		13,525		101,229
Domino’s Pizza Enterprises Ltd.		795		22,774
Flight Centre Travel Group Ltd.		739		22,349
Fortescue Metals Group Ltd.		20,700		61,040
Goodman Group		21,548		161,413
GPT Group (The)		23,998		90,305
Harvey Norman Holdings Ltd.		7,026		15,639
Incitec Pivot Ltd.		22,086		51,052
Insurance Australia Group Ltd.		30,864		152,228
LendLease Group(a)		7,681		62,924
Macquarie Group Ltd.		4,407		337,559
Medibank Pvt Ltd.		36,617		66,291
Mirvac Group		49,339		77,922
National Australia Bank Ltd.		36,830		624,981
Newcrest Mining Ltd.		10,261		157,702
Oil Search Ltd.		18,232		91,835
Orica Ltd.		5,028		61,113
Origin Energy Ltd.(b)		23,388		106,687
QBE Insurance Group Ltd.		18,031		128,392
Ramsay Health Care Ltd.		1,881		76,512
REA Group Ltd.		701		36,573
Rio Tinto Ltd.		5,008		277,173
Rio Tinto plc		15,810		757,179
Santos Ltd.		23,541		90,789
Scentre Group		70,831		194,726
SEEK Ltd.		4,434		52,898
Sonic Healthcare Ltd.		5,363		83,663
South32 Ltd.		68,187		162,204
Stockland		32,369		80,301
Suncorp Group Ltd.		18,213		162,091
Sydney Airport(a)		14,680		69,610
Tabcorp Holdings Ltd.		25,426		76,869
Telstra Corp. Ltd.		55,346		111,072
TPG Telecom Ltd.		4,934		22,381
Transurban Group(a)		35,985		295,348

Security	Shares		Value
Australia (continued)
Treasury Wine Estates Ltd.		9,555	$	99,638
Vicinity Centres		43,755		80,176
Washington H Soul Pattinson & Co. Ltd.		1,455		25,516
Wesfarmers Ltd.		15,349		348,709
Westpac Banking Corp.		46,304		818,187
Woodside Petroleum Ltd.		12,801		281,973
Woolworths Group Ltd.		17,947		372,293
WorleyParsons Ltd.		4,337		34,834
				12,956,458
Austria— 0.2%
ANDRITZ AG		968		44,457
Erste Group Bank AG(b)		4,000		132,630
OMV AG		1,958		85,512
Raiffeisen Bank International AG		1,968		50,217
Verbund AG		920		39,387
voestalpine AG		1,524		45,452
				397,655
Belgium— 0.9%
Ageas		2,429		109,343
Anheuser-Busch InBev SA		10,306		678,949
Colruyt SA		799		56,986
Groupe Bruxelles Lambert SA		1,073		93,504
KBC Group NV		3,339		214,828
Proximus SADP		2,022		54,713
Solvay SA		1,058		105,802
Telenet Group Holding NV		704		32,745
UCB SA		1,681		137,298
Umicore SA		2,958		118,039
				1,602,207
Chile— 0.0%
Antofagasta plc		5,243		52,438
China— 0.2%
BeiGene Ltd., ADR(b)		441		61,855
BOC Hong Kong Holdings Ltd.		49,000		181,874
Minth Group Ltd.		10,000		32,270
Yangzijiang Shipbuilding Holdings Ltd.		31,700		29,127
				305,126
Colombia— 0.0%
Millicom International Cellular SA, SDR		879		55,619
Denmark— 1.7%
AP Moller — Maersk A/S, Class A		50		59,323
AP Moller — Maersk A/S, Class B		87		109,440
Carlsberg A/S, Class B		1,422		151,271
Chr Hansen Holding A/S		1,315		116,728
Coloplast A/S, Class B		1,580		146,965
Danske Bank A/S		9,895		196,440
DSV A/S		2,608		172,239
Genmab A/S(b)		817		134,332
H Lundbeck A/S		927		40,800
ISS A/S		2,222		62,209
Novo Nordisk A/S, Class B		24,576		1,128,704
Novozymes A/S, Class B		2,911		130,070
Orsted A/S(c)		2,664		178,269
Pandora A/S		1,463		59,727
Tryg A/S		1,607		40,530
Vestas Wind Systems A/S		2,598		196,665
William Demant Holding A/S(b)		1,342		38,209
				2,961,921
Finland— 1.2%
Elisa OYJ		1,891		78,324
Fortum OYJ		5,906		129,279

SCHEDULE OF INVESTMENTS 5

Schedule of Investments  (continued) December 31, 2018 BlackRock International Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Finland (continued)
Kone OYJ, Class B		4,692	$	224,003
Metso OYJ		1,399		36,755
Neste OYJ		1,705		132,005
Nokia OYJ		76,654		444,986
Nokian Renkaat OYJ		1,554		47,729
Nordea Bank AB		41,280		347,503
Orion OYJ, Class B		1,385		48,183
Sampo OYJ, Class A		5,893		261,176
Stora Enso OYJ, Class R		7,327		84,947
UPM-Kymmene OYJ		7,343		185,879
Wartsila OYJ Abp		5,901		94,197
				2,114,966
France— 10.7%
Accor SA		2,501		106,353
Aeroports de Paris		395		74,903
Air Liquide SA		5,799		720,095
Airbus SE		7,875		750,801
Alstom SA(b)		2,068		83,536
Amundi SA(c)		804		42,508
Arkema SA		915		78,551
Atos SE		1,264		103,567
AXA SA		26,251		566,547
BioMerieux		551		36,344
BNP Paribas SA		15,203		686,579
Bollore SA		11,639		46,664
Bouygues SA		2,914		104,638
Bureau Veritas SA		3,526		71,851
Capgemini SE		2,208		219,619
Carrefour SA		7,725		131,996
Casino Guichard Perrachon SA		735		30,608
Cie de Saint-Gobain		6,850		227,396
Cie Generale des Etablissements Michelin SCA		2,270		223,429
CNP Assurances		2,282		48,439
Covivio		498		48,049
Credit Agricole SA		15,172		163,288
Danone SA		8,329		587,050
Dassault Aviation SA		33		45,750
Dassault Systemes SE		1,798		213,566
Edenred		3,130		115,275
Eiffage SA		1,063		88,874
Electricite de France SA		7,785		123,212
Engie SA		24,963		358,667
EssilorLuxottica SA		3,873		482,133
Eurazeo SA		622		44,036
Eutelsat Communications SA		2,321		45,726
Faurecia SA		1,009		38,071
Gecina SA		601		77,799
Getlink SE		6,216		83,527
Hermes International		437		242,780
ICADE		443		33,762
Iliad SA		353		49,541
Imerys SA		476		22,875
Ingenico Group SA		788		44,701
Ipsen SA		501		64,823
JCDecaux SA		990		27,814
Kering SA		1,026		480,649
Klepierre SA		2,717		83,966
Legrand SA		3,681		208,096
L’Oreal SA		3,419		782,351
LVMH Moet Hennessy Louis Vuitton SE		3,762		1,101,423
Natixis SA		12,518		59,041
Orange SA		27,138		439,792
Pernod Ricard SA		2,884		473,324
Peugeot SA		7,820		166,783

Security	Shares		Value
France (continued)
Publicis Groupe SA		2,776	$	158,389
Remy Cointreau SA		300		34,012
Renault SA		2,559		159,408
Rexel SA		4,041		43,045
Safran SA		4,513		541,267
Sanofi		15,204		1,318,946
Sartorius Stedim Biotech		374		37,445
Schneider Electric SE		7,387		501,070
SCOR SE		2,168		97,465
SEB SA		300		38,772
Societe BIC SA		341		34,835
Societe Generale SA		10,426		330,552
Sodexo SA		1,203		123,374
Suez		4,957		65,484
Teleperformance		768		122,857
Thales SA		1,414		165,236
TOTAL SA		32,216		1,699,237
Ubisoft Entertainment SA(b)		1,039		83,704
Unibail-Rodamco-Westfield		1,887		292,003
Valeo SA		3,186		92,922
Veolia Environnement SA		7,116		145,730
Vinci SA		6,856		563,783
Vivendi SA		14,202		344,218
Wendel SA		369		44,263
				18,189,185
Germany— 8.2%
1&1 Drillisch AG		705		36,005
adidas AG		2,547		532,295
Allianz SE (Registered)		5,791		1,163,732
Aroundtown SA		10,443		86,635
Axel Springer SE		646		36,600
BASF SE		12,423		865,308
Bayer AG (Registered)		12,494		868,943
Bayerische Motoren Werke AG		4,509		365,703
Beiersdorf AG		1,340		139,765
Brenntag AG		2,054		89,655
Commerzbank AG(b)		13,321		88,453
Continental AG		1,462		203,563
Covestro AG(c)		2,547		126,139
Daimler AG (Registered)		12,300		648,394
Delivery Hero AG(b)(c)		1,223		45,660
Deutsche Bank AG (Registered)		26,102		208,168
Deutsche Boerse AG		2,638		315,387
Deutsche Lufthansa AG (Registered)		3,133		70,754
Deutsche Post AG (Registered)		13,398		365,889
Deutsche Telekom AG (Registered)		45,082		766,247
Deutsche Wohnen SE		4,719		215,662
E.ON SE		30,205		298,163
Evonik Industries AG		2,169		54,141
Fraport AG Frankfurt Airport Services Worldwide		553		39,577
Fresenius Medical Care AG & Co. KGaA		2,963		192,065
Fresenius SE & Co. KGaA		5,667		273,909
GEA Group AG		2,303		59,292
Hannover Rueck SE		802		108,086
HeidelbergCement AG		1,979		121,308
Henkel AG & Co. KGaA (Preference)		1,382		136,020
HOCHTIEF AG		256		34,573
HUGO BOSS AG		842		51,905
Infineon Technologies AG		15,530		310,937
Innogy SE(b)		1,847		78,553
KION Group AG		942		47,904
LANXESS AG		1,156		53,149
Merck KGaA		1,718		176,838
METRO AG		2,394		36,837

6 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock International Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Germany (continued)
MTU Aero Engines AG		691	$	125,487
Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen (Registered)		2,032		443,177
OSRAM Licht AG		1,322		57,532
ProSiebenSat.1 Media SE		3,098		55,125
Puma SE		110		53,816
RWE AG		6,890		150,063
SAP SE		13,293		1,319,326
Siemens AG (Registered)		10,347		1,154,742
Siemens Healthineers AG(b)(c)		1,994		83,323
Symrise AG		1,640		121,513
Telefonica Deutschland Holding AG		9,887		38,914
thyssenkrupp AG		5,794		99,529
TUI AG		5,857		84,181
Uniper SE		2,676		69,029
United Internet AG (Registered)		1,635		71,562
Volkswagen AG		432		69,109
Vonovia SE		6,658		300,135
Wirecard AG		1,606		242,108
Zalando SE(b)(c)		1,484		38,344
				13,889,229
Hong Kong— 3.4%
AIA Group Ltd.		163,354		1,356,951
ASM Pacific Technology Ltd.		4,000		38,617
Bank of East Asia Ltd. (The)		16,825		53,361
BGP Holdings plc(d)		253,848		—
CK Asset Holdings Ltd.		34,659		253,585
CK Hutchison Holdings Ltd.		36,659		351,861
CK Infrastructure Holdings Ltd.		9,000		68,109
CLP Holdings Ltd.		22,783		257,468
Dairy Farm International Holdings Ltd.		4,500		40,789
Hang Lung Group Ltd.		12,000		30,596
Hang Lung Properties Ltd.		27,000		51,320
Hang Seng Bank Ltd.		10,574		236,871
Henderson Land Development Co. Ltd.		17,124		85,227
HK Electric Investments & HK Electric Investments Ltd.(a)(c)		35,000		35,276
HKT Trust & HKT Ltd.(a)		50,100		72,171
Hong Kong & China Gas Co. Ltd.		127,804		264,049
Hong Kong Exchanges & Clearing Ltd.		15,707		454,067
Hongkong Land Holdings Ltd.		15,600		98,345
Hysan Development Co. Ltd.		8,000		38,043
Jardine Matheson Holdings Ltd.		3,100		215,849
Jardine Strategic Holdings Ltd.		3,200		117,328
Kerry Properties Ltd.		8,500		29,011
Link REIT		28,500		288,925
Melco Resorts & Entertainment Ltd., ADR		3,286		57,899
MTR Corp. Ltd.		20,000		105,257
New World Development Co. Ltd.		81,445		107,570
NWS Holdings Ltd.		20,254		41,589
PCCW Ltd.		56,000		32,246
Power Assets Holdings Ltd.		18,500		128,527
Shangri-La Asia Ltd.		16,960		25,037
Sino Land Co. Ltd.		43,311		74,204
Sun Hung Kai Properties Ltd.		22,000		313,976
Swire Pacific Ltd., Class A		6,500		68,627
Swire Properties Ltd.		15,600		54,813
Techtronic Industries Co. Ltd.		18,500		98,173
WH Group Ltd.(c)		117,000		89,862
Wharf Holdings Ltd. (The)		15,953		41,591
Wharf Real Estate Investment Co. Ltd.		15,953		95,414
Wheelock & Co. Ltd.		11,000		62,975
Yue Yuen Industrial Holdings Ltd.		10,000		32,013
				5,867,592

Security	Shares		Value
Ireland— 0.6%
AerCap Holdings NV(b)		1,663	$	65,855
AIB Group plc		10,827		45,654
Bank of Ireland Group plc		12,910		71,802
CRH plc		11,469		303,777
James Hardie Industries plc, CDI		5,870		63,952
Kerry Group plc, Class A		2,109		208,839
Kingspan Group plc		2,069		88,693
Paddy Power Betfair plc		1,126		92,437
Ryanair Holdings plc(b)		2,005		24,601
Smurfit Kappa Group plc		2,996		79,716
				1,045,326
Israel— 0.5%
Azrieli Group Ltd.		564		26,983
Bank Hapoalim BM		14,196		89,778
Bank LeumiLe-Israel BM		20,033		121,100
Bezeq The Israeli Telecommunication Corp. Ltd.		27,577		26,910
Check Point Software Technologies Ltd.(b)		1,776		182,306
Elbit Systems Ltd.		313		35,929
Israel Chemicals Ltd.		9,360		53,222
Mizrahi Tefahot Bank Ltd.		1,858		31,380
Nice Ltd.(b)		814		88,190
Teva Pharmaceutical Industries Ltd., ADR		12,892		198,795
Wix.com Ltd.(b)		587		53,029
				907,622
Italy— 2.0%
Assicurazioni Generali SpA		16,150		269,931
Atlantia SpA		6,588		136,339
Davide Campari-Milano SpA		7,722		65,393
Enel SpA		110,010		637,755
Eni SpA		34,409		543,566
Ferrari NV		1,630		162,192
Intesa Sanpaolo SpA		201,309		448,239
Leonardo SpA		5,381		47,408
Mediobanca Banca di Credito Finanziario SpA		8,248		69,790
Moncler SpA		2,379		79,167
Pirelli & C SpA(b)(c)		5,318		34,174
Poste Italiane SpA(c)		6,946		55,698
Prysmian SpA		3,194		62,146
Recordati SpA		1,390		48,136
Snam SpA		29,981		131,268
Telecom Italia SpA(b)		231,749		122,369
Terna Rete Elettrica Nazionale SpA		18,707		106,240
UniCredit SpA		27,282		309,021
				3,328,832
Japan— 24.0%
ABC-Mart, Inc.		400		22,152
Acom Co. Ltd.		5,300		17,241
Aeon Co. Ltd.		8,100		158,323
AEON Financial Service Co. Ltd.		1,500		26,611
Aeon Mall Co. Ltd.		1,400		22,304
AGC, Inc.		2,500		77,707
Air Water, Inc.		2,000		30,143
Aisin Seiki Co. Ltd.		2,200		75,627
Ajinomoto Co., Inc.		6,100		108,391
Alfresa Holdings Corp.		2,500		63,724
Alps Electric Co. Ltd.		2,500		48,476
Amada Holdings Co. Ltd.		4,500		40,396
ANA Holdings, Inc.		1,500		53,849
Aozora Bank Ltd.		1,600		47,688
Asahi Group Holdings Ltd.		4,800		186,018
Asahi Intecc Co. Ltd.		1,300		54,997
Asahi Kasei Corp.		16,800		172,425
Asics Corp.		2,100		26,671

SCHEDULE OF INVESTMENTS 7

Schedule of Investments  (continued) December 31, 2018 BlackRock International Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Japan (continued)
Astellas Pharma, Inc.		25,600	$	327,082
Bandai Namco Holdings, Inc.		2,700		121,228
Bank of Kyoto Ltd. (The)		700		28,766
Benesse Holdings, Inc.		1,000		25,438
Bridgestone Corp.		8,400		322,273
Brother Industries Ltd.		3,000		44,404
Calbee, Inc.		1,100		34,358
Canon, Inc.		13,700		376,965
Casio Computer Co. Ltd.		2,600		30,826
Central Japan Railway Co.		2,000		421,975
Chiba Bank Ltd. (The)		8,100		45,121
Chubu Electric Power Co., Inc.		8,100		115,096
Chugai Pharmaceutical Co. Ltd.		3,000		173,998
Chugoku Electric Power Co., Inc. (The)		3,700		48,084
Coca-Cola Bottlers Japan Holdings, Inc.		1,800		53,678
Concordia Financial Group Ltd.		14,300		54,642
Credit Saison Co. Ltd.		2,100		24,604
CyberAgent, Inc.		1,300		50,255
Dai Nippon Printing Co. Ltd.		3,200		66,797
Daicel Corp.		3,500		35,930
Daifuku Co. Ltd.		1,300		58,943
Dai-ichi Life Holdings, Inc.		14,800		229,839
Daiichi Sankyo Co. Ltd.		7,513		240,309
Daikin Industries Ltd.		3,400		361,269
Daito Trust Construction Co. Ltd.		1,000		136,903
Daiwa House Industry Co. Ltd.		7,500		239,238
Daiwa House REIT Investment Corp.		23		51,523
Daiwa Securities Group, Inc.		21,500		109,126
DeNA Co. Ltd.		1,400		23,352
Denso Corp.		6,000		265,606
Dentsu, Inc.		2,900		129,516
Disco Corp.		400		46,507
Don Quijote Holdings Co. Ltd.		1,600		98,922
East Japan Railway Co.		4,100		362,072
Eisai Co. Ltd.		3,400		263,227
Electric Power Development Co. Ltd.		1,980		46,985
FamilyMart UNY Holdings Co. Ltd.		800		100,683
FANUC Corp.		2,600		394,575
Fast Retailing Co. Ltd.		800		408,593
Fuji Electric Co. Ltd.		1,600		47,124
FUJIFILM Holdings Corp.		5,400		209,328
Fujitsu Ltd.		2,600		162,074
Fukuoka Financial Group, Inc.		1,900		38,520
Hakuhodo DY Holdings, Inc.		3,100		44,238
Hamamatsu Photonics KK		1,900		63,674
Hankyu Hanshin Holdings, Inc.		3,000		99,743
Hikari Tsushin, Inc.		300		46,892
Hino Motors Ltd.		3,400		32,016
Hirose Electric Co. Ltd.		435		42,558
Hisamitsu Pharmaceutical Co., Inc.		800		44,162
Hitachi Chemical Co. Ltd.		1,400		21,061
Hitachi Construction Machinery Co. Ltd.		1,400		32,762
Hitachi High-Technologies Corp.		900		28,183
Hitachi Ltd.		13,200		349,935
Hitachi Metals Ltd.		2,900		30,162
Honda Motor Co. Ltd.		22,100		582,226
Hoshizaki Corp.		700		42,475
Hoya Corp.		5,100		307,530
Hulic Co. Ltd.		4,000		35,745
Idemitsu Kosan Co. Ltd.		1,800		58,548
IHI Corp.		2,000		55,083
Iida Group Holdings Co. Ltd.		2,000		34,642
Inpex Corp.		13,600		120,507
Isetan Mitsukoshi Holdings Ltd.		4,480		49,498

Security	Shares		Value
Japan (continued)
Isuzu Motors Ltd.		7,300	$	102,398
ITOCHU Corp.		19,400		329,466
J Front Retailing Co. Ltd.		3,100		35,482
Japan Airlines Co. Ltd.		1,500		53,162
Japan Airport Terminal Co. Ltd.		600		20,742
Japan Exchange Group, Inc.		6,800		109,683
Japan Post Bank Co. Ltd.		5,400		59,453
Japan Post Holdings Co. Ltd.		21,800		251,703
Japan Prime Realty Investment Corp.		11		41,771
Japan Real Estate Investment Corp.		17		95,449
Japan Retail Fund Investment Corp.		35		69,845
Japan Tobacco, Inc.		15,000		356,416
JFE Holdings, Inc.		6,500		103,534
JGC Corp.		2,800		39,408
JSR Corp.		2,600		39,027
JTEKT Corp.		2,700		29,861
JXTG Holdings, Inc.		44,550		231,372
Kajima Corp.		6,000		80,599
Kakaku.com, Inc.		1,800		31,840
Kamigumi Co. Ltd.		1,400		28,642
Kaneka Corp.		700		25,069
Kansai Electric Power Co., Inc. (The)		9,400		140,969
Kansai Paint Co. Ltd.		2,400		46,098
Kao Corp.		6,600		488,516
Kawasaki Heavy Industries Ltd.		1,900		40,545
KDDI Corp.		24,000		573,478
Keihan Holdings Co. Ltd.		1,300		52,971
Keikyu Corp.		2,900		47,390
Keio Corp.		1,400		81,470
Keisei Electric Railway Co. Ltd.		1,700		53,263
Keyence Corp.		1,328		671,232
Kikkoman Corp.		1,900		101,678
Kintetsu Group Holdings Co. Ltd.		2,300		99,942
Kirin Holdings Co. Ltd.		11,300		235,623
Kobayashi Pharmaceutical Co. Ltd.		700		47,471
Kobe Steel Ltd.		4,100		28,418
Koito Manufacturing Co. Ltd.		1,400		72,231
Komatsu Ltd.		12,700		272,922
Konami Holdings Corp.		1,200		52,730
Konica Minolta, Inc.		6,000		54,009
Kose Corp.		400		62,831
Kubota Corp.		13,100		186,200
Kuraray Co. Ltd.		4,200		59,071
Kurita Water Industries Ltd.		1,300		31,474
Kyocera Corp.		4,300		214,936
Kyowa Hakko Kirin Co. Ltd.		3,400		64,247
Kyushu Electric Power Co., Inc.		5,000		59,538
Kyushu Railway Co.		2,100		71,049
Lawson, Inc.		700		44,278
LINE Corp.(b)		1,000		34,153
Lion Corp.		3,000		62,003
LIXIL Group Corp.		3,500		43,390
M3, Inc.		5,600		75,439
Makita Corp.		3,000		106,548
Marubeni Corp.		20,800		145,943
Marui Group Co. Ltd.		2,500		48,450
Maruichi Steel Tube Ltd.		700		21,959
Mazda Motor Corp.		7,600		78,131
McDonald’s Holdings Co. Japan Ltd.		900		38,230
Mebuki Financial Group, Inc.		10,980		29,038
Medipal Holdings Corp.		2,300		49,207
MEIJI Holdings Co. Ltd.		1,600		130,396
MINEBEA MITSUMI, Inc.		5,100		73,542
MISUMI Group, Inc.		3,800		80,054

8 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock International Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Japan (continued)
Mitsubishi Chemical Holdings Corp.		17,000	$	128,434
Mitsubishi Corp.		18,400		504,465
Mitsubishi Electric Corp.		25,100		276,793
Mitsubishi Estate Co. Ltd.		16,300		256,456
Mitsubishi Gas Chemical Co., Inc.		2,200		32,955
Mitsubishi Heavy Industries Ltd.		4,000		143,529
Mitsubishi Materials Corp.		1,400		36,891
Mitsubishi Motors Corp.		8,900		48,467
Mitsubishi Tanabe Pharma Corp.		3,400		49,081
Mitsubishi UFJ Financial Group, Inc.		158,060		775,704
Mitsubishi UFJ Lease & Finance Co. Ltd.		5,400		25,882
Mitsui & Co. Ltd.		22,600		347,211
Mitsui Chemicals, Inc.		2,400		54,183
Mitsui Fudosan Co. Ltd.		11,900		264,322
Mitsui OSK Lines Ltd.		1,500		32,460
Mizuho Financial Group, Inc.		326,400		505,018
MonotaRO Co. Ltd.		1,700		41,907
MS&AD Insurance Group Holdings, Inc.		6,300		179,079
Murata Manufacturing Co. Ltd.		2,400		323,400
Nabtesco Corp.		1,500		32,476
Nagoya Railroad Co. Ltd.		2,400		63,208
NEC Corp.		3,500		104,069
Nexon Co. Ltd.(b)		5,900		76,166
NGK Insulators Ltd.		3,500		47,439
NGK Spark Plug Co. Ltd.		2,100		41,569
NH Foods Ltd.		1,200		45,110
Nidec Corp.		3,000		339,441
Nikon Corp.		4,300		64,049
Nintendo Co. Ltd.		1,500		398,309
Nippon Building Fund, Inc.		18		113,343
Nippon Electric Glass Co. Ltd.		1,100		26,950
Nippon Express Co. Ltd.		1,000		55,553
Nippon Paint Holdings Co. Ltd.		1,900		64,736
Nippon Prologis REIT, Inc.		23		48,541
Nippon Steel & Sumitomo Metal Corp.		10,100		173,527
Nippon Telegraph & Telephone Corp.		9,500		387,594
Nippon Yusen KK		2,000		30,582
Nissan Chemical Corp.		1,700		88,711
Nissan Motor Co. Ltd.		32,000		255,978
Nisshin Seifun Group, Inc.		2,600		53,551
Nissin Foods Holdings Co. Ltd.		800		50,125
Nitori Holdings Co. Ltd.		1,100		137,764
Nitto Denko Corp.		2,200		110,340
Nomura Holdings, Inc.		46,000		174,322
Nomura Real Estate Holdings, Inc.		1,700		31,174
Nomura Real Estate Master Fund, Inc.		52		68,417
Nomura Research Institute Ltd.		1,470		54,512
NSK Ltd.		4,800		41,183
NTT Data Corp.		8,400		91,810
NTT Docomo, Inc.		18,000		404,446
Obayashi Corp.		8,600		77,872
Obic Co. Ltd.		900		69,470
Odakyu Electric Railway Co. Ltd.		3,900		85,763
Oji Holdings Corp.		11,600		59,269
Olympus Corp.		3,900		119,281
Omron Corp.		2,600		94,255
Ono Pharmaceutical Co. Ltd.		5,100		104,146
Oracle Corp.		500		31,739
Oriental Land Co. Ltd.		2,700		271,538
ORIX Corp.		18,300		267,398
Osaka Gas Co. Ltd.		5,000		91,210
Otsuka Corp.		1,400		38,530
Otsuka Holdings Co. Ltd.		5,200		212,494
Panasonic Corp.		30,300		272,198

Security	Shares		Value
Japan (continued)
Park24 Co. Ltd.		1,500	$	33,032
Persol Holdings Co. Ltd.		2,400		35,600
Pigeon Corp.		1,600		68,244
Pola Orbis Holdings, Inc.		1,200		32,338
Rakuten, Inc.		11,400		76,478
Recruit Holdings Co. Ltd.		15,000		362,381
Renesas Electronics Corp.(b)		11,100		50,415
Resona Holdings, Inc.		27,800		133,342
Ricoh Co. Ltd.		8,900		86,970
Rinnai Corp.		400		26,338
Rohm Co. Ltd.		1,300		82,973
Ryohin Keikaku Co. Ltd.		300		72,835
Sankyo Co. Ltd.		600		22,818
Santen Pharmaceutical Co. Ltd.		4,900		70,698
SBI Holdings, Inc.		2,945		57,434
Secom Co. Ltd.		2,800		232,262
Sega Sammy Holdings, Inc.		2,268		31,618
Seibu Holdings, Inc.		3,000		52,180
Seiko Epson Corp.		3,700		51,677
Sekisui Chemical Co. Ltd.		4,900		72,842
Sekisui House Ltd.		8,300		121,886
Seven & i Holdings Co. Ltd.		10,340		449,326
Seven Bank Ltd.		7,900		22,552
SG Holdings Co. Ltd.		1,300		33,803
Sharp Corp.		2,300		23,027
Shimadzu Corp.		3,000		59,160
Shimamura Co. Ltd.		300		22,973
Shimano, Inc.		1,000		140,967
Shimizu Corp.		7,300		59,385
Shin-Etsu Chemical Co. Ltd.		5,000		384,164
Shinsei Bank Ltd.		2,100		24,965
Shionogi & Co. Ltd.		3,700		211,179
Shiseido Co. Ltd.		5,100		319,403
Shizuoka Bank Ltd. (The)		5,700		44,432
Showa Denko KK		1,800		53,450
Showa Shell Sekiyu KK		2,500		34,635
SMC Corp.		800		240,858
SoftBank Group Corp.		11,200		733,591
Sohgo Security Services Co. Ltd.		900		42,050
Sompo Holdings, Inc.		4,400		149,468
Sony Corp.		17,200		829,205
Sony Financial Holdings, Inc.		2,300		42,864
Stanley Electric Co. Ltd.		1,800		50,354
Subaru Corp.		8,200		175,180
SUMCO Corp.		3,100		34,525
Sumitomo Chemical Co. Ltd.		20,000		96,854
Sumitomo Corp.		15,000		212,832
Sumitomo Dainippon Pharma Co. Ltd.		2,100		66,970
Sumitomo Electric Industries Ltd.		10,000		132,433
Sumitomo Heavy Industries Ltd.		1,500		44,477
Sumitomo Metal Mining Co. Ltd.		3,100		83,016
Sumitomo Mitsui Financial Group, Inc.		17,900		590,075
Sumitomo Mitsui Trust Holdings, Inc.		4,400		160,235
Sumitomo Realty & Development Co. Ltd.		5,000		183,043
Sumitomo Rubber Industries Ltd.		2,300		27,078
Sundrug Co. Ltd.		1,000		29,779
Suntory Beverage & Food Ltd.		1,800		81,275
Suzuken Co. Ltd.		1,000		50,923
Suzuki Motor Corp.		4,600		231,893
Sysmex Corp.		2,400		113,979
T&D Holdings, Inc.		7,400		85,600
Taiheiyo Cement Corp.		1,600		49,240
Taisei Corp.		3,100		132,768
Taisho Pharmaceutical Holdings Co. Ltd.		500		50,184

SCHEDULE OF INVESTMENTS 9

Schedule of Investments  (continued) December 31, 2018 BlackRock International Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Japan (continued)
Taiyo Nippon Sanso Corp.		1,700	$	27,637
Takashimaya Co. Ltd.		1,900		24,260
Takeda Pharmaceutical Co. Ltd.		9,800		332,166
TDK Corp.		1,800		126,010
Teijin Ltd.		2,400		38,304
Terumo Corp.		4,200		236,902
THK Co. Ltd.		1,600		29,891
Tobu Railway Co. Ltd.		2,500		67,501
Toho Co. Ltd.		1,500		54,349
Toho Gas Co. Ltd.		1,000		42,064
Tohoku Electric Power Co., Inc.		5,700		75,046
Tokio Marine Holdings, Inc.		9,200		437,080
Tokyo Century Corp.		600		26,426
Tokyo Electric Power Co. Holdings, Inc.(b)		19,200		114,049
Tokyo Electron Ltd.		2,100		236,406
Tokyo Gas Co. Ltd.		5,200		131,519
Tokyu Corp.		6,600		107,850
Tokyu Fudosan Holdings Corp.		6,800		33,517
Toppan Printing Co. Ltd.		3,300		48,508
Toray Industries, Inc.		18,400		130,090
Toshiba Corp.(b)		8,700		245,661
Tosoh Corp.		3,500		45,399
TOTO Ltd.		1,900		65,721
Toyo Seikan Group Holdings Ltd.		2,000		45,776
Toyo Suisan Kaisha Ltd.		1,200		41,788
Toyoda Gosei Co. Ltd.		900		17,718
Toyota Industries Corp.		2,100		96,705
Toyota Motor Corp.		30,700		1,777,118
Toyota Tsusho Corp.		2,800		82,271
Trend Micro, Inc.		1,600		86,457
Tsuruha Holdings, Inc.		500		42,816
Unicharm Corp.		5,400		174,647
United Urban Investment Corp.		39		60,400
USS Co. Ltd.		2,900		48,657
Welcia Holdings Co. Ltd.		600		27,120
West Japan Railway Co.		2,200		155,433
Yahoo Japan Corp.		37,900		94,285
Yakult Honsha Co. Ltd.		1,500		105,006
Yamada Denki Co. Ltd.		8,400		40,343
Yamaguchi Financial Group, Inc.		2,600		24,853
Yamaha Corp.		1,800		76,571
Yamaha Motor Co. Ltd.		3,700		72,238
Yamato Holdings Co. Ltd.		4,100		112,408
Yamazaki Baking Co. Ltd.		1,600		33,507
Yaskawa Electric Corp.		3,200		78,221
Yokogawa Electric Corp.		3,000		51,787
Yokohama Rubber Co. Ltd. (The)		1,600		29,924
ZOZO, Inc.		2,700		49,467
				40,862,920
Luxembourg— 0.3%
ArcelorMittal		9,140		189,202
Eurofins Scientific SE		152		56,769
RTL Group SA		515		27,599
SES SA, FDR		4,843		92,725
Tenaris SA		6,279		67,485
				433,780
Macau— 0.3%
Galaxy Entertainment Group Ltd.		32,000		202,133
MGM China Holdings Ltd.		12,800		21,369
Sands China Ltd.		32,400		141,297
SJM Holdings Ltd.		26,000		24,157
Wynn Macau Ltd.		20,800		45,279
				434,235

Security	Shares		Value
Mexico— 0.0%
Fresnillo plc		2,939	$	32,294
Netherlands— 4.6%
ABN AMRO Group NV, CVA(c)		5,624		132,343
Aegon NV		23,684		110,927
Akzo Nobel NV		3,464		278,970
ASML Holding NV		5,544		868,521
EXOR NV		1,442		78,282
Heineken Holding NV		1,532		129,433
Heineken NV		3,549		313,685
ING Groep NV		52,634		566,163
Koninklijke Ahold Delhaize NV		16,577		418,772
Koninklijke DSM NV		2,504		203,139
Koninklijke KPN NV		44,704		130,580
Koninklijke Philips NV		12,727		446,202
Koninklijke Vopak NV		935		42,401
NN Group NV		4,004		159,193
NXP Semiconductors NV		4,685		343,317
Randstad NV		1,584		72,626
Royal Dutch Shell plc, Class A		61,902		1,821,952
Royal Dutch Shell plc, Class B		50,373		1,506,027
Wolters Kluwer NV		3,872		227,702
				7,850,235
New Zealand— 0.2%
a2 Milk Co. Ltd.(b)		9,707		72,925
Auckland International Airport Ltd.		12,791		61,735
Fisher & Paykel Healthcare Corp. Ltd.		7,597		66,388
Fletcher Building Ltd.		11,346		37,163
Meridian Energy Ltd.		17,039		38,988
Ryman Healthcare Ltd.		5,318		38,379
Spark New Zealand Ltd.		24,403		68,070
				383,648
Norway— 0.7%
Aker BP ASA		1,436		36,206
DNB ASA		13,461		216,071
Equinor ASA		15,885		336,955
Gjensidige Forsikring ASA		2,659		41,597
Marine Harvest ASA		5,540		116,769
Norsk Hydro ASA		17,881		81,020
Orkla ASA		10,838		84,861
Schibsted ASA, Class B		1,303		39,637
Telenor ASA		9,912		192,494
Yara International ASA		2,361		91,015
				1,236,625
Portugal— 0.2%
EDP — Energias de Portugal SA		34,032		119,054
Galp Energia SGPS SA		6,665		104,946
Jeronimo Martins SGPS SA		3,347		39,663
				263,663
Singapore— 1.3%
Ascendas Real Estate Investment Trust		35,562		67,112
CapitaLand Commercial Trust		34,838		44,747
CapitaLand Ltd.		34,092		77,744
CapitaLand Mall Trust		33,000		54,724
City Developments Ltd.		5,431		32,378
ComfortDelGro Corp. Ltd.		28,800		45,491
DBS Group Holdings Ltd.		23,867		415,043
Genting Singapore Ltd.		80,400		57,552
Golden Agri-Resources Ltd.		85,302		15,315
Jardine Cycle & Carriage Ltd.		1,283		33,215
Keppel Corp. Ltd.		19,302		83,794
Oversea-Chinese Banking Corp. Ltd.		41,835		346,042
SATS Ltd.		9,000		30,826

10 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock International Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Singapore (continued)
Sembcorp Industries Ltd.		13,100	$	24,407
Singapore Airlines Ltd.		7,200		49,741
Singapore Exchange Ltd.		10,700		56,077
Singapore Press Holdings Ltd.		21,330		36,757
Singapore Technologies Engineering Ltd.		20,781		53,272
Singapore Telecommunications Ltd.		112,850		242,880
Suntec REIT		28,300		36,916
United Overseas Bank Ltd.		17,859		323,069
UOL Group Ltd.		6,746		30,680
Venture Corp. Ltd.		3,600		36,960
Wilmar International Ltd.		25,500		58,396
				2,253,138
South Africa— 0.2%
Anglo American plc		14,035		313,832
Investec plc		8,906		50,067
				363,899
Spain— 3.0%
ACS Actividades de Construccion y Servicios SA		3,419		132,340
Aena SME SA(c)		954		148,225
Amadeus IT Group SA		5,939		413,221
Banco Bilbao Vizcaya Argentaria SA		90,188		479,062
Banco de Sabadell SA		74,815		85,605
Banco Santander SA		220,028		999,146
Bankia SA		16,407		48,004
Bankinter SA		8,963		71,920
CaixaBank SA		47,717		172,804
Enagas SA		3,015		81,502
Endesa SA		4,223		97,385
Ferrovial SA		6,590		133,465
Gas Natural SDG SA		4,657		118,804
Grifols SA		3,966		104,115
Iberdrola SA		80,615		647,329
Industria de Diseno Textil SA		14,821		378,302
Mapfre SA		14,331		38,062
Red Electrica Corp. SA		5,756		128,360
Repsol SA		18,599		299,017
Siemens Gamesa Renewable Energy SA(b)		3,170		38,596
Telefonica SA		63,353		533,268
				5,148,532
Sweden— 2.5%
Alfa Laval AB		3,904		83,925
Assa Abloy AB, Class B		13,812		247,329
Atlas Copco AB, Class A(b)		9,266		221,069
Atlas Copco AB, Class B(b)		5,188		113,678
Boliden AB(b)		3,637		78,810
Electrolux AB		3,199		67,431
Epiroc AB, Class A(b)		8,928		84,857
Epiroc AB, Class B(b)		5,188		46,310
Essity AB, Class B		8,062		198,176
Hennes & Mauritz AB, Class B		11,653		165,718
Hexagon AB, Class B		3,437		158,884
Husqvarna AB, Class B		5,551		41,210
ICA Gruppen AB		1,070		38,225
Industrivarden AB, Class C		2,221		44,967
Investor AB, Class B		6,267		266,312
Kinnevik AB, Class B		3,118		75,454
L E Lundbergforetagen AB, Class B		1,010		29,826
Lundin Petroleum AB		2,489		62,161
Sandvik AB		15,561		222,962
Securitas AB, Class B		4,163		67,066
Skandinaviska Enskilda Banken AB, Class A		21,639		210,350
Skanska AB, Class B		4,522		72,104
SKF AB, Class B		5,029		76,434

Security	Shares		Value
Sweden (continued)
Svenska Handelsbanken AB, Class A		20,311	$	225,974
Swedbank AB, Class A		12,441		278,071
Swedish Match AB		2,339		92,080
Tele2 AB, Class B		6,403		81,663
Telefonaktiebolaget LM Ericsson, Class B		41,946		371,305
Telia Co. AB		37,422		178,012
Volvo AB, Class B		21,373		279,859
				4,180,222
Switzerland— 9.0%
ABB Ltd. (Registered)		24,927		476,009
Adecco Group AG (Registered)		2,162		101,619
Baloise Holding AG (Registered)		649		89,601
Barry Callebaut AG (Registered)		29		45,259
Chocoladefabriken Lindt & Spruengli AG		14		86,994
Chocoladefabriken Lindt & Spruengli AG (Registered)		1		74,575
Cie Financiere Richemont SA (Registered)		7,060		455,283
Clariant AG (Registered)(b)		2,648		48,834
Coca-Cola HBC AG(b)		2,691		84,222
Credit Suisse Group AG (Registered)(b)		34,613		378,379
Dufry AG (Registered)(b)		430		40,946
EMS-Chemie Holding AG (Registered)		109		51,897
Geberit AG (Registered)		492		191,595
Givaudan SA (Registered)		123		285,196
Glencore plc(b)		153,723		571,552
Julius Baer Group Ltd.(b)		2,976		106,054
Kuehne + Nagel International AG (Registered)		718		92,426
LafargeHolcim Ltd. (Registered)(b)		6,658		274,766
Lonza Group AG (Registered)(b)		1,019		264,894
Nestle SA (Registered)		41,265		3,349,182
Novartis AG (Registered)		29,324		2,511,433
Pargesa Holding SA		513		36,999
Partners Group Holding AG		231		140,528
Roche Holding AG		9,503		2,359,204
Schindler Holding AG		541		107,417
Schindler Holding AG (Registered)		268		52,089
SGS SA (Registered)		71		159,823
Sika AG (Registered)		1,722		218,735
Sonova Holding AG (Registered)		738		121,361
STMicroelectronics NV		9,080		128,696
Straumann Holding AG (Registered)		137		86,524
Swatch Group AG (The)		410		119,662
Swatch Group AG (The) (Registered)		742		42,919
Swiss Life Holding AG (Registered)(b)		455		175,616
Swiss Prime Site AG (Registered)		1,010		81,811
Swiss Re AG		4,106		377,753
Swisscom AG (Registered)		344		164,424
Temenos AG (Registered)(b)		803		96,491
UBS Group AG (Registered)(b)		52,134		650,280
Vifor Pharma AG		605		65,833
Zurich Insurance Group AG(b)		2,047		610,188
				15,377,069
United Arab Emirates— 0.0%
NMC Health plc		1,384		48,303
United Kingdom— 14.1%
3i Group plc		13,723		135,408
Admiral Group plc		2,678		69,879
Ashtead Group plc		6,516		135,920
Associated British Foods plc		4,737		123,463
AstraZeneca plc		17,017		1,270,251
Auto Trader Group plc(c)		12,604		73,146
Aviva plc		52,775		252,581
Babcock International Group plc		3,361		20,963
BAE Systems plc		43,651		255,308

SCHEDULE OF INVESTMENTS 11

Schedule of Investments  (continued) December 31, 2018 BlackRock International Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
United Kingdom (continued)
Barclays plc		231,717	$	443,337
Barratt Developments plc		13,463		79,415
Berkeley Group Holdings plc		1,695		75,178
BP plc		269,838		1,705,832
British American Tobacco plc		31,023		987,122
British Land Co. plc (The)		12,415		84,425
BT Group plc		112,599		342,368
Bunzl plc		4,467		134,898
Burberry Group plc		5,561		122,114
Centrica plc		74,586		128,659
CNH Industrial NV		14,332		129,494
Coca-Cola European Partners plc		2,902		133,057
Compass Group plc		21,505		452,569
ConvaTec Group plc(c)		18,256		32,337
Croda International plc		1,750		104,512
DCC plc		1,188		90,621
Diageo plc		33,285		1,189,420
Direct Line Insurance Group plc		18,282		74,315
easyJet plc		2,112		29,760
Experian plc		12,591		305,230
Fiat Chrysler Automobiles NV(b)		14,876		214,488
G4S plc		20,630		52,077
GlaxoSmithKline plc		67,079		1,278,393
GVC Holdings plc		7,296		62,636
Hammerson plc		10,560		44,457
Hargreaves Lansdown plc		3,784		89,246
HSBC Holdings plc		268,188		2,212,481
Imperial Brands plc		12,962		393,419
Informa plc		16,631		133,492
InterContinental Hotels Group plc		2,408		130,256
International Consolidated Airlines Group SA		8,141		64,540
Intertek Group plc		2,146		131,341
ITV plc		48,169		76,669
J Sainsbury plc		23,366		78,989
John Wood Group plc		9,011		57,976
Johnson Matthey plc		2,573		91,871
Kingfisher plc		28,521		74,990
Land Securities Group plc		10,701		109,876
Legal & General Group plc		82,057		241,770
Lloyds Banking Group plc		958,314		631,702
London Stock Exchange Group plc		4,328		224,539
Marks & Spencer Group plc		21,603		67,756
Meggitt plc		10,324		62,017
Melrose Industries plc		64,402		134,542
Merlin Entertainments plc(c)		9,513		38,533
Micro Focus International plc		5,801		101,626
Mondi plc		4,883		101,702
National Grid plc		45,603		446,149
Next plc		1,872		95,316
Pearson plc		10,380		124,351
Persimmon plc		4,139		101,926
Prudential plc		35,056		625,976
Reckitt Benckiser Group plc		9,053		693,246
RELX plc		26,763		551,864
Rolls-Royce Holdings plc(b)		23,013		242,442
Royal Bank of Scotland Group plc		64,051		177,681
Royal Mail plc		11,966		41,533
RSA Insurance Group plc		13,648		89,568
Sage Group plc (The)		14,406		110,486
Schroders plc		1,653		51,481
Segro plc		13,449		100,964
Severn Trent plc		3,146		72,926
Smith & Nephew plc		11,624		217,586
Smiths Group plc		5,262		91,606

Security	Shares		Value
United Kingdom (continued)
SSE plc		13,551	$	187,134
St James’s Place plc		7,035		84,728
Standard Chartered plc		38,513		299,310
Standard Life Aberdeen plc		31,196		102,147
Taylor Wimpey plc		43,564		75,752
Tesco plc		133,153		322,918
Unilever NV, CVA		20,874		1,130,792
Unilever plc		15,237		799,985
United Utilities Group plc		9,066		85,243
Vodafone Group plc		360,816		701,531
Weir Group plc (The)		3,203		53,039
Whitbread plc		2,441		142,547
Wm Morrison Supermarkets plc		29,757		80,896
WPP plc		17,448		189,886
				23,973,975
United States— 0.7%
Carnival plc		2,337		112,227
Ferguson plc		3,204		204,730
QIAGEN NV(b)		3,012		102,922
Shire plc		12,362		719,315
				1,139,194
Total Common Stocks— 98.3% (Cost: $189,542,309)				167,655,908
Preferred Securities— 0.5%
Preferred Stocks— 0.5%
Germany— 0.5%
Bayerische Motoren Werke AG (Preference)		733		52,272
Fuchs Petrolub SE (Preference)		924		38,200
Henkel AG & Co. KGaA (Preference)		2,452		267,830
Porsche Automobil Holding SE (Preference)		2,036		119,742
Sartorius AG (Preference)		473		58,868
Volkswagen AG (Preference)		2,524		402,466
				939,378
United Kingdom— 0.0%
Rolls-Royce Holdings plc (Preference)(b)		1,058,598		1,349
Total Preferred Stocks— 0.5% (Cost: $717,502)				940,727
Rights— 0.0%
Spain— 0.0%
Repsol SA(b)		18,599		8,524
Total Rights— 0.0% (Cost: $8,512)				8,524
Total Long-Term Investments— 98.8% (Cost: $190,268,323)				168,605,159
Short-Term Securities— 0.0%
BlackRock Liquidity Funds,T-Fund, Institutional Class, 2.32%(e)(f)		35,389		35,389
Total Short-Term Securities— 0.0% (Cost: $35,389)				35,389
Total Investments— 98.8% (Cost: $190,303,712)				168,640,548
Other Assets Less Liabilities— 1.2%				1,988,594
Net Assets— 100.0%			$	170,629,142

12 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock International Index V.I. Fund (Percentages shown are based on Net Assets)

^(a)  A security contractually bound to one or more other securities to form a single saleable unit which cannot be sold separately.

^(b)  Non-income producing security.

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

^(d)  Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy.

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

^(f)  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)		Change in Unrealized Appreciation (Depreciation)
BlackRock Liquidity Funds,T-Fund, Institutional Class		—		35,389		35,389	$	35,389	$	278	$	—	$	—

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
Nikkei 225 Index		4		03/07/19	$	364	$	(16,869	)
EURO STOXX 50 Index		20		03/15/19		681		(17,792	)
FTSE 100 Index		5		03/15/19		424		(5,539	)
SPI 200 Index		2		03/21/19		196		4,921
							$	(35,279	)

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statement 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)	$	—	$	—	$	4,921	$	—	$	—	$	—	$	4,921
Liabilities — Derivative Financial Instruments
Futures contracts
Net unrealized depreciation(a)	$	—	$	—	$	40,200	$	—	$	—	$	—	$	40,200

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

For the year ended December 31, 2018, the effect of derivative financial instruments in the Statement of Operations were 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	$	—	$	—	$	(20,965	)	$	—	$	—	$	—	$	(20,965	)
	$	—	$	—	$	(20,965	)	$	—	$	—	$	—	$	(20,965	)
Net Change in Unrealized Appreciation (Depreciation) on:
Futures contracts	$	—	$	—	$	(35,596	)	$	—	$	—	$	—	$	(35,596	)

SCHEDULE OF INVESTMENTS 13

Schedule of Investments  (continued) December 31, 2018 BlackRock International Index V.I. Fund

Average Quarterly Balances of Outstanding Derivative Financial Instruments

Futures contracts:
Average notional value of contracts — long	$	2,299,195

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

Fair Value Hierarchy as of Period End

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

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

	Level 1			Level 2		Level 3		Total
Assets:
Investments:
Long-Term Investments:
Common Stocks:
Australia	$	126,922		$	12,829,536	$	—	$	12,956,458
Austria		—			397,655		—		397,655
Belgium		—			1,602,207		—		1,602,207
Chile		—			52,438		—		52,438
China		61,855			243,271		—		305,126
Colombia		—			55,619		—		55,619
Denmark		—			2,961,921		—		2,961,921
Finland		—			2,114,966		—		2,114,966
France		627,379			17,561,806		—		18,189,185
Germany		132,369			13,756,860		—		13,889,229
Hong Kong		57,899			5,809,693		—		5,867,592
Ireland		158,292			887,034		—		1,045,326
Israel		434,130			473,492		—		907,622
Italy		—			3,328,832		—		3,328,832
Japan		—			40,862,920		—		40,862,920
Luxembourg		—			433,780		—		433,780
Macau		—			434,235		—		434,235
Mexico		—			32,294		—		32,294
Netherlands		343,317			7,506,918		—		7,850,235
New Zealand		37,163			346,485		—		383,648
Norway		—			1,236,625		—		1,236,625
Portugal		—			263,663		—		263,663
Singapore		—			2,253,138		—		2,253,138
South Africa		—			363,899		—		363,899
Spain		—			5,148,532		—		5,148,532
Sweden		—			4,180,222		—		4,180,222
Switzerland		74,575			15,302,494		—		15,377,069
United Arab Emirates		—			48,303		—		48,303
United Kingdom		133,057			23,840,918		—		23,973,975
United States		—			1,139,194		—		1,139,194
Preferred Securities		—			940,727		—		940,727
Rights		8,524			—		—		8,524
Short-Term Securities		35,389			—		—		35,389
	$	2,230,871		$	166,409,677	$	—	$	168,640,548
Derivative Financial Instruments(a)
Assets:
Equity contracts	$	4,921		$	—	$	—	$	4,921
Liabilities:
Equity contracts	$	(40,200	)	$	—	$	—	$	(40,200	)

^(a)  Derivative financial instruments are futures contracts, which 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.

14 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Statement of Assets and Liabilities

December 31, 2018

	BlackRock International Index V.I. Fund
ASSETS
Investments at value — unaffiliated (cost — $190,268,323)	$	168,605,159
Investments at value — affiliated (cost — $35,389)		35,389
Cash		3,357
Cash pledged for futures contracts		92,479
Foreign currency at value (cost — $814,607)		822,375
Receivables:
Investments sold		104,881
Capital shares sold		130,201
Dividends — affiliated		66
Dividends — unaffiliated		1,046,217
From the Manager		7,281
Variation margin on futures contracts		12,303
Deferred offering costs		29,077
Prepaid expenses		162
Total assets		170,888,947
LIABILITIES
Payables:
Capital shares redeemed		79,918
Custodian fees		19,000
Printing fees		32,663
Professional fees		82,007
Variation margin on futures contracts		3,835
Investment advisory fees		2,837
Directors’ and Officer’s fees		4,998
Other accrued expenses		34,547
Total liabilities		259,805
NET ASSETS	$	170,629,142
NET ASSETS CONSIST OF
Paid-in capital	$	193,590,893
Accumulated loss		(22,961,751	)
NET ASSETS	$	170,629,142
NET ASSET VALUE
Class I — Based on net assets of $170,629,142 and 21,377,191 shares outstanding, 100 million shares authorized, $0.10 par value	$	7.98

See notes to financial statements.

FINANCIAL STATEMENTS 15

Statement of Operations

Year Ended December 31, 2018

	BlackRock International Index V.I. Fund
INVESTMENT INCOME
Dividends — affiliated	$	278
Dividends — unaffiliated		10,293,566
Foreign taxes withheld		(874,192	)
Total investment income		9,419,652
EXPENSES
Investment advisory		402,127
Reorganization		151,536
Custodian		101,456
Professional		60,848
Printing		56,770
Licensing		20,002
Transfer agent		16,787
Directors and Officer		14,790
Accounting services		9,412
Offering		6,204
Registration		5,445
Miscellaneous		49,063
Total expenses		894,440
Less:
Fees waived and/or reimbursed by the Manager or Predecessor Manager		(183,835	)
Transfer agent fees waived and/or reimbursed		(15,533	)
Total expenses after fees waived and/or reimbursed		695,072
Net investment income		8,724,580
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — unaffiliated		51,948,947
Foreign currency transactions		91,041
Futures contracts		(20,965	)
		52,019,023
Net change in unrealized appreciation (depreciation) on:
Investments — unaffiliated		(88,912,218	)
Foreign currency translations		(27,999	)
Futures contracts		(35,596	)
		(88,975,813	)
Net realized and unrealized loss		(36,956,790	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(28,232,210	)

See notes to financial statements.

16 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Statements of Changes in Net Assets

	BlackRock International Index V.I. Fund
	Year Ended December 31,
	2018			2017
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income	$	8,724,580		$	8,329,518
Net realized gain		52,019,023			4,812,052
Net change in unrealized appreciation (depreciation)		(88,975,813	)		55,954,078
Net increase (decrease) in net assets resulting from operations		(28,232,210	)		69,095,648
DISTRIBUTIONS TO SHAREHOLDERS(a)(b)
Decrease in net assets resulting from distributions to shareholders		(60,158,843	)		(12,750,402	)
CAPITAL SHARE TRANSACTIONS
Shares sold		3,757,710			2,738,444
Shares issued in reinvestment of distributions		60,158,359			12,750,402
Shares redeemed		(139,137,066	)		(13,121,822	)
Net increase (decrease) in net assets derived from capital share transactions		(75,220,997	)		2,367,024
NET ASSETS(b)
Total increase (decrease) in net assets		(163,612,050	)		58,712,270
Beginning of year		334,241,192			275,528,922
End of year	$	170,629,142		$	334,241,192

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

^(b)  Prior year distribution character information and (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 17

Financial Highlights

(For a share outstanding throughout each period)

	BlackRock International Index V.I. Fund(a)
	Class I
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	14.28		$	11.84		$	12.21		$	12.76		$	14.01
Net investment income(b)		0.42			0.36			0.34			0.31			0.44
Net realized and unrealized gain (loss)		(2.40	)		2.65			(0.24	)		(0.45	)		(1.26	)
Net increase (decrease) from investment operations		(1.98	)		3.01			0.10			(0.14	)		(0.82	)
Distributions(c)
From net investment income		(0.64	)		(0.40	)		(0.35	)		(0.30	)		(0.43	)
From net realized gain		(3.68	)		(0.17	)		(0.12	)		(0.11	)		—
Total distributions		(4.32	)		(0.57	)		(0.47	)		(0.41	)		(0.43	)
Net asset value, end of year	$	7.98		$	14.28		$	11.84		$	12.21		$	12.76
Total Return(d)
Based on net asset value		(13.70	)%		25.40	%		0.90	%		(1.16	)%		(5.88	)%
Ratios to Average Net Assets
Total expenses		0.31	%(e)		0.26	%		0.42	%		0.68	%		0.64	%
Total expenses after fees waived and/or reimbursed		0.24	%(e)		0.26	%(f)		0.42	%(f)		0.68	%(f)		0.64	%(f)
Net investment income		3.00	%		2.69	%		2.83	%		2.31	%		3.12	%
Supplemental Data
Net assets, end of year (000)	$	170,629		$	334,241		$	275,529		$	280,934		$	290,761
Portfolio turnover rate		4	%		4	%		3	%		3	%		3	%

^(a)  On October 29, 2018, the Fund acquired all of the assets and assumed certain stated liabilities of the International Equity Index Fund (the “Predecessor Fund”), a series of State Farm Variable Product Trust, through a tax-free reorganization (the “Reorganization”). The Predecessor Fund is the performance and accounting survivor of the Reorganization.

^(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 insurance-related fees and expenses and assumes the reinvestment of distributions.

^(e)  Includes reorganization costs associated with the Fund’s reorganization. Without these costs, total expenses and total expenses after fees waived and/or reimbursed would have been 0.27% and 0.24%, respectively.

^(f)  The expense ratio includes the effect of expense reimbursements that are less than 0.01%.

See notes to financial statements.

18 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements

1. ORGANIZATION

BlackRock Variable Series Funds, Inc. (the “Company”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as anopen-end management investment company. The Company is organized as a Maryland corporation that is comprised of 15 separate portfolios. The funds offer shares to insurance companies for their separate accounts to fund benefits under certain variable annuity and variable life insurance contracts. The financial statements presented are for BlackRock International Index V.I. Fund (the “Fund”). The Fund is classified as diversified.

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

Reorganization:On October 29, 2018, the International Equity Index Fund (the “Predecessor Fund”), a series of State Farm Variable Product Trust, reorganized into the Fund (the “Reorganization”) pursuant to an Agreement and Plan of Reorganization. The Reorganization was approved by shareholders of the Predecessor Fund.

The Predecessor Fund is the performance and accounting survivor of the Reorganization, meaning that the Fund assumed the performance and financial history of the Predecessor Fund upon completion of the Reorganization. The Reorganization wastax-free; accordingly, the Predecessor Fund’s shareholders became shareholders of the Fund without realizing any gain or loss for federal income tax purposes.

As a result, the Fund acquired all of the assets and assumed certain stated liabilities of the Predecessor Fund in exchange for an equal aggregate value of newly-issued shares of the Fund. Each shareholder of the Predecessor Fund received shares of the Fund in an amount equal to the aggregate net asset value (“NAV”) of such shareholder’s Predecessor Fund shares, as determined at the close of business on October 26, 2018.

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

Predecessor Fund	Shares Prior to Reorganization		Conversion Ratio		Shares Post- Reorganization
International Equity Index Fund, a series of State Farm Variable Product Trust		14,050,452		1		14,050,452

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

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

Predecessor Fund	Net Assets		Fair Value of Investments		Cost of Investments
International Equity Index Fund, a series of State Farm Variable Product Trust	$	177,944,330	$	174,789,237	$	190,647,069

Reorganization costs incurred by the Fund in connection with the Reorganization were expensed by the Fund. The Manager or Predecessor Manager reimbursed the Fund $151,536, which is included in fees waived and/or reimbursed by the Manager or Predecessor Manager in the Statement 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. The 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 Fund is 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.

Foreign Currency Translation: The 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.

The 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 Statement 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. The 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.

NOTESTO FINANCIAL STATEMENTS 19

Notes to Financial Statements  (continued)

Segregation and Collateralization: In cases where the Fund enters into certain investments (e.g., futures contracts) that would be treated as “senior securities” for 1940 Act purposes, the Fund may segregate or designate on its books and records cash or liquid assets having a market value at least equal to the amount of its future obligations under such investments. Doing so allows the investment to be excluded from treatment as a “senior security.” Furthermore, if required by an exchange or counterparty agreement, the Fund 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.

Offering Costs:Offering costs are amortized over a12- month period beginning with the commencement of operations of a class of shares.

Distributions:Distributions paid by the Fund are recorded on theex-dividend date. Distributions of capital gains are recorded on theex-dividend date and made at least annually. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP.

Recent Accounting Standards: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 Fund.

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

Other: Expenses directly related to the Fund are charged to the Fund. Other operating expenses shared by several funds, including other funds managed by the Manager, are prorated among those funds on the basis of relative net assets or other appropriate methods.

3. INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS

Investment Valuation Policies: The Fund’s 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 Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Fund determines the fair values of its financial instruments using various independent dealers or pricing services under policies approved by the Board of Directors of the Company (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 the Fund’s assets and liabilities:

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

• Generally, trading in foreign instruments is substantially completed each day at various times prior to the close of trading on the NYSE. Occasionally, events affecting the values of such instruments may occur between the foreign market close and the close of trading on the NYSE that may not be reflected in the computation of the Fund’s net assets. Each business day, the Fund uses a pricing service to assist with the valuation of certain foreign exchange-traded equity securities and foreign exchange-traded andover-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.

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 the 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.

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 the 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.

20 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

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 the Fund. Typically, the most recently available information by a Private Company is as of a date that is earlier than the date the Fund is calculating its NAV. This factor may result in a difference between the value of the investment and the price the 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 the Fund has the ability to access

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

• Level 3 — Unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the 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 or funds. 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 the 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

Preferred Stocks:Preferred stock has a preference over common stock in liquidation (and generally in receiving dividends as well), but is subordinated to the liabilities of the issuer in all respects. As a general rule, the market value of preferred stock with a fixed dividend rate and no conversion element varies inversely with interest rates and perceived credit risk, while the market price of convertible preferred stock generally also reflects some element of conversion value. Because preferred stock is junior to debt securities and other obligations of the issuer, deterioration in the credit quality of the issuer will cause greater changes in the value of a preferred stock than in a more senior debt security with similar stated yield characteristics. Unlike interest payments on debt securities, preferred stock dividends are payable only if declared by the issuer’s board of directors. Preferred stock also may be subject to optional or mandatory redemption provisions.

NOTESTO FINANCIAL STATEMENTS 21

Notes to Financial Statements  (continued)

5. DERIVATIVE FINANCIAL INSTRUMENTS

The Fund engages in various portfolio investment strategies using derivative contracts both to increase the returns of the Fund and/or to manage its 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 Schedule of Investments. These contracts may be transacted on an exchange or OTC.

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

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

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

6. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

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

For such services, the Fund paid the Manager a monthly fee at an annual rate equal to 0.08% of the average daily value of the Fund’s net assets for the period October 29, 2018 through December 31, 2018.

Prior to October 29, 2018, the Predecessor Fund paid State Farm Investment Management Corp. (“SFIMC” or “Predecessor Manager”), the investment adviser to the Predecessor Fund, an effective investment advisory fee of 0.15%.

SFIMC engaged BlackRock Fund Advisors (“BFA”) as the investment sub-adviser to provide day-to-day portfolio management for the Predecessor Fund. Sub-advisory fees for managing the portfolio were paid by SFIMC. No additional advisory fees were charged to the Predecessor Fund for the services of the sub-adviser.

For the period January 1, 2018 through October 26, 2018, BFA earned $116,396 of fees for sub-advisory services which is included in investment advisory in the Statement of Operations.

Prior to October 29, 2018, the Predecessor Fund did not pay any direct or indirect discount, commission or other compensation for transfer agent services provided by SFIMC or for distribution and underwriting services provided by State Farm VP Management Corp.

Transfer Agent: On behalf of the Fund, the Manager entered into agreements with insurance companies and other financial intermediaries (“Service Organizations”), some of which may be affiliates. Pursuant to these agreements, the Service Organizations provide the Fund with administrative, networking, recordkeeping, sub-transfer agency and shareholder services to sub-accounts they service. For these services, the Service Organizations receive an annual fee per shareholder account, which will vary depending on share class and/or net assets of Fund shareholders serviced by the Service Organizations. For the period October 29, 2018 to December 31, 2018, the Fund did not pay any amounts to affiliates in return for these services.

In addition, the Fund pays the transfer agent, which is not an affiliate, a fee for the issuance, transfer and redemption of shares and the opening and maintenance of shareholder accounts, which is included in transfer agent in the Statement of Operations.

Expense Limitations, Waivers and Reimbursements: With respect to the Fund, effective October 29, 2018, the Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees the 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. This amount is included in fees waived and/or reimbursed by the Manager or Predecessor Manager in the Statement of Operations. For the year ended December 31, 2018, the amount waived was $9.

Effective October 29, 2018, the Manager has contractually agreed to waive its investment advisory fee with respect to any portion of the 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, 2021. The contractual agreement may be terminated upon 90 days’ notice by a majority of directors who are not “interested persons” of the Fund, as defined in the 1940 Act (“Independent Directors”) or by a vote of a majority of the outstanding voting securities of the Fund. For the year ended December 31, 2018, there were no fees waived by the Manager pursuant to this arrangement.

With respect to the Fund, effective October 29, 2018, the Manager has contractually agreed to waive and/or reimburse fees or expenses in order to limit expenses, excluding interest expense, dividend expense, acquired fund fees and expenses, and certain other fund expenses, which constitute extraordinary expenses not incurred in the ordinary course of the Fund’s business (“expense limitation”). The expense limitation as a percentage of average daily net assets is 0.27%. The Manager has agreed not to reduce or discontinue this contractual expense limitation through April 30, 2021, unless approved by the Board, including a majority of the Independent Directors, or by a vote of a majority of the outstanding voting securities of the Fund. For the year ended December 31, 2018, the fees waived and/or reimbursed by the Manager or Predecessor Manager were $32,290.

22 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

These amounts are shown as transfer agent fees waived and/or reimbursed in the Statement of Operations. For the year ended December 31, 2018, the fees waived and/or reimbursed were $15,533.

In addition, effective October 29, 2018, the Manager has contractually agreed to waive and/or reimburse fees or expenses in order to limit fees paid by the Fund for operational and recordkeeping services to 0.05% of average daily net assets. For the year ended December 31, 2018, there were no fees waived and/or reimbursed by the Manager pursuant to this arrangement.

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

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

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

On December 31, 2018, the 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,
	2020
Fund Level	$	32,290
Class I		15,533

Prior to October 29, 2018, SFIMC reimbursed expenses incurred by the Predecessor Fund (other than the investment advisory and management services fee and acquired fund fees) that exceeded 0.20% of the Predecessor Fund’s average daily net assets. Prior-year reimbursements and waivers are not subject to recoupment. For the period January 1, 2018, through October 26, 2018, there were no fees reimbursed by SFIMC pursuant to this agreement.

Interfund Lending: In accordance with an exemptive order (the “Order”) from the SEC, the 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 the Fund’s investment policies and restrictions. The 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 Fund did not participate in the Interfund Lending Program.

Directors and Officers: Certain directors and/or officers of the Company are directors and/or officers of BlackRock or its affiliates. The Fund reimburses the Manager for a portion of the compensation paid to the Company’s Chief Compliance Officer, which is included in Directors and Officer in the Statement of Operations.

Other Transactions: The Fund may purchase securities from, or sell securities to, an affiliated fund provided the affiliation is due solely to having a common investment adviser, common officers, or common directors. For the year ended December 31, 2018, the purchase and sale transactions and any net realized gains (losses) with affiliated funds in compliance with Rule17a-7 under the 1940 Act were as follows:

Purchases	$	148,238
Sales		66,382
Net Realized Gain		11,523

7. PURCHASES AND SALES

For the year ended December 31, 2018, purchases and sales of investments, excluding short-term securities, were $12,000,747 and $138,624,825, respectively.

8. INCOME TAX INFORMATION

It is the 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.

NOTESTO FINANCIAL STATEMENTS 23

Notes to Financial Statements  (continued)

The 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 the Fund’s U.S. federal tax returns generally remains open for each of the four years ended December 31, 2018. The statutes of limitations on the 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 Fund as of December 31, 2018, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the Fund’s financial statements.

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

Paid in capital	$	(6,204	)
Accumulated earnings	$	6,204

The tax character of distributions paid was as follows:

	12/31/18		12/31/17
Ordinary income	$	9,255,946	$	9,117,495
Long-term capital gains		50,902,897		3,632,907
	$	60,158,843	$	12,750,402

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

Net unrealized losses(a)	$	(22,833,320	)
Qualified late-year losses(b)		(128,431	)
	$	(22,961,751	)

^(a)  The difference between book-basis andtax-basisnet unrealized losses was attributable primarily to the tax deferral of losses on wash sales, the realization for tax purposes of unrealized gains on investments in passive foreign investment companies, the realization for tax purposes of unrealized gains/losses on certain futures contracts and the classification of investments.

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

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:

Tax cost	$	191,376,498
Gross unrealized appreciation	$	40,948,741
Gross unrealized depreciation		(63,696,639	)
Net unrealized depreciation	$	(22,747,898	)

9. BANK BORROWINGS

The Company, on behalf of the Fund, 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 Fund may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Fund, 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. Prior to April 19, 2018, the aggregate commitment amount was $2.1 billion and the fee was 0.12% per annum. 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 Statement 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 Fund did not borrow under the credit agreement.

10. PRINCIPAL RISKS

In the normal course of business, the Fund invests in securities or other instruments and may enter into certain transactions, and such activities subject the 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. The Fund’s prospectus provides details of the risks to which the Fund is subject.

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. The Fund may invest in illiquid investments and may experience difficulty in selling those investments in a timely manner at the price that it believes the

24 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

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 the 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 the Fund may lose value, regardless of the individual results of the securities and other instruments in which the Fund invests.

The price the Fund could receive upon the sale of any particular portfolio investment may differ from the 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 the 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 the Fund, and the Fund could realize a greater than expected loss or lesser than expected gain upon the sale of the investment. The Fund’s ability to value its investments may also be impacted by technological issues and/or errors by pricing services or other third party service providers.

Counterparty Credit Risk: The Fund 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 Fund manages 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 Fund to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Fund’s exposure to market, issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Statement of Assets and Liabilities, less any collateral held by the Fund.

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.

With exchange-traded futures, there is less counterparty credit risk to the Fund 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, the Fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency). Additionally, credit risk exists in exchange-traded futures with respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Fund.

Concentration Risk:The Fund invests a significant portion of its assets in securities of issuers located in Europe or with significant exposure to European issuers or countries. The European financial markets have recently experienced volatility and adverse trends due to concerns about economic downturns in, or rising government debt levels of, several European countries. These events may spread to other countries in Europe and may affect the value and liquidity of certain of the Fund’s investments.

The United Kingdom is scheduled to withdraw from the European Union in March 2019, which may introduce significant new uncertainties and instability in the financial markets across Europe.

The Fund invests a significant portion of its assets in securities of issuers located in Asia or with significant exposure to Asian issuers or countries. The Asian financial markets have recently experienced volatility and adverse trends due to concerns in several Asian countries regarding monetary policy, government intervention in the markets, rising government debt levels or economic downturns. These events may spread to other countries in Asia and may affect the value and liquidity of certain of the Fund’s investments.

11. CAPITAL SHARE TRANSACTIONS

Transactions in capital shares were as follows:

	Year Ended 12/31/2018 (a)						Year Ended 12/31/2017
	Shares			Amount			Shares			Amount
Class I
Shares sold		280,077		$	3,757,710			205,642		$	2,738,444
Shares issued in reinvestment of distributions		7,541,790			60,158,359			894,765			12,750,402
Shares redeemed		(9,845,024	)		(139,137,066	)		(969,140	)		(13,121,822	)
Net increase (decrease)		(2,023,157	)	$	(75,220,997	)		131,267		$	2,367,024

^(a)  Includes the activity of the Predecessor Fund prior to the Reorganization on October 29, 2018. Excludes the exchange of shares of the Predecessor Fund for shares of the Fund during the Reorganization. The Predecessor Fund is the performance and accounting survivor of the Reorganization.

As of December 31, 2018, BlackRock Financial Management, Inc., an affiliate of the Fund, owned 790 Class I Shares of BlackRock International Index V.I. Fund.

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 Fund has adopted the amendments pertinent to RegulationS-X in this shareholder report. The amendments impacted certain disclosure presentation on the Statement of Assets and Liabilities, Statements of Changes in Net Assets and Notes to the Financial Statements.

NOTESTO FINANCIAL STATEMENTS 25

Notes to Financial Statements  (continued)

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

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

Share Class	Net Investment Income			Net Realized Gain
Class I	$	(8,906,575	)	$	(3,843,827	)

Distributions in excess of net investment income as of December 31, 2017 was $(2,271,240).

13. SUBSEQUENT EVENTS

Management has evaluated the impact of all subsequent events on the Fund 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.

26 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Report of Independent Registered Public Accounting Firm

To the Shareholders of BlackRock International Index V.I. Fund and the Board of Directors of BlackRock Variable Series Funds, Inc.:

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying statement of assets and liabilities of BlackRock International Index V.I. Fund (formerly, International Equity Index Fund of State Farm Variable Product Trust) of BlackRock Variable Series Funds, Inc. (the “Fund”), including the schedule of investments, as of December 31, 2018, the related statements of operations, changes in net assets, and the financial highlights for the year 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 Fund as of December 31, 2018, and the results of its operations, the changes in its net assets, and the financial highlights for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

The statements of changes in net assets for the year ended December 31, 2017 and the financial highlights for each of the four years in the period ended December 31, 2017 of the Fund were audited by other auditors whose report dated February 23, 2018, expressed an unqualified opinion on those financial statements and financial highlights.

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements and financial highlights based on our audit. 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 Fund 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 audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit 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 Fund’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit 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 audit 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 audit provides a reasonable basis for our opinion.

Deloitte & Touche LLP

Boston, Massachusetts

February 15, 2019

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

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING  FIRM 27

Disclosure of Investment Advisory Agreement

The Board of Directors (the “Board,” the members of which are referred to as “Board Members”) of BlackRock Variable Series Funds, Inc. (the “Company”) met in person on November 14, 2017 (the “Meeting”) to consider the approval of the proposed investment advisory agreement (the “Advisory Agreement” or the “Agreement”) between the Company, on behalf of the BlackRock International Index V.I. Fund (the “International Fund”) and BlackRock Small Cap Index V.I. Fund (the “Small Cap Fund”) (each, a “Fund” and together, the “Funds”), and BlackRock Advisors, LLC (the “Manager” or “BlackRock”) as each Fund’s investment advisor. The Funds commenced operations in October 2018.

Activities and Composition of the Board

On the date of the Meeting, the Board consisted of eleven individuals, nine of whom were not “interested persons” of the Company 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 each 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 Committee and an Executive Committee, each of which is chaired by an Independent Board Member and composed of Independent Board Members (except for the Performance Oversight Committee and the Executive Committee, each of which also has one interested Board Member).

The Agreement

Pursuant to the 1940 Act, the Board is required to consider the initial approval of the Agreement. The Board’s consideration of the Agreement is a deliberative process, during which the Board assessed, among other things, the nature, extent and quality of the services to be provided to each Fund by BlackRock, BlackRock’s personnel and affiliates, including (as applicable): investment management; accounting, administrative and shareholder services; oversight of each 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 Agreement

The Approval Process: At the Meeting, the Board reviewed materials relating to its consideration of the Agreement. The Board considered all factors it believed relevant with respect to the Company and each Fund, including, among other factors: (a) the nature, extent and quality of the services to be provided by BlackRock; (b) the investment performance of BlackRock portfolio management; (c) the advisory fee and the estimated cost of the services and estimated profits to be realized by BlackRock and its affiliates from their relationship with each Fund; (d) the sharing of potential economies of scale; (e) potentialfall-out benefits to BlackRock and its affiliates as a result of BlackRock’s relationship with each Fund; and (g) other factors deemed relevant by the Board Members.

In determining whether to approve the Agreement, 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 Agreement. The Board received materials in advance of the Meeting relating to its consideration of the Agreement, including, among other things, (a) information independently compiled and prepared by Broadridge Financial Solutions, Inc. (“Broadridge”), based on either a Lipper classification or Morningstar category, regarding each Fund’s estimated fees and expenses as compared with a peer group of funds as determined by Broadridge (“Expense Peers”) and other metrics, as applicable; (b) information regarding BlackRock’s economic outlook for each 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 noted information received 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, reviewed the nature, extent and quality of services to be provided by BlackRock, including the investment advisory services to be provided to each Fund. The Board received information concerning the investment philosophy and investment process to be used by BlackRock in managing each Fund, as well as a description of the capabilities, personnel and services of BlackRock. In connection with this review, the Board considered BlackRock’sin-house research capabilities as well as other resources available to its personnel. The Board considered the scope of the services to be provided by BlackRock to each Fund under the Agreement relative to services typically provided by third parties to other funds. The Board noted that the standard of care applicable under the Agreement was comparable to that found generally in investment company advisory agreements. The Board concluded that the scope of BlackRock’s services to be provided to each Fund was consistent with each Fund’s operational requirements, including, in addition to seeking to meet its investment objective, compliance with investment restrictions, tax and reporting requirements and related shareholder services.

The Board, including the Independent Board Members, also considered the quality of the administrative and othernon-investment advisory services to be provided by BlackRock and its affiliates to each Fund. The Board evaluated the procedures of BlackRock designed to fulfill its fiduciary duty to each Fund with respect to possible conflicts of interest, including BlackRock’s code of ethics (regulating the personal trading of BlackRock’s officers and employees), the procedures by which BlackRock allocates trades among its various investment advisory clients, the integrity of the systems in place to ensure compliance with the foregoing and the record of BlackRock in these matters. The Board also noted information received at prior Board meetings concerning the standards of BlackRock with respect to the execution of portfolio transactions.

28 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Disclosure of Investment Advisory Agreement  (continued)

The Board, including the Independent Board Members, considered, among other factors, with respect to BlackRock: the number, education and experience of investment personnel generally and each Fund’s portfolio management team; BlackRock’s research capabilities; investments by portfolio managers in the funds they manage; portfolio trading capabilities; use of technology; commitment to compliance; credit analysis capabilities; risk analysis and oversight capabilities; and the approach to training and retaining portfolio managers and other research, advisory and management personnel. The Board also considered BlackRock’s overall risk management program, including the continued efforts of BlackRock and its affiliates to address cybersecurity risks and the role of BlackRock’s Risk & Quantitative Analysis Group. The Board engaged in a review of BlackRock’s compensation structure with respect to each Fund’s portfolio management team and BlackRock’s ability to attract and retain high-quality talent and create performance incentives. The Board also considered the business reputation of BlackRock and its financial resources and concluded that BlackRock would be able to meet any reasonably foreseeable obligation under the Agreement.

In addition to investment advisory services, the Board, including the Independent Board Members, considered the quality of the administrative and othernon-investment advisory services to be provided by BlackRock and its affiliates to each Fund. The Board noted that BlackRock and its affiliates will provide each Fund with certain administrative, shareholder and other services (in addition to any such services to be provided to each Fund by third parties) and officers and other personnel as are necessary for the operations of each Fund. In particular, the Board noted that BlackRock and its affiliates will provide each 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, each Fund’s custodian, fund accountant, transfer agent, and auditor; (v) organizing Board meetings and preparing the materials for such Board meetings; (vi) providing legal and compliance support; (vii) furnishing analytical and other support to assist the Board in its consideration of strategic issues such as the merger, consolidation or repurposing of certainopen-end funds; and (viii) performing administrative functions necessary for the operation of each Fund, such as tax reporting, expense management, fulfilling regulatory filing requirements, overseeing each Fund’s distribution partners, and shareholder call center and other services. The Board reviewed the structure and duties of BlackRock’s fund administration, shareholder services, and legal & compliance departments and considered BlackRock’s policies and procedures for assuring compliance with applicable laws and regulations.

B. The Investment Performance of each Fund and BlackRock

The Board, including the Independent Board Members, previously received and considered information about BlackRock’s investment performance for other funds. The Board, however, could not consider the performance history of the Funds because the Funds were not yet organized and had not yet commenced operations as of the date of the Meeting.

C. Consideration of the Advisory/Management Fees and the Cost of the Services to be Provided and Estimated Profits to be Realized by BlackRock and its Affiliates from their Relationship with each Fund

In connection with the initial approval of the Agreement, the Board, including the Independent Board Members, reviewed each Fund’s proposed contractual management fee rate compared with those of its Expense Peers. The contractual management fee rate represents a combination of the advisory fee and any administrative fees, before taking into account any reimbursements or fee waivers. In addition, the Board, including the Independent Board Members, considered each Fund’s estimated total expense ratio, as well as its actual management fee rate, to those of its Expense Peers. The estimated total expense ratio represents a fund’s total net operating expenses, including any12b-1 or non12b-1 service fees. The estimated 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 andsub-advised mutual funds (including mutual funds sponsored by third parties).

The Board noted that each Fund’s contractual management fee rate and actual management fee rate ranked in the first quartile, and that each Fund’s estimated total expense ratio ranked in the first quartile, relative to each Fund’s Expense Peers. The Board further noted that BlackRock and the Board have contractually agreed to a cap on each Fund’s total expenses as a percentage of each Fund’s average daily net assets. Additionally, the Board noted that BlackRock and the Board have contractually agreed to a cap on certain operational and recordkeeping fees for each of the Funds.

Following consideration of this information, the Board, including the Independent Board Members, concluded that the fees to be paid pursuant to the Agreement were fair and reasonable in light of the services provided.

As the Funds had not commenced operations as of the date of the Meeting, BlackRock was not able to provide the Board with specific information concerning the expected profits to be realized by BlackRock and its affiliates from their relationships with the Funds. BlackRock, however, will provide the Board with such information at future meetings.

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 each Fund increase. The Board also noted the existence of fee waivers and/or expense caps, noting that any contractual fee waivers and expense caps would be approved by the Board.

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 each Fund, both tangible and intangible, such as BlackRock’s ability to leverage its investment professionals who manage other portfolios and risk management personnel, an increase in BlackRock’s profile in the investment advisory community, and the engagement of BlackRock’s affiliates as service providers to each Fund, including for administrative, distribution, securities lending and cash management services. The Board also considered BlackRock’s overall

DISCLOSUREOF INVESTMENT ADVISORY AGREEMENT 29

Disclosure of Investment Advisory Agreement  (continued)

operations and its efforts to expand the scale of, and improve the quality of, its operations. The Board also noted that, subject to applicable law, BlackRock may use and benefit from third party research obtained by soft dollars generated by certain registered fund transactions to assist in managing all or a number of its other client accounts.

The Board, including all of the Independent Board Members, concluded that these potential ancillary benefits that BlackRock and its affiliates could receive with regard to providing investment advisory and other services to each Fund were consistent with those generally available to other mutual fund sponsors.

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

Conclusion

The Board, including the Independent Board Members, approved the Advisory Agreement between the Manager and the Company, on behalf of each Fund, for atwo-year term beginning on the effective date of the 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 Agreement were fair and reasonable and in the best interest of each Fund and its shareholders. In arriving at its decision to approve the Agreement, the Board did not identify any single factor or group of factors asall-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.

30 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Glossary of Terms Used in this Report

Portfolio Abbreviations
ADR	American Depositary Receipt
CDI	Crest Depository Interests
CVA	Certification Van Aandelon (Dutch Certificate)
FDR	Fiduciary Depositary Receipt
REIT	Real Estate Investment Trust
SDR	Swedish Depositary Receipts

GLOSSARYOF TERMS USEDINTHIS REPORT 31

DECEMBER 31, 2018

ANNUAL REPORT

BlackRock Variable Series Funds, Inc.

^Ø  BlackRock iShares^® Dynamic Allocation V.I. Fund

Not FDIC Insured • May Lose Value • No Bank Guarantee

Fund Summary  as of December 31, 2018 BlackRock iShares^® Dynamic Allocation V.I. Fund

Investment Objective

BlackRock iShares^® Dynamic Allocation V.I. Fund’s (the “Fund”) investment objective is to seek to provide total return.

On November 14, 2017, the Board of Directors of the Company (the “Board”) and, on May 23, 2018, the Board of Trustees of State Farm Variable Product Trust each approved a reorganization of the State Farm Stock and Bond Balanced Fund (the “Target Fund”), with and into the Fund. At a special shareholder meeting on September 14, 2018, the shareholders of the Target Fund approved the reorganization, which was completed on October 29, 2018.

Portfolio Management Commentary

How did the Fund perform?

For the12-month period ended December 31, 2018, the Fund outperformed its blended benchmark, (60% MSCI All Country World Index / 40% Bloomberg Barclays U.S. Aggregate Bond Index).

What factors influenced performance?

The largest contributions to Fund performance came from exposure to the iShares Short Maturity Bond ETF and the iShares Intermediate-Term Corporate Bond ETF.

The largest detractors from Fund performance derived from exposure to the iShares Core MSCI EAFE ETF and the iShares Core S&P 500 ETF.

Describe recent portfolio activity.

During the12-month period, the Fund adopted a more defensive stance in terms of overall asset allocation, decreasing exposure to equities and increasing exposure to fixed income. The larger fixed income allocation funded increases in investment grade U.S. credit and shorter duration corporate bonds. The Fund also maintained an overweight to U.S. stocks, reducing exposures to developed market and emerging market stocks. The composition of the Fund’s U.S. equities allocation was reorganized, funding an increase in broad U.S. market exposure from small- andmid-cap exposures. In addition, the Fund sought exposure to global technology stocks, and decreased exposure to preferred and momentum-oriented stocks. Lastly, the Fund added to emerging market government bonds, and trimmed its holdings in agency bonds.

Describe portfolio positioning at period end.

At period end, the Fund maintained a slight overweight position to equities relative to the benchmark, but reduced from earlier in the year. The Fund’s top holdings included exposure to U.S. equities, short duration corporate bonds, and investment grade U.S. credit. Within equities, the Fund maintained broad exposure to U.S. large cap and momentum, with smaller allocations to value, growth and minimum volatility. Within fixed income, the Fund was underweight duration and overweight broader credit versus rates. In addition, the Fund ended the period with small allocations to U.S. Treasuries, emerging market equities and emerging market government bonds.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions.

These views are not intended to be a forecast of future events and are no guarantee of future results.

Portfolio Information

PORTFOLIO COMPOSITION

Asset Type	Percent of Affiliated Investment Companies
Equity Funds		48	%
Fixed Income Funds		34
Short-Term Securities		18

2 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Fund Summary  as of December 31, 2018 (continued) BlackRock iShares^® Dynamic Allocation V.I. Fund

TOTAL RETURN BASED ON A $10,000 INVESTMENT

^(a)  Assuming transaction costs, if any, and other operating expenses, including investment advisory fees. Does not include insurance-related fees and expenses.

^(b)  The Fund invests in a portfolio of underlying exchange-traded funds that seek to track equity, fixed income and alternative indices.

^(c)  A customized weighted index comprised of 60% MSCI All Country World Index and 40% Bloomberg Barclays U.S. Aggregate Bond Index.

^(d)  A free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. The MSCI All Country World Index consists of 46 country indexes comprising 23 developed and 23 emerging market country indexes.

^(e)  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.

^(f)  Commencement of operations.

Performance Summary for the Period Ended December 31, 2018

				Average Annual Total Returns
	6-Month Total Returns (b)			1 Year (b)			Since Inception (b)(c)
Class I(a)		(4.94	)%		(4.94	)%		2.73	%
Class III(a)		(5.10	)		(5.18	)		2.46
60% MSCI All Country World Index / 40% Bloomberg Barclays U.S. Aggregate Bond Index		(4.73	)		(5.52	)		3.47
MSCI All Country World Index		(9.02	)		(9.41	)		4.12
Bloomberg Barclays U.S. Aggregate Bond Index		1.65			0.01			2.12

^(a) Average annual and cumulative total returns are based on changes in net asset value for the periods shown, and assume reinvestment of all distributions at net asset value on theex-dividend date. Insurance-related fees and expenses are not reflected in these returns.

^(b) For a portion of the period, the Fund’s investment adviser waived a portion of its fee. Without such waiver, the Fund’s performance would have been lower.

^(c) The Fund commenced operations on April 30, 2014.

Past performance is not indicative of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

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

Expense Example

	Actual						Hypothetical (a)
	Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Annualized Expense Ratio
Class I	$	1,000.00	$	950.60	$	1.43	$	1,000.00	$	1,023.74	$	1.48		0.29	%
Class III		1,000.00		949.00		3.24		1,000.00		1,021.88		3.36		0.66

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

^(b) For each class of the Fund, expenses are equal to annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect theone-half year period shown).

See “Disclosure of Expenses” on the following page for further information on how expenses were calculated.

FUND SUMMARY 3

Disclosure of Expenses BlackRock iShares^® Dynamic Allocation V.I. Fund

Shareholders of the Fund may incur the following charges: (a) transactional expenses; and (b) operating expenses, including investment advisory fees, service and distribution fees, including12b-1 fees, acquired fund fees and expenses, and other fund expenses. The expense example on the previous page (which is based on a hypothetical investment of $1,000 invested on July 1, 2018 and held through December 31, 2018) is intended to assist shareholders both in calculating expenses based on an investment in the Fund and in comparing these expenses with similar costs of investing in other mutual funds.

The expense example provides 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 share class under the heading entitled “Expenses Paid During the Period.”

The expense example also provides information about hypothetical account values and hypothetical expenses based on the 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 the Fund and other funds, compare the 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.

The expenses shown in the expense example are intended to highlight shareholders’ ongoing costs only and do not reflect transactional expenses, such as sales charges, if any. Therefore, the hypothetical example is 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.

4 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Consolidated Schedule of Investments December 31, 2018 BlackRock iShares^® Dynamic Allocation V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Affiliated Investment Companies — 121.3%(d)
Equity Funds — 58.4%
iShares Core MSCI EAFE ETF		190,016	$	10,450,880
iShares Core MSCI Emerging Markets ETF(a)		81,513		3,843,338
iShares Core S&P 500 ETF(a)		109,639		27,586,269
iShares Core S&PMid-Cap ETF(a)		20,257		3,363,877
iShares Core S&PSmall-Cap ETF(a)		31,125		2,157,585
iShares Edge MSCI Minimum Volatility USA ETF(a)		91,341		4,786,268
iShares Edge MSCI USA Momentum Factor ETF(a)		78,970		7,915,163
iShares Global Tech ETF		45,208		6,511,308
iShares S&P 500 Growth ETF(a)		14,822		2,233,231
iShares S&P 500 Value ETF(a)		22,800		2,305,992
				71,153,911
Fixed Income Funds — 41.3%
iShares iBoxx $ Investment Grade Corporate Bond ETF		105,522		11,904,992
iShares Intermediate-Term Corporate Bond ETF(a)		175,713		9,210,876
iShares J.P. Morgan USD Emerging Markets Bond ETF		62,919		6,537,913
iShares Short Maturity Bond ETF(a)		370,419		18,465,387

Security	Shares		Value
Fixed Income Funds (continued)
iShares U.S. Treasury Bond ETF(a)		164,381	$	4,051,992
				50,171,160
Short-Term Securities — 21.6%(b)
BlackRock Liquidity Funds,T-Fund, Institutional Class, 2.32%		272,513		272,513
SL Liquidity Series, LLC, Money Market Series, 2.57%(c)		26,024,369		26,021,766
				26,294,279
Total Affiliated Investment Companies — 121.3% (Cost: $157,476,510)				147,619,350
Liabilities in Excess of Other Assets — (21.3)%				(25,936,341	)
Net Assets — 100.0%			$	121,683,009

^(a)  Security, or a portion of the security, is on loan.

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

^(c) Security was purchased with the cash collateral from loaned securities.

^(d)  During the year ended December 31, 2018, investments in issuers considered to be affiliates of the Fund for the 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:

Affiliated 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		57,845		214,668	(b)		—			272,513	$	272,513	$	1,577		$	—		$	—
SL Liquidity Series, LLC, Money Market Series		2,016,002		24,008,367	(b)		—			26,024,369		26,021,766		60,001	(c)		(5,127	)		(846	)
iShares1-3 Year Treasury Bond ETF		23,797		3,441			(27,238	)		—		—		7,040			(32,501	)		16,848
iShares 20+ Year Treasury Bond ETF		—		5,600			(5,600	)		—		—		4,471			18,873			—
iShares Agency Bond ETF		11,079		300			(11,379	)		—		—		5,711			(24,942	)		220
iShares Commodities Select Strategy ETF		6,561		600			(7,161	)		—		—		2,930			39,439			(16,904	)
iShares Core MSCI EAFE ETF		—		203,181			(13,165	)		190,016		10,450,880		187,273			(47,557	)		(863,834	)
iShares Core MSCI Emerging Markets ETF		50,350		69,237			(38,074	)		81,513		3,843,338		84,777			297,238			(525,507	)
iShares Core S&P 500 ETF		15,804		98,112			(4,277	)		109,639		27,586,269		281,230			310,289			(2,060,848	)
iShares Core S&PMid-Cap ETF		12,423		18,803			(10,969	)		20,257		3,363,877		33,384			404,294			(713,878	)
iShares Core S&PSmall-Cap ETF		19,736		24,727			(13,338	)		31,125		2,157,585		19,023			283,951			(488,953	)
iShares Edge MSCI Minimum Volatility Global ETF		8,397		2,800			(11,197	)		—		—		8,960			147,889			(109,653	)
iShares Edge MSCI Minimum Volatility USA ETF		18,450		78,476			(5,585	)		91,341		4,786,268		47,510			55,227			(154,615	)
iShares Edge MSCI USA Momentum Factor ETF		1,400		88,042			(10,472	)		78,970		7,915,163		47,269			86,801			(435,990	)
iShares Global Infrastructure ETF		8,277		300			(8,577	)		—		—		4,923			13,992			(37,044	)
iShares Global Tech ETF		—		46,348			(1,140	)		45,208		6,511,308		36,797			(14,311	)		(700,087	)
iShares Gold Trust		10,379		1,450			(11,829	)		—		—		—			1,414			(8,039	)
iShares iBoxx $ High Yield Corporate Bond ETF		14,263		600			(14,863	)		—		—		15,356			(9,613	)		(13,820	)
iShares iBoxx $ Investment Grade Corporate Bond ETF		15,740		96,524			(6,742	)		105,522		11,904,992		161,087			5,041			(169,353	)
iShares Intermediate-Term Corporate Bond ETF		—		191,967			(16,254	)		175,713		9,210,876		133,802			(4,394	)		(52,103	)
iShares International Aggregate Bond ETF		—		1,600			(1,600	)		—		—		935			(625	)		—
iShares J.P. Morgan USD Emerging Markets Bond ETF		3,140		61,034			(1,255	)		62,919		6,537,913		170,612			(4,728	)		(172,884	)
iShares MSCI Canada ETF		21,075		300			(21,375	)		—		—		—			46,125			(82,130	)
iShares MSCI EAFE ETF		56,073		1,700			(57,773	)		—		—		—			657,197			(615,024	)
iShares MSCI EAFESmall-Cap ETF		13,600		100			(13,700	)		—		—		—			157,760			(135,709	)
iShares Short Maturity Bond ETF		—		381,298			(10,879	)		370,419		18,465,387		139,371			(1,846	)		(96,893	)
iShares Silver Trust		4,905		1,820			(6,725	)		—		—		—			(11,338	)		(1,680	)
iShares S&P 500 Growth ETF		—		15,435			(613	)		14,822		2,233,231		11,122			5,985			(128,074	)
iShares S&P 500 Value ETF		—		23,420			(620	)		22,800		2,305,992		24,516			(975	)		(159,529	)
iShares U.S. Credit Bond ETF		20,159		1,099			(21,258	)		—		—		18,141			(32,278	)		(61,398	)
iShares U.S. Preferred Stock ETF		13,613		400			(14,013	)		—		—		15,116			(15,181	)		(1,250	)
iShares U.S. Real Estate ETF		3,900		2,400			(6,300	)		—		—		11,129			8,084			(6,792	)
iShares U.S. Treasury Bond ETF		—		168,524			(4,143	)		164,381		4,051,992		27,837			(568	)		53,925
Total											$	147,619,350	$	1,561,900		$	2,333,615		$	(7,741,844	)

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

^(b)  Represents net shares purchased.

^(c)  Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.

CONSOLIDATED SCHEDULE OF INVESTMENTS 5

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock iShares^® Dynamic Allocation V.I. Fund

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 Consolidated Financial Statements.

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

	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Affiliated Investment Companies	$	121,325,071	$	—	$	—	$	121,325,071
Short-Term Securities		272,513		—		—		272,513
	$	121,597,584	$	—	$	—	$	121,597,584
Investments valued at NAV(a)								26,021,766
Total Investment							$	147,619,350

^(a)  As of December 31, 2018, certain investments of the Fund were fair valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

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

See notes to consolidated financial statements.

6 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Consolidated Statement of Assets and Liabilities

December 31, 2018

	BlackRock iShares® Dynamic Allocation V.I. Fund
ASSETS
Investments at value — affiliated (including securities loaned at value of $25,634,487) (cost — $157,476,510)	$	147,619,350
Cash		106
Receivables:
Securities lending income — affiliated		5,643
Capital shares sold		194,057
Dividends — affiliated		340
Dividends — unaffiliated		38,254
From the Manager		1,161
Prepaid expenses		119
Total assets		147,859,030
LIABILITIES
Cash collateral on securities loaned at value		26,027,438
Payables:
Investments purchased		69,991
Accounting services fees		9,664
Capital shares redeemed		4,273
Printing fees		18,568
Distribution fees		822
Transfer agent fees		24,810
Board realignment and consolidation		1,177
Investment advisory fees		2,758
Directors’ and Officer’s fees		5,084
Other affiliates		66
Other accrued expenses		11,370
Total liabilities		26,176,021
NET ASSETS	$	121,683,009
NET ASSETS CONSIST OF
Paid-in capital	$	131,354,207
Accumulated loss		(9,671,198	)
NET ASSETS	$	121,683,009
NET ASSET VALUE
Class I — Based on net assets of $117,501,961 and 11,389,620 shares outstanding, 100 million shares authorized, $0.10 par value.	$	10.32
Class III — Based on net assets of $4,181,048 and 406,539 shares outstanding, 100 million shares authorized, $0.10 par value.	$	10.28

See notes to consolidated financial statements.

CONSOLIDATED FINANCIAL STATEMENTS 7

Consolidated Statement of Operations

Year Ended December 31, 2018

	BlackRock iShares® Dynamic Allocation V.I. Fund
INVESTMENT INCOME
Dividends — affiliated	$	1,501,899
Securities lending income — affiliated — net		60,001
Total investment income		1,561,900
EXPENSES
Reorganization		118,371
Transfer agent — class specific		98,712
Professional		72,657
Investment advisory		70,875
Accounting services		50,451
Printing		25,746
Directors and Officer		18,210
Distribution — class specific		9,664
Custodian		8,045
Transfer agent		5,079
Registration		3,869
Board realignment and consolidation		1,195
Miscellaneous		6,212
Total expenses		489,086
Less:
Fees waived and/or reimbursed by the Manager		(203,677	)
Transfer agent fees waived and/or reimbursed — class specific		(98,709	)
Total expenses after fees waived and/or reimbursed		186,700
Net investment income		1,375,200
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain from investments — affiliated		2,333,615
Net change in unrealized depreciation on investments — affiliated		(7,741,844	)
Net realized and unrealized loss		(5,408,229	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(4,033,029	)

See notes to consolidated financial statements.

8 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Consolidated Statements of Changes in Net Assets

	BlackRock iShares® Dynamic Allocation V.I. Fund
	Year Ended December 31,
	2018			2017
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income	$	1,375,200		$	518,378
Net realized gain		2,333,615			379,198
Net change in unrealized appreciation (depreciation)		(7,741,844	)		2,493,939
Net increase (decrease) in net assets resulting from operations		(4,033,029	)		3,391,515
DISTRIBUTIONS TO SHAREHOLDERS(a)(b)
From net investment income and net realized gain:
Class I		(2,881,352	)		(452,727	)
Class III		(93,658	)		(56,728	)
From return of capital:
Class I		—			(13,367	)
Class III		—			(3,178	)
Decrease in net assets resulting from distributions to shareholders		(2,975,010	)		(526,000	)
CAPITAL SHARE TRANSACTIONS
Net increase in net assets derived from capital share transactions		99,743,994			6,142,899
NET ASSETS(b)
Total increase in net assets		92,735,955			9,008,414
Beginning of year		28,947,054			19,938,640
End of year	$	121,683,009		$	28,947,054

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

^(b)  Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year RegulationS-X presentation changes. Refer to Note 11 for this prior year information.

See notes to consolidated financial statements.

CONSOLIDATED FINANCIAL STATEMENTS 9

Consolidated Financial Highlights

(For a share outstanding throughout each period)

	BlackRock iShares® Dynamic Allocation V.I. Fund
	Class I
	Year Ended December 31,												Period from 04/30/2014 (a) to 12/31/2014
	2018			2017			2016			2015
Net asset value, beginning of period	$	11.13		$	9.85		$	9.45		$	10.02		$	10.00
Net investment income(b)		0.33			0.23			0.22			0.24			0.20
Net realized and unrealized gain (loss)		(0.88	)		1.26			0.39			(0.63	)		(0.07	)
Net increase (decrease) from investment operations		(0.55	)		1.49			0.61			(0.39	)		0.13
Distributions(c)
From net investment income		(0.11	)		(0.20	)		(0.20	)		(0.17	)		(0.10	)
From net realized gain		(0.15	)		—			—			—			(0.01	)
From return of capital		—			(0.01	)		(0.01	)		(0.01	)		—
Total distributions		(0.26	)		(0.21	)		(0.21	)		(0.18	)		(0.11	)
Net asset value, end of period	$	10.32		$	11.13		$	9.85		$	9.45		$	10.02
Total Return(d)
Based on net asset value		(4.94	)%		15.11	%		6.49	%		(3.88	)%		1.27	%(e)
Ratios to Average Net Assets(f)
Total expenses		1.00	%(g)		0.94	%		0.83	%		1.90	%		6.47	%(h)(i)
Total expenses after fees waived and/or reimbursed		0.37	%(g)		0.53	%		0.53	%		0.64	%		0.75	%(h)
Net investment income		3.01	%		2.14	%		2.27	%		2.41	%		2.85	%(h)
Supplemental Data
Net assets, end of period (000)	$	117,502		$	25,332		$	18,135		$	14,636		$	6,092
Portfolio turnover rate		54	%		48	%		54	%		54	%		25	%

^(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 insurance-related fees and expenses 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:

	Year Ended December 31,												Period from 04/30/2014 (a) to 12/31/2014
	2018			2017			2016			2015
Investments in underlying funds		0.20	%		0.21	%		0.23	%		0.29	%		0.27	%

^(g)  Includes reorganization costs associated with the Fund’s reorganization. Without these costs, the total expenses and total expenses after fees waived and/or reimbursed would have been 0.76% and 0.37%, respectively.

^(h)  Annualized.

⁽ⁱ⁾  Organization and/or offering costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses for Class I would have been 7.00%.

See notes to consolidated financial statements.

10 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Consolidated Financial Highlights  (continued)

(For a share outstanding throughout each period)

	BlackRock iShares® Dynamic Allocation V.I. Fund (continued)
	Class III
	Year Ended December 31,												Period from 04/30/2014 (a) to 12/31/2014
	2018			2017			2016			2015
Net asset value, beginning of period	$	11.09		$	9.83		$	9.44		$	10.01		$	10.00
Net investment income(b)		0.20			0.21			0.21			0.26			0.17
Net realized and unrealized gain (loss)		(0.77	)		1.24			0.37			(0.66	)		(0.06	)
Net increase (decrease) from investment operations		(0.57	)		1.45			0.58			(0.40	)		0.11
Distributions(c)
From net investment income		(0.09	)		(0.18	)		(0.18	)		(0.16	)		(0.09	)
From net realized gain		(0.15	)		—			—			—			(0.01	)
From return of capital		—			(0.01	)		(0.01	)		(0.01	)		—
Total distributions		(0.24	)		(0.19	)		(0.19	)		(0.17	)		(0.10	)
Net asset value, end of period	$	10.28		$	11.09		$	9.83		$	9.44		$	10.01
Total Return(d)
Based on net asset value		(5.18	)%		14.72	%		6.16	%		(3.99	)%		1.05	%(e)
Ratios to Average Net Assets(f)
Total expenses		1.38	%(g)		1.25	%		1.02	%		1.87	%		8.32	%(h)(i)
Total expenses after fees waived and/or reimbursed		0.72	%(g)		0.78	%		0.78	%		0.86	%		1.00	%(h)
Net investment income		1.83	%		1.97	%		2.08	%		2.56	%		2.54	%(h)
Supplemental Data
Net assets, end of period (000)	$	4,181		$	3,615		$	1,804		$	1,174		$	20
Portfolio turnover rate		54	%		48	%		54	%		54	%		25	%

^(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 insurance-related fees and expenses 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:

	Year Ended December 31,												Period from 04/30/2014 (a) to 12/31/2014
	2018			2017			2016			2015
Investments in underlying funds		0.20	%		0.21	%		0.23	%		0.29	%		0.27	%

^(g)  Includes reorganization costs associated with the Fund’s reorganization. Without these costs, the total expenses and total expenses after fees waived and/or reimbursed would have been 1.14% and 0.72%, respectively.

^(h)  Annualized.

⁽ⁱ⁾  Organization and/or offering costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses for Class III would have been 9.13%.

See notes to consolidated financial statements.

CONSOLIDATED FINANCIAL HIGHLIGHTS 11

Notes to Consolidated Financial Statements

1. ORGANIZATION

BlackRock Variable Series Funds, Inc. (the “Company”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as anopen-end management investment company. The Company is organized as a Maryland corporation that is comprised of 15 separate portfolios. The funds offer shares to insurance companies for their separate accounts to fund benefits under certain variable annuity and variable life insurance contracts. The consolidated financial statements presented are for BlackRock iShares^@ Dynamic Allocation V.I. Fund (the “Fund”). The Fund is classified as diversified. Class I and Class III Shares have equal voting, dividend, liquidation and other rights, except that only shares of the respective classes are entitled to vote on matters concerning only that class. In addition, Class III Shares bear certain expenses related to the distribution of such shares.

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

Reorganization:The Board and the Board of Trustees of State Farm Variable Product Trust and shareholders of the Target Fund approved the reorganization of the Target Fund into the Fund. As a result, the Fund acquired substantially all of the assets and assumed substantially all of the liabilities of the Target Fund in exchange for an equal aggregate value of newly-issued Class I Shares of the Fund.

Each shareholder of the Target Fund received shares of the 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 October 26, 2018, less the costs of the Target Fund’s reorganization.

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

Target Fund	Shares Prior to Reorganization		Conversion Ratio		iShares® Dynamic Allocation V.I. Fund Share Class		Shares of iShares® Dynamic  Allocation V.I. Fund
State Farm Stock and Bond Balanced Fund		9,171,251		0.94097697		Class I		8,629,936

The Target Fund’s net assets and composition of net assets on October 26, 2018, the valuation date of the reorganization were as follows:

Target Fund	Net Assets		Paid-In Capital		Accumulated Loss
State Farm Stock and Bond Balanced Fund	$	93,649,853	$	98,897,788	$	(5,247,935	)

For financial reporting purposes, assets received and shares issued by the 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 Fund’s realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes.

The net assets of the Fund before the reorganization were $32,398,241. The aggregate net assets of the Fund immediately after the acquisition amounted to $126,048,094. The Target Fund’s fair value and cost of investments prior to the reorganization were as follows:

Target Fund	Fair Value of Investments		Cost of Investments
State Farm Stock and Bond Balanced Fund	$	93,059,358	$	98,307,293

The purpose of the transaction was to combine the assets of the Target Fund with the assets of the Fund. The reorganization was a tax-free event and closed on October 29, 2018.

Assuming the acquisition had been completed on January 1, 2018, the beginning of the fiscal reporting period of the Fund, the pro forma results of operations for the year ended December 31, 2018, are as follows:

• Net investment income: $2,113,145

• Net realized and change in unrealized loss on investments: $(6,224,912)

• Net decrease in net assets resulting from operations: $(4,111,767)

Because the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of the Fund that have been included in the Fund’s Consolidated Statement of Operations since October 29, 2018.

Reorganization costs incurred by the Fund in connection with the reorganization were expensed by the Fund. The Manager reimbursed the Fund $116,751, which is included in fees waived and/or reimbursed by the Manager in the Consolidated Statement of Operations.

Basis of Consolidation:The accompanying consolidated financial statements of the Fund include the accounts of iShares^@ Dynamic Allocation V.I. Fund (Cayman) (the “Subsidiary”), which is a wholly-owned subsidiary of the Fund and primarily invests in commodity-related instruments. The Subsidiary enables the Fund to hold these commodity-related instruments and satisfy regulated investment company tax requirements. The Fund may invest up to 25% of its total assets in the Subsidiary. The net

12 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Consolidated Financial Statements  (continued)

assets of the Subsidiary as of period end were $0, which is 0.0% of the Fund’s consolidated net assets. Intercompany accounts and transactions, if any, have been eliminated. The Subsidiary is subject to the same investment policies and restrictions that apply to the Fund, except that the Subsidiary may invest without limitation in commodity-related instruments.

2. SIGNIFICANT ACCOUNTING POLICIES

The consolidated 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 consolidated financial statements, disclosure of contingent assets and liabilities at the date of the consolidated 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. The 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 Fund is 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. Income, expenses and realized and unrealized gains and losses are allocated daily to each class based on its relative net assets.

Distributions: Distributions paid by the Fund are recorded on theex-dividend date. Distributions of capital gains are recorded on theex-dividend date and made at least annually. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP.

Net income and realized gains from investments held by the Subsidiary are treated as ordinary income for tax purposes. If a net loss is realized by the Subsidiary in any taxable year, the loss will generally not be available to offset the Fund’s ordinary income and/or capital gains for that year.

Recent Accounting Standards: 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 Fund.

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

Other: Expenses directly related to the Fund or its classes are charged to the 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 Fund and other shared expenses prorated to the Fund are allocated daily to each class based on its relative net assets or other appropriate methods.

3. INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS

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

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

• Exchange-traded funds (“ETFs”) traded on a recognized securities exchange are valued at the official closing price each day, if available. For ETFs traded on more than one exchange, the official closing price on the exchange where the stock is primarily traded is used. ETFs 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.

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

• The Fund values its investment in SL Liquidity Series, LLC, Money Market Series (the “Money Market Series”) at fair value, which is ordinarily based upon its pro rata ownership in the underlying fund’s net assets. The Money Market Series seeks current income consistent with maintaining liquidity and preserving capital. Although the Money Market Series is not registered under the 1940 Act, its investments may follow the parameters of investments by a money market fund that is subject to Rule2a-7 under the 1940 Act.

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 the

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS 13

Notes to Consolidated Financial Statements  (continued)

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

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

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

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

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

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 privately held companies or funds. 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 the 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 is based on the pricing transparency of the investments and is not necessarily an indication of the risks associated with investing in those securities.

As of December 31, 2018, certain investments of the Fund were valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

4. SECURITIES AND OTHER INVESTMENTS

Securities Lending: The Fund may lend its securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received by the Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current market value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Fund and any additional required collateral is delivered to the Fund, or excess collateral returned by the Fund, on the next business day. During the term of the loan, the Fund is entitled to all distributions made on or in respect of the loaned securities, but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.

The market value of any securities on loan, all of which were classified as investment companies in the Fund’s Consolidated Schedule of Investments, and the value of any related collateral are shown separately in the Consolidated Statement of Assets and Liabilities as a component of investments at value — unaffiliated, and collateral on securities loaned at value, respectively. As of period end, any securities on loan were collateralized by cash and/or U.S. Government obligations. Cash collateral invested by the securities lending agent, BlackRock Investment Management, LLC (“BIM”), if any, is disclosed in the Consolidated Schedule of Investments.

Securities lending transactions are entered into by the Fund under Master Securities Lending Agreements (each, an “MSLA”), which provide the right, in the event of default (including bankruptcy or insolvency), for thenon-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, the Fund, as lender, would offset the market value of the collateral received against the market value of the securities loaned. When the value of the collateral is greater than that of the market value of the securities loaned, the lender is left with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, absent an event of default, the borrower can resell orre-pledge the loaned securities, and the Fund can reinvest cash collateral received in connection with loaned securities. Upon an event of default, the parties’ obligations to return the securities or collateral to the other party are extinguished, and the parties can resell orre-pledge the loaned securities or the collateral received in connection with the loaned securities in order to satisfy the defaulting party’s net payment obligation for all transactions under the MSLA. The defaulting party remains liable for any deficiency.

As of period end, the following table is a summary of the Fund’s securities lending agreements by counterparty which are subject to offset under an MSLA:

Counterparty	Securities Loaned at Value		Cash Collateral Received (a)			Net Amount
Deutsche Bank Securities Inc.	$	687,652	$	(687,652	)	$	—
JP Morgan Securities LLC		24,946,835		(24,946,835	)		—
	$	25,634,487	$	(25,634,487	)	$	—

^(a)  Cash collateral with a value of $ 26,027,438 has been received in connection with securities lending agreements. Collateral received in excess of the value of securities loaned from the individual counterparty, if any, is not shown for financial reporting purposes in the table above.

14 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Consolidated Financial Statements  (continued)

The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Fund benefits from a borrower default indemnity provided by BIM. BIM’s indemnity allows for full replacement of the securities loaned if the collateral received does not cover the value on the securities loaned in the event of borrower default. The Fund could incur a loss if the value of an investment purchased with cash collateral falls below the market value of loaned securities or if the value of an investment purchased with cash collateral falls below the value of the original cash collateral received.

5. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

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

For such services, the Fund pays the Manager a monthly fee at an annual rate equal to the following percentages of the average daily value of the Fund’s net assets:

Average Daily Net Assets	Investment Advisory Fees
First $1 Billion		0.150	%
$1 Billion — $3 Billion		0.140
$3 Billion — $5 Billion		0.135
Greater than $5 Billion		0.130

The Manager provides investment management and other services to the Subsidiary. The Manager does not receive separate compensation from the Subsidiary for providing investment management or administrative services. However, the Fund pays the Manager based on the Fund’s net assets, which includes the assets of the Subsidiary.

Distribution Fees: The Company, on behalf of the Fund, entered into a Distribution Agreement and a Distribution Plan with BlackRock Investments, LLC (“BRIL”), an affiliate of the Manager. Pursuant to the Distribution Plan and in accordance with Rule12b-1 under the 1940 Act, the Fund pays BRIL ongoing distribution fees. The fees are accrued daily and paid monthly at an annual rate of 0.25% based upon the average daily net assets attributable to Class III.

BRIL and broker-dealers, pursuant tosub-agreements with BRIL, provide shareholder servicing and distribution services to the Fund. 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 class specific distribution fees borne directly by Class III were $9,664.

Transfer Agent: On behalf of the Fund, the Manager entered into agreements with insurance companies and other financial intermediaries (“Service Organizations”), some of which may be affiliates. Pursuant to these agreements, the Service Organizations provide the Fund with administrative, networking, recordkeeping,sub-transfer agency and shareholder services tosub-accounts they service. For these services, the Service Organizations receive an annual fee per shareholder account, which will vary depending on share class and/or net assets of Fund shareholders serviced by the Service Organizations which is shown as transfer agent — class specific. For the year ended December 31, 2018, the Fund did not pay any amounts to affiliates in return for these services.

In addition, the Fund pays the transfer agent, which is not an affiliate, a fee for the issuance, transfer and redemption of shares and the opening and maintenance of shareholder accounts, which is included in transfer agent in the Consolidated Statement of Operations. For the year ended December 31, 2018, the following table shows the class specific transfer agent fees borne directly by each share class of the Fund:

Class I		Class III	Total
$	90,392	$8,320	$	98,712

Expense Limitations, Waivers and Reimbursements: With respect to the Fund, the Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees the 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. This amount is included in fees waived and/or reimbursed by the Manager in the Consolidated Statement of Operations. For the year ended December 31, 2018, the amount waived was $82.

In addition, the Manager has contractually agreed to waive the management fee on assets estimated to be attributable to the Fund’s investments in other equity and fixed-income mutual funds managed by BlackRock or its affiliates, if any. For the year ended December 31, 2018, there were no fees waived by the manager.

For the year ended December 31, 2018, the Fund reimbursed the Manager $442 for certain accounting services, which is included in accounting services in the Consolidated Statement of Operations.

Effective October 29, 2018, with respect to the 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 the Fund’s business (“expense limitation”). The expense limitations as a percentage of average daily net assets are as follows:

Class I		Class III
	0.19%		0.44%

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS 15

Notes to Consolidated Financial Statements  (continued)

The Manager has agreed not to reduce or discontinue this contractual expense limitation through April 30, 2021, unless approved by the Board, including a majority of the directors who are not “interested persons” of the Fund, as defined in the 1940 Act (“Independent Directors”), or by a vote of a majority of the outstanding voting securities of the Fund. For the year ended December 31, 2018, the Manager waived and/or reimbursed $86,844 which is included in fees waived and/or reimbursed by the Manager in the Consolidated Statement of Operations.

Prior to October 29, 2018, Class I and Class III expense limitations as a percentage of average daily net assets were 0.53% and 0.78%, respectively.

These amounts waived and/or reimbursed are shown as transfer agent fees waived and/or reimbursed — class specific in the Consolidated Statement of Operations. For the year ended December 31, 2018, class specific expense waivers and/or reimbursements were as follows:

	Class I		Class III		Total
Transfer agent fees waived and/or reimbursed	$	90,389	$	8,320	$	98,709

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

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

This repayment applies only to the contractual expense limitation on net expenses and does not apply to any voluntary waivers that may be in effect from time to time.

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

	Expiring December 31,
	2019		2020
Fund Level	$	79,451	$	86,844
Class I		25,064		90,389
Class III		3,305		8,320

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

Fund Level	$	21,999
Class I		29,259
Class III		2,053

Securities Lending: The U.S. Securities and Exchange Commission (“SEC”) has issued an exemptive order which permits BIM, an affiliate of the Manager, to serve as securities lending agent for the Fund, subject to applicable conditions. As securities lending agent, BIM bears all operational costs directly related to securities lending. The Fund is responsible for expenses in connection with the investment of cash collateral received for securities on loan (the “collateral investment expenses”). The cash collateral is invested in a private investment company managed by the Manager or its affiliates. However, BIM has agreed to cap the collateral investment expenses of the private investment company to an annual rate of 0.04%. The investment adviser to the private investment company will not charge any advisory fees with respect to shares purchased by the Fund. The private investment company in which the cash collateral has been invested may, under certain circumstances, impose a liquidity fee of up to 2% of the value withdrawn or temporarily restrict withdrawals for up to 10 business days during a 90 day period, in the event that the private investment company’s weekly liquid assets fall below certain thresholds.

Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment expenses. The Fund retains a portion of securities lending income and remits a remaining portion to BIM as compensation for its services as securities lending agent.

Pursuant to a securities lending agreement, the Fund retains 80% of securities lending income, and this amount retained can never be less than 70% of the total of securities lending income plus the collateral investment expenses.

In addition, commencing the business day following the date that the aggregate securities lending income earned across the Equity-Bond Complex in a calendar year exceeds a specified threshold, the Fund, pursuant to the securities lending agreement, will retain for the remainder of that calendar year securities lending income in an amount equal to 85% of securities lending income, and this amount retained can never be less than 70% of the total of securities lending income plus the collateral investment expenses.

The share of securities lending income earned by the Fund is shown as securities lending income — affiliated — net in the Consolidated Statement of Operations. For the year ended December 31, 2018, the Fund paid BIM $12,881 for securities lending agent services.

16 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Consolidated Financial Statements  (continued)

Interfund Lending: In accordance with an exemptive order (the “Order”) from the SEC, the 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 the Fund’s investment policies and restrictions. The 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 Fund did not participate in the Interfund Lending Program.

Directors and Officers: Certain directors and/or officers of the Company are directors and/or officers of BlackRock or its affiliates. The Fund reimburses the Manager for a portion of the compensation paid to the Company’s Chief Compliance Officer, which is included in Directors and Officer in the Consolidated Statement of Operations.

6. PURCHASES AND SALES

For the year ended December 31, 2018, purchases and sales of investments, and excluding short-term securities, were $33,229,988 and $28,504,245, respectively.

7. INCOME TAX INFORMATION

It is the 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.

The 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 the Fund’s U.S. federal tax returns generally remains open for each of the four years ended December 31, 2018. The statutes of limitations on the 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 Fund as of December 31, 2018, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the Fund’s consolidated 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 difference attributable to the characterization of income/losses from a wholly owned subsidiary was reclassified to the following accounts:

Paid-in capital	$	(9,924	)
Accumulated earnings		9,924

The tax character of distributions paid was as follows:

	12/31/18		12/31/17
Ordinary income	$	1,250,006	$	509,455
Long term capital gains		1,725,004		—
Tax return of capital		—		16,545
	$	2,975,010	$	526,000

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

Undistributed ordinary income	$	23,778
Undistributed long-term capital gains		130,939
Net unrealized losses(a)		(9,825,915	)
	$	(9,671,198	)

^(a)  The difference between book-basis andtax-basisnet unrealized losses was attributable primarily to the tax deferral of losses on wash sales and the timing and recognition of partnership income.

During the year ended December 31, 2018, the Fund utilized $458,729 of its capital loss carryforward.

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

Tax cost	$	157,563,080
Gross unrealized appreciation	$	73,594
Gross unrealized depreciation		(10,017,324	)
Net unrealized depreciation	$	(9,943,730	)

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS 17

Notes to Consolidated Financial Statements  (continued)

8. BANK BORROWINGS

The Company, on behalf of the Fund, 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 Fund may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Fund, 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. Prior to April 19, 2018, the aggregate commitment amount was $2.1 billion and the fee was 0.12% per annum. 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 Consolidated Statement 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 Fund did not borrow under the credit agreement.

9. PRINCIPAL RISKS

In the normal course of business, the Fund invests in securities or other instruments and may enter into certain transactions, and such activities subject the 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. The Fund’s prospectus provides details of the risks to which the Fund is subject.

The Fund may be exposed to additional risks when reinvesting cash collateral in money market funds that do not seek to maintain a stable NAV per share of $1.00, which may be subject to redemption gates or liquidity fees under certain circumstances.

Counterparty Credit Risk: The Fund 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 Fund manages 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 Fund to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Fund’s exposure to market, issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Consolidated Statement of Assets and Liabilities, less any collateral held by the Fund.

10. CAPITAL SHARE TRANSACTIONS

Transactions in capital shares for each class were as follows:

	Year Ended 12/31/2018						Year Ended 12/31/2017
	Shares			Amount			Shares			Amount
Class I
Shares sold		766,813		$	8,557,354			583,027		$	6,150,100
Shares issued in reinvestment of distributions		279,201			2,881,352			41,877			466,094
Shares issued in reorganization		8,629,936			93,649,853			—			—
Shares redeemed		(563,155	)		(6,224,356	)		(189,522	)		(1,993,433	)
Net increase		9,112,795		$	98,864,203			435,382		$	4,622,761
Class III
Shares sold		173,313		$	1,932,140			176,888		$	1,880,454
Shares issued in reinvestment of distributions		9,111			93,658			5,402			59,907
Shares redeemed		(101,732	)		(1,146,007	)		(39,950	)		(420,223	)
Net increase		80,692		$	879,791			142,340		$	1,520,138
Total Net Increase		9,193,487		$	99,743,994			577,722		$	6,142,899

11. 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 Fund has adopted the amendments pertinent to RegulationS-X in this shareholder report. The amendments impacted certain disclosure presentation on the Consolidated Statement of Assets and Liabilities, Consolidated Statements of Changes in Net Assets and Notes to the Consolidated Financial Statements.

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

18 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Consolidated Financial Statements  (continued)

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

Share Class	Net Investment Income			Return of Capital
Class I	$	(452,727	)	$	(13,367	)
Class III		(56,728	)		(3,178	)

Undistributed net investment income as of December 31, 2017 was $16,399.

12. SUBSEQUENT EVENTS

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

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS 19

Report of Independent Registered Public Accounting Firm

To the Shareholders of BlackRock iShares Dynamic Allocation V.I. Fund and the Board of Directors of BlackRock Variable Series Funds, Inc.:

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying consolidated statement of assets and liabilities of BlackRock iShares Dynamic Allocation V.I. Fund, of BlackRock Variable Series Funds, Inc. and subsidiary (the “Fund”), including the consolidated schedule of investments, as of December 31, 2018, the related consolidated statement of operations for the year then ended, the consolidated statements of changes in net assets for each of the two years in the period then ended, the consolidated financial highlights for each of the four years in the period then ended and for the period from April 30, 2014 (commencement of operations) through December 31, 2014, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of December 31, 2018, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the four years in the period then ended and for the period from April 30, 2014 (commencement of operations) through December 31, 2014, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s 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 Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its 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 Fund’s 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 15, 2019

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

20 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Glossary of Terms Used in this Report

Currency
USD	United States Dollar
Portfolio Abbreviations
EAFE	Europe, Australasia and Far East
ETF	Exchange-Traded Fund
MSCI	Morgan Stanley Capital International
S&P	Standard & Poor’s

GLOSSARYOF TERMS USEDINTHIS REPORT 21

DECEMBER 31, 2018

ANNUAL REPORT

BlackRock Variable Series Funds, Inc.

^Ø  BlackRock Large Cap Focus Growth V.I. Fund

Not FDIC Insured • May Lose Value • No Bank Guarantee

Fund Summary  as of December 31, 2018 BlackRock Large Cap Focus Growth V.I. Fund

Investment Objective

BlackRock Large Cap Focus Growth V.I. Fund’s (the “Fund”) investment objective is to seek long-term capital growth.

Portfolio Management Commentary

How did the Fund perform?

For the 12-month period ended December 31, 2018, the Fund outperformed its benchmark, the Russell 1000^® Growth Index.

What factors influenced performance?

On a sector basis, the largest contributor to relative performance was consumer discretionary where internet & direct marketing retail holdings had the most positive impact. Selection within hotels, restaurants & leisure and a lack of exposure to media also added value within the sector. Health care and industrials were additional sources of strength. Within health care, equipment & supplies and life sciences tools & services holdings drove gains, while positioning to machinery and zero exposure to air freight & logistics benefited performance in industrials.

The top individual contributors were Amazon.com Inc. and Netflix Inc. Amazon outperformed as the company delivered a series of strong earnings reports, with revenue acceleration in North America, International, Prime, Amazon Web Services (“AWS”) and advertising. In addition, Amazon’s operating margin expansion has been notable, driven by advertising, subscription services, AWS and shipping efficiencies. At period end, the Fund maintained its overweight position in Amazon. Netflix continued to outperform after a series of strong earnings reports. The company exceeded 23 million global net subscriber additions for 2017 and is on pace to exceed 28 million in 2018, ahead of our forecasts. Overall, the investment adviser’s thesis is playing out as the mutually reinforcing growth of content and subscribers is benefiting Netflix as it gains scale.

Conversely, communication services detracted from performance with entertainment holdings hindering results. Consumer staples and materials also weighed on performance. Selection within beverages was a drag in consumer staples, while an overweight to construction materials was a weakness in materials (at period end the Fund had zero exposure to construction materials).

The top detractors over the annual period were Tencent Holdings Ltd. and Constellation Brands Inc. Tencent underperformed amid U.S./China trade tensions, weakness in the Chinese stock market, regulatory uncertainty and questions around timing of game launches and monetization. In addition, data showed a modest decline in Tencent’s share of mobile user time spent. Constellation has underperformed on investor concerns over sales growth for its Mexican import beers and overall beer profit margin growth, as well over reinvestment risk in cannabis and hemp company Canopy Growth. Constellation announced a $4 billion investment in Canopy Growth during the second quarter.

Describe recent portfolio activity.

Due to a combination of portfolio trading activity, market movement and sector reclassifications during the 12-month period, the portfolio’s weighting in the communication services sector increased, particularly within entertainment and interactive media & services. Health care exposure also increased, namely within equipment & supplies. Exposure to information technology decreased, largely with respect to internet software & services. Consumer discretionary exposure, namely within specialty retail, declined as well.

Describe portfolio positioning at period end.

As of period end, the Fund’s largest overweight position relative to the Russell 1000^® Growth Index was the health care sector, followed by communication services. Industrials was the largest sector underweight, followed by consumer staples.

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.

2 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Fund Summary  as of December 31, 2018 (continued) BlackRock Large Cap Focus Growth V.I. Fund

TOTAL RETURN BASED ON A $10,000 INVESTMENT

^(a)  Assuming transaction costs, if any, and other operating expenses, including investment advisory fees. Does not include insurance related fees and expenses.

^(b)  Under normal circumstances, the Fund seeks to invest at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in large cap equity securities and derivatives that have similar economic characteristics to such securities. The Fund’s total returns prior to June 12, 2017 are the returns of the Fund when it followed different investment strategies under the name “BlackRock Large Cap Growth V.I. Fund.”

^(c)  An unmanaged index that measures the performance of the large cap growth segment of the U.S. equity universe and consists of those Russell 1000^® securities with higherprice-to-book ratios and higher forecasted growth values.

Performance Summary for the Period Ended December 31, 2018

	6-Month			Average Annual Total Returns
	Total Returns (b)			1 Year (b)			5 Years (b)			10 Years (b)
Class I(a)		(10.60	)%		3.01	%		11.05	%		14.61	%
Class III(a)		(10.72	)		2.77			10.78			14.33
Russell 1000® Growth Index		(8.17	)		(1.51	)		10.40			15.29

^(a)  Average annual and cumulative total returns are based on changes in net asset value for the periods shown, and assume reinvestment of all distributions at net asset value on theex-dividend date. Insurance-related fees and expenses are not reflected in these returns. The Fund’s total returns prior to June 12, 2017 are the returns of the Fund when it followed different investment strategies under the name “BlackRock Large Cap Growth V.I. Fund.”

^(b)  For a portion of the period, the Fund’s investment adviser waived a portion of its fee. Without such waiver, the Fund’s performance would have been lower.

Past performance is not indicative of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

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

Expense Example

	Actual						Hypothetical (a)
	Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Annualized Expense Ratio
Class I	$	1,000.00	$	894.00	$	3.87	$	1,000.00	$	1,021.12	$	4.13		0.81	%
Class III		1,000.00		892.80		5.06		1,000.00		1,019.86		5.40		1.06

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

^(b)  For each class of the Fund, expenses are equal to annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect theone-half year period shown).

See “Disclosure of Expenses” on the following page for further information on how expenses were calculated.

FUND SUMMARY 3

Fund Summary  as of December 31, 2018 (continued) BlackRock Large Cap Focus Growth V.I. Fund

SECTOR ALLOCATION

Sector	Percent of Net Assets
Information Technology		33	%
Health Care		19
Consumer Discretionary		17
Communication Services		14
Financials		6
Industrials		5
Real Estate		2
Consumer Staples		2
Short-Term Securities		7
Liabilities in Excess of Other Assets		(5	)

For Fund compliance purposes, the Fund’s sector classifications refer to one or more of the sectorsub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine sector sub classifications for reporting ease.

Disclosure of Expenses

Shareholders of the Fund may incur the following charges: (a) transactional expenses; and (b) operating expenses, including investment advisory fees, service and distribution fees, including12b-1 fees, acquired fund fees and expenses, and other fund expenses. The expense example on the previous page (which is based on a hypothetical investment of $1,000 invested on July 1, 2018 and held through December 31, 2018) is intended to assist shareholders both in calculating expenses based on an investment in the Fund and in comparing these expenses with similar costs of investing in other mutual funds.

The expense example provides 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 share class under the heading entitled “Expenses Paid During the Period.”

The expense example also provides information about hypothetical account values and hypothetical expenses based on the 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 the Fund and other funds, compare the 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.

The expenses shown in the expense example are intended to highlight shareholders’ ongoing costs only and do not reflect any transactional expenses, such as sales charges, if any. Therefore, the hypothetical example is 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.

4 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments December 31, 2018 BlackRock Large Cap Focus Growth V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Common Stocks — 98.2%
Automobiles — 0.9%
Tesla, Inc.(a)(b)		4,228	$	1,407,078
Beverages — 1.7%
Constellation Brands, Inc., Class A		16,720		2,688,910
Biotechnology — 1.4%
Vertex Pharmaceuticals, Inc.(b)		13,974		2,315,632
Capital Markets — 3.9%
CME Group, Inc.		14,503		2,728,304
S&P Global, Inc.		20,957		3,561,433
				6,289,737
Diversified Financial Services — 2.4%
Berkshire Hathaway, Inc., Class B(b)		18,726		3,823,475
Entertainment — 5.4%(b)
Electronic Arts, Inc.		53,328		4,208,112
Netflix, Inc.		17,256		4,618,741
				8,826,853
Equity Real Estate Investment Trusts (REITs) — 2.3%
SBA Communications Corp.(b)		22,962		3,717,318
Health Care Equipment & Supplies — 8.4%
Align Technology, Inc.(b)		12,732		2,666,463
Becton Dickinson and Co.		18,339		4,132,143
Boston Scientific Corp.(b)		112,641		3,980,733
Intuitive Surgical, Inc.(b)		5,987		2,867,294
				13,646,633
Health Care Providers & Services — 5.6%
Centene Corp.(b)		19,224		2,216,527
UnitedHealth Group, Inc.		27,549		6,863,007
				9,079,534
Hotels, Restaurants & Leisure — 1.2%
Domino’s Pizza, Inc.(a)		7,943		1,969,785
Interactive Media & Services — 8.6%
Alphabet, Inc., Class A(b)		6,127		6,402,470
Alphabet, Inc., Class C(b)		74		76,635
Facebook, Inc., Class A(b)		20,017		2,624,028
Tencent Holdings Ltd.		119,746		4,799,462
				13,902,595
Internet & Direct Marketing Retail — 14.6%
Amazon.com, Inc.(b)		11,146		16,740,958
Booking Holdings, Inc.(b)		2,326		4,006,349
MercadoLibre, Inc.		9,845		2,883,108
				23,630,415
IT Services — 10.6%
Mastercard, Inc., Class A		29,792		5,620,261
PayPal Holdings, Inc.(b)		40,343		3,392,443
Visa, Inc., Class A		62,088		8,191,890
				17,204,594
Life Sciences Tools & Services — 1.9%
Illumina, Inc.(b)		10,029		3,007,998
Machinery — 1.0%
Xylem, Inc.		23,815		1,588,937
Pharmaceuticals — 1.3%
Zoetis, Inc.		24,553		2,100,264
Professional Services — 2.6%
CoStar Group, Inc.(b)		12,290		4,145,909

Security		Shares			Value
Road & Rail — 1.8%
Union Pacific Corp.			21,561		$	2,980,377
Semiconductors & Semiconductor Equipment — 3.4%
ASML Holding NV (Registered), NYRS(a)			19,976			3,108,665
NVIDIA Corp.			18,665			2,491,778
						5,600,443
Software — 18.3%
Adobe, Inc.(b)			17,912			4,052,411
Autodesk, Inc.(b)			19,703			2,534,003
Intuit, Inc.			19,785			3,894,677
Microsoft Corp.			102,984			10,460,085
salesforce.com, Inc.(a)(b)			44,356			6,075,441
ServiceNow, Inc.(a)(b)			14,931			2,658,465
						29,675,082
Technology Hardware, Storage & Peripherals — 0.9%
Apple, Inc.			9,314			1,469,190
Total Common Stocks — 98.2% (Cost: $136,713,044)						159,070,759
Total Long-Term Investments — 98.2% (Cost: $136,713,044)						159,070,759
Short-Term Securities — 7.1%
Money Market Funds — 7.1%(c)(f)
BlackRock Liquidity Funds,T-Fund, Institutional Class, 2.32%			3,741,601			3,741,601
SL Liquidity Series, LLC, Money Market Series, 2.57%(d)			7,770,691			7,769,914
Total Money Market Funds — 7.1% (Cost: $11,512,292)						11,511,515
		Par (000)
Time Deposits — 0.0%
Brown Brothers Harriman & Co.:
0.83%, 01/02/19	AUD		—	(e)		230
1.52%, 01/02/19	HKD		1			90
Total Time Deposits — 0.0% (Cost: $320)						320
Total Short-Term Securities — 7.1% (Cost: $11,512,612)						11,511,835
Total Investments — 105.3% (Cost: $148,225,656)						170,582,594
Liabilities in Excess of Other Assets — (5.3)%						(8,517,100	)
Net Assets — 100.0%					$	162,065,494

^(a)  Security, or a portion of the security, is on loan.

^(b)  Non-income producing security.

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

^(d)  Security was purchased with the cash collateral from loaned securities.

^(e)  Amount is less than $500.

SCHEDULE OF INVESTMENTS 5

Schedule of Investments  (continued) December 31, 2018 BlackRock Large Cap Focus Growth V.I. Fund

^(f)  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, were as follows:

Affiliates	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		82,464		3,659,137		3,741,601	$	3,741,601	$	42,698		$	—		$	—
SL Liquidity Series, LLC, Money Market Series		2,198,635		5,572,056		7,770,691		7,769,914		24,190	(b)		(1,480	)		(777	)
							$	11,511,515	$	66,888		$	(1,480	)	$	(777	)

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

^(b)  Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.

For Fund compliance purposes, the Fund’s industry classifications refer to one or more of the industrysub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment advisor. These definitions may not apply for purposes of this report, which may combine such industrysub-classifications for reporting ease.

Fair Value Hierarchy as of Period End

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

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

	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Long-Term Investments
Common Stocks:
Automobiles	$	1,407,078	$	—	$	—		1,407,078
Beverages		2,688,910		—		—		2,688,910
Biotechnology		2,315,632		—		—		2,315,632
Capital Markets		6,289,737		—		—		6,289,737
Diversified Financial Services		3,823,475		—		—		3,823,475
Entertainment		8,826,853		—		—		8,826,853
Equity Real Estate Investment Trusts (REITs)		3,717,318		—		—		3,717,318
Health Care Equipment & Supplies		13,646,633		—		—		13,646,633
Health Care Providers & Services		9,079,534		—		—		9,079,534
Hotels, Restaurants & Leisure		1,969,785		—		—		1,969,785
Interactive Media & Services		9,103,133		4,799,462		—		13,902,595
Internet & Direct Marketing Retail		23,630,415		—		—		23,630,415
IT Services		17,204,594		—		—		17,204,594
Life Sciences Tools & Services		3,007,998		—		—		3,007,998
Machinery		1,588,937		—		—		1,588,937
Pharmaceuticals		2,100,264		—		—		2,100,264
Professional Services		4,145,909		—		—		4,145,909
Road & Rail		2,980,377		—		—		2,980,377
Semiconductors & Semiconductor Equipment		5,600,443		—		—		5,600,443
Software		29,675,082		—		—		29,675,082
Technology Hardware, Storage & Peripherals		1,469,190		—		—		1,469,190
Short-Term Securities
Money Market Funds		3,741,601		—		—		3,741,601
Time Deposits		—		320		—		320
Subtotal	$	158,012,898	$	4,799,782	$	—	$	162,812,680
Investments valued at NAV(a)								7,769,914
Total Investments							$	170,582,594

^(a)  As of December 31, 2018, certain investments of the Fund were fair valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

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

See notes to financial statements.

6 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Statement of Assets and Liabilities

December 31, 2018

	BlackRock Large Cap Focus Growth V.I. Fund
ASSETS
Investments at value — unaffiliated (including securities loaned at value of $7,654,931) (cost — $136,713,364)	$	159,071,079
Investments at value — affiliated (cost — $11,512,292)		11,511,515
Receivables:
Investments sold		1,902,180
Securities lending income — affiliated		1,435
Capital shares sold		86,094
Dividends — affiliated		5,575
Dividends — unaffiliated		25,135
Prepaid expenses		186
Total assets		172,603,199
LIABILITIES
Cash collateral on securities loaned at value		7,772,921
Payables:
Investments purchased		2,197,176
Capital shares redeemed		213,992
Distribution fees		15,155
Board realignment and consolidation		7,800
Investment advisory fees		92,106
Directors’ and Officer’s fees		5,552
Other affiliates		384
Other accrued expenses		232,619
Total liabilities		10,537,705
NET ASSETS	$	162,065,494
NET ASSETS CONSIST OF
Paid-in capital	$	138,951,741
Accumulated earnings		23,113,753
NET ASSETS	$	162,065,494
NET ASSET VALUE
Class I — Based on net assets of $91,380,167 and 6,862,235 shares outstanding, 100 million shares authorized, $0.10 par value.	$	13.32
Class III — Based on net assets of $70,685,327 and 5,384,728 shares outstanding, 100 million shares authorized, $0.10 par value.	$	13.13

See notes to financial statements.

FINANCIAL STATEMENTS 7

Statement of Operations

Year Ended December 31, 2018

	BlackRock Large Cap Focus Growth V.I. Fund
INVESTMENT INCOME
Dividends — affiliated	$	42,698
Dividends — unaffiliated		989,508
Securities lending income — affiliated — net		24,190
Foreign taxes withheld		(366	)
Total investment income		1,056,030
EXPENSES
Investment advisory		1,149,721
Transfer agent — class specific		367,671
Distribution — class specific		179,321
Professional		70,242
Accounting services		50,037
Directors and Officer		19,396
Printing		15,294
Board realignment and consolidation		7,907
Transfer agent		5,000
Custodian		4,163
Registration		598
Miscellaneous		12,383
Total expenses		1,881,733
Less:
Fees waived and/or reimbursed by the Manager		(1,760	)
Transfer agent fees waived and/or reimbursed — class specific		(243,856	)
Total expenses after fees waived and/or reimbursed		1,636,117
Net investment loss		(580,087	)
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — affiliated		(1,480	)
Investments — unaffiliated		15,470,426
Foreign currency transactions		(147	)
		15,468,799
Net change in unrealized appreciation (depreciation) on:
Investments — affiliated		(777	)
Investments — unaffiliated		(11,921,848	)
Foreign currency translations		(25	)
		(11,922,650	)
Net realized and unrealized gain		3,546,149
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	2,966,062

See notes to financial statements.

8 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Statements of Changes in Net Assets

	BlackRock Large Cap Focus Growth V.I. Fund
	Year Ended December 31,
	2018			2017
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income (loss)	$	(580,087	)	$	24,367
Net realized gain		15,468,799			27,208,552
Net change in unrealized appreciation (depreciation)		(11,922,650	)		9,233,119
Net increase in net assets resulting from operations		2,966,062			36,466,038
DISTRIBUTIONS TO SHAREHOLDERS(a)(b)
Class I		(10,303,447	)		(16,392,533	)
Class III		(7,856,717	)		(8,780,361	)
Decrease in net assets resulting from distributions to shareholders		(18,160,164	)		(25,172,894	)
CAPITAL SHARE TRANSACTIONS
Net increase in net assets derived from capital share transactions		22,131,719			17,142,344
NET ASSETS(b)
Total increase in net assets		6,937,617			28,435,488
Beginning of year		155,127,877			126,692,389
End of year	$	162,065,494		$	155,127,877

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

^(b)  Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year RegulationS-X presentation changes. Refer to Note 11 for this prior year information.

See notes to financial statements.

FINANCIAL STATEMENTS 9

Financial Highlights

(For a share outstanding throughout each period)

	BlackRock Large Cap Focus Growth V.I. Fund
	Class I
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	14.51		$	13.35		$	13.59		$	14.08		$	14.22
Net investment income (loss)(a)		(0.04	)		0.02			0.09			0.08			0.09
Net realized and unrealized gain		0.49			3.92			0.99			0.31			1.92
Net increase from investment operations		0.45			3.94			1.08			0.39			2.01
Distributions(b)
From net investment income		—			(0.01	)		(0.10	)		(0.09	)		(0.08	)
From net realized gain		(1.64	)		(2.77	)		(1.22	)		(0.79	)		(2.07	)
Total distributions		(1.64	)		(2.78	)		(1.32	)		(0.88	)		(2.15	)
Net asset value, end of year	$	13.32		$	14.51		$	13.35		$	13.59		$	14.08
Total Return(c)
Based on net asset value		3.01	%		29.56	%		7.89	%		2.73	%		14.16	%
Ratios to Average Net Assets(d)
Total expenses		0.96	%		1.01	%		0.96	%		0.95	%		0.96	%
Total expenses after fees waived and/or reimbursed		0.82	%		0.89	%		0.84	%		0.82	%		0.83	%
Net investment income (loss)		(0.23	)%		0.10	%		0.68	%		0.59	%		0.57	%
Supplemental Data
Net assets, end of year (000)	$	91,380		$	100,308		$	87,346		$	98,485		$	108,329
Portfolio turnover rate		63	%		95	%		37	%		35	%		51	%

^(a)  Based on average shares outstanding.

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

^(c)  Where applicable, excludes insurance-related fees and expenses and assumes the reinvestment of distributions.

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

	Year Ended December 31,
	2018			2017			2016			2015			2014
Investments in underlying funds		0.01	%		0.01	%		0.01	%		—	%		—	%

See notes to financial statements.

10 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Financial Highlights  (continued)

(For a share outstanding throughout each period)

	BlackRock Large Cap Focus Growth V.I. Fund (continued)
	Class III
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	14.36		$	13.24		$	13.50		$	13.99		$	14.14
Net investment income (loss)(a)		(0.08	)		(0.02	)		0.06			0.05			0.05
Net realized and unrealized gain		0.49			3.88			0.96			0.30			1.92
Net increase from investment operations		0.41			3.86			1.02			0.35			1.97
Distributions(b)
From net investment income		—			(0.00	)(c)		(0.06	)		(0.05	)		(0.05	)
From net realized gain		(1.64	)		(2.74	)		(1.22	)		(0.79	)		(2.07	)
Total distributions		(1.64	)		(2.74	)		(1.28	)		(0.84	)		(2.12	)
Net asset value, end of year	$	13.13		$	14.36		$	13.24		$	13.50		$	13.99
Total Return(d)
Based on net asset value		2.77	%		29.23	%		7.54	%		2.51	%		13.96	%
Ratios to Average Net Assets(e)
Total expenses		1.22	%		1.28	%		1.22	%		1.21	%		1.22	%
Total expenses after fees waived and/or reimbursed		1.07	%		1.14	%		1.09	%		1.07	%		1.09	%
Net investment income (loss)		(0.48	)%		(0.16	)%		0.42	%		0.35	%		0.32	%
Supplemental Data
Net assets, end of year (000)	$	70,685		$	54,820		$	39,346		$	37,818		$	32,090
Portfolio turnover rate		63	%		95	%		37	%		35	%		51	%

^(a)  Based on average shares outstanding.

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

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

^(d)  Where applicable, excludes insurance-related fees and expenses and assumes the reinvestment of distributions.

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

	Year Ended December 31,
	2018			2017			2016			2015			2014
Investments in underlying funds		0.01	%		0.01	%		0.01	%		—	%		—	%

See notes to financial statements.

FINANCIAL HIGHLIGHTS 11

Notes to Financial Statements

1. ORGANIZATION

BlackRock Variable Series Funds, Inc. (the “Company”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as anopen-end management investment company. The Company is organized as a Maryland corporation that is comprised of 15 separate portfolios. The funds offer shares to insurance companies for their separate accounts to fund benefits under certain variable annuity and variable life insurance contracts. The financial statements presented are for BlackRock Large Cap Focus Growth V.I. Fund (the “Fund”). The Fund is classified as diversified. Class I and Class III Shares have equal voting, dividend, liquidation and other rights, except that only shares of the respective classes are entitled to vote on matters concerning only that class. In addition, Class III Shares bear certain expenses related to the distribution of such shares.

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

2. SIGNIFICANT ACCOUNTING POLICIES

The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. The 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 Fund is 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. Income, expenses and realized and unrealized gains and losses are allocated daily to each class based on its relative net assets.

Foreign Currency Translation: The 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.

The 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 Statement 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. The 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.

Distributions:Distributions paid by the Fund are recorded on theex-dividend date. Distributions of capital gains are recorded on theex-dividend date and made at least annually. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP.

Recent Accounting Standards: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 Fund.

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

Other: Expenses directly related to the Fund or its classes are charged to the 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 Fund and other shared expenses prorated to the Fund are allocated daily to each class based on its relative net assets or other appropriate methods.

The Fund has an arrangement with its custodian whereby credits are earned on uninvested cash balances, which could be used to reduce custody fees and/or overdraft charges. The Fund may incur charges on certain uninvested cash balances and overdrafts, subject to certain conditions.

3. INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS

Investment Valuation Policies: The Fund’s 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 Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Fund determines the fair values of its financial instruments using various independent dealers or pricing services under policies approved by the Board of Directors of the Company (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.

12 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

Fair Value Inputs and Methodologies: The following methods and inputs are used to establish the fair value of the 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.

• Investments inopen-end U.S. mutual funds are valued at net asset value (“NAV”) each business day.

• The Fund values its investment in SL Liquidity Series, LLC, Money Market Series (the “Money Market Series”) at fair value, which is ordinarily based upon its pro rata ownership in the underlying fund’s net assets. The Money Market Series seeks current income consistent with maintaining liquidity and preserving capital. Although the Money Market Series is not registered under the 1940 Act, its investments may follow the parameters of investments by a money market fund that is subject to Rule2a-7 under the 1940 Act.

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

Fair Value Hierarchy: Various inputs are used in determining the fair value of investments. 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 the Fund has the ability to access

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

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

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 privately held companies or funds. 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 the 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 is based on the pricing transparency of the investments and is not necessarily an indication of the risks associated with investing in those securities.

As of December 31, 2018, certain investments of the Fund were valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

4. SECURITIES AND OTHER INVESTMENTS

Securities Lending: The Fund may lend its securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received by the Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current market value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Fund and any additional required collateral is delivered to the Fund, or excess collateral returned by the Fund, on the next business day. During the term of the loan, the Fund is entitled to all distributions made on or in respect of the loaned securities but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.

The market value of any securities on loan, all of which were classified as common stocks in the Fund’s Schedule of Investments, and the value of any related collateral are shown separately in the Statement of Assets and Liabilities as a component of investments at value — unaffiliated, and collateral on securities loaned at value, respectively. As of period end, any securities on loan were collateralized by cash and/or U.S. Government obligations. Cash collateral invested by the securities lending agent, BlackRock Investment Management, LLC (“BIM”), if any, is disclosed in the Schedule of Investments.

NOTESTO FINANCIAL STATEMENTS 13

Notes to Financial Statements  (continued)

Securities lending transactions are entered into by the Fund under Master Securities Lending Agreements (each, an “MSLA”), which provide the right, in the event of default (including bankruptcy or insolvency), for thenon-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, the Fund, as lender, would offset the market value of the collateral received against the market value of the securities loaned. When the value of the collateral is greater than that of the market value of the securities loaned, the lender is left with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, absent an event of default, the borrower can resell orre-pledge the loaned securities, and the Fund can reinvest cash collateral received in connection with loaned securities. Upon an event of default, the parties’ obligations to return the securities or collateral to the other party are extinguished, and the parties can resell orre-pledge the loaned securities or the collateral received in connection with the loaned securities in order to satisfy the defaulting party’s net payment obligation for all transactions under the MSLA. The defaulting party remains liable for any deficiency.

As of period end, the following table is a summary of the Fund’s securities lending agreements by counterparty which are subject to offset under an MSLA:

Counterparty	Securities Loaned at Value		Cash Collateral Received (a)			Net Amount
Citigroup Global Markets Inc.	$	1,759,134	$	(1,759,134	)	$	—
Deutsche Bank Securities Inc.		1,162,471		(1,162,471	)		—
JP Morgan Securities LLC		3,739,281		(3,739,281	)		—
State Street Bank & Trust Co.		13,639		(13,639	)		—
Toronto Dominion Bank		980,406		(980,406	)		—
	$	7,654,931	$	(7,654,931	)	$	—

^(a)  Cash collateral with a value of $ 7,772,921 has been received in connection with securities lending agreements. Collateral received in excess of the value of securities loaned from the individual counterparty, if any, is not shown for financial reporting purposes in the table above.

The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Fund benefits from a borrower default indemnity provided by BIM. BIM’s indemnity allows for full replacement of the securities loaned if the collateral received does not cover the value on the securities loaned in the event of borrower default. The Fund could incur a loss if the value of an investment purchased with cash collateral falls below the market value of loaned securities or if the value of an investment purchased with cash collateral falls below the value of the original cash collateral received.

5. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

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

For such services, the Fund pays the Manager a monthly fee at an annual rate equal to the following percentages of the average daily value of the Fund’s net assets:

Average Daily Net Assets	Investment Advisory Fees
First $1 Billion		0.65	%
$1 Billion — $3 Billion		0.61
$3 Billion — $5 Billion		0.59
$5 Billion — $10 Billion		0.57
Greater than $10 Billion		0.55

Distribution Fees: The Company, on behalf of the Fund, entered into a Distribution Agreement and a Distribution Plan with BlackRock Investments, LLC (“BRIL”), an affiliate of the Manager. Pursuant to the Distribution Plan and in accordance with Rule12b-1 under the 1940 Act, the Fund pays BRIL ongoing distribution fees. The fees are accrued daily and paid monthly at an annual rate of 0.25% based upon the average daily net assets attributable to Class III.

BRIL and broker-dealers, pursuant tosub-agreements with BRIL, provide shareholder servicing and distribution services to the Fund. 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 class specific distribution fees borne directly by Class III were $179,321.

Transfer Agent: On behalf of the Fund, the Manager entered into agreements with insurance companies and other financial intermediaries (“Service Organizations”), some of which may be affiliates. Pursuant to these agreements, the Service Organizations provide the Fund with administrative, networking, recordkeeping,sub-transfer agency and shareholder services tosub-accounts they service. For these services, the Service Organizations receive an annual fee per shareholder account, which will vary depending on share class and/or net assets of Fund shareholders serviced by the Service Organizations, which is shown as transfer agent — class specific. For the year ended December 31, 2018, the Fund did not pay any amounts to affiliates in return for these services.

In addition, the Fund pays the transfer agent, which is not an affiliate, a fee for the issuance, transfer and redemption of shares and the opening and maintenance of shareholder accounts, which is included in transfer agent in the Statement of Operations.

14 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

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

Class I		Class III		Total
$	216,942	$	150,729	$	367,671

Expense Limitations, Waivers and Reimbursements:With respect to the Fund, the Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees the 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 caps will be reduced by the amount of the affiliated money market fund waiver. This amount is shown as fees waived and/or reimbursed by the Manager in the Statement of Operations. For the year ended December 31, 2018, the amount waived was $1,760.

The Manager has contractually agreed to waive its investment advisory fee with respect to any portion of the 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. The contractual agreement may be terminated upon 90 days’ notice by a majority of the directors who are not “interested persons” of the Fund, as defined in the 1940 Act (“Independent Directors”), or by a vote of a majority of the outstanding voting securities of the Fund. For the year ended December 31, 2018, there were no fees waived by the Manager pursuant to this arrangement.

For the year ended December 31, 2018, the Fund reimbursed the Manager $2,035 for certain accounting services, which is included in accounting services in the Statement of Operations.

The Manager has contractually agreed to reimburse transfer agent fees in order to limit such expenses to a percentage of average daily net assets as follows:

Class I	0.07	%
Class III	0.07

The Manager has agreed not to reduce or discontinue this contractual expense limitation through April 30, 2019 unless approved by the Board, including a majority of the Independent Directors, or by a vote of a majority of the outstanding voting securities of the Fund.

These amounts waived and/or reimbursed are shown as transfer agent fees waived and/or reimbursed — class specific in the Statement of Operations. For the year ended December 31, 2018, class specific expense waivers and/or reimbursements are as follows:

	Class I		Class III		Total
Transfer Agent Fees Waived and/or Reimbursed	$	143,337	$	100,519	$	243,856

With respect to the 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 the Fund’s business (“expense limitation”). The expense limitations as a percentage of average daily net assets are as follows:

Class I	Class III
1.25%		1.50%

The Manager has agreed not to reduce or discontinue this contractual expense limitation through April 30, 2019, unless approved by the Board, including a majority of the Independent Directors, or by a vote of a majority of the outstanding voting securities of the Fund. For the year ended December 31, 2018, there were no fees waived and/or reimbursed by the Manager.

Securities Lending: The U.S. Securities and Exchange Commission (“SEC”) has issued an exemptive order which permits BIM, an affiliate of the Manager, to serve as securities lending agent for the Fund, subject to applicable conditions. As securities lending agent, BIM bears all operational costs directly related to securities lending. The Fund is responsible for expenses in connection with the investment of cash collateral received for securities on loan (the “collateral investment expenses”). The cash collateral is invested in a private investment company managed by the Manager or its affiliates. However, BIM has agreed to cap the collateral investment expenses of the private investment company to an annual rate of 0.04%. The investment adviser to the private investment company will not charge any advisory fees with respect to shares purchased by the Fund. The private investment company in which the cash collateral has been invested may, under certain circumstances, impose a liquidity fee of up to 2% of the value withdrawn or temporarily restrict withdrawals for up to 10 business days during a 90 day period, in the event that the private investment company’s weekly liquid assets fall below certain thresholds.

Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment expenses. The Fund retains a portion of securities lending income and remits a remaining portion to BIM as compensation for its services as securities lending agent.

Pursuant to a securities lending agreement, the Fund retains 71.5% of securities lending income, and this amount retained can never be less than 65% of the total of securities lending income plus the collateral investment expenses.

In addition, commencing the business day following the date that the aggregate securities lending income earned across the Equity-Bond Complex in a calendar year exceeds a specified threshold, the Fund, pursuant to the securities lending agreement, will retain for the remainder of that calendar year securities lending income in an amount equal to 75% of securities lending income, and this amount retained can never be less than 65% of the total of securities lending income plus the collateral investment expenses.

NOTESTO FINANCIAL STATEMENTS 15

Notes to Financial Statements  (continued)

The share of securities lending income earned by the Fund is shown as securities lending income — affiliated — net in the Statement of Operations. For the year ended December 31, 2018, the Fund paid BIM $9,137 for securities lending agent services.

Interfund Lending: In accordance with an exemptive order (the “Order”) from the SEC, the 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 the Fund’s investment policies and restrictions. The 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 33¹⁄₃% 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 Fund did not participate in the Interfund Lending Program.

Directors and Officers:Certain directors and/or officers of the Company are directors and/or officers of BlackRock or its affiliates. The Fund reimburses the Manager for a portion of the compensation paid to the Company’s Chief Compliance Officer, which is included in Directors and Officer in the Statement of Operations.

6. PURCHASES AND SALES

For the year ended December 31, 2018, purchases and sales of investments, excluding short-term securities, were $110,449,679 and $109,752,812, respectively.    

7. INCOME TAX INFORMATION

It is the 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.

The 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 the Fund’s U.S. federal tax returns generally remains open for each of the four years ended December 31, 2018. The statutes of limitations on the 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 Fund 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 Fund’s financial statements.

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

Paid in capital	$	(617,029	)
Accumulated earnings	$	617,029

The tax character of distributions paid was as follows:

	12/31/18		12/31/17
Ordinary income	$	513,495	$	2,327,022
Long term capital gains		17,646,669		22,845,872
	$	18,160,164	$	25,172,894

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

Undistributed long-term capital gains	$	737,387
Net unrealized gains(a)		22,376,366
	$	23,113,753

^(a)  The difference between book-basis and tax-basis net unrealized gains was attributable primarily to the tax deferral of losses on wash sales and timing and recognition of partnership income.

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

Tax cost	$	148,260,086
Gross unrealized appreciation	$	27,466,004
Gross unrealized depreciation		(5,143,496	)
Net unrealized appreciation	$	22,322,508

16 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

8. BANK BORROWINGS

The Company, on behalf of the Fund, 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 Fund may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Fund, 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. Prior to April 19, 2018, the aggregate commitment amount was $2.1 billion and the fee was 0.12% per annum. 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 Statement 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 Fund did not borrow under the credit agreement.

9. PRINCIPAL RISKS

In the normal course of business, the Fund invests in securities or other instruments and may enter into certain transactions, and such activities subject the 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. The Fund’s prospectus provides details of the risks to which the Fund is subject.

The Fund may be exposed to additional risks when reinvesting cash collateral in money market funds that do not seek to maintain a stable NAV per share of $1.00, which may be subject to redemption gates or liquidity fees under certain circumstances.

Valuation Risk: The market values of equities, such as common stocks and preferred securities or equity related investments, such as futures and options, may decline due to general market conditions which are not specifically related to a particular company. They may also decline due to factors which affect a particular industry or industries. The Fund may invest in illiquid investments and may experience difficulty in selling those investments in a timely manner at the price that it believes the investments are worth. Prices may fluctuate widely over short or extended periods in response to company, market or economic news. Markets also tend to move in cycles, with periods of rising and falling prices. This volatility may cause the 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 the Fund may lose value, regardless of the individual results of the securities and other instruments in which the Fund invests.

Counterparty Credit Risk: The Fund 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 Fund manages 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 Fund to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Fund’s exposure to market, issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Statement of Assets and Liabilities, less any collateral held by the Fund.

Concentration Risk: As of period end, the Fund invested a significant portion of its assets in securities in the information technology sector. Changes in economic conditions affecting such sector would have a greater impact on the Fund and could affect the value, income and/or liquidity of positions in such securities.

10. CAPITAL SHARE TRANSACTIONS

Transactions in capital shares for each class were as follows:

	Year Ended 12/31/2018						Year Ended 12/31/2017
	Shares			Amount			Shares			Amount
Class I
Shares sold		386,678		$	6,168,160			299,156		$	4,606,186
Shares issued in reinvestment of distributions		755,113			10,303,447			1,121,874			16,392,533
Shares redeemed		(1,192,018	)		(19,141,189	)		(1,052,862	)		(16,192,812	)
Net increase (decrease)		(50,227	)	$	(2,669,582	)		368,168		$	4,805,907
Class III
Shares sold		2,379,648		$	38,478,618			722,465		$	10,907,398
Shares issued in reinvestment of distributions		587,788			7,856,717			607,374			8,780,361
Shares redeemed		(1,399,440	)		(21,534,034	)		(485,328	)		(7,351,322	)
Net increase		1,567,996		$	24,801,301			844,511		$	12,336,437
Total Net Increase		1,517,769		$	22,131,719			1,212,679		$	17,142,344

NOTESTO FINANCIAL STATEMENTS 17

Notes to Financial Statements  (continued)

11. 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 Fund has adopted the amendments pertinent to RegulationS-X in this shareholder report. The amendments impacted certain disclosure presentation on the Statement 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
Class I	$	(39,574	)	$	(16,352,959	)
Class III		(2,263	)		(8,778,098	)

Undistributed net investment income as of December 31, 2017 was $17,082.

12. SUBSEQUENT EVENTS

Management has evaluated the impact of all subsequent events on the Fund 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.

18 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Report of Independent Registered Public Accounting Firm

To the Shareholders of BlackRock Large Cap Focus Growth V.I. Fund and the Board of Directors of BlackRock Variable Series Funds, Inc.:

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying statement of assets and liabilities of BlackRock Large Cap Focus Growth V.I. Fund, of BlackRock Variable Series Funds, Inc. (the “Fund”), including the schedule of investments, as of December 31, 2018, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of December 31, 2018, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s 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 Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its 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 Fund’s 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 15, 2019

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

REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 19

Glossary of Terms Used in this Report

Currency
AUD	Australian Dollar
HKD	Hong Kong Dollar
Portfolio Abbreviations
NYRS	New York Registered Shares
S&P	Standard & Poor’s

20 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

DECEMBER 31, 2018

ANNUAL REPORT

BlackRock Variable Series Funds, Inc.

^Ø  BlackRock Managed Volatility V.I. Fund

Not FDIC Insured • May Lose Value • No Bank Guarantee

Fund Summary  as of December 31, 2018 BlackRock Managed Volatility V.I. Fund

Investment Objective

BlackRock Managed Volatility V.I. Fund’s (the “Fund”) investment objective is to seek a level of current income and degree of stability of principal not normally available from an investment solely in equity securities, as well as the opportunity for capital appreciation greater than is normally available from an investment solely in debt securities.

On November 15, 2017, the Board of Directors of BlackRock Variable Series Funds, Inc. (the “Company”) and, on December 1, 2017, the Board of Trustees of HIMCO VIT Portfolio Diversifier Fund (the “Target Fund”) approved a reorganization of the Target Fund into the Fund. At a special shareholder meeting on April 4, 2018, the shareholders of the Target Fund approved the reorganization, which was completed on April 23, 2018.

Portfolio Management Commentary

How did the Fund perform?

For the12-month period ended December 31, 2018, the Fund outperformed its blended benchmark (50% MSCI All Country World Index/50% FTSE World Government Bond Index (hedged into USD) and underperformed its performance benchmark, the ICE BofAML3-Month U.S. Treasury Bill Index.

What factors influenced performance?

Positive contributions were driven by a mix of relative value and directional positioning across countries. Positive returns were generated across fixed income, equity and currency allocations. The Fund’s cautious stance on the U.S. bond market contributed positively to performance, especially early in the period as domestic inflation strengthened, growth remained firm and the Fed maintained relatively hawkish rhetoric despite equity market volatility. A defensive view on domestic stocks also contributed as concerns over rising inflation and tightening monetary policy acted as a headwind to the U.S. equity market. Exposure to equities in Europe, Asia(ex-Japan) and emerging markets also added value. Later in the period, directional long positions in global developed market (“DM”) sovereign bond futures contributed positively. As global growth momentum slowed over the second half of the year, the majority of DM central banks had marginally dovish responses. This, coupled with the sharp equitysell-off in December, pushed global DM interest rates lower, benefiting the Fund’s long positions.

On the downside, exposure to European bonds dampened Fund returns late in the second quarter of 2018. Additionally, an allocation to Mexican bonds detracted from returns amid heightened concerns over the outcome of that country’s presidential election. An underweight position in the Japanese yen also weighed on returns as increased risk aversion in global markets and more hawkish comments from the Bank of Japan resulted in appreciation of the yen. As the period progressed, relative value fixed income positioning began to weigh on returns. Specifically, the Fund held a relative short position in Indian interest rates on expectations of higher inflation due to a weaker rupee and expanding monetary base. However, the Reserve Bank of India surprised the market by keeping interest rates unchanged, and rates subsequently rallied. The negative impact of the short Indian rate position was partially offset by a paired long in Mexican rates. On the equity side, a directional long position in Japanese equities weighed on returns in October and November before the position was cut in early December. Cross-sector equity positioning slightly detracted as well.

Describe recent portfolio activity.

The Fund began the period with a preference for stocks relative to bonds. Within equities, the Fund held notable long exposure to U.S. and Japanese stocks. Within fixed income, the Fund maintained a cautious stance on U.S. bonds. During the first half of the year, the Fund also added to emerging market stocks and bonds on attractive valuations, while trimming an overweight to European stocks and significantly reducing exposure to both European bonds and U.S. stocks. In the second half of the year, the Fund increased its long exposure to European stocks and moved from a net short position in European fixed income to a net long position. The Fund generally increased its stance with respect to duration and corresponding interest rate sensitivity into period end on expectations of weaker growth and moderate central bank policies.

Derivatives are used by the investment adviser as a means to manage and/or take outright views on interest rates, credit risk and/or foreign exchange positions in the Fund and to efficiently implement and manage risk. Derivatives comprise the majority of the Fund’s notional exposures. The strategies that employ these derivatives (primarily futures, forwards, and interest rate or total return swaps) vary in nature, but generally speaking, they seek to generate macro alpha by tactically allocating across major asset classes in line with the investment adviser’s macro outlook. During the period, the Fund’s use of derivatives as opposed to physical securities contributed positively to Fund performance.

The Fund held a relatively high allocation to cash backing derivative positions. Given derivatives’ ability to generate economic exposures for the Fund without the need to fully allocate cash, the Fund often had a high percentage exposure to cash throughout the period. The Fund’s cash exposures did not have a material impact on Fund performance.

Describe portfolio positioning at period end.

As of period end, the Fund was positioned net long in equities, net long in duration, and net long in the U.S. dollar. In equities, the Fund was long in Europe with underweights in North America and Asia(ex-Japan). The Fund maintained a slightly constructive view on emerging market equities. On the fixed income side, the Fund held a strong preference for Europe and Australia with generally bearish positions in emerging markets. In currencies, the Fund was positioned long in the U.S. dollar and Australian dollar with shorts in emerging markets and the euro.

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.

2 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Fund Summary  as of December 31, 2018 (continued) BlackRock Managed Volatility V.I. Fund

TOTAL RETURN BASED ON A $10,000 INVESTMENT

^(a)  Assuming transaction costs, if any, and other operating expenses, including investment advisory fees. Does not include insurance-related fees and expenses.

^(b)  The Fund uses an asset allocation strategy, investing various percentages of its portfolio in three major categories: stocks, bonds and money market investments. The Fund’s total returns prior to January 22, 2013 are the returns of the Fund when it followed different investment strategies under the name “BlackRock Balanced Capital V.I. Fund”.

^(c)  A free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. The MSCI All Country World Index consists of 46 country indexes comprising of 23 developed and 23 emerging market country indexes.

^(d)  A market capitalization weighted bond index consisting of government bond markets of 23 countries, including the United States.

^(e)  A customized weighted index comprised of the returns of 50% MSCI ACWI/50% FTSE WGBI (hedged into USD).

^(f)  An unmanaged index that tracks 3-month U.S. Treasury securities. Effective June 2, 2014, the ICE BofAML 3-Month U.S. Treasury Bill Index was added to the performance benchmarks against which the Fund measures its performance.

Performance Summary for the Period Ended December 31, 2018

	6-Month Total Returns (b)			Average Annual Total Returns
				1 Year (b)			5 Years (b)			10 Years (b)
Class I(a)		(0.15	)%		1.02	%		1.87	%		6.10	%
Class III(a)		(0.26	)		0.80	(c)		1.62	(c)		5.84	(c)
50% MSCI ACWI/50% FTSE WGBI (hedged into USD)		(3.58	)		(3.32	)		4.11			6.63
MSCI ACWI		(9.02	)		(9.41	)		4.26			9.46
FTSE WGBI (hedged into USD)		1.81			2.60			3.60			3.25
ICE BofAML 3-Month U.S. Treasury Bill Index		1.06			1.87			0.63			0.38

^(a)  Average annual and cumulative total returns are based on changes in net asset value for the periods shown, and assume reinvestment of all distributions at net asset value on the ex-dividend date. Insurance-related fees and expenses are not reflected in these returns. The Fund’s total returns prior to January 22, 2013 are the returns of the Fund when it followed different investment strategies under the name “BlackRock Balanced Capital V.I. Fund”.

^(b)  For a portion of the period, the Fund’s investment adviser waived a portion of its fee. Without such waiver, the Fund’s performance would have been lower.

^(c)  The returns for Class III Shares prior to February 14, 2018, the recommencement of operations of Class III Shares, are based upon the performance of the Fund’s Class I Shares, as adjusted to reflect the distribution (12b-1) fees applicable to Class III Shares.

Past performance is not indicative of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

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

Expense Example

	Actual						Hypothetical (a)
	Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Annualized Expense Ratio
Class I	$	1,000.00	$	998.50	$	2.97	$	1,000.00	$	1,022.23	$	3.01		0.59	%
Class III		1,000.00		997.40		4.23		1,000.00		1,020.97		4.28		0.84

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

^(b)  For each class of the Fund, expenses are equal to annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period shown).

See “Disclosure of Expenses” on page 5 for further information on how expenses were calculated.

FUND SUMMARY 3

Fund Summary  as of December 31, 2018 (continued) BlackRock Managed Volatility V.I. Fund

Portfolio Information

PORTFOLIO COMPOSITION

Asset Type	Percent of Total Investments (a)
Common Stocks		71	%
U.S. Treasury Obligations		29
U.S. Government Sponsored Agency Obligations		—	(b)
Preferred Stocks		—	(b)
Corporate Bonds		—	(b)
Rights		—	(b)
Other Interests		—	(b)

^(a)  Total investments exclude short-term securities.

^(b)  Representing less than 0.5% of the Fund’s total investments.

For Fund compliance purposes, the Fund’s sector classifications refer to one or more of the sector sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine sector sub-classifications for reporting ease.

4 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Disclosure of Expenses BlackRock Managed Volatility V.I. Fund

Shareholders of the Fund may incur the following charges: (a) transactional expenses; 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 example on the previous page (which is based on a hypothetical investment of $1,000 invested on July 1, 2018 and held through December 31, 2018) is intended to assist shareholders both in calculating expenses based on an investment in the Fund and in comparing these expenses with similar costs of investing in other mutual funds.

The expense example provides 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 share class under the heading entitled “Expenses Paid During the Period.”

The expense example also provides information about hypothetical account values and hypothetical expenses based on the 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 the Fund and other funds, compare the 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.

The expenses shown in the expense example are intended to highlight shareholders’ ongoing costs only and do not reflect any transactional expenses, such as sales charges, if any. Therefore, the hypothetical example is 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 Fund 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 Fund’s 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 the Fund can realize on an investment and/or may result in lower distributions paid to shareholders. The Fund’s investments in these instruments, if any, are discussed in detail in the Notes to Financial Statements.

DISCLOSURE OF EXPENSES / DERIVATIVE FINANCIAL INSTRUMENTS 5

Schedule of Investments   December 31, 2018 BlackRock Managed Volatility V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Common Stocks— 55.3%
Aerospace & Defense— 0.8%
Airbus SE		1,299	$	123,847
BAE Systems plc		28,041		164,008
Boeing Co. (The)		1,224		394,740
Bombardier, Inc., Class B(a)		12,346		18,358
CAE, Inc.		12,582		231,235
Dassault Aviation SA		302		418,680
Harris Corp.		206		27,738
Huntington Ingalls Industries, Inc.		549		104,480
Lockheed Martin Corp.		223		58,390
Northrop Grumman Corp.		353		86,450
Raytheon Co.		640		98,144
Singapore Technologies Engineering Ltd.		46,700		119,715
Spirit AeroSystems Holdings, Inc., Class A		1,647		118,732
TransDigm Group, Inc.(a)		40		13,602
				1,978,119
Air Freight & Logistics —0.4%
CH Robinson Worldwide, Inc.		812		68,281
Expeditors International of Washington, Inc.		8,921		607,431
United Parcel Service, Inc., Class B		2,215		216,029
				891,741
Airlines —0.5%
American Airlines Group, Inc.		5,691		182,738
Delta Air Lines, Inc.		1,382		68,962
Deutsche Lufthansa AG (Registered)		13,120		296,296
Southwest Airlines Co.		7,934		368,772
United Continental Holdings, Inc.(a)		4,127		345,554
				1,262,322
Auto Components —0.0%
Bridgestone Corp.		2,100		80,568
Automobiles —0.6%
Bayerische Motoren Werke AG		2,656		215,415
Daimler AG (Registered)		4,597		242,330
Ferrari NV		263		26,170
Fiat Chrysler Automobiles NV(a)		8,071		116,371
Honda Motor Co. Ltd.		1,500		39,518
Peugeot SA		4,564		97,340
Subaru Corp.		4,900		104,680
Suzuki Motor Corp.		1,900		95,782
Toyota Motor Corp.		5,900		341,531
Volkswagen AG		521		83,347
				1,362,484
Banks— 4.3%
ABN AMRO Group NV, CVA(b)		1,344		31,627
AIB Group plc		43,771		184,570
Australia & New Zealand Banking Group Ltd.		15,115		261,167
Banco Bilbao Vizcaya Argentaria SA		84,469		448,684
Banco de Sabadell SA		44,820		51,284
Banco Santander SA		92,180		418,589
Bank Hapoalim BM		775		4,901
Bank Leumi Le-Israel BM		6,880		41,590
Bank of America Corp.		37,699		928,903
Bank of Ireland Group plc		43,888		244,093
Bankinter SA		23,802		190,990
Barclays plc		48,996		93,743
BB&T Corp.		2,869		124,285
BOC Hong Kong Holdings Ltd.		4,500		16,703
CaixaBank SA		75,228		272,433
CIT Group, Inc.		2,087		79,870
Citigroup, Inc.		7,894		410,962
Citizens Financial Group, Inc.		3,236		96,206

Security	Shares		Value
Banks (continued)
Commonwealth Bank of Australia		6,493	$	331,193
DBS Group Holdings Ltd.		7,100		123,468
Fifth Third Bancorp		3,850		90,591
Hang Seng Bank Ltd.		1,300		29,122
HSBC Holdings plc		122,381		1,009,611
ING Groep NV		25,935		278,972
JPMorgan Chase & Co.		12,620		1,231,964
M&T Bank Corp.		95		13,597
Mitsubishi UFJ Financial Group, Inc.		32,200		158,027
Mizuho Financial Group, Inc.		59,400		91,906
National Australia Bank Ltd.		4,123		69,965
Nordea Bank AB		11,014		92,718
Oversea-Chinese Banking Corp. Ltd.		12,500		103,395
Regions Financial Corp.		4,212		56,357
Royal Bank of Canada		2,837		194,176
Royal Bank of Scotland Group plc		55,018		152,623
Skandinaviska Enskilda Banken AB, Class A		18,467		179,516
Standard Chartered plc		27,481		213,573
Sumitomo Mitsui Financial Group, Inc.		7,400		243,941
Sumitomo Mitsui Trust Holdings, Inc.		100		3,642
SunTrust Banks, Inc.		2,292		115,608
SVB Financial Group(a)		108		20,511
Svenska Handelsbanken AB, Class A		4,395		48,897
Swedbank AB, Class A		7,667		171,366
Toronto-Dominion Bank (The)		4,814		239,290
UniCredit SpA		10,020		113,496
United Overseas Bank Ltd.		5,400		97,686
US Bancorp		6,633		303,128
Wells Fargo & Co.		18,352		845,660
Westpac Banking Corp.		12,931		228,489
				10,753,088
Beverages —0.8%
Asahi Group Holdings Ltd.		300		11,626
Carlsberg A/S, Class B		729		77,550
Coca-Cola Amatil Ltd.		5,727		33,031
Coca-Cola Co. (The)		176		8,334
Coca-Cola European Partners plc		2,981		136,679
Constellation Brands, Inc., Class A		72		11,579
Diageo plc		8,101		289,484
Heineken Holding NV		1,985		167,706
Heineken NV		1,745		154,235
Kirin Holdings Co. Ltd.		4,100		85,491
Molson Coors Brewing Co., Class B		748		42,008
Monster Beverage Corp.(a)		1,775		87,365
PepsiCo, Inc.		4,362		481,914
Pernod Ricard SA		1,539		252,582
Treasury Wine Estates Ltd.		16,102		167,908
				2,007,492
Biotechnology— 1.7%
AbbVie, Inc.		8,715		803,436
Alexion Pharmaceuticals, Inc.(a)		323		31,447
Alkermes plc(a)		299		8,823
Amgen, Inc.		4,524		880,687
BeiGene Ltd., ADR(a)		218		30,577
Biogen, Inc.(a)		1,279		384,877
Celgene Corp.(a)		5,116		327,884
CSL Ltd.		3,681		480,805
Genmab A/S(a)		283		46,531
Gilead Sciences, Inc.		7,618		476,506
Incyte Corp.(a)		684		43,495
Regeneron Pharmaceuticals, Inc.(a)		267		99,724
Shire plc		3,981		231,645
United Therapeutics Corp.(a)		702		76,448

6 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Managed Volatility V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Biotechnology (continued)
Vertex Pharmaceuticals, Inc.(a)		1,677	$	277,896
				4,200,781
Capital Markets —1.0%
Ameriprise Financial, Inc.		2,317		241,825
Bank of New York Mellon Corp. (The)		605		28,477
Brookfield Asset Management, Inc., Class A		5,488		210,322
Charles Schwab Corp. (The)		5,409		224,636
CME Group, Inc.		1,550		291,586
Credit Suisse Group AG (Registered)(a)		12,229		133,684
Deutsche Bank AG (Registered)		7,278		58,043
E*TRADE Financial Corp.(a)		1,806		79,247
Goldman Sachs Group, Inc. (The)		1,009		168,554
Hargreaves Lansdown plc		692		16,321
Hong Kong Exchanges & Clearing Ltd.		4,700		135,870
Investec plc		5,390		30,301
Macquarie Group Ltd.		236		18,077
Moody’s Corp.		183		25,627
Morgan Stanley		5,042		199,915
MSCI, Inc.		620		91,407
S&P Global, Inc.		1,716		291,617
SEI Investments Co.		369		17,048
Singapore Exchange Ltd.		3,200		16,771
St James’s Place plc		748		9,009
TD Ameritrade Holding Corp.(c)		1,532		75,007
UBS Group AG (Registered)(a)		11,405		142,257
				2,505,601
Chemicals— 3.5%
Air Water, Inc.		10,700		161,263
Albemarle Corp.(c)		4,331		333,790
Arkema SA		964		82,758
Asahi Kasei Corp.		20,800		213,478
Axalta Coating Systems Ltd.(a)		2,076		48,620
BASF SE		5,307		369,652
CF Industries Holdings, Inc.		5,246		228,253
Chr Hansen Holding A/S		631		56,012
Covestro AG(b)		3,929		194,582
Daicel Corp.		10,200		104,709
DowDuPont, Inc.		16,889		903,224
Eastman Chemical Co.		2,445		178,754
Ecolab, Inc.		2,341		344,946
Evonik Industries AG		13,140		327,990
FMC Corp.		1,352		99,994
Hitachi Chemical Co. Ltd.		2,000		30,087
Incitec Pivot Ltd.		124,947		288,819
International Flavors & Fragrances, Inc.		406		54,235
Israel Chemicals Ltd.		1,107		6,295
JSR Corp.		1,200		18,013
Kaneka Corp.		3,200		114,600
Kansai Paint Co. Ltd.		7,600		145,976
Kuraray Co. Ltd.		2,300		32,348
Linde plc		4,327		675,185
Methanex Corp.		443		21,306
Mitsubishi Chemical Holdings Corp.		34,000		256,869
Mitsubishi Gas Chemical Co., Inc.		8,400		125,829
Mitsui Chemicals, Inc.		8,300		187,383
Mosaic Co. (The)		4,035		117,862
Nitto Denko Corp.		300		15,046
Novozymes A/S, Class B		3,706		165,593
Nutrien Ltd.		12,952		608,323
Orica Ltd.		1,329		16,153
PPG Industries, Inc.		2,434		248,828
Sherwin-Williams Co. (The)		1,547		608,683
Shin-Etsu Chemical Co. Ltd.		3,300		253,548

Security	Shares		Value
Chemicals (continued)
Showa Denko KK		3,600	$	106,900
Sumitomo Chemical Co. Ltd.		26,600		128,816
Symrise AG		498		36,898
Taiyo Nippon Sanso Corp.		5,200		84,536
Teijin Ltd.		10,800		172,367
Toray Industries, Inc.		12,100		85,548
Tosoh Corp.		13,800		179,001
Westlake Chemical Corp.		263		17,403
Yara International ASA		8,519		328,402
				8,778,877
Commercial Services & Supplies —0.3%
Cintas Corp.		2,556		429,382
Copart, Inc.(a)		3,895		186,103
ISS A/S		2,755		77,131
Waste Management, Inc.		742		66,031
				758,647
Communications Equipment —0.2%
Nokia OYJ		22,882		132,833
Telefonaktiebolaget LM Ericsson, Class B		29,189		258,380
				391,213
Construction & Engineering —0.2%
CIMIC Group Ltd.		1,905		58,255
HOCHTIEF AG		88		11,884
Kajima Corp.		10,800		145,077
Obayashi Corp.		6,600		59,762
Shimizu Corp.		4,800		39,048
Taisei Corp.		2,100		89,940
WSP Global, Inc.		289		12,420
				416,386
Construction Materials —0.3%
Boral Ltd.		40,723		141,717
CRH plc		490		12,978
Fletcher Building Ltd.		2,716		8,896
HeidelbergCement AG		433		26,542
James Hardie Industries plc, CDI		4,304		46,891
LafargeHolcim Ltd. (Registered)(a)		7,702		317,851
Taiheiyo Cement Corp.		3,000		92,326
				647,201
Consumer Finance —0.5%
Ally Financial, Inc.		6,757		153,114
American Express Co.		5,961		568,202
Capital One Financial Corp.		2,927		221,252
Discover Financial Services		2,972		175,288
Synchrony Financial		6,130		143,810
				1,261,666
Containers & Packaging —0.5%
Amcor Ltd.		34,770		324,663
CCL Industries, Inc., Class B		1,665		61,053
International Paper Co.		10,678		430,964
Packaging Corp. of America		2,908		242,702
Sealed Air Corp.		747		26,026
WestRock Co.		1,442		54,450
				1,139,858
Diversified Consumer Services —0.0%
H&R Block, Inc.		679		17,226
Diversified Financial Services— 0.8%
AXA Equitable Holdings, Inc.		957		15,915
Berkshire Hathaway, Inc., Class B(a)		4,934		1,007,424
EXOR NV		287		15,580
Groupe Bruxelles Lambert SA		3,378		294,368

SCHEDULE OF INVESTMENTS 7

Schedule of Investments  (continued) December 31, 2018 BlackRock Managed Volatility V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Diversified Financial Services (continued)
Investor AB, Class B		1,227	$	52,141
L E Lundbergforetagen AB, Class B		371		10,956
ORIX Corp.		24,600		359,453
Standard Life Aberdeen plc		9,414		30,825
Voya Financial, Inc.		3,865		155,141
				1,941,803
Electric Utilities —0.8%
American Electric Power Co., Inc.		2,027		151,498
Chubu Electric Power Co., Inc.		7,900		112,254
CK Infrastructure Holdings Ltd.		5,500		41,622
CLP Holdings Ltd.		12,500		141,261
Duke Energy Corp.		2,087		180,108
Edison International		575		32,643
Electricite de France SA		834		13,200
Entergy Corp.		1,330		114,473
Eversource Energy		77		5,008
Exelon Corp.		4,330		195,283
FirstEnergy Corp.		1,269		47,651
Fortum OYJ		1,198		26,224
Kansai Electric Power Co., Inc. (The)		11,000		164,964
Kyushu Electric Power Co., Inc.		3,600		42,868
NextEra Energy, Inc.		811		140,968
PG&E Corp.(a)		1,780		42,275
Pinnacle West Capital Corp.		174		14,825
Power Assets Holdings Ltd.		8,000		55,579
PPL Corp.		795		22,522
Southern Co. (The)		2,666		117,091
Tohoku Electric Power Co., Inc.		1,400		18,432
Tokyo Electric Power Co. Holdings, Inc.(a)		16,400		97,417
Xcel Energy, Inc.		1,582		77,945
				1,856,111
Electronic Equipment, Instruments & Components —0.4%
Amphenol Corp., Class A		1,515		122,745
CDW Corp.		5,554		450,152
Hitachi Ltd.		11,600		307,519
Keyence Corp.		300		151,634
Kyocera Corp.		500		24,992
				1,057,042
Energy Equipment & Services —0.0%
Halliburton Co.		2,909		77,321
Tenaris SA		2,981		32,039
				109,360
Entertainment —0.5%
Netflix, Inc.(a)		1,492		399,349
Nintendo Co. Ltd.		300		79,662
Twenty-First Century Fox, Inc., Class A		3,170		152,540
Twenty-First Century Fox, Inc., Class B		3,115		148,835
Viacom, Inc., Class B		1,734		44,564
Walt Disney Co. (The)		4,504		493,863
				1,318,813
Equity Real Estate Investment Trusts (REITs)— 1.4%
American Tower Corp.		443		70,078
Ascendas Real Estate Investment Trust		43,300		81,715
AvalonBay Communities, Inc.		989		172,136
Boston Properties, Inc.		1,271		143,051
Brookfield Property REIT, Inc., Class A		9,436		151,920
Camden Property Trust		217		19,107
CapitaLand Commercial Trust		32,300		41,487
CapitaLand Mall Trust		41,700		69,151
Crown Castle International Corp.		1,748		189,885
Duke Realty Corp.		2,497		64,672
Equity Residential		4,111		271,367

Security	Shares		Value
Equity Real Estate Investment Trusts (REITs) (continued)
Essex Property Trust, Inc.		177	$	43,402
Federal Realty Investment Trust		40		4,722
H&R REIT		3,356		50,763
HCP, Inc.		5,281		147,498
Host Hotels & Resorts, Inc.		10,847		180,820
Kimco Realty Corp.		5,051		73,997
Liberty Property Trust		1,290		54,025
Link REIT		6,000		60,826
Macerich Co. (The)		1,289		55,788
Public Storage		2,015		407,856
SBA Communications Corp.(a)		1,262		204,305
Simon Property Group, Inc.		2,994		502,962
SL Green Realty Corp.		1,599		126,449
UDR, Inc.		1,404		55,627
Ventas, Inc.		1,094		64,098
VEREIT, Inc.		7,893		56,435
Vornado Realty Trust		2,243		139,133
Weyerhaeuser Co.		2,247		49,119
				3,552,394
Food & Staples Retailing —0.0%
Alimentation Couche-Tard, Inc., Class B		1,714		85,260
Dairy Farm International Holdings Ltd.		1,900		17,222
Koninklijke Ahold Delhaize NV		399		10,080
				112,562
Food Products —1.1%
Barry Callebaut AG (Registered)		47		73,351
Bunge Ltd.		2,501		133,654
Campbell Soup Co.		1,806		59,580
Chocoladefabriken Lindt & Spruengli AG		6		37,283
Conagra Brands, Inc.		5,078		108,466
Danone SA		2,890		203,695
General Mills, Inc.		4,835		188,275
Hershey Co. (The)		430		46,087
Hormel Foods Corp.		284		12,121
Ingredion, Inc.		260		23,764
JM Smucker Co. (The)		521		48,708
Kerry Group plc, Class A		64		6,338
Kikkoman Corp.		700		37,460
Lamb Weston Holdings, Inc.		85		6,253
MEIJI Holdings Co. Ltd.		100		8,150
Nestle SA (Registered)		17,471		1,417,995
Saputo, Inc.		2,919		83,794
Toyo Suisan Kaisha Ltd.		100		3,482
Tyson Foods, Inc., Class A		2,972		158,705
Yamazaki Baking Co. Ltd.		1,900		39,790
				2,696,951
Gas Utilities —0.2%
Hong Kong & China Gas Co. Ltd.		76,000		157,020
Osaka Gas Co. Ltd.		600		10,945
Tokyo Gas Co. Ltd.		5,800		146,694
UGI Corp.		1,022		54,524
				369,183
Health Care Equipment & Supplies —0.2%
Abbott Laboratories		1,866		134,968
Cochlear Ltd.		166		20,340
Coloplast A/S, Class B		185		17,208
Hoya Corp.		3,700		223,110
Koninklijke Philips NV		3,203		112,295
Olympus Corp.		1,600		48,936
Siemens Healthineers AG(a)(b)		75		3,134
Terumo Corp.		400		22,562
				582,553

8 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Managed Volatility V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Health Care Providers & Services —2.6%
Alfresa Holdings Corp.		700	$	17,843
AmerisourceBergen Corp.		1,945		144,708
Anthem, Inc.		1,038		272,610
Cardinal Health, Inc.		2,314		103,204
Centene Corp.(a)		822		94,777
CVS Health Corp.		10,122		663,193
DaVita, Inc.(a)		3,512		180,728
Fresenius SE & Co. KGaA		101		4,882
Halfmoon Parent, Inc.		4,705		893,662
HCA Healthcare, Inc.		4,662		580,186
Henry Schein, Inc.(a)		464		36,433
Humana, Inc.		2,166		620,516
Laboratory Corp. of America Holdings(a)		951		120,168
McKesson Corp.		1,574		173,880
Quest Diagnostics, Inc.		2,826		235,321
Ramsay Health Care Ltd.		482		19,606
Ryman Healthcare Ltd.		1,646		11,879
Sonic Healthcare Ltd.		8,652		134,972
Suzuken Co. Ltd.		1,400		71,292
UnitedHealth Group, Inc.		7,287		1,815,337
Universal Health Services, Inc., Class B		1,531		178,453
WellCare Health Plans, Inc.(a)		200		47,218
				6,420,868
Health Care Technology —0.0%
Cerner Corp.(a)		1,091		57,212
Hotels, Restaurants & Leisure —1.6%
Chipotle Mexican Grill, Inc.(a)		621		268,142
Darden Restaurants, Inc.		2,616		261,234
Domino’s Pizza, Inc.		1,455		360,825
McDonald’s Corp.		8,413		1,493,896
Paddy Power Betfair plc		189		15,516
Star Group, Inc. (The)(a)		1,338		22,091
Starbucks Corp.		14,024		903,146
Yum! Brands, Inc.		6,883		632,685
				3,957,535
Household Durables —0.2%
DR Horton, Inc.		2,786		96,563
NVR, Inc.(a)		57		138,908
PulteGroup, Inc.		5,792		150,534
Sony Corp.		3,100		149,450
Techtronic Industries Co. Ltd.		1,500		7,960
				543,415
Household Products —1.3%
Church & Dwight Co., Inc.		3,197		210,235
Clorox Co. (The)		559		86,164
Colgate-Palmolive Co.		3,981		236,949
Essity AB, Class B		2,497		61,380
Henkel AG & Co. KGaA (Preference)		2,290		225,389
Kimberly-Clark Corp.		4,614		525,719
Lion Corp.		3,100		64,069
Pigeon Corp.		1,000		42,653
Procter & Gamble Co. (The)		14,033		1,289,913
Reckitt Benckiser Group plc		4,119		315,418
Unicharm Corp.		1,600		51,747
				3,109,636
Independent Power and Renewable Electricity Producers —0.0%
Electric Power Development Co. Ltd.		2,100		49,833
NRG Energy, Inc.		722		28,591
				78,424
Industrial Conglomerates— 0.3%
Jardine Matheson Holdings Ltd.		2,600		181,035

Security	Shares		Value
Industrial Conglomerates (continued)
Jardine Strategic Holdings Ltd.		4,900	$	179,655
Keppel Corp. Ltd.		16,800		72,932
NWS Holdings Ltd.		9,000		18,480
Sembcorp Industries Ltd.		19,900		37,076
Siemens AG (Registered)		2,270		253,336
Toshiba Corp.(a)		4,100		115,771
				858,285
Insurance —4.5%
Admiral Group plc		2,528		65,965
Aegon NV		36,223		169,656
Ageas		14,509		653,132
AIA Group Ltd.		61,600		511,700
Alleghany Corp.		20		12,466
Allianz SE (Registered)		3,638		731,076
Allstate Corp. (The)		5,295		437,526
American Financial Group, Inc.		307		27,793
American International Group, Inc.		8,976		353,744
Aon plc		1,926		279,963
Arch Capital Group Ltd.(a)(c)		5,059		135,177
Assurant, Inc.		343		30,678
Athene Holding Ltd., Class A(a)		5,417		215,759
Aviva plc		59,366		284,126
AXA SA		13,016		280,910
Brighthouse Financial, Inc.(a)		432		13,167
Chubb Ltd.		1,419		183,306
Cincinnati Financial Corp.		146		11,303
Dai-ichi Life Holdings, Inc.		8,500		132,002
Direct Line Insurance Group plc		22,795		92,660
Everest Re Group Ltd.		559		121,728
Fairfax Financial Holdings Ltd.		181		79,679
Hannover Rueck SE		956		128,840
Hartford Financial Services Group, Inc. (The)		6,334		281,546
Insurance Australia Group Ltd.		2,143		10,570
Japan Post Holdings Co. Ltd.		2,700		31,174
Legal & General Group plc		81,980		241,543
Lincoln National Corp.		2,835		145,464
Loews Corp.		5,213		237,296
Manulife Financial Corp.		17,152		243,359
Mapfre SA		12,340		32,774
Marsh & McLennan Cos., Inc.		7,562		603,070
MetLife, Inc.		12,111		497,278
MS&AD Insurance Group Holdings, Inc.		6,500		184,764
Muenchener Rueckversicherungs-Gesellschaft AG (Registered)		361		78,734
NN Group NV		336		13,359
Principal Financial Group, Inc.		4,143		182,996
Progressive Corp. (The)(c)		7,480		451,268
Prudential Financial, Inc.		1,674		136,515
Prudential plc		19,336		345,273
QBE Insurance Group Ltd.		54,713		389,590
Reinsurance Group of America, Inc.		255		35,759
RenaissanceRe Holdings Ltd.		533		71,262
Sompo Holdings, Inc.		3,300		112,101
Sony Financial Holdings, Inc.		1,400		26,091
Sun Life Financial, Inc.		10,089		334,699
Swiss Re AG		1,191		109,572
T&D Holdings, Inc.		3,900		45,113
Tokio Marine Holdings, Inc.		5,600		266,049
Torchmark Corp.		1,175		87,573
Travelers Cos., Inc. (The)		3,273		391,942
Unum Group		7,106		208,774
Willis Towers Watson plc(c)		913		138,648
Zurich Insurance Group AG(a)		991		295,406
				11,181,918

SCHEDULE OF INVESTMENTS 9

Schedule of Investments  (continued) December 31, 2018 BlackRock Managed Volatility V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Interactive Media & Services —1.4%(a)
Alphabet, Inc., Class A		946	$	988,532
Alphabet, Inc., Class C		1,300		1,346,293
Facebook, Inc., Class A		7,943		1,041,248
IAC/InterActiveCorp		126		23,063
TripAdvisor, Inc.		524		28,264
Twitter, Inc.		386		11,094
				3,438,494
Internet & Direct Marketing Retail —1.0%(a)
Amazon.com, Inc.		1,489		2,236,433
Booking Holdings, Inc.		161		277,310
eBay, Inc.		1,537		43,144
Wayfair, Inc., Class A		451		40,626
				2,597,513
IT Services —1.4%
Automatic Data Processing, Inc.		2,943		385,886
Broadridge Financial Solutions, Inc.		1,149		110,591
Cognizant Technology Solutions Corp., Class A		680		43,167
Computershare Ltd.		22,502		272,708
Fidelity National Information Services, Inc.		3,000		307,650
Fiserv, Inc.(a)		4,334		318,506
FleetCor Technologies, Inc.(a)		128		23,772
Fujitsu Ltd.		3,300		205,709
International Business Machines Corp.		1,969		223,816
Jack Henry & Associates, Inc.		845		106,909
Leidos Holdings, Inc.		1,694		89,308
Mastercard, Inc., Class A		1,117		210,722
Otsuka Corp.		600		16,513
Paychex, Inc.		4,366		284,445
PayPal Holdings, Inc.(a)		3,734		313,992
Shopify, Inc., Class A(a)		477		65,963
Square, Inc., Class A(a)		97		5,441
Visa, Inc., Class A		3,330		439,360
Wirecard AG		302		45,527
				3,469,985
Life Sciences Tools & Services —0.4%
Agilent Technologies, Inc.		1,839		124,059
Illumina, Inc.(a)		678		203,353
Lonza Group AG (Registered)(a)		46		11,958
Mettler-Toledo International, Inc.(a)		233		131,780
QIAGEN NV(a)		1,512		51,666
Thermo Fisher Scientific, Inc.		1,868		418,040
Waters Corp.(a)		694		130,923
				1,071,779
Machinery —0.0%
ANDRITZ AG		745		34,215
Media —0.5%
CBS Corp. (Non-Voting), Class B		3,544		154,944
Charter Communications, Inc., Class A(a)		569		162,148
Comcast Corp., Class A		18,263		621,855
Liberty Global plc, Class C(a)		5,317		109,743
Liberty Media Corp.-Liberty SiriusXM, Class C(a)		1,138		42,083
News Corp., Class A		3,556		40,360
ProSiebenSat.1 Media SE		707		12,580
SES SA, FDR		806		15,432
Sirius XM Holdings, Inc.		19,032		108,673
				1,267,818
Metals & Mining— 0.8%
Anglo American plc		7,391		165,268
ArcelorMittal		710		14,697
Barrick Gold Corp.		14,936		201,634
BlueScope Steel Ltd.		4,263		32,885

Security	Shares		Value
Metals & Mining (continued)
First Quantum Minerals Ltd.		3,219	$	26,031
Freeport-McMoRan, Inc.		4,280		44,127
Glencore plc(a)		73,903		274,776
Kinross Gold Corp.(a)		142,587		459,554
Nucor Corp.		7,252		375,726
South32 Ltd.		37,147		88,366
Steel Dynamics, Inc.		7,842		235,574
Turquoise Hill Resources Ltd.(a)		24,919		41,069
				1,959,707
Multiline Retail —0.0%
Wesfarmers Ltd.		300		6,816
Multi-Utilities —0.1%
Ameren Corp.		730		47,618
CMS Energy Corp.		112		5,561
Consolidated Edison, Inc.		412		31,502
Dominion Energy, Inc.		631		45,091
DTE Energy Co.		279		30,774
E.ON SE		7,017		69,267
Public Service Enterprise Group, Inc.		510		26,545
				256,358
Oil, Gas & Consumable Fuels— 3.8%
Anadarko Petroleum Corp.		3,323		145,680
BP plc		109,168		690,126
Cabot Oil & Gas Corp.		2,005		44,812
Canadian Natural Resources Ltd.		10,440		251,900
Chevron Corp.		7,748		842,905
ConocoPhillips		3,126		194,906
Devon Energy Corp.		6,524		147,051
Enbridge, Inc.		5,138		159,612
Eni SpA		21,370		337,586
EOG Resources, Inc.		575		50,146
Equinor ASA		5,941		126,021
Exxon Mobil Corp.		13,768		938,840
Galp Energia SGPS SA		38,768		610,434
Hess Corp.		322		13,041
HollyFrontier Corp.		848		43,350
Idemitsu Kosan Co. Ltd.		3,000		97,580
JXTG Holdings, Inc.		52,200		271,102
Marathon Oil Corp.		1,778		25,496
Marathon Petroleum Corp.		1,682		99,255
Neste OYJ		2,512		194,486
Occidental Petroleum Corp.		3,634		223,055
Oil Search Ltd.		5,293		26,661
OMV AG		1,414		61,754
Phillips 66		1,365		117,595
Repsol SA		39,006		627,102
Royal Dutch Shell plc, Class A		33,751		993,388
Royal Dutch Shell plc, Class B		29,890		893,636
Showa Shell Sekiyu KK		15,200		210,583
Suncor Energy, Inc.		1,460		40,778
TOTAL SA		14,109		744,181
TransCanada Corp.		1,306		46,636
Valero Energy Corp.		1,529		114,629
				9,384,327
Paper & Forest Products —0.1%
West Fraser Timber Co. Ltd.		2,692		132,983
Personal Products— 1.1%
Beiersdorf AG		1,836		191,499
Estee Lauder Cos., Inc. (The), Class A		3,487		453,659
Kao Corp.		4,200		310,874
Kobayashi Pharmaceutical Co. Ltd.		400		27,126
Kose Corp.		700		109,955

10 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Managed Volatility V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Personal Products (continued)
L’Oreal SA		1,989	$	455,132
Pola Orbis Holdings, Inc.		4,800		129,351
Shiseido Co. Ltd.		3,500		219,198
Unilever NV, CVA		8,039		435,491
Unilever plc		5,484		287,925
				2,620,210
Pharmaceuticals —4.4%
Allergan plc		1,667		222,811
Astellas Pharma, Inc.		32,900		420,351
AstraZeneca plc		5,161		385,248
Aurora Cannabis, Inc.(a)		1,267		6,292
Bausch Health Cos., Inc.(a)		3,846		71,134
Bayer AG (Registered)		3,812		265,120
Bristol-Myers Squibb Co.		9,422		489,756
Chugai Pharmaceutical Co. Ltd.		2,400		139,198
Daiichi Sankyo Co. Ltd.		4,500		143,936
Eisai Co. Ltd.		1,900		147,098
Eli Lilly & Co.		5,433		628,707
GlaxoSmithKline plc		21,533		410,376
H Lundbeck A/S		2,697		118,703
Hisamitsu Pharmaceutical Co., Inc.		500		27,601
Johnson & Johnson		10,474		1,351,670
Kyowa Hakko Kirin Co. Ltd.		2,800		52,909
Merck & Co., Inc.		12,839		981,028
Merck KGaA		2,072		213,276
Mitsubishi Tanabe Pharma Corp.		3,700		53,412
Mylan NV(a)		854		23,400
Nektar Therapeutics(a)		1,267		41,646
Novartis AG (Registered)		3,970		340,008
Novo Nordisk A/S, Class B		15,155		696,025
Ono Pharmaceutical Co. Ltd.		2,500		51,052
Orion OYJ, Class B		1,912		66,516
Otsuka Holdings Co. Ltd.		2,900		118,506
Pfizer, Inc.		25,675		1,120,714
Roche Holding AG		1,629		404,414
Sanofi		9,494		823,604
Santen Pharmaceutical Co. Ltd.		1,000		14,428
Shionogi & Co. Ltd.		5,000		285,377
Sumitomo Dainippon Pharma Co. Ltd.		2,900		92,482
Taisho Pharmaceutical Holdings Co. Ltd.		1,000		100,368
Takeda Pharmaceutical Co. Ltd.		5,200		176,251
Teva Pharmaceutical Industries Ltd., ADR		7,920		122,126
UCB SA		1,496		122,188
Zoetis, Inc.		1,618		138,404
				10,866,135
Professional Services —0.6%
CoStar Group, Inc.(a)		347		117,057
Equifax, Inc.		2,100		195,573
Nielsen Holdings plc		4,731		110,374
Recruit Holdings Co. Ltd.		2,600		62,813
Robert Half International, Inc.		6,201		354,697
SGS SA (Registered)		87		195,839
Thomson Reuters Corp.		709		34,240
TransUnion		3,487		198,062
Verisk Analytics, Inc.(a)		2,879		313,926
				1,582,581
Real Estate Management & Development— 0.2%
Aroundtown SA		3,095		25,676
CapitaLand Ltd.		48,600		110,829
City Developments Ltd.		1,600		9,539
CK Asset Holdings Ltd.		3,000		21,950
Daito Trust Construction Co. Ltd.		500		68,452
Daiwa House Industry Co. Ltd.		4,000		127,594

Security	Shares		Value
Real Estate Management & Development (continued)
Hongkong Land Holdings Ltd.		2,000	$	12,608
Mitsubishi Estate Co. Ltd.		1,900		29,893
Sumitomo Realty & Development Co. Ltd.		300		10,982
Sun Hung Kai Properties Ltd.		3,500		49,951
Swiss Prime Site AG (Registered)		653		52,894
				520,368
Road & Rail —0.1%
Canadian National Railway Co.		1,694		125,462
Canadian Pacific Railway Ltd.		123		21,825
				147,287
Semiconductors & Semiconductor Equipment —0.6%
Broadcom, Inc.		568		144,431
Infineon Technologies AG		12,653		253,334
Intel Corp.		11,887		557,857
NVIDIA Corp.		456		60,876
NXP Semiconductors NV(a)		621		45,507
QUALCOMM, Inc.		1,818		103,462
Renesas Electronics Corp.(a)		5,400		24,527
Rohm Co. Ltd.		600		38,295
STMicroelectronics NV		10,702		151,686
SUMCO Corp.		3,900		43,434
Texas Instruments, Inc.		1,004		94,878
				1,518,287
Software —1.3%
Adobe, Inc.(a)		179		40,497
BlackBerry Ltd.(a)		4,086		29,062
CDK Global, Inc.		2,483		118,886
Citrix Systems, Inc.(a)		549		56,251
Constellation Software, Inc.		279		178,587
Intuit, Inc.		1,817		357,676
Microsoft Corp.		17,956		1,823,792
Open Text Corp.		2,033		66,268
Oracle Corp.		4,822		217,713
SAP SE		2,861		283,953
Temenos AG (Registered)(a)		741		89,041
				3,261,726
Specialty Retail —2.3%
Advance Auto Parts, Inc.		281		44,246
AutoZone, Inc.(a)		158		132,458
Best Buy Co., Inc.		2,630		139,285
Burlington Stores, Inc.(a)		2,073		337,215
Gap, Inc. (The)		11,376		293,046
Hennes & Mauritz AB, Class B		1,877		26,693
Home Depot, Inc. (The)		5,468		939,512
L Brands, Inc.		11,301		290,097
Lowe’s Cos., Inc.		4,492		414,881
O’Reilly Automotive, Inc.(a)		565		194,546
Ross Stores, Inc.		7,118		592,217
Tiffany & Co.		6,264		504,315
TJX Cos., Inc. (The)		13,023		582,649
Tractor Supply Co.		7,217		602,186
Ulta Beauty, Inc.(a)		2,877		704,405
				5,797,751
Technology Hardware, Storage & Peripherals— 2.1%
Apple, Inc.		21,987		3,468,229
Brother Industries Ltd.		3,700		54,765
Canon, Inc.		3,400		93,553
Dell Technologies, Inc., Class C(a)		1,745		85,287
FUJIFILM Holdings Corp.		5,700		220,958
Hewlett Packard Enterprise Co.		7,031		92,880
HP, Inc.		9,357		191,444
Konica Minolta, Inc.		5,800		52,208

SCHEDULE OF INVESTMENTS 11

Schedule of Investments  (continued) December 31, 2018 BlackRock Managed Volatility V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Technology Hardware, Storage & Peripherals (continued)
NEC Corp.		1,800	$	53,521
NetApp, Inc.		3,926		234,265
Ricoh Co. Ltd.		7,400		72,312
Seagate Technology plc(c)		7,802		301,079
Seiko Epson Corp.		6,400		89,387
Western Digital Corp.		2,761		102,074
Xerox Corp.		3,240		64,022
				5,175,984
Textiles, Apparel & Luxury Goods —0.7%
adidas AG		1,302		272,104
Asics Corp.		7,300		92,715
Gildan Activewear, Inc.		11,628		352,962
HUGO BOSS AG		1,025		63,185
Kering SA		734		343,856
LVMH Moet Hennessy Louis Vuitton SE		1,718		502,989
NIKE, Inc., Class B		549		40,703
Pandora A/S		1,240		50,623
Puma SE		35		17,123
				1,736,260
Tobacco —0.6%
Altria Group, Inc.		7,912		390,773
British American Tobacco plc		8,641		274,948
Japan Tobacco, Inc.		7,300		173,456
Philip Morris International, Inc.		5,493		366,713
Swedish Match AB		5,505		216,718
				1,422,608
Trading Companies & Distributors —0.1%
Ashtead Group plc		1,144		23,863
Ferguson plc		1,048		66,965
Finning International, Inc.		7,029		122,539
Marubeni Corp.		1,600		11,227
				224,594
Transportation Infrastructure —0.2%
Transurban Group(d)		45,040		369,667
Total Common Stocks— 55.3% (Cost: $149,296,836)				137,120,788
	Par (000)
Corporate Bonds— 0.0%
Diversified Telecommunication Services— 0.0%
AT&T, Inc., 7.13%, 12/15/31		USD        25		27,399
Total Corporate Bonds— 0.0% (Cost: $30,294)				27,399
	Beneficial Interest (000)
Other Interests— 0.0%(a)(e)(f)(g)
Capital Markets— 0.0%
Lehman Brothers Holdings, Inc.		25		—
Total Other Interests— 0.0%				—
	Shares
Preferred Stocks— 0.2%
Automobiles— 0.1%
Bayerische Motoren Werke AG (Preference)		992		70,741
Porsche Automobil Holding SE (Preference)		1,657		97,452

Security	Shares		Value
Preferred Stocks (continued)
Volkswagen AG (Preference)		669	$	106,676
				274,869
Chemicals— 0.0%
Fuchs Petrolub SE (Preference)		2,367		97,857
Health Care Equipment & Supplies— 0.0%
Sartorius AG (Preference)		173		21,531
Household Products— 0.1%
Henkel AG & Co. KGaA (Preference)		2,202		240,522
Total Preferred Stocks— 0.2% (Cost: $660,706)				634,779
Rights— 0.0%(a)
Oil, Gas & Consumable Fuels —0.0%
Repsol SA		39,006		17,876
Total Rights— 0.0% (Cost: $17,852)				17,876
	Par (000)
U.S. Government Sponsored Agency Obligations — 0.3%
Federal Home Loan Mortgage Corp. Notes, 3.75%, 03/27/19		USD        680		682,097
Total U.S. Government Sponsored Agency Securities — 0.3% (Cost: $683,597)				682,097
U.S. Treasury Obligations— 22.6%
U.S. Treasury Bonds, 8.75%, 08/15/20		14,500		15,908,653
U.S. Treasury Notes:
3.63%, 02/15/20		14,500		14,657,461
2.75%, 08/15/21		11,500		11,577,715
1.13%, 08/31/21		14,500		13,995,898
Total U.S. Treasury Obligations— 22.6% (Cost: $56,024,056)				56,139,727
Total Long-Term Investments— 78.4% (Cost: $206,713,341)				194,622,666
	Shares
Short-Term Securities — 5.0%(h)(j)
BlackRock Liquidity Funds, T-Fund, Institutional Class, 2.32%		11,969,958		11,969,958
SL Liquidity Series, LLC, Money Market Series, 2.57%(i)		459,918		459,872
Total Short-Term Securities — 5.0% (Cost: $12,429,834)				12,429,830
Total Investments — 83.4% (Cost: $219,143,175)				207,052,496
Other Assets Less Liabilities — 16.6%				41,097,428
Net Assets — 100.0%			$	248,149,924

^(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)  Security, or a portion of the security, is on loan.

^(d)  A security contractually bound to one or more other securities to form a single saleable unit which cannot be sold separately.

12 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Managed Volatility V.I. Fund

^(e)  Other interests represent beneficial interests in liquidation trusts and other reorganizational or private entities.

^(f)  Issuer filed for bankruptcy and/or is in default.

^(g)  Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy.

^(h)  Annualized 7-day yield as of period end.

⁽ⁱ⁾  Security was purchased with the cash collateral from loaned securities.

^(j)  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:

Affiliated Persons and/or Related Parties	Par/ Shares Held at 12/31/17		Par/ Shares Purchased			Par/ Shares Sold			Par/ 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		3,387,049		8,582,909	(b)		—			11,969,958	$	11,969,958	$	460,581		$	—		$	—
SL Liquidity Series, LLC, Money Market Series		1,935,844		—			(1,475,926	)(c)		459,918		459,872		3,019	(d)		(68	)		(4	)
BlackRock, Inc.		—		105,000			(105,000	)		—		—		102			(212	)		—
BlackRock, Inc.		—		378			(378	)		—		—		—			79,675			—
iShares 1-3 Year Credit Bond ETF		15,923		—			(15,923	)		—		—		7,571			(29,567	)		14,296
iShares 3-7 Year Treasury Bond ETF		6,491		—			(6,491	)		—		—		3,290			(25,574	)		7,607
iShares Core U.S. Aggregate Bond ETF		17,278		—			(17,278	)		—		—		12,444			(85,240	)		27,745
iShares MSCI EAFE ETF		21,263		—			(21,263	)		—		—		—			131,855			(116,368	)
PNC Financial Services Group, Inc. (The)(e)		—		1,442			(1,442	)		—		N/A		1,082			90,833			—
PNC Financial Services Group, Inc. (The)(e)		—		320,000			(320,000	)		—		N/A		259			(2,665	)		—
											$	12,429,830	$	488,348		$	159,037		$	(66,724	)

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

^(b)  Represents net shares purchased.

^(c)  Represents net shares sold.

^(d)  Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.

^(e)  As of period end, the entity is no longer an affiliate of the Fund.

For Fund compliance purposes, the Fund’s industry classifications refer to one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

Description	Number of Contracts		Expiration Date		Notional Amount (000)		Value/ Unrealized Appreciation (Depreciation)
Long Contracts
Amsterdam Exchange Index		263		01/18/19	$	29,393	$	(1,193,142	)
CAC 40 10 Euro Index		105		01/18/19		5,689		(189,975	)
Euro-BTP		70		03/07/19		10,251		371,044
TOPIX Index		58		03/07/19		7,903		(479,296	)
Australia 10 Year Bond		169		03/15/19		15,793		191,398
DAX Index		66		03/15/19		19,966		(688,113	)
FTSE 100 Index		105		03/15/19		8,912		(224,631	)
FTSE/MIB Index		109		03/15/19		11,368		(449,422	)
Canada 10 Year Bond		692		03/20/19		69,327		1,579,271
U.S. Treasury 10 Year Note		59		03/20/19		7,199		91,619
SPI 200 Index		112		03/21/19		10,967		(102,552	)
								(1,093,799	)

SCHEDULE OF INVESTMENTS 13

Schedule of Investments  (continued) December 31, 2018 BlackRock Managed Volatility V.I. Fund

Futures Contracts (continued)

Description	Number of Contracts		Expiration Date		Notional Amount (000)		Value/ Unrealized Appreciation (Depreciation)
Short Contracts
IBEX 35 Index		255		01/18/19	$	24,884	$	1,110,273
OMXS30 Index		537		01/18/19		8,532		449,272
Hang Seng Index		82		01/30/19		13,537		(91,278	)
MSCI Singapore Index		1,173		01/30/19		29,408		(58,095	)
Euro-Bund		31		03/07/19		5,809		(12,013	)
S&P/TSX 60 Index		45		03/14/19		5,652		176,956
MSCI EAFE E-Mini Index		591		03/15/19		50,708		1,759,259
S&P 500 E-Mini Index		715		03/15/19		89,561		5,394,431
Long Gilt		151		03/27/19		23,706		6,278
								8,735,083
							$	7,641,284

Forward Foreign Currency Exchange Contracts

Currency Purchased		Currency Sold		Counterparty	Settlement Date		Unrealized Appreciation (Depreciation)
BRL	19,126,000	USD	4,866,667	JPMorgan Chase Bank NA		03/20/19	$	40,180
BRL	21,174,000	USD	5,429,323	UBS AG		03/20/19		2,946
CHF	1,760,000	USD	1,794,232	UBS AG		03/20/19		9,332
EUR	9,439,000	USD	10,781,292	JPMorgan Chase Bank NA		03/20/19		103,250
EUR	10,983,115	USD	12,613,613	UBS AG		03/20/19		51,518
INR	892,440,000	USD	12,388,118	BNP Paribas SA		03/20/19		337,310
JPY	907,186,000	USD	8,090,254	Morgan Stanley & Co. International plc		03/20/19		237,884
JPY	67,064,000	USD	600,827	UBS AG		03/20/19		14,833
KRW	3,018,528,000	USD	2,697,301	Goldman Sachs International		03/20/19		20,428
KRW	6,718,906,000	USD	5,975,016	JPMorgan Chase Bank NA		03/20/19		74,344
MXN	79,157,000	USD	3,843,599	Morgan Stanley & Co. International plc		03/20/19		136,676
MYR	45,267,000	USD	10,825,541	UBS AG		03/20/19		119,047
PLN	21,719,000	USD	5,784,186	UBS AG		03/20/19		29,788
THB	175,568,000	USD	5,372,338	Goldman Sachs International		03/20/19		30,838
USD	2,549,755	AUD	3,548,000	Morgan Stanley & Co. International plc		03/20/19		47,456
USD	3,459,306	AUD	4,785,033	UBS AG		03/20/19		84,565
USD	6,658,354	CAD	8,906,000	Morgan Stanley & Co. International plc		03/20/19		123,132
USD	18,713,259	CAD	24,819,820	UBS AG		03/20/19		500,480
USD	353,140	NOK	3,035,000	Morgan Stanley & Co. International plc		03/20/19		939
USD	75,663	NZD	110,000	UBS AG		03/20/19		1,732
USD	273,152	ZAR	3,902,000	UBS AG		03/20/19		4,421
								1,971,099
AUD	7,068,000	USD	5,098,113	JPMorgan Chase Bank NA		03/20/19		(113,263	)
AUD	15,452,565	USD	11,190,748	UBS AG		03/20/19		(292,512	)
CAD	11,771,000	USD	8,814,673	Morgan Stanley & Co. International plc		03/20/19		(177,116	)
GBP	3,240,000	USD	4,151,428	UBS AG		03/20/19		(6,348	)
NOK	2,192,000	USD	259,465	UBS AG		03/20/19		(5,091	)
USD	8,670,377	CNY	59,973,000	Citibank NA		03/20/19		(59,672	)
USD	10,009,965	CNY	69,110,000	Morgan Stanley & Co. International plc		03/20/19		(50,124	)
USD	5,626,428	CNY	38,918,000	UBS AG		03/20/19		(38,723	)
USD	586,065	CZK	13,243,000	UBS AG		03/20/19		(4,832	)
USD	109,514	EUR	96,000	JPMorgan Chase Bank NA		03/20/19		(1,188	)
USD	26,204,627	EUR	22,791,251	UBS AG		03/20/19		(77,005	)

14 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Managed Volatility V.I. Fund

Forward Foreign Currency Exchange Contracts (continued)

Currency Purchased		Currency Sold		Counterparty	Settlement Date		Unrealized Appreciation (Depreciation)
USD	4,671,109	GBP	3,685,000	Morgan Stanley & Co. International plc		03/20/19	$	(43,280	)
USD	103,887	INR	7,484,000	BNP Paribas SA		03/20/19		(2,829	)
USD	5,452,177	INR	396,237,000	Citibank NA		03/20/19		(197,822	)
USD	10,321,726	JPY	1,152,479,950	UBS AG		03/20/19		(258,257	)
USD	3,808,357	MXN	77,740,000	Morgan Stanley & Co. International plc		03/20/19		(100,666	)
USD	870,393	MXN	17,911,000	UBS AG		03/20/19		(30,232	)
USD	7,912,781	MYR	32,947,000	UBS AG		03/20/19		(53,096	)
USD	10,281,224	PLN	38,839,000	Morgan Stanley & Co. International plc		03/20/19		(115,615	)
USD	358,732	PLN	1,347,000	UBS AG		03/20/19		(1,847	)
USD	6,189,552	SEK	55,625,000	Morgan Stanley & Co. International plc		03/20/19		(125,275	)
USD	1,924,558	SEK	17,220,000	UBS AG		03/20/19		(30,343	)
USD	539,475	SGD	739,000	Morgan Stanley & Co. International plc		03/20/19		(3,680	)
USD	222,488	SGD	304,000	UBS AG		03/20/19		(948	)
USD	24,700,903	THB	808,097,000	Goldman Sachs International		03/20/19		(168,606	)
USD	3,052,537	ZAR	44,361,000	Morgan Stanley & Co. International plc		03/20/19		(2,599	)
ZAR	45,974,000	USD	3,171,189	Morgan Stanley & Co. International plc		03/20/19		(4,965	)
ZAR	85,135,000	USD	5,959,710	UBS AG		03/20/19		(96,472	)
								(2,062,406	)
	Net Unrealized Depreciation						$	(91,307	)

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
28 day MXIBTIIE	Monthly		9.04%	Monthly		03/20/19	(a)		03/13/24		MXN	310,000	$	279,090		$	—		$	279,090
28 day MXIBTIIE	Monthly		8.93%	Monthly		03/20/19	(a)		03/13/24		MXN	523,000		353,113			—			353,113
28 day MXIBTIIE	Monthly		8.75%	Monthly		03/20/19	(a)		03/13/24		MXN	900,000		285,306			—			285,306
28 day MXIBTIIE	Monthly		8.66%	Monthly		03/20/19	(a)		03/13/24		MXN	229,550		28,137			—			28,137
28 day MXIBTIIE	Monthly		8.97%	Monthly		03/20/19	(a)		03/13/24		MXN	318,000		243,991			—			243,991
3.11%	Semi-Annual		3 month LIBOR	Quarterly		03/20/19	(a)		03/19/24		USD	28,000		(701,425	)		—			(701,425	)
3.21%	Semi-Annual		3 month LIBOR	Quarterly		03/20/19	(a)		03/19/24		USD	29,000		(859,170	)		1,916			(861,086	)
3.04%	Semi-Annual		3 month LIBOR	Quarterly		03/20/19	(a)		03/19/24		USD	30,000		(650,674	)		(2,069	)		(648,605	)
6 month LIBOR	Semi-Annual		1.52%	Semi-Annual		03/20/19	(a)		03/20/24		GBP	32,000		393,071			—			393,071
6 month EURIBOR	Semi-Annual		0.59%	Annual		03/20/19	(a)		03/20/24		EUR	63,000		1,257,775			5,998			1,251,777
6 month BBR	Semi-Annual		2.61%	Semi-Annual		03/20/19	(a)		03/20/24		AUD	25,000		307,008			—			307,008
6 month BBR	Semi-Annual		2.58%	Semi-Annual		03/20/19	(a)		03/20/24		AUD	49,500		563,808			—			563,808
6 month BBR	Semi-Annual		2.57%	Semi-Annual		03/20/19	(a)		03/20/24		AUD	23,500		258,369			—			258,369
6 month EURIBOR	Semi-Annual		0.37%	Annual		03/20/19	(a)		03/20/24		EUR	23,000		168,824			—			168,824
6 month LIBOR	Semi-Annual		1.38%	Semi-Annual		03/20/19	(a)		03/20/24		GBP	13,000		50,715			—			50,715
2.48%	Annual		6 month WIBOR	Semi-Annual		03/20/19	(a)		03/20/24		PLN	74,900		(306,773	)		—			(306,773	)
2.47%	Annual		6 month WIBOR	Semi-Annual		03/20/19	(a)		03/20/24		PLN	139,100		(552,318	)		—			(552,318	)
3 month JIBAR	Quarterly		7.81%	Quarterly		03/20/19	(a)		03/20/24		ZAR	1,000		240			—			240
2.48%	Semi-Annual		3 month BA	Semi-Annual		03/20/19	(a)		03/20/24		CAD	36,000		(230,577	)		(3,810	)		(226,767	)
6 month LIBOR	Semi-Annual		1.56%	Semi-Annual		03/20/19	(a)		03/20/24		GBP	27,000		403,779			18,850			384,929
6 month BBR	Semi-Annual		2.61%	Semi-Annual		03/20/19	(a)		03/20/24		AUD	48,000		586,289			—			586,289
2.59%	Annual		6 month WIBOR	Semi-Annual		03/20/19	(a)		03/20/24		PLN	98,000		(527,072	)		—			(527,072	)
2.64%	Annual		6 month WIBOR	Semi-Annual		03/20/19	(a)		03/20/24		PLN	98,000		(588,382	)		—			(588,382	)
6 month LIBOR	Semi-Annual		1.00%	Semi-Annual		03/20/19	(a)		03/20/24		GBP	12,000		(233,212	)		(209,081	)		(24,131	)
2.31%	Annual		6 month WIBOR	Semi-Annual		03/20/19	(a)		03/20/24		PLN	68,000		(133,871	)		—			(133,871	)
6 month EURIBOR	Semi-Annual		0.32%	Annual		03/20/19	(a)		03/20/24		EUR	25,000		104,961			(8,089	)		113,050
3 month JIBAR	Quarterly		8.39%	Quarterly		03/20/19	(a)		03/20/24		ZAR	1,018,000		1,904,841			—			1,904,841
													$	2,405,843		$	(196,285	)	$	2,602,128

^(a)  Forward swap.

SCHEDULE OF INVESTMENTS 15

Schedule of Investments  (continued) December 31, 2018 BlackRock Managed Volatility V.I. Fund

OTC Interest Rate Swaps

Paid by the Fund		Received by the Fund			Counterparty	Effective Date			Termination Date		Notional Amount (000)			Value			Upfront Premium Paid (Received)		Unrealized Appreciation (Depreciation)
Rate	Frequency	Rate		Frequency
6.55%	Semi-Annual		1 day MIBOR	Semi-Annual	Bank of America NA		03/20/19	(a)		03/20/24		INR	502,405	$	(85,551	)	$	—	$	(85,551	)
3 month TWCPBA	Quarterly		1.11%	Quarterly	Bank of America NA		03/20/19	(a)		03/20/24		TWD	231,000		86,328			—		86,328
1.78%	Quarterly		3 month CD_KSDA	Quarterly	Bank of America NA		03/20/19	(a)		03/20/24		KRW	10,768,570		(5,451	)		—		(5,451	)
2.12%	Quarterly		3 month CD_KSDA	Quarterly	Bank of America NA		03/20/19	(a)		03/20/24		KRW	17,122,356		(258,795	)		—		(258,795	)
3 month TWCPBA	Quarterly		1.09%	Quarterly	Bank of America NA		03/20/19	(a)		03/20/24		TWD	262,000		91,235			—		91,235
6.60%	Semi-Annual		1 day MIBOR	Semi-Annual	Bank of America NA		03/20/19	(a)		03/20/24		INR	493,526		(99,576	)		—		(99,576	)
6.60%	Semi-Annual		1 day MIBOR	Semi-Annual	Bank of America NA		03/20/19	(a)		03/20/24		INR	1,221,123		(248,209	)		—		(248,209	)
3 month TWCPBA	Quarterly		1.09%	Quarterly	Bank of America NA		03/20/19	(a)		03/20/24		TWD	173,000		59,140			—		59,140
3 month TWCPBA	Quarterly		1.09%	Quarterly	Bank of America NA		03/20/19	(a)		03/20/24		TWD	173,000		58,865			—		58,865
6.54%	Semi-Annual		1 day MIBOR	Semi-Annual	Bank of America NA		03/20/19	(a)		03/20/24		INR	501,149		(83,834	)		—		(83,834	)
2.19%	Quarterly		3 month CD_KSDA	Quarterly	Bank of America NA		03/20/19	(a)		03/20/24		KRW	25,621,453		(466,483	)		—		(466,483	)
6 month THBFIX	Semi-Annual		2.37%	Semi-Annual	Bank of America NA		03/20/19	(a)		03/20/24		THB	549,640		346,329			—		346,329
3.41%	Quarterly		1 week CNREPOFI	Quarterly	Bank of America NA		03/20/19	(a)		03/20/24		CNY	60,872		(216,655	)		—		(216,655	)
3.46%	Quarterly		1 week CNREPOFI	Quarterly	Bank of America NA		03/20/19	(a)		03/20/24		CNY	93,015		(359,285	)		—		(359,285	)
7.57%	Semi-Annual		1 day MIBOR	Semi-Annual	Bank of America NA		03/20/19	(a)		03/20/24		INR	2,081,000		(1,630,985	)		—		(1,630,985	)
7.63%	Semi-Annual		1 day MIBOR	Semi-Annual	Bank of America NA		03/20/19	(a)		03/20/24		INR	346,840		(283,475	)		—		(283,475	)
7.64%	Semi-Annual		1 day MIBOR	Semi-Annual	Bank of America NA		03/20/19	(a)		03/20/24		INR	987,160		(815,095	)		—		(815,095	)
6 month THBFIX	Semi-Annual		2.36%	Semi-Annual	BNP Paribas SA		03/20/19	(a)		03/20/24		THB	381,607		232,680			—		232,680
1.78%	Quarterly		3 month CD_KSDA	Quarterly	BNP Paribas SA		03/20/19	(a)		03/20/24		KRW	10,768,570		(7,747	)		—		(7,747	)
2.20%	Quarterly		3 month CD_KSDA	Quarterly	BNP Paribas SA		03/20/19	(a)		03/20/24		KRW	25,753,392		(472,729	)		—		(472,729	)
1.79%	Quarterly		3 month CD_KSDA	Quarterly	BNP Paribas SA		03/20/19	(a)		03/20/24		KRW	11,112,500		(12,498	)		—		(12,498	)
3 month TWCPBA	Quarterly		0.98%	Quarterly	BNP Paribas SA		03/20/19	(a)		03/20/24		TWD	426,000		73,693			—		73,693
2.12%	Quarterly		3 month CD_KSDA	Quarterly	BNP Paribas SA		03/20/19	(a)		03/20/24		KRW	17,121,500		(260,243	)		—		(260,243	)
2.14%	Quarterly		3 month CD_KSDA	Quarterly	BNP Paribas SA		03/20/19	(a)		03/20/24		KRW	17,119,788		(269,709	)		—		(269,709	)
2.12%	Quarterly		3 month CD_KSDA	Quarterly	BNP Paribas SA		03/20/19	(a)		03/20/24		KRW	17,122,356		(255,144	)		—		(255,144	)
3 month KLIBOR	Quarterly		4.03%	Quarterly	BNP Paribas SA		03/20/19	(a)		03/20/24		MYR	49,140		143,473			—		143,473
2.03%	Quarterly		3 month CD_KSDA	Quarterly	BNP Paribas SA		03/20/19	(a)		03/20/24		KRW	25,448,800		(283,699	)		—		(283,699	)
6 month THBFIX	Semi-Annual		2.36%	Semi-Annual	BNP Paribas SA		03/20/19	(a)		03/20/24		THB	647,000		401,088			—		401,088
1.79%	Quarterly		3 month CD_KSDA	Quarterly	Deutsche Bank AG		03/20/19	(a)		03/20/24		KRW	8,796,860		(9,143	)		—		(9,143	)
7.29%	Semi-Annual		1 day MIBOR	Semi-Annual	Deutsche Bank AG		03/20/19	(a)		03/20/24		INR	854,820		(524,492	)		—		(524,492	)
6.66%	Semi-Annual		1 day MIBOR	Semi-Annual	Deutsche Bank AG		03/20/19	(a)		03/20/24		INR	1,116,560		(268,801	)		—		(268,801	)
2.05%	Quarterly		3 month CD_KSDA	Quarterly	Deutsche Bank AG		03/20/19	(a)		03/20/24		KRW	20,614,559		(246,373	)		—		(246,373	)
3 month KLIBOR	Quarterly		4.05%	Quarterly	Goldman Sachs International		03/20/19	(a)		03/20/24		MYR	41,860		129,075			—		129,075
6 month THBFIX	Semi-Annual		2.33%	Semi-Annual	Goldman Sachs International		03/20/19	(a)		03/20/24		THB	198,113		113,305			—		113,305
1.97%	Quarterly		3 month CD_KSDA	Quarterly	Goldman Sachs International		03/20/19	(a)		03/20/24		KRW	24,248,120		(214,466	)		—		(214,466	)
3 month KLIBOR	Quarterly		3.98%	Quarterly	Goldman Sachs International		03/20/19	(a)		03/20/24		MYR	28,000		66,460			—		66,460
6.59%	Semi-Annual		1 day MIBOR	Semi-Annual	JPMorgan Chase Bank NA		03/20/19	(a)		03/20/24		INR	493,526		(95,876	)		—		(95,876	)
6.59%	Semi-Annual		1 day MIBOR	Semi-Annual	JPMorgan Chase Bank NA		03/20/19	(a)		03/20/24		INR	1,090,288		(211,808	)		—		(211,808	)
6.55%	Semi-Annual		1 day MIBOR	Semi-Annual	JPMorgan Chase Bank NA		03/20/19	(a)		03/20/24		INR	508,481		(86,585	)		—		(86,585	)
6.57%	Semi-Annual		1 day MIBOR	Semi-Annual	JPMorgan Chase Bank NA		03/20/19	(a)		03/20/24		INR	640,943		(116,828	)		—		(116,828	)
7.29%	Semi-Annual		1 day MIBOR	Semi-Annual	JPMorgan Chase Bank NA		03/20/19	(a)		03/20/24		INR	728,180		(447,880	)		—		(447,880	)
6 month THBFIX	Semi-Annual		1.92%	Semi-Annual	JPMorgan Chase Bank NA		03/20/19	(a)		03/20/24		THB	49,500		(1,030	)		—		(1,030	)
6 month THBFIX	Semi-Annual		1.97%	Semi-Annual	JPMorgan Chase Bank NA		03/20/19	(a)		03/20/24		THB	286,500		13,849			—		13,849
3 month TWCPBA	Quarterly		1.11%	Quarterly	JPMorgan Chase Bank NA		03/20/19	(a)		03/20/24		TWD	231,000		87,800			—		87,800
1.79%	Quarterly		3 month CD_KSDA	Quarterly	JPMorgan Chase Bank NA		03/20/19	(a)		03/20/24		KRW	20,637,500		(23,650	)		—		(23,650	)
3 month TWCPBA	Quarterly		1.07%	Quarterly	JPMorgan Chase Bank NA		03/20/19	(a)		03/20/24		TWD	194,000		62,147			—		62,147
6 month THBFIX	Semi-Annual		2.37%	Semi-Annual	JPMorgan Chase Bank NA		03/20/19	(a)		03/20/24		THB	309,526		192,783			—		192,783
														$	(6,203,845	)	$	—	$	(6,203,845	)

(a) Forward swap.

16 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Managed Volatility V.I. Fund

OTC Total Return Swaps

Reference Entity	Fixed Amount Paid / (Received) by the Fund (a)			Counterparty		Termination Date		Notional Amount (000)			Value			Upfront Premium Paid (Received)		Unrealized Appreciation (Depreciation)
Taiwan Capitalization Weighted Stock Index Future January 2019		TWD	251,500,004		Merrill Lynch International & Co.		01/16/19		TWD	251,500	$	(125,946	)	$	—	$	(125,946	)
Taiwan Capitalization Weighted Stock Index Future January 2019		TWD	239,710,941		Merrill Lynch International & Co.		01/16/19		TWD	239,711		(120,042	)		—		(120,042	)
Taiwan Capitalization Weighted Stock Index Future January 2019		TWD	74,664,064		Merrill Lynch International & Co.		01/16/19		TWD	74,664		(37,391	)		—		(37,391	)
KOSPI 200 Index Futures March 2019		KRW	4,092,570,400		Merrill Lynch International & Co.		03/14/19		KRW	4,092,570		(5,372	)		—		(5,372	)
											$	(288,751	)	$	—	$	(288,751	)

^(a)  At termination, the fixed amount paid (received) will be exchanged for the total return of the reference entity.

The following reference rates, and their values as of period end, are used for security descriptions:

Reference Index		Reference Rate
1 day MIBOR	Mumbai Interbank Offered Rate		6.65	%
1 week CNREPOFI	7 Day China Fixing Repo Rates		2.55	%
28 day MXIBTIIE	Mexico Interbank TIIE 28-Day		8.41	%
3 month BA	3 month Canadian Bankers Acceptances		2.24	%
3 month CD_KSDA	Certificates of Deposit by the Korean Securities Dealers Association		1.89	%
3 month JIBAR	Johannesburg Interbank Average Rate		7.15	%
3 month KLIBOR	Kuala Lumpur Interbank Offered Rate		3.65	%
3 month LIBOR	London Interbank Offered Rate		2.81	%
3 month TWCPBA	Taiwan Secondary Markets Bills Rate		0.67	%
6 month BBR	Australian Bank Bill Rate		2.22	%
6 month EURIBOR	Euro Interbank Offered Rate		(0.24	%)
6 month LIBOR	London Interbank Offered Rate		2.88	%
6 month THBFIX	6 month Thai Baht Interest Rate Fixing		1.74	%
6 month WIBOR	Warsaw Interbank Offered Rate		1.79	%

Balances Reported in the Statement 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)	$	26,764	$	(223,049	)	$	7,172,558	$	(4,570,430	)
OTC Swaps		—		—			2,158,250		(8,650,846	)

^(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 Statement 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 Statement 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)	$	—	$	—	$	8,890,191	$	—	$	2,239,610	$	—	$	11,129,801
Forward foreign currency exchange contracts
Unrealized appreciation on forward foreign currency exchange contracts		—		—		—		1,971,099		—		—		1,971,099
Swaps — centrally cleared
Net unrealized appreciation(a)		—		—		—		—		7,172,558		—		7,172,558
Swaps — OTC
Unrealized appreciation on OTC swaps; Swap premiums paid		—		—		—		—		2,158,250		—		2,158,250
	$	—	$	—	$	8,890,191	$	1,971,099	$	11,570,418	$	—	$	22,431,708

SCHEDULE OF INVESTMENTS 17

Schedule of Investments  (continued) December 31, 2018 BlackRock Managed Volatility V.I. Fund

Derivative Financial Instruments Categorized by Risk Exposure (continued)

	Commodity Contracts		Credit Contracts		Equity Contracts		Foreign Currency Exchange Contracts		Interest Rate Contracts		Other Contracts		Total
Liabilities — Derivative Financial Instruments
Futures contracts
Net unrealized depreciation(a)	$	—	$	—	$	3,476,504	$	—	$	12,013	$	—	$	3,488,517
Forward foreign currency exchange contracts
Unrealized depreciation on forward foreign currency exchange contracts		—		—		—		2,062,406		—		—		2,062,406
Swaps — centrally cleared
Net unrealized depreciation(a)		—		—		—		—		4,570,430		—		4,570,430
Swaps — OTC
Unrealized depreciation on OTC swaps; Swap premiums received		—		—		288,751		—		8,362,095		—		8,650,846
	$	—	$	—	$	3,765,255	$	2,062,406	$	12,944,538	$	—	$	18,772,199

^(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 Statement of Assets and Liabilities.

For the year ended December 31, 2018, the effect of derivative financial instruments in the Statement of Operations were 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	$	—	$	—	$	10,103,810		$	—		$	3,391,179		$	—	$	13,494,989
Forward foreign currency exchange contracts		—		—		—			1,358,731			—			—		1,358,731
Swaps						(34,416	)					(3,013,248	)				(3,047,664	)
	$	—	$	—	$	10,069,394		$	1,358,731		$	377,931		$	—	$	11,806,056
Net Change in Unrealized Appreciation (Depreciation) on:
Futures contracts	$	—	$	—	$	5,386,956		$	—		$	2,221,059		$	—	$	7,608,015
Forward foreign currency exchange contracts		—		—		—			(46,136	)		—			—		(46,136	)
Swaps		—		—		(288,751	)		—			(3,601,717	)		—		(3,890,468	)
	$	—	$	—	$	5,098,205		$	(46,136	)	$	(1,380,658	)	$	—	$	3,671,411

Average Quarterly Balances of Outstanding Derivative Financial Instruments

Futures contracts:
Average notional value of contracts — long	$	170,796,372
Average notional value of contracts — short		274,529,030
Forward foreign currency exchange contracts:
Average amounts purchased — in USD		96,570,799
Average amounts sold — in USD		73,441,614
Interest rate swaps:
Average notional value — pays fixed rate		480,571,722
Average notional value — receives fixed rate		463,979,783
Total return swaps:
Average notional value		19,736,869

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

18 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Managed Volatility V.I. Fund

Derivative Financial Instruments — Offsetting as of Period End

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

	Assets			Liabilities
Derivative Financial Instruments:
Futures contracts	$	1,100,342		$	1,787,454
Forward foreign currency exchange contracts		1,971,099			2,062,406
Swaps — Centrally cleared		1,097,301			—
Swaps — OTC(a)		2,158,250			8,650,846
Total derivative assets and liabilities in the Statement of Assets and Liabilities	$	6,326,992		$	12,500,706
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)		(2,197,643	)		(1,787,454	)
Total derivative assets and liabilities subject to an MNA	$	4,129,349		$	10,713,252

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

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

Counterparty	Derivative Assets Subject to an MNA by Counterparty		Derivatives Available for Offset (a)			Non-cash Collateral Received		Cash Collateral Received		Net Amount of Derivative Assets
Bank of America NA	$	641,897	$	(641,897	)	$	—	$	—	$	—
BNP Paribas SA		1,188,244		(1,188,244	)		—		—		—
Goldman Sachs International		360,106		(360,106	)		—		—		—
JPMorgan Chase Bank NA		574,353		(574,353	)		—		—		—
Morgan Stanley & Co. International plc		546,087		(546,087	)		—		—		—
UBS AG		818,662		(818,662	)		—		—		—
	$	4,129,349	$	(4,129,349	)	$	—	$	—	$	—

Counterparty	Derivative Liabilities Subject to an MNA by Counterparty		Derivatives Available for Offset (a)			Non-cash Collateral Pledged		Cash Collateral Pledged (b)			Net Amount of Derivative Liabilities  (c)(d)
Bank of America NA	$	4,553,394	$	(641,897	)	$	—	$	(3,440,000	)	$	471,497
BNP Paribas SA		1,564,598		(1,188,244	)		—		(376,354	)		—
Citibank NA		257,494		—			—		—			257,494
Deutsche Bank AG		1,048,809		—			—		—			1,048,809
Goldman Sachs International		383,072		(360,106	)		—		(22,966	)		—
JPMorgan Chase Bank NA		1,098,108		(574,353	)		—		—			523,755
Merrill Lynch International & Co.		288,751		—			—		—			288,751
Morgan Stanley & Co. International plc		623,320		(546,087	)		—		—			77,233
UBS AG		895,706		(818,662	)		—		—			77,044
	$	10,713,252	$	(4,129,349	)	$	—	$	(3,839,320	)	$	2,744,583

^(a)  The amount of derivatives available for offset is limited to the amount of derivative assets and/or liabilities that are subject to an MNA.

^(b)  Excess of collateral pledged to the individual counterparty is not shown for financial reporting purposes.

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

^(d)  Net amount may also include forward foreign currency exchange contracts that are not required to be collateralized.

SCHEDULE OF INVESTMENTS 19

Schedule of Investments  (continued) December 31, 2018 BlackRock Managed Volatility V.I. Fund

Fair Value Hierarchy as of Period End

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

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

	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Long-Term Investments:
Common Stocks:
Aerospace & Defense	$	1,570,549	$	407,570	$	—	$	1,978,119
Air Freight & Logistics		891,741		—		—		891,741
Airlines		966,026		296,296		—		1,262,322
Auto Components		—		80,568		—		80,568
Automobiles		—		1,362,484		—		1,362,484
Banks		4,751,108		6,001,980		—		10,753,088
Beverages		767,879		1,239,613		—		2,007,492
Biotechnology		3,441,800		758,981		—		4,200,781
Capital Markets		1,945,268		560,333		—		2,505,601
Chemicals		4,489,406		4,289,471		—		8,778,877
Commercial Services & Supplies		681,516		77,131		—		758,647
Communications Equipment		—		391,213		—		391,213
Construction & Engineering		12,420		403,966		—		416,386
Construction Materials		8,896		638,305		—		647,201
Consumer Finance		1,261,666		—		—		1,261,666
Containers & Packaging		815,195		324,663		—		1,139,858
Diversified Consumer Services		17,226		—		—		17,226
Diversified Financial Services		1,178,480		763,323		—		1,941,803
Electric Utilities		1,142,290		713,821		—		1,856,111
Electronic Equipment, Instruments & Components		572,897		484,145		—		1,057,042
Energy Equipment & Services		77,321		32,039		—		109,360
Entertainment		1,239,151		79,662		—		1,318,813
Equity Real Estate Investment Trusts (REITs)		3,299,215		253,179		—		3,552,394
Food & Staples Retailing		85,260		27,302		—		112,562
Food Products		869,407		1,827,544		—		2,696,951
Gas Utilities		54,524		314,659		—		369,183
Health Care Equipment & Supplies		134,968		447,585		—		582,553
Health Care Providers & Services		6,160,394		260,474		—		6,420,868
Health Care Technology		57,212		—		—		57,212
Hotels, Restaurants & Leisure		3,957,535		—		—		3,957,535
Household Durables		386,005		157,410		—		543,415
Household Products		2,348,980		760,656		—		3,109,636
Independent Power and Renewable Electricity Producers		28,591		49,833		—		78,424
Industrial Conglomerates		—		858,285		—		858,285
Insurance		5,949,738		5,232,180		—		11,181,918
Interactive Media & Services		3,438,494		—		—		3,438,494
Internet & Direct Marketing Retail		2,597,513		—		—		2,597,513
IT Services		2,929,528		540,457		—		3,469,985
Life Sciences Tools & Services		1,008,155		63,624		—		1,071,779
Machinery		—		34,215		—		34,215
Media		1,239,806		28,012		—		1,267,818
Metals & Mining		1,383,715		575,992		—		1,959,707
Multiline Retail		—		6,816		—		6,816
Multi-Utilities		187,091		69,267		—		256,358
Oil, Gas & Consumable Fuels		3,499,687		5,884,640		—		9,384,327
Paper & Forest Products		132,983		—		—		132,983
Personal Products		453,659		2,166,551		—		2,620,210
Pharmaceuticals		5,197,688		5,668,447		—		10,866,135
Professional Services		1,323,929		258,652		—		1,582,581
Real Estate Management & Development		—		520,368		—		520,368
Road & Rail		147,287		—		—		147,287
Semiconductors & Semiconductor Equipment		1,007,011		511,276		—		1,518,287
Software		2,888,732		372,994		—		3,261,726
Specialty Retail		5,771,058		26,693		—		5,797,751
Technology Hardware, Storage & Peripherals		4,539,280		636,704		—		5,175,984

20 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Managed Volatility V.I. Fund

Fair Value Hierarchy as of Period End (continued)

	Level 1			Level 2			Level 3		Total
Textiles, Apparel & Luxury Goods	$	410,788		$	1,325,472		$	—	$	1,736,260
Tobacco		757,486			665,122			—		1,422,608
Trading Companies & Distributors		122,539			102,055			—		224,594
Transportation Infrastructure		—			369,667			—		369,667
Corporate Bonds(a)		—			27,399			—		27,399
Preferred Securities(a)		—			634,779			—		634,779
Rights		17,876			—			—		17,876
U.S. Government Sponsored Agency Securities		—			682,097			—		682,097
U.S. Treasury Obligations		—			56,139,727			—		56,139,727
Short-Term Securities		11,969,958			—			—		11,969,958
Subtotal	$	100,186,927		$	106,405,697		$	—	$	206,592,624
Investments valued at NAV(b)										459,872
Total Investments									$	207,052,496
Derivative Financial Instruments(c)
Assets:
Equity contracts	$	8,890,191		$	—		$	—	$	8,890,191
Foreign currency exchange contracts		—			1,971,099			—		1,971,099
Interest rate contracts		2,239,610			9,330,808			—		11,570,418
Liabilities:
Equity contracts		(3,476,504	)		(288,751	)		—		(3,765,255	)
Foreign currency exchange contracts		—			(2,062,406	)		—		(2,062,406	)
Interest rate contracts		(12,013	)		(12,932,525	)		—		(12,944,538	)
	$	7,641,284		$	(3,981,775	)	$	—	$	3,659,509

^(a)  See above Schedule of Investments for values in each industry.

^(b)  As of December 31, 2018, certain investments of the Fund were fair valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

^(c)  Derivative financial instruments are 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.

SCHEDULE OF INVESTMENTS 21

Statement of Assets and Liabilities

December 31, 2018

	BlackRock Managed Volatility V.I. Fund
ASSETS
Investments at value — unaffiliated (including securities loaned at value of $453,631) (cost — $206,713,341)	$	194,622,666
Investments at value — affiliated (cost — $12,429,834)		12,429,830
Cash		1,300
Cash pledged:
Collateral — OTC derivatives		4,490,000
Futures contracts		22,825,000
Centrally cleared swaps		7,038,000
Foreign currency at value (cost — $13,765,056)		13,818,114
Receivables:
Securities lending income — affiliated		264
Dividends — affiliated		32,237
Dividends — unaffiliated		165,400
Interest — unaffiliated		858,259
Variation margin on futures contracts		1,100,342
Variation margin on centrally cleared swaps		1,097,301
Unrealized appreciation on:
Forward foreign currency exchange contracts		1,971,099
OTC swaps		2,158,250
Prepaid expenses		282
Total assets		262,608,344
LIABILITIES
Cash received as collateral for OTC derivatives		1,160,000
Cash collateral on securities loaned at value		459,965
Payables:
Capital shares redeemed		123,736
Income dividend distributions		166
Distribution fees		46,290
Variation margin on futures contracts		1,787,454
Board realignment and consolidation		2,070
Investment advisory fees		23,165
Directors’ and Officer’s fees		5,473
Other affiliates		685
Other accrued expenses		136,164
Unrealized depreciation on:
Forward foreign currency exchange contracts		2,062,406
OTC swaps		8,650,846
Total liabilities		14,458,420
NET ASSETS	$	248,149,924
NET ASSETS CONSIST OF
Paid-in capital	$	377,958,214
Accumulated loss		(129,808,290	)
NET ASSETS	$	248,149,924
NET ASSET VALUE
Class I — Based on net assets of $12,570,664 and 934,693 shares outstanding, 100 million shares authorized, $0.10 par value.	$	13.45
Class III — Based on net assets of $235,579,260 and 17,519,192 shares outstanding, 100 million shares authorized, $0.10 par value.	$	13.45

See notes to financial statements.

22 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Statement of Operations

Year Ended December 31, 2018

	BlackRock Managed Volatility V.I. Fund
INVESTMENT INCOME
Dividends — affiliated	$	484,967
Dividends — unaffiliated		2,598,357
Interest — affiliated		362
Interest — unaffiliated		945,695
Securities lending income — affiliated — net		3,019
Foreign taxes withheld		(77,475	)
Total investment income		3,954,925
EXPENSES
Investment advisory		1,066,217
Distribution — class specific		451,080
Professional		145,248
Accounting services		87,010
Custodian		79,787
Transfer agent — class specific		43,950
Directors and Officer		16,520
Printing		12,598
Registration		9,074
Offering		6,781
Transfer agent		4,999
Board realignment and consolidation		2,237
Miscellaneous		15,323
Total expenses		1,940,824
Less:
Fees waived and/or reimbursed by the Manager		(291,066	)
Transfer agent fees waived and/or reimbursed — class specific		(43,950	)
Total expenses after fees waived and/or reimbursed		1,605,808
Net investment income		2,349,117
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — affiliated		159,037
Investments — unaffiliated		11,387,017
Forward foreign currency exchange contracts		1,358,731
Foreign currency transactions		(67,620	)
Futures contracts		13,494,989
Swaps . . . . .		(3,047,664	)
		23,284,490
Net change in unrealized appreciation (depreciation) on:
Investments — affiliated		(66,724	)
Investments — unaffiliated		(28,192,508	)
Forward foreign currency exchange contracts		(46,136	)
Foreign currency translations		69,759
Futures contracts		7,608,015
Swaps . . . . .		(3,890,468	)
		(24,518,062	)
Net realized and unrealized loss		(1,233,572	)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	1,115,545

See notes to financial statements.

FINANCIAL STATEMENTS 23

Statements of Changes in Net Assets

	BlackRock Managed Volatility V.I. Fund
	Year Ended December 31,
	2018			2017
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income	$	2,349,117		$	43,960
Net realized gain		23,284,490			47,809
Net change in unrealized appreciation (depreciation)		(24,518,062	)		644,084
Net increase in net assets resulting from operations		1,115,545			735,853
DISTRIBUTIONS TO SHAREHOLDERS(a)(b)
Class I		(363,124	)		(148,699	)
Class III		(6,371,560	)		—
Decrease in net assets resulting from distributions to shareholders		(6,734,684	)		(148,699	)
CAPITAL SHARE TRANSACTIONS
Net increase (decrease) in net assets derived from capital share transactions		239,233,033			(1,946,110	)
NET ASSETS(b)
Total increase (decrease) in net assets		233,613,894			(1,358,956	)
Beginning of year		14,536,030			15,894,986
End of year	$	248,149,924		$	14,536,030

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

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

See notes to financial statements.

24 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Financial Highlights

(For a share outstanding throughout each period)

	BlackRock Managed Volatility V.I. Fund
	Class I
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	13.71		$	13.19		$	13.08		$	13.70		$	14.41
Net investment income (loss)(a)		0.15			0.04			0.02	(b)		(0.06	)		0.04
Net realized and unrealized gain (loss)		(0.01	)		0.62			0.20			(0.01	)		0.29
Net increase (decrease) from investment operations		0.14			0.66			0.22			(0.07	)		0.33
Distributions(c)
From net investment income		(0.25	)		(0.05	)		(0.11	)		—			—
From net realized gain		(0.15	)		(0.09	)		—			(0.55	)		(1.04	)
Total distributions		(0.40	)		(0.14	)		(0.11	)		(0.55	)		(1.04	)
Net asset value, end of year	$	13.45		$	13.71		$	13.19		$	13.08		$	13.70
Total Return(d)
Based on net asset value		1.02	%		4.98	%		1.71	%(e)		(0.57	)%		2.28	%
Ratios to Average Net Assets(f)
Total expenses		1.21	%		1.48	%		1.39	%		1.47	%		1.60	%
Total expenses after fees waived and/or reimbursed		0.71	%		0.89	%		0.94	%		1.00	%		1.07	%
Net investment income (loss)		1.09	%		0.29	%		0.18	%(b)		(0.46	)%		0.25	%
Supplemental Data
Net assets, end of year (000)	$	12,571		$	14,536		$	15,895		$	18,180		$	21,283
Portfolio turnover rate		319	%		0	%		1	%		13	%		64	%

^(a)  Based on average shares outstanding.

^(b)  Net investment income per share the ratio of net investment income to average net assets includes $0.02 per share and 0.19%, respectively, resulting from a one time payment from a third party administrator.

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

^(d)  Where applicable, excludes insurance-related fees and expenses and assumes the reinvestments of distributions.

^(e)  Includes reimbursements of out of pocket expenses from a third party administrator. Excluding this amount, the Fund’s total return is 1.48%.

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

	Year Ended December 31,
	2018			2017			2016			2015			2014
Investments in underlying funds		0.03	%		0.23	%		0.25	%		0.23	%		0.23	%

See notes to financial statements.

FINANCIAL HIGHLIGHTS 25

Financial Highlights  (continued)

(For a share outstanding throughout each period)

	BlackRock Managed Volatility V.I. Fund (continued)
	Class III
	Period from 02/14/2018(a) to 12/31/2018
Net asset value, beginning of period	$	13.70
Net investment income(b)		0.15
Net realized and unrealized (loss)		(0.02	)
Net increase from investment operations		0.13
Distributions(c)
From net investment income		(0.23	)
From net realized gain		(0.15	)
Total distributions		(0.38	)
Net asset value, end of period	$	13.45
Total Return(d)
Based on net asset value		0.90	%(e)
Ratios to Average Net Assets(f)
Total expenses		0.99	%(g)
Total expenses after fees waived and/or reimbursed		0.84	%(g)
Net investment income		1.22	%(g)
Supplemental Data
Net assets, end of period (000)	$	235,579
Portfolio turnover rate		319	%(h)

^(a)  Recommencement 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 insurance-related fees and expenses and assumes the reinvestments of distributions.

^(e)  Aggregate total return.

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

	Period from 02/14/2018(a) to 12/31/2018
Investments in underlying funds		0.03	%

^(g)  Annualized.

^(h)  Portfolio turnover rate is representative of the Fund for the entire year.

See notes to financial statements.

26 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  

1. ORGANIZATION

BlackRock Variable Series Funds, Inc. (the “Company”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Company is organized as a Maryland corporation that is comprised of 15 separate portfolios. The funds offer shares to insurance companies for their separate accounts to fund benefits under certain variable annuity and variable life insurance contracts. The financial statements presented are for BlackRock Managed Volatility V.I. Fund (the “Fund”). The Fund is classified as diversified. Class I and Class III Shares have identical voting, dividend, liquidation and other rights, except that only shares of the respective classes are entitled to vote on matters concerning only that class. In addition, Class III Shares bear certain expenses related to the distribution of such shares. Class III Shares recommenced operations on February 14, 2018.

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

REORGANIZATION

The Board, the Board of Trustees of HIMCO Variable Insurance Trust and shareholders of the Target Fund approved the reorganization of the Target Fund into the Fund. As a result, the Fund acquired substantially all of the assets and assumed substantially all of the liabilities of the Target Fund in exchange for an equal aggregate value of newly-issued Class III Shares of the Fund.

Each shareholder of the Target Fund received shares of the 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 April 20, 2018, less the costs of the Target Fund’s reorganization.

The reorganization was accomplished by a tax-free exchange of shares of the Fund in the following amount and at the following conversion ratio:

Target Fund’s Share Class	Shares Prior to Reorganization		Conversion Ratio		Managed Volatility V.I. Fund’s Share Class		Shares of Managed Volatility V.I. Fund
Class IB		39,633,345		0.49126053		Class III		19,470,298

The Target Fund’s net assets and composition of net assets as of the close of business on April 20, 2018, the valuation date of the reorganization were as follows:

Target Fund	Net Assets		Paid- In Capital		Accumulated Loss
HIMCO VIT Portfolio Diversifier Fund	$	268,343,917	$	392,342,469	$	(123,998,552	)

For financial reporting purposes, assets received and shares issued by the 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 Fund realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes.

The net assets of the Fund before the acquisition were $13,676,731. The aggregate net assets of the Fund immediately after the acquisition amounted to $282,020,648. The Target Fund’s fair value and cost of investments prior to the reorganization were as follows:

Target Fund	Fair Value of Investments		Cost of Investments
HIMCO VIT Portfolio Diversifier Fund	$	202,633,700	$	186,254,411

The purpose of the transaction was to combine the assets of the Target Fund with the assets of the Fund. The reorganization was a tax-free event and closed on April 23, 2018.

Assuming the acquisition had been completed on January 1, 2018, the beginning of the fiscal reporting period of the Fund, the pro forma results of operations for the year ended December 31, 2018, are as follows:

• Net investment income: $3,467,734

• Net realized and change in unrealized loss on investments: $(7,842,825)

• Net decrease in net assets resulting from operations: $(4,375,091)

Because the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of the Fund that have been included in the Fund’s Statement of Operations since April 23, 2018.

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

NOTESTO FINANCIAL STATEMENTS 27

Notes to Financial Statements  (continued)

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. The 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 the ex-dividend date. Dividends from foreign securities where the ex-dividend date may have passed are subsequently recorded when the Fund is informed of the ex-dividend date. Under the applicable foreign tax laws, a withholding tax at various rates may be imposed on capital gains, dividends and interest. Interest income, including amortization and accretion of premiums and discounts on debt securities, 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: The 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.

The 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 Statement 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. The 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 the Fund enters into certain investments (e.g., futures contracts, forward foreign currency exchange contracts and swaps) that would be treated as “senior securities” for 1940 Act purposes, the Fund may segregate or designate on its books and records cash or liquid assets having a market value at least equal to the amount of its future obligations under such investments. Doing so allows the investment to be excluded from treatment as a “senior security.” Furthermore, if required by an exchange or counterparty agreement, the Fund 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.

Offering Costs:Offering costs are amortized over a 12–month period beginning with the commencement of operations of a class of shares.

Distributions: Distributions paid by the Fund are recorded on the ex-dividend date. Distributions of capital gains are recorded on the ex-dividend date and made at least annually. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP.

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 Fund.

In August 2018, the Financial Accounting Standards Board issued Accounting Standards Update 2018-13 “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 Fund.

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

Other: Expenses directly related to the Fund or its classes are charged to the 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 Fund and other shared expenses prorated to the Fund are allocated daily to each class based on its relative net assets or other appropriate methods.

3. INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS

Investment Valuation Policies: The Fund’s 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 Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Fund determines the fair values of its financial instruments using various independent dealers or pricing services under policies approved by the Board. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) is the committee formed by management to develop global pricing policies and procedures and to oversee the pricing function for all financial instruments.

Fair Value Inputs and Methodologies: The following methods and inputs are used to establish the fair value of the 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.

28 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

• 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 the 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 Fund’s net assets. Each business day, the Fund uses a pricing service to assist with the valuation of certain foreign exchange-traded equity securities and foreign exchange-traded over-the-counter (“OTC”) options (the “Systematic Fair Value Price”). Using current market factors, the Systematic Fair Value Price is designed to value such foreign securities and foreign options at fair value as of the close of trading on the NYSE, which follows the close of the local markets.

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

• The Fund values its investment in SL Liquidity Series, LLC, Money Market Series (the “Money Market Series”) at fair value, which is ordinarily based upon its pro rata ownership in the underlying fund’s net assets. The Money Market Series seeks current income consistent with maintaining liquidity and preserving capital. Although the Money Market Series is not registered under the 1940 Act, its investments may follow the parameters of investments by a money market fund that is subject to Rule 2a-7 under the 1940 Act.

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

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

• Swap agreements are valued utilizing quotes received daily by the Fund’s 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.

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 the Fund might reasonably expect to receive or pay from the current sale or purchase of that asset or liability in an arm’s-length transaction. Fair value determinations shall be based upon all available factors that the Global Valuation Committee, or its delegate, deems relevant and consistent with the principles of fair value measurement. The pricing of all Fair Valued Investments is subsequently reported to the Board or a committee thereof on a quarterly basis.

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 the Fund has the ability to access

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

• Level 3 — Unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the 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 privately held companies or funds. 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/or non-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 the 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.

NOTESTO FINANCIAL STATEMENTS 29

Notes to Financial Statements  (continued)

As of December 31, 2018, certain investments of the Fund were valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

4. SECURITIES AND OTHER INVESTMENTS

Preferred Stocks: Preferred stock has a preference over common stock in liquidation (and generally in receiving dividends as well), but is subordinated to the liabilities of the issuer in all respects. As a general rule, the market value of preferred stock with a fixed dividend rate and no conversion element varies inversely with interest rates and perceived credit risk, while the market price of convertible preferred stock generally also reflects some element of conversion value. Because preferred stock is junior to debt securities and other obligations of the issuer, deterioration in the credit quality of the issuer will cause greater changes in the value of a preferred stock than in a more senior debt security with similar stated yield characteristics. Unlike interest payments on debt securities, preferred stock dividends are payable only if declared by the issuer’s board of directors. Preferred stock also may be subject to optional or mandatory redemption provisions.

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.

Securities Lending: The Fund may lend its securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received by the Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current market value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Fund and any additional required collateral is delivered to the Fund, or excess collateral returned by the Fund, on the next business day. During the term of the loan, the Fund is entitled to all distributions made on or in respect of the loaned securities, but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.

The market value of any securities on loan, all of which were classified as investment companies in the Fund’s Schedule of Investments, and the value of any related collateral are shown separately in the Statement of Assets and Liabilities as a component of investments at value-unaffiliated, and collateral on securities loaned at value, respectively. As of period end, any securities on loan were collateralized by cash and/or U.S. Government obligations. Cash collateral invested by the securities lending agent, BlackRock Investment Management, LLC (“BIM”), if any, is disclosed in the Schedule of Investments.

Securities lending transactions are entered into by the Fund under Master Securities Lending Agreements (each, an “MSLA”), which provide the right, in the event of default (including bankruptcy or insolvency), for the non-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, the Fund, as lender, would offset the market value of the collateral received against the market value of the securities loaned. When the value of the collateral is greater than that of the market value of the securities loaned, the lender is left with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, absent an event of default, the borrower can resell or re-pledge the loaned securities, and the Fund can reinvest cash collateral received in connection with loaned securities. Upon an event of default, the parties’ obligations to return the securities or collateral to the other party are extinguished, and the parties can resell or re-pledge the loaned securities or the collateral received in connection with the loaned securities in order to satisfy the defaulting party’s net payment obligation for all transactions under the MSLA. The defaulting party remains liable for any deficiency.

As of period end, the following table is a summary of the Fund’s securities lending agreements by counterparty which are subject to offset under an MSLA:

Counterparty	Securities Loaned at Value		Cash Collateral Received (a)			Net Amount
Citigroup Global Markets, Inc.	$	453,631	$	(453,631	)	$	—

^(a)  Cash collateral with a value of $459,965 has been received in connection with securities lending agreements. Collateral received in excess of the value of securities loaned from the individual counterparty, if any, is not shown for financial reporting purposes in the table above.

The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Fund benefits from a borrower default indemnity provided by BIM. BIM’s indemnity allows for full replacement of the securities loaned if the collateral received does not cover the value on the securities loaned in the event of borrower default. The Fund could incur a loss if the value of an investment purchased with cash collateral falls below the market value of loaned securities or if the value of an investment purchased with cash collateral falls below the value of the original cash collateral received.

30 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

5. DERIVATIVE FINANCIAL INSTRUMENTS

The Fund engages in various portfolio investment strategies using derivative contracts both to increase the returns of the Fund and/or to manage its 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 Schedule of Investments. These contracts may be transacted on an exchange or OTC.

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

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

Securities deposited as initial margin are designated in the Schedule of Investments and cash deposited, if any, is shown as cash pledged for futures contracts in the Statement of Assets and Liabilities. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in market value of the contract (“variation margin”). Variation margin is recorded as unrealized appreciation (depreciation) and, if any, shown as variation margin receivable (or payable) on futures contracts in the Statement of Assets and Liabilities. When the contract is closed, a realized gain or loss is recorded in the Statement 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: The Fund enters into forward foreign currency exchange contracts 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 Fund are denominated and in some cases, may be used to obtain exposure to a particular market.

The contract is marked-to-market daily and the change in market value is recorded as unrealized appreciation (depreciation) in the Statement of Assets and Liabilities. When a contract is closed, a realized gain or loss is recorded in the Statement 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 on the Statement of Assets and Liabilities.

Swaps: Swap contracts are entered into to manage exposure to issuers, markets and securities. Such contracts are agreements between the Fund 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 Statement of Assets and Liabilities and amortized over the term of the contract. The daily fluctuation in market value is recorded as unrealized appreciation (depreciation) on OTC Swaps in the Statement of Assets and Liabilities. Payments received or paid are recorded in the Statement of Operations as realized gains or losses, respectively. When an OTC swap is terminated, a realized gain or loss is recorded in the Statement of Operations equal to the difference between the proceeds from (or cost of) the closing transaction and the Fund’s 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 Fund’s counterparty on the swap agreement becomes the CCP. The Fund is required to interface with the CCP through the broker. Upon entering into a centrally cleared swap, the Fund is required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on the size and risk profile of the particular swap. Securities deposited as initial margin are designated in the Schedule of Investments and cash deposited is shown as cash pledged for centrally cleared swaps in the Statement of Assets and Liabilities. Amounts pledged, which are considered restricted cash, are included in cash pledged for centrally cleared swaps on the Statement of Assets and Liabilities. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in market value of the contract (“variation margin”). Variation margin is recorded as unrealized appreciation (depreciation) and shown as variation margin receivable (or payable) on centrally cleared swaps in the Statement of Assets and Liabilities. Payments received from (paid to) the counterparty, including at termination, are recorded as realized gains (losses) in the Statement of Operations.

• 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 Fund receives payment from or makes a payment to the counterparty.

• 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).

NOTESTO FINANCIAL STATEMENTS 31

Notes to Financial Statements  (continued)

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 Statement 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 its contractual rights and to secure rights that will help it mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its counterparties. An ISDA Master Agreement is a bilateral agreement between the 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, the Fund may, under certain circumstances, offset with the counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of default including the bankruptcy or insolvency of the counterparty. Bankruptcy or insolvency laws of a particular jurisdiction may restrict or prohibit the right of offset in bankruptcy, insolvency or other events.

Collateral Requirements: For derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by netting the mark-to-market amount for each transaction under such agreement and comparing that amount to the value of any collateral currently pledged by the Fund and the counterparty.

Cash collateral that has been pledged to cover obligations of the Fund and cash collateral received from the counterparty, if any, is reported separately on the Statement of Assets and Liabilities as cash pledged as collateral and cash received as collateral, respectively. Non-cash collateral pledged by the Fund, if any, is noted in the Schedule 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 Fund. Any additional required collateral is delivered to/pledged by the Fund on the next business day. Typically, the counterparty is not permitted to sell, re-pledge or use cash and non-cash collateral it receives. The Fund generally agrees not to use non-cash collateral that it receives but may, absent default or certain other circumstances defined in the underlying ISDA Master Agreement, be permitted to use cash collateral received. In such cases, interest may be paid pursuant to the collateral arrangement with the counterparty. To the extent amounts due to the Fund from its/ counterparties are not fully collateralized, it bears the risk of loss from counterparty non-performance. Likewise, to the extent the Fund has delivered collateral to a counterparty and stands ready to perform under the terms of its agreement with such counterparty, it bears the risk of loss from a counterparty in the amount of the value of the collateral in the event the counterparty fails to return such collateral. Based on the terms of agreements, collateral may not be required for all derivative contracts.

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

6. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

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

For such services, the Fund pays the Manager a monthly fee at an annual rate equal to the following percentages of the average daily value of the Fund’s net assets:

Average Daily Net Assets	Investment Advisory Fees
First $1 Billion		0.55	%
$1 Billion — $3 Billion		0.52
$3 Billion — $5 Billion		0.50
$5 Billion — $10 Billion		0.48
Greater than $10 Billion		0.47

With respect to the Fund, the Manager entered into sub-advisory agreements with BlackRock International Limited (“BIL”), BlackRock Asset Management North Asia Limited (“BNA”) and BlackRock (Singapore) Limited (“BSL”), each an affiliate of the Manager. The Manager pays each of BIL, BNA and BSL, for services they provide, a monthly fee that is a percentage of the investment advisory fees paid by the Fund to the Manager.

Distribution Fees: The Company, on behalf of the Fund, entered into a Distribution Agreement and a Distribution Plan with BlackRock Investments, LLC (“BRIL”), an affiliate of the Manager. Pursuant to the Distribution Plan and in accordance with Rule 12b-1 under the 1940 Act, the Fund pays BRIL ongoing distribution fees. The fees are accrued daily and paid monthly at an annual rate of 0.25% based upon the average daily net assets attributable to Class III.

BRIL and broker-dealers, pursuant to sub-agreements with BRIL, provide shareholder servicing and distribution services to the Fund. 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 class specific distribution fees borne directly by Class III were $451,080.

Transfer Agent: On behalf of the Fund, the Manager entered into agreements with insurance companies and other financial intermediaries (“Service Organizations”), some of which may be affiliates. Pursuant to these agreements, the Service Organizations provide the Fund with administrative, networking, recordkeeping, sub-transfer agency and shareholder services to sub-accounts they service. For these services, the Service Organizations receive an annual fee per shareholder account, which will

32 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

vary depending on share class and/or net assets of Fund shareholders serviced by the Service Organizations, which is shown as transfer agent — class specific. For the year ended December 31, 2018, the Fund did not pay any amounts to affiliates in return for these services.

In addition, the Fund pays the transfer agent, which is not an affiliate, a fee for the issuance, transfer and redemption of shares and the opening and maintenance of shareholder accounts, which is included in transfer agent in the Statement of Operations.

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

Class I		Class III		Total
$	26,690	$	17,260	$	43,950

Expense Limitations, Waivers and Reimbursements:With respect to the Fund, the Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees the 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 will be reduced by the amount of the affiliated money market fund waiver. This amount is included in fees waived and/or reimbursed by the Manager in the Statement of Operations. For the year ended December 31, 2018, the amount waived was $19,635.

The Manager has contractually agreed to waive its investment advisory fee with respect to any portion of the 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, 2021. The contractual agreement may be terminated upon 90 days’ notice by a majority of the directors who are not “interested persons” of the Fund, as defined in the 1940 Act (“Independent Directors”), or by a vote of a majority of the outstanding voting securities of the Fund. This amount is included in fees waived and/or reimbursed by the Manager in the Statement of Operations. For the year ended December 31, 2018, the Fund waived $9,795 in investment advisory fees pursuant to this arrangement.

For the year ended December 31, 2018, the Fund reimbursed the Manager $2,259 for certain accounting services, which is included in accounting services in the Statement of Operations.

The Manager has contractually agreed to reimburse all transfer agent fees for Class I Shares and Class III Shares.

The Manager has agreed not to reduce or discontinue this contractual expense limitation through April 30, 2021, unless approved by the Board, including a majority of the Independent Directors, or by a vote of a majority of the outstanding voting securities of the Fund.

These amounts waived and/or reimbursed are shown as transfer agent fees waived and/or reimbursed — class specific in the Statement of Operations. For the year ended December 31, 2018, class specific expense waivers and/or reimbursements were as follows:

	Class I		Class III		Total
Transfer agent fees waived and/or reimbursed	$	26,690	$	17,260	$	43,950

With respect to the 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 the Fund’s business (“expense limitation”). The expense limitations as a percentage of average daily net assets are as follows:

Class I	Class III (a)
0.59%	0.84%

^(a)  Class III recommenced operations on February 14, 2018.

Prior to April 23, 2018, Class I and Class III’s expense limitations as a percentage of average daily net assets were 1.00% and 1.25%, respectively.

The Manager has agreed not to reduce or discontinue this contractual expense limitation through April 30, 2021 unless approved by the Board, including a majority of the Independent Directors, or by a vote of a majority of the outstanding voting securities of the Fund. This amount is included in fees waived and/or reimbursed by the Manager in the Statement of Operations. For the year ended December 31, 2018, the amount waived and/or reimbursed was $261,636.

Securities Lending: The U.S. Securities and Exchange Commission (“SEC”) has issued an exemptive order which permits BIM, an affiliate of the Manager, to serve as securities lending agent for the Fund, subject to applicable conditions. As securities lending agent, BIM bears all operational costs directly related to securities lending. The Fund is responsible for expenses in connection with the investment of cash collateral received for securities on loan (the “collateral investment expenses”). The cash collateral is invested in a private investment company managed by the Manager or its affiliates. However, BIM has agreed to cap the collateral investment expenses of the private investment company to an annual rate of 0.04%. The investment adviser to the private investment company will not charge any advisory fees with respect to shares purchased by the Fund. The private investment company in which the cash collateral has been invested may, under certain circumstances, impose a liquidity fee of up to 2% of the value withdrawn or temporarily restrict withdrawals for up to 10 business days during a 90 day period, in the event that the private investment company’s weekly liquid assets fall below certain thresholds.

Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment expenses. The Fund retains a portion of securities lending income and remits a remaining portion to BIM as compensation for its services as securities lending agent.

Pursuant to a securities lending agreement, the Fund retains 80% of securities lending income, and this amount retained can never be less than 70% of the total of securities lending income plus the collateral investment expenses.

NOTESTO FINANCIAL STATEMENTS 33

Notes to Financial Statements  (continued)

In addition, commencing the business day following the date that the aggregate securities lending income earned across the Equity-Bond Complex in a calendar year exceeds a specified threshold, the Fund, pursuant to the securities lending agreement, will retain for the remainder of that calendar year securities lending income in an amount equal to 85% of securities lending income, and this amount retained can never be less than 70% of the total of securities lending income plus the collateral investment expenses.

The share of securities lending income earned by the Fund is shown as securities lending income — affiliated — net in the Statement of Operations. For the year ended December 31, 2018, the Fund paid BIM $639 for securities lending agent services.

lnterfund Lending: In accordance with an exemptive order (the “Order”) from the SEC, the Fund may participate in a joint lending and borrowing facility for temporary purposes (the “lnterfund Lending Program”), subject to compliance with the terms and conditions of the Order, and to the extent permitted by the Fund’s investment policies and restrictions. The Fund is currently permitted to borrow under the lnterfund 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 lnterfund Lending Program. A borrowing BlackRock fund may not borrow through the lnterfund 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 Fund did not participate in the lnterfund Lending Program.

Directors and Officers: Certain directors and/or officers of the Company are directors and/or officers of BlackRock or its affiliates. The Fund reimburses the Manager for a portion of the compensation paid to the Company’s Chief Compliance Officer, which is included in Directors and Officer in the Statement of Operations.

7. PURCHASES AND SALES

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

	Purchases		Sales
Non-U.S Government Securities	$	373,841,841	$	382,742,327
U.S Government Securities		76,962,685		68,777,949

8. INCOME TAX INFORMATION

It is the 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.

The 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 the Fund’s U.S. federal tax returns generally remains open for each of the four years ended December 31, 2018. The statutes of limitations on the 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 Fund 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 Fund’s 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 December 31, 2018, the following permanent differences, attributable tonon-deductible offering costs, were reclassified to the following accounts:

Paid-in capital	$	(6,781	)
Accumulated earnings		6,781

The tax character of distributions paid was as follows:

	12/31/2018		12/31/2017
Ordinary income	$	6,734,684	$	93,042
Long term capital gains		—		55,657
	$	6,734,684	$	148,699

As of December 31, 2018, the tax components of accumulated net earnings (losses) were as follows:

Undistributed ordinary income	$	159,108
Capital loss carryforward		(111,405,144	)
Net unrealized losses(a)		(17,334,954	)
Qualified late-year losses(b)		(1,227,300	)
	$	(129,808,290	)

34 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

^(a)  The difference between book-basis and tax-basis net unrealized losses was attributable primarily to the tax deferral of losses on wash sales and straddles, the realization for tax purposes of unrealized gains/losses on certain futures and foreign currency exchange contracts, the realization for tax purposes of unrealized gains on investments in passive foreign investment companies, the timing and recognition of partnership income, and the classification of investments.

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

As of December 31, 2018, the Fund had a capital loss carryforward, with no expiration date, available to offset future realized capital gains of $111,405,144.

During the year ended December 31, 2018, the Fund utilized $6,083,346 of its capital loss carryforward.

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:

Tax cost	$	221,000,783
Gross unrealized appreciation	$	22,784,354
Gross unrealized depreciation		(39,228,683	)
Net unrealized depreciation	$	(16,444,329	)

9. BANK BORROWINGS

The Company, on behalf of the Fund, along with certain other funds managed by the Manager and its affiliates (“Participating Funds”), is a party to a 364-day, $2.25 billion credit agreement with a group of lenders. Under this agreement, the Fund may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Fund, 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. Prior to April 19, 2018, the aggregate commitment amount was $2.1 billion and the fee was 0.12% per annum. 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 Statement 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 Fund did not borrow under the credit agreement.

10. PRINCIPAL RISKS

In the normal course of business, the Fund invests in securities or other instruments and may enter into certain transactions, and such activities subject the 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. The Fund’s prospectus provides details of the risks to which the Fund is subject.

The Fund 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 the Fund to reinvest in lower yielding securities. The Fund may also be exposed to reinvestment risk, which is the risk that income from the Fund’s portfolio will decline if the Fund invests the proceeds from matured, traded or called fixed-income securities at market interest rates that are below the Fund portfolio’s current earnings rate.

The Fund may be exposed to additional risks when reinvesting cash collateral in money market funds that do not seek to maintain a stable NAV per share of $1.00, which may be subject to redemption gates or liquidity fees under certain circumstances.

Valuation Risk: The market values of equities, such as common stocks and preferred securities or equity related investments, such as futures and options, may decline due to general market conditions which are not specifically related to a particular company. They may also decline due to factors which affect a particular industry or industries. The Fund may invest in illiquid investments and may experience difficulty in selling those investments in a timely manner at the price that it believes the investments are worth. Prices may fluctuate widely over short or extended periods in response to company, market or economic news. Markets also tend to move in cycles, with periods of rising and falling prices. This volatility may cause the 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 the Fund may lose value, regardless of the individual results of the securities and other instruments in which the Fund invests.

Counterparty Credit Risk: The Fund 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 Fund manages 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 Fund to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Fund’s exposure to market, issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Statement of Assets and Liabilities, less any collateral held by the Fund.

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

The 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 the Fund.

NOTESTO FINANCIAL STATEMENTS 35

Notes to Financial Statements  (continued)

With exchange-traded futures and centrally cleared swaps, there is less counterparty credit risk to the Fund 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, the Fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency). Additionally, credit risk exists in exchange-traded futures and centrally cleared swaps with respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Fund.

11. CAPITAL SHARE TRANSACTIONS

Transactions in capital shares were as follows:

	Year Ended 12/31/2018 (a)						Year Ended 12/31/2017
	Shares			Amount			Shares			Amount
Class I
Shares sold		26,476		$	367,264			41,987		$	563,708
Shares issued in reinvestment of distributions		26,995			363,124			10,985			148,699
Shares redeemed		(178,879	)		(2,476,164	)		(197,978	)		(2,658,517	)
Net decrease		(125,408	)	$	(1,745,776	)		(145,006	)	$	(1,946,110	)
Class III
Shares sold		725,363		$	10,018,545			—		$	—
Shares issued in reinvestment of distributions		474,003			6,371,288			—			—
Shares issued in reorganization		19,470,298			268,343,917			—			—
Shares redeemed		(3,150,472	)		(43,754,941	)		—			—
Net increase		17,519,192		$	240,978,809			—		$	—
Total Net Increase (Decrease)		17,393,784		$	239,233,033			(145,006	)	$	(1,946,110	)

^(a)  Period February 14, 2018 (recommencement of operations) to December 31, 2018 for Class III.

As of December 31, 2018, BlackRock Financial Management, Inc., an affiliate of the Fund, owned 730 Class III shares of BlackRock Managed Volatility V.I. Fund.

12. REGULATION S-X AMENDMENTS

On August 17, 2018, the SEC adopted amendments to certain disclosure requirements in Securities Act Release No. 33-10532, Disclosure Update and Simplification. The Fund has adopted the amendments pertinent to Regulation S-X in this shareholder report. The amendments impacted certain disclosure presentation on the Statement of Assets and Liabilities, Statements of Changes in Net Assets and Notes to the Financial Statements.

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

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

Share Class	Net Investment Income			Net Realized Gain
Class I	$	(50,000	)	$	(98,699	)

Distributions in excess of net investment income as of December 31, 2017 was $(31,377).

13. SUBSEQUENT EVENTS

Management has evaluated the impact of all subsequent events on the Fund 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.

36 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Report of Independent Registered Public Accounting Firm

To the Shareholders of BlackRock Managed Volatility V.I. Fund and the Board of Directors of BlackRock Variable Series Funds, Inc.:

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying statement of assets and liabilities of BlackRock Managed Volatility V.I. Fund of BlackRock Variable Series Funds, Inc. (the “Fund”), including the schedule of investments, as of December 31, 2018, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of December 31, 2018, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s 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 Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its 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 Fund’s 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 15, 2019

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

REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 37

Glossary of Terms Used in this Report

Currency
AUD	Australian Dollar
BRL	Brazilian Real
CAD	Canadian Dollar
CHF	Swiss Franc
CNY	Chinese Yuan
CZK	Czech Koruna
EUR	Euro
GBP	British Pound
HKD	Hong Kong Dollar
INR	Indian Rupee
JPY	Japanese Yen
KRW	South Korean Won
MXN	Mexican Peso
MYR	Malaysian Ringgit
NOK	Norwegian Krone
NZD	New Zealand Dollar
PLN	Polish Zloty
SEK	Swedish Krona
SGD	Singapore Dollar
THB	Thai Baht
TWD	New Taiwan Dollar
USD	United States Dollar
ZAR	South African Rand
Portfolio Abbreviations
ADR	American Depositary Receipt
CDI	Crest Depository Interests
CVA	Certification Van Aandelon (Dutch Certificate)
ETF	Exchange-Traded Fund
FDR	Fiduciary Depositary Receipt
OTC	Over-The-Counter
REIT	Real Estate Investment Trust
S&P	Standard & Poor’s

38 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

DECEMBER 31, 2018

ANNUAL REPORT

BlackRock Variable Series Funds, Inc.

^Ø  BlackRock S&P 500 Index V.I. Fund

Not FDIC Insured • May Lose Value • No Bank Guarantee

Fund Summary  as of December 31, 2018 BlackRock S&P 500 Index V.I. Fund

Investment Objective

BlackRock S&P 500 Index V.I. Fund’s (the “Fund”) investment objective is to seek investment results that, before expenses, correspond to the aggregate price and yield performance of the Standard and Poor’s (“S&P”) 500^® Index.

On November 15, 2017, the Board of Directors of the Company (the “Board”) and, on December 1, 2017, the Board of Trustees of HIMCO Variable Insurance Trust each approved a reorganization of the HIMCO VIT Index Fund (the “HIMCO Fund”), with and into the Fund. At a special shareholder meeting on April 4, 2018, the shareholders of the HIMCO Fund approved the HIMCO Reorganization, which was completed on April 23, 2018.

On November 14, 2017, the Board and, on May 23, 2018, the Board of Trustees of State Farm Variable Product Trust each approved a reorganization of the State Farm Large Cap Equity Index Fund (the “State Farm Fund”), with and into the Fund. At a special shareholder meeting on September 14, 2018, the shareholders of the State Farm Fund approved the State Farm reorganization, which was completed on October 29, 2018.

Portfolio Management Commentary

How did the Fund perform?

For the 12-month period ended December 31, 2018, the Fund’s Class I, Class II and Class III Shares returned (4.61)%, (4.74)% and (4.82)%, respectively, while the benchmark S&P 500^® Index returned (4.38)%.

Returns for the Fund’s respective share classes differ from the benchmark index based on individual share-class expenses.

Describe the market environment.

In the beginning of the first quarter of 2018, the low volatility regime that helped global equity markets reach record highs in 2017 continued to support U.S. markets. Further fueled bytax-reform optimism, January saw markets rally, led higher by momentum and information technology names. However, as the first quarter progressed, a combination of economic over-heating concerns, the return of volatility, rising yields and the specter of trade wars weighed on markets.

From a sector standpoint, technology and consumer discretionary stocks outperformed, due to their impressive early-quarter runs. Although the first quarter was plagued with volatility, the defensive sectors of telecommunications and consumer staples were the worst performing in the S&P 500^® Index.

Contrary to what the U.S. equity market’s lackluster performance would suggest, the U.S. economy remained healthy in the first quarter of 2018. This supported the Fed’s decision to increase interest rates in March and to revise higher their rate hike expectations for 2019.

Despite the fluid headlines and ongoing threats regarding the topic of U.S. protectionism in the second quarter of 2018, investors found confidence in strong U.S. economic data and earnings growth. On the macroeconomic front, the U.S. unemployment rate struck 3.8%, the lowest level since 1975. Economic reports throughout the second quarter of 2018 also indicated strong economic conditions. Additionally, the core personal consumption expenditure hit the Fed’s target rate of 2%, supporting their decision to raise rates in June. From a sector standpoint, energy outperformed as a prolonged period of higher crude oil prices increased the attractiveness of energy company shares.

In the third quarter of 2018, U.S. large cap equities reachedall-time highs as impressive economic growth and earnings results fueledrisk-on appetite and outweighed the specter of trade wars. Despite the announcement of tariffs on $505 billion of Chinese goods and China’s retaliatory measures, U.S. equity volatility was limited. Macroeconomic releases continued to showcase strength in both labor and economic conditions. The strength of the economy allowed the Fed to raise the target range of the benchmark federal funds rate from 2% to 2.25%.

In the fourth quarter of 2018, ten out of the eleven Global Industry Classification Standard equity sectors moved lower. The utilities sector (+1.36%) was the only sector to advance, as lower interest rates and a flight to safety throughout the fourth quarter benefited the traditionally defensive sector.

Conversely, the energy sector(-23.78%) trailed the market, as a decline in crude oil provided a headwind. However, it was the information technology sector(-17.34%) that deducted the most from the index’s overall total return(-3.6%), as lowered corporate earnings guidance weighed on investor sentiment.

More broadly, concerns over Fed policy, Sino-American trade tensions, and a potential slowdown in growth contributed to investor anxiety throughout the fourth quarter. The quarter began with Fed Chairman Powell’s comment that the U.S. Federal Funds rate was “a long way from neutral.” The hawkish comment drove a temporarysell-off in Treasuries. However, this was short lived as declines in energy prices and softness in portions of the U.S. economy contributed to a reduction in inflation expectations. This was accompanied by a broad basedrisk-off in December — which was the worst December performance on record since 1931 — and the10-year U.S. Treasury yield ended the quarter lower than its intra-quarter highs.

For theone-year period ended December 31, 2018, the largest negative returns for the S&P 500^® Index in 2018 came from the energy(-18.08%), materials(-14.70%), and industrials(-13.29%) sectors. However, the health care (+6.41%), utilities (+4.11%), and information technology sectors (+3.37%) contributed positively to overall return.

Describe recent portfolio activity.

During the period, as changes were made to the composition of the S&P 500^® Index, the Fund purchased and sold securities to maintain its objective of replicating the risks and return of the benchmark index.

Describe portfolio positioning at period end.

The Fund remains positioned to match the risk characteristics of its benchmark index, irrespective of the market’s future direction.

2 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Fund Summary  as of December 31, 2018 (continued) BlackRock S&P 500 Index V.I. Fund

TOTAL RETURN BASED ON A $10,000 INVESTMENT

^(a)  Assuming transaction costs, if any, and other operating expenses, including investment advisory fees. Does not include insurance-related fees and expenses. The returns for Class III Shares prior to February 14, 2018, the recommencement of operations of Class III Shares, are based upon the performance of the Fund’s Class I Shares, as adjusted to reflect the distribution(12b-1) fees applicable to Class III Shares.

^(b)  Under normal circumstances, the Fund invests at least 80% of its assets in the common stocks represented in the S&P 500^® Index and in derivative instruments linked to the S&P 500^® Index.

^(c)  An unmanaged index that covers 500 leading companies and captures approximately 80% coverage of available market capitalization.

Performance Summary for the Period Ended December 31, 2018

				Average Annual Total Returns
	6-Month Total Returns (b)			1 Year (b)			5 Years (b)			10 Years (b)
Class I(a)		(6.93	)%		(4.61	)%		8.17	%		12.76	%
Class II(a)		(7.00	)		(4.74	)		8.01			12.61
Class III(a)		(7.04	)		(4.82	)(c)		7.91	(c)		12.48	(c)
S&P 500® Index		(6.85	)		(4.38	)		8.49			13.12

^(a)  Average annual and cumulative total returns are based on changes in net asset value for the periods shown, and assume reinvestment of all distributions at net asset value on the ex-dividend date. Insurance-related fees and expenses are not reflected in these returns.

^(b)  For a portion of the period, the Fund’s investment adviser waived a portion of its fee. Without such waiver, the Fund’s performance would have been lower.

^(c)  The returns for Class III Shares prior to February 14, 2018, the recommencement of operations of Class III Shares, are based upon the performance of the Fund’s Class I Shares, as adjusted to reflect the distribution (12b-1) fees applicable to Class III Shares.

Past performance is not indicative of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

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

Expense Example

	Actual						Hypothetical (a)
	Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Annualized Expense Ratio
Class I	$	1,000.00	$	930.70	$	0.73	$	1,000.00	$	1,024.45	$	0.77		0.15	%
Class II		1,000.00		930.00		1.46		1,000.00		1,023.69		1.53		0.30
Class III		1,000.00		929.60		1.75		1,000.00		1,023.39		1.84		0.36

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

^(b)  For each class of the Fund, expenses are equal to annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period shown).

See “Disclosure of Expenses” on page 5 for further information on how expenses were calculated

FUND SUMMARY 3

Fund Summary  as of December 31, 2018 (continued) BlackRock S&P 500 Index V.I. Fund

Portfolio Information

SECTOR ALLOCATION

Sector	Percent of Net Assets
Information Technology		20	%
Health Care		16
Financials		13
Communication Services		10
Consumer Discretionary		10
Industrials		9
Consumer Staples		7
Energy		5
Utilities		3
Real Estate		3
Materials		3
Short-Term Securities		3
Liabilities in Excess of Other Assets		(2	)

For Fund compliance purposes, the Fund’s sector classifications refer to one or more of the sector sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine sector sub classifications for reporting ease.

4 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Disclosure of Expenses BlackRock S&P 500 Index V.I. Fund

Shareholders of the Fund may incur the following charges: (a) transactional expenses; 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 example on the previous page (which is based on a hypothetical investment of $1,000 invested on July 1, 2018 and held through December 31, 2018) is intended to assist shareholders both in calculating expenses based on an investment in the Fund and in comparing these expenses with similar costs of investing in other mutual funds.

The expense example provides 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 share class under the heading entitled “Expenses Paid During the Period.”

The expense example also provides information about hypothetical account values and hypothetical expenses based on the 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 the Fund and other funds, compare the 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.

The expenses shown in the expense example are intended to highlight shareholders’ ongoing costs only and do not reflect any transactional expenses, such as sales charges, if any. Therefore, the hypothetical example is 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 Fund 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 Fund’s 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 the Fund can realize on an investment and/or may result in lower distributions paid to shareholders. The Fund’s investments in these instruments, if any, are discussed in detail in the Notes to Financial Statements.

DISCLOSURE OF EXPENSES / DERIVATIVE FINANCIAL INSTRUMENTS 5

Schedule of Investments December 31, 2018 BlackRock S&P 500 Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Common Stocks — 99.4%
Aerospace & Defense — 2.5%
Arconic, Inc.(a)		35,588	$	600,014
Boeing Co. (The)		43,297		13,963,283
General Dynamics Corp.		22,830		3,589,104
Harris Corp.		9,685		1,304,085
Huntington Ingalls Industries, Inc.		3,495		665,133
L3 Technologies, Inc.		6,426		1,115,939
Lockheed Martin Corp.(a)		20,249		5,301,998
Northrop Grumman Corp.		14,234		3,485,907
Raytheon Co.(a)		23,265		3,567,688
Textron, Inc.		20,100		924,399
TransDigm Group, Inc.(b)		3,978		1,352,759
United Technologies Corp.		66,571		7,088,480
				42,958,789
Air Freight & Logistics — 0.6%
CH Robinson Worldwide, Inc.(a)		11,273		947,947
Expeditors International of Washington, Inc.		14,246		970,010
FedEx Corp.		19,944		3,217,565
United Parcel Service, Inc., Class B		56,994		5,558,625
				10,694,147
Airlines — 0.4%
Alaska Air Group, Inc.(a)		10,108		615,072
American Airlines Group, Inc.(a)		33,399		1,072,442
Delta Air Lines, Inc.		51,149		2,552,335
Southwest Airlines Co.		41,777		1,941,795
United Continental Holdings, Inc.(a)(b)		18,763		1,571,026
				7,752,670
Auto Components — 0.1%
Aptiv plc		21,600		1,329,912
BorgWarner, Inc.		17,495		607,776
Goodyear Tire & Rubber Co. (The)		19,102		389,872
				2,327,560
Automobiles — 0.4%
Ford Motor Co.		320,304		2,450,326
General Motors Co.		107,609		3,599,521
Harley-Davidson, Inc.(a)		13,462		459,323
				6,509,170
Banks — 5.6%
Bank of America Corp.		748,257		18,437,053
BB&T Corp.		63,176		2,736,784
Citigroup, Inc.		200,209		10,422,881
Citizens Financial Group, Inc.		38,360		1,140,443
Comerica, Inc.		13,128		901,762
Fifth Third Bancorp		53,748		1,264,690
First Republic Bank		13,416		1,165,850
Huntington Bancshares, Inc.(a)		87,025		1,037,338
JPMorgan Chase & Co.		272,620		26,613,164
KeyCorp		84,812		1,253,521
M&T Bank Corp.		11,609		1,661,596
People’s United Financial, Inc.		29,867		430,981
PNC Financial Services Group, Inc. (The)(a)		37,828		4,422,472
Regions Financial Corp.		84,758		1,134,062
SunTrust Banks, Inc.		36,833		1,857,857
SVB Financial Group(b)		4,302		817,036
US Bancorp		124,540		5,691,478
Wells Fargo & Co.		347,314		16,004,229
Zions Bancorp(a)		15,468		630,166
				97,623,363
Beverages — 1.9%
Brown-Forman Corp., Class B		13,633		648,658

Security	Shares		Value
Beverages (continued)
Coca-Cola Co. (The)		313,760	$	14,856,536
Constellation Brands, Inc., Class A		13,617		2,189,886
Molson Coors Brewing Co., Class B		15,181		852,565
Monster Beverage Corp.(b)		32,553		1,602,259
PepsiCo, Inc.		115,836		12,797,561
				32,947,465
Biotechnology — 2.6%
AbbVie, Inc.		123,317		11,368,594
Alexion Pharmaceuticals, Inc.(b)		18,360		1,787,530
Amgen, Inc.		52,240		10,169,561
Biogen, Inc.(b)		16,518		4,970,597
Celgene Corp.(b)		57,325		3,673,959
Gilead Sciences, Inc.		106,081		6,635,367
Incyte Corp.(b)		14,327		911,054
Regeneron Pharmaceuticals, Inc.(b)		6,371		2,379,568
Vertex Pharmaceuticals, Inc.(b)		20,951		3,471,790
				45,368,020
Building Products — 0.3%
Allegion plc		7,793		621,180
AO Smith Corp.		11,796		503,689
Fortune Brands Home & Security, Inc.		11,776		447,370
Johnson Controls International plc		75,755		2,246,136
Masco Corp.		25,003		731,088
				4,549,463
Capital Markets — 2.7%
Affiliated Managers Group, Inc.		4,216		410,807
Ameriprise Financial, Inc.		11,350		1,184,600
Bank of New York Mellon Corp. (The)		74,576		3,510,292
BlackRock, Inc.(e)		9,976		3,918,772
Cboe Global Markets, Inc.		9,258		905,710
Charles Schwab Corp. (The)		98,223		4,079,201
CME Group, Inc.		29,331		5,517,748
E*TRADE Financial Corp.(b)		20,843		914,591
Franklin Resources, Inc.(a)		24,397		723,615
Goldman Sachs Group, Inc. (The)		28,360		4,737,538
Intercontinental Exchange, Inc.		46,545		3,506,235
Invesco Ltd.		34,489		577,346
Moody’s Corp.		13,666		1,913,787
Morgan Stanley		107,175		4,249,489
MSCI, Inc.		7,217		1,064,002
Nasdaq, Inc.(a)		9,406		767,247
Northern Trust Corp.(a)		18,082		1,511,474
Raymond James Financial, Inc.		10,572		786,663
S&P Global, Inc.		20,569		3,495,496
State Street Corp.(a)		31,111		1,962,171
T. Rowe Price Group, Inc.(a)		19,729		1,821,381
				47,558,165
Chemicals — 2.1%
Air Products & Chemicals, Inc.		17,998		2,880,580
Albemarle Corp.(a)		8,707		671,049
Celanese Corp.		10,959		985,981
CF Industries Holdings, Inc.		18,971		825,428
DowDuPont, Inc.		188,084		10,058,732
Eastman Chemical Co.		11,481		839,376
Ecolab, Inc.		20,840		3,070,774
FMC Corp.		11,024		815,335
International Flavors & Fragrances, Inc.(a)		8,406		1,128,674
Linde plc		45,176		7,049,263
LyondellBasell Industries NV, Class A		25,699		2,137,129
Mosaic Co. (The)		29,073		849,222
PPG Industries, Inc.		19,666		2,010,455
Sherwin-Williams Co. (The)		6,741		2,652,314
				35,974,312

6 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock S&P 500 Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Commercial Services & Supplies — 0.4%
Cintas Corp.		7,098	$	1,192,393
Copart, Inc.(b)		17,083		816,226
Republic Services, Inc.		17,828		1,285,221
Rollins, Inc.(a)		12,330		445,113
Waste Management, Inc.		32,156		2,861,562
				6,600,515
Communications Equipment — 1.1%
Arista Networks, Inc.(b)		4,267		899,057
Cisco Systems, Inc.		368,583		15,970,702
F5 Networks, Inc.(b)		4,970		805,289
Juniper Networks, Inc.		28,296		761,445
Motorola Solutions, Inc.		13,406		1,542,226
				19,978,719
Construction & Engineering — 0.1%
Fluor Corp.		11,830		380,926
Jacobs Engineering Group, Inc.		9,560		558,877
Quanta Services, Inc.(b)		11,428		343,983
				1,283,786
Construction Materials — 0.1%
Martin Marietta Materials, Inc.(a)		5,141		883,584
Vulcan Materials Co.		10,825		1,069,510
				1,953,094
Consumer Finance — 0.6%
American Express Co.		57,427		5,473,942
Capital One Financial Corp.		38,731		2,927,676
Discover Financial Services		27,543		1,624,486
Synchrony Financial		54,209		1,271,743
				11,297,847
Containers & Packaging — 0.3%
Avery Dennison Corp.		7,112		638,871
Ball Corp.		27,739		1,275,439
International Paper Co.		33,205		1,340,154
Packaging Corp. of America		7,746		646,481
Sealed Air Corp.(a)		12,865		448,217
WestRock Co.		20,786		784,879
				5,134,041
Distributors — 0.1%
Genuine Parts Co.		12,007		1,152,912
LKQ Corp.(a)(b)		26,087		619,045
				1,771,957
Diversified Consumer Services — 0.0%
H&R Block, Inc.		16,849		427,459
Diversified Financial Services — 1.9%
Berkshire Hathaway, Inc., Class B(b)		159,556		32,578,144
Jefferies Financial Group, Inc.		23,043		400,026
				32,978,170
Diversified Telecommunication Services — 2.1%
AT&T, Inc.		596,658		17,028,619
CenturyLink, Inc.(a)		78,014		1,181,912
Verizon Communications, Inc.(a)		338,747		19,044,357
				37,254,888
Electric Utilities — 2.1%
Alliant Energy Corp.		19,342		817,199
American Electric Power Co., Inc.		40,438		3,022,336
Duke Energy Corp.		58,442		5,043,545
Edison International		26,909		1,527,624
Entergy Corp.		14,850		1,278,139
Evergy, Inc.		21,598		1,226,118
Eversource Energy		25,800		1,678,032

Security	Shares		Value
Electric Utilities (continued)
Exelon Corp.		79,276	$	3,575,348
FirstEnergy Corp.		39,832		1,495,692
NextEra Energy, Inc.		39,182		6,810,615
PG&E Corp.(b)		42,318		1,005,053
Pinnacle West Capital Corp.		9,188		782,818
PPL Corp.		59,043		1,672,688
Southern Co. (The)		84,349		3,704,608
Xcel Energy, Inc.		42,356		2,086,880
				35,726,695
Electrical Equipment — 0.5%
AMETEK, Inc.		19,029		1,288,264
Eaton Corp. plc		35,408		2,431,113
Emerson Electric Co.		51,396		3,070,911
Rockwell Automation, Inc.		9,894		1,488,849
				8,279,137
Electronic Equipment, Instruments & Components — 0.5%
Amphenol Corp., Class A		24,721		2,002,895
Corning, Inc.		65,618		1,982,320
FLIR Systems, Inc.		11,031		480,290
IPG Photonics Corp.(b)		2,812		318,571
Keysight Technologies, Inc.(b)		15,483		961,185
TE Connectivity Ltd.(a)		28,122		2,126,867
				7,872,128
Energy Equipment & Services — 0.5%
Baker Hughes a GE Co.		41,989		902,763
Halliburton Co.		71,819		1,908,949
Helmerich & Payne, Inc.		8,939		428,536
National Oilwell Varco, Inc.(a)		30,887		793,796
Schlumberger Ltd.		113,426		4,092,410
TechnipFMC plc		34,439		674,316
				8,800,770
Entertainment — 2.0%
Activision Blizzard, Inc.(a)		62,556		2,913,233
Electronic Arts, Inc.(b)		24,769		1,954,522
Netflix, Inc.(b)		35,726		9,562,421
Take-Two Interactive Software, Inc.(b)		9,436		971,342
Twenty-First Century Fox, Inc., Class A		86,630		4,168,635
Twenty-First Century Fox, Inc., Class B		39,933		1,907,999
Viacom, Inc., Class B		28,483		732,013
Walt Disney Co. (The)		122,043		13,382,015
				35,592,180
Equity Real Estate Investment Trusts (REITs) — 2.9%
Alexandria Real Estate Equities, Inc.		8,713		1,004,086
American Tower Corp.		36,089		5,708,919
Apartment Investment & Management Co., Class A		12,760		559,909
AvalonBay Communities, Inc.		11,332		1,972,335
Boston Properties, Inc.		12,598		1,417,905
Crown Castle International Corp.		34,063		3,700,264
Digital Realty Trust, Inc.		16,853		1,795,687
Duke Realty Corp.		29,031		751,903
Equinix, Inc.		6,590		2,323,370
Equity Residential		30,161		1,990,928
Essex Property Trust, Inc.		5,451		1,336,640
Extra Space Storage, Inc.		10,216		924,344
Federal Realty Investment Trust		6,055		714,732
HCP, Inc.		39,555		1,104,771
Host Hotels & Resorts, Inc.		60,835		1,014,119
Iron Mountain, Inc.		23,465		760,501
Kimco Realty Corp.(a)		34,546		506,099
Macerich Co. (The)		8,673		375,367
Mid-America Apartment Communities, Inc.		9,170		877,569
Prologis, Inc.		51,609		3,030,481

SCHEDULE OF INVESTMENTS 7

Schedule of Investments  (continued) December 31, 2018 BlackRock S&P 500 Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Equity Real Estate Investment Trusts (REITs) (continued)
Public Storage		12,293	$	2,488,226
Realty Income Corp.		24,194		1,525,190
Regency Centers Corp.		13,891		815,124
SBA Communications Corp.(b)		9,316		1,508,167
Simon Property Group, Inc.		25,356		4,259,554
SL Green Realty Corp.		6,991		552,848
UDR, Inc.		22,399		887,448
Ventas, Inc.		29,132		1,706,844
Vornado Realty Trust		14,331		888,952
Welltower, Inc.(a)		30,796		2,137,550
Weyerhaeuser Co.		61,086		1,335,340
				49,975,172
Food & Staples Retailing — 1.6%
Costco Wholesale Corp.		35,925		7,318,282
Kroger Co. (The)		65,421		1,799,077
Sysco Corp.		39,026		2,445,369
Walgreens Boots Alliance, Inc.		65,906		4,503,357
Walmart, Inc.(a)		116,706		10,871,164
				26,937,249
Food Products — 1.1%
Archer-Daniels-Midland Co.		45,962		1,883,063
Campbell Soup Co.		15,794		521,044
Conagra Brands, Inc.		39,811		850,363
General Mills, Inc.		48,901		1,904,205
Hershey Co. (The)		11,497		1,232,248
Hormel Foods Corp.(a)		22,041		940,710
JM Smucker Co. (The)(a)		9,375		876,469
Kellogg Co.		20,531		1,170,472
Kraft Heinz Co. (The)		50,973		2,193,878
Lamb Weston Holdings, Inc.		12,020		884,191
McCormick & Co., Inc. (Non-Voting)		9,983		1,390,033
Mondelez International, Inc., Class A		119,187		4,771,056
Tyson Foods, Inc., Class A		24,442		1,305,203
				19,922,935
Health Care Equipment & Supplies — 3.4%
Abbott Laboratories		143,954		10,412,193
ABIOMED, Inc.(b)		3,692		1,200,048
Align Technology, Inc.(b)		5,967		1,249,669
Baxter International, Inc.		40,572		2,670,449
Becton Dickinson and Co.		21,992		4,955,237
Boston Scientific Corp.(b)		113,445		4,009,146
Cooper Cos., Inc. (The)(a)		4,039		1,027,925
Danaher Corp.		50,434		5,200,754
Dentsply Sirona, Inc.		18,555		690,432
Edwards Lifesciences Corp.(b)		17,199		2,634,371
Hologic, Inc.(b)		22,086		907,735
IDEXX Laboratories, Inc.(b)		7,070		1,315,161
Intuitive Surgical, Inc.(b)		9,362		4,483,649
Medtronic plc		110,104		10,015,060
ResMed, Inc.		11,628		1,324,080
Stryker Corp.		25,461		3,991,012
Varian Medical Systems, Inc.(b)		7,470		846,426
Zimmer Biomet Holdings, Inc.		16,806		1,743,118
				58,676,465
Health Care Providers & Services — 3.2%
AmerisourceBergen Corp.(a)		12,857		956,561
Anthem, Inc.		21,204		5,568,806
Cardinal Health, Inc.		24,425		1,089,355
Centene Corp.(b)		16,856		1,943,497
CVS Health Corp.		105,792		6,931,492
DaVita, Inc.(b)		10,342		532,199
Halfmoon Parent, Inc.		31,244		5,933,844

Security	Shares		Value
Health Care Providers & Services (continued)
HCA Healthcare, Inc.		22,007	$	2,738,771
Henry Schein, Inc.(b)		12,476		979,615
Humana, Inc.		11,247		3,222,040
Laboratory Corp. of America Holdings(b)		8,272		1,045,250
McKesson Corp.(a)		16,017		1,769,398
Quest Diagnostics, Inc.		10,969		913,389
UnitedHealth Group, Inc.		78,849		19,642,863
Universal Health Services, Inc., Class B		7,082		825,478
WellCare Health Plans, Inc.(b)		4,108		969,858
				55,062,416
Health Care Technology — 0.1%
Cerner Corp.(b)		27,012		1,416,509
Hotels, Restaurants & Leisure — 1.8%
Carnival Corp.		32,941		1,623,991
Chipotle Mexican Grill, Inc.(b)		2,005		865,739
Darden Restaurants, Inc.		10,283		1,026,860
Hilton Worldwide Holdings, Inc.		24,114		1,731,385
Marriott International, Inc., Class A		23,212		2,519,895
McDonald’s Corp.		63,200		11,222,424
MGM Resorts International		41,059		996,091
Norwegian Cruise Line Holdings Ltd.(b)		18,034		764,461
Royal Caribbean Cruises Ltd.		14,162		1,384,902
Starbucks Corp.		101,891		6,561,781
Wynn Resorts Ltd.		8,023		793,555
Yum! Brands, Inc.		25,603		2,353,428
				31,844,512
Household Durables — 0.3%
DR Horton, Inc.		28,071		972,941
Garmin Ltd.		10,121		640,862
Leggett & Platt, Inc.(a)		10,692		383,201
Lennar Corp., Class A		23,983		938,934
Mohawk Industries, Inc.(b)		5,284		618,017
Newell Brands, Inc.(a)		35,207		654,498
PulteGroup, Inc.		20,895		543,061
Whirlpool Corp.		5,231		559,037
				5,310,551
Household Products — 1.7%
Church & Dwight Co., Inc.		20,146		1,324,801
Clorox Co. (The)		10,465		1,613,075
Colgate-Palmolive Co.		71,104		4,232,110
Kimberly-Clark Corp.		28,390		3,234,757
Procter & Gamble Co. (The)		204,248		18,774,476
				29,179,219
Independent Power and Renewable Electricity Producers — 0.1%
AES Corp.		53,692		776,386
NRG Energy, Inc.		23,769		941,253
				1,717,639
Industrial Conglomerates — 1.4%
3M Co.		47,736		9,095,617
General Electric Co.		713,080		5,398,016
Honeywell International, Inc.		60,690		8,018,363
Roper Technologies, Inc.		8,479		2,259,823
				24,771,819
Insurance — 2.4%
Aflac, Inc.		62,410		2,843,400
Allstate Corp. (The)		28,254		2,334,628
American International Group, Inc.		72,741		2,866,723
Aon plc		19,831		2,882,634
Arthur J Gallagher & Co.		15,056		1,109,627
Assurant, Inc.		4,366		390,495
Brighthouse Financial, Inc.(b)		10,046		306,202

8 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock S&P 500 Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Insurance (continued)
Chubb Ltd.		37,647	$	4,863,239
Cincinnati Financial Corp.(a)		12,571		973,247
Everest Re Group Ltd.		3,332		725,576
Hartford Financial Services Group, Inc. (The)(a)		29,165		1,296,384
Lincoln National Corp.		17,512		898,541
Loews Corp.		22,667		1,031,802
Marsh & McLennan Cos., Inc.		41,232		3,288,252
MetLife, Inc.		80,902		3,321,836
Principal Financial Group, Inc.(a)		21,891		966,925
Progressive Corp. (The)		47,803		2,883,955
Prudential Financial, Inc.		33,941		2,767,889
Torchmark Corp.		8,413		627,021
Travelers Cos., Inc. (The)		21,622		2,589,235
Unum Group		17,933		526,872
Willis Towers Watson plc		10,697		1,624,446
				41,118,929
Interactive Media & Services — 4.6%(b)
Alphabet, Inc., Class A		24,498		25,599,430
Alphabet, Inc., Class C		25,222		26,120,155
Facebook, Inc., Class A		196,957		25,819,093
TripAdvisor, Inc.		8,394		452,772
Twitter, Inc.		58,848		1,691,292
				79,682,742
Internet & Direct Marketing Retail — 3.5%
Amazon.com, Inc.(b)		33,672		50,574,334
Booking Holdings, Inc.(b)		3,798		6,541,751
eBay, Inc.(b)		74,197		2,082,710
Expedia Group, Inc.		9,712		1,094,057
				60,292,852
IT Services — 4.8%
Accenture plc, Class A		52,259		7,369,042
Akamai Technologies, Inc.(b)		13,309		812,914
Alliance Data Systems Corp.		3,841		576,457
Automatic Data Processing, Inc.		35,783		4,691,867
Broadridge Financial Solutions, Inc.		9,493		913,701
Cognizant Technology Solutions Corp., Class A		47,469		3,013,332
DXC Technology Co.		23,103		1,228,387
Fidelity National Information Services, Inc.		26,702		2,738,290
Fiserv, Inc.(b)		32,667		2,400,698
FleetCor Technologies, Inc.(b)		7,315		1,358,542
Gartner, Inc.(a)(b)		7,446		951,897
Global Payments, Inc.		12,989		1,339,556
International Business Machines Corp.		74,504		8,468,870
Jack Henry & Associates, Inc.		6,372		806,185
Mastercard, Inc., Class A(a)		74,490		14,052,538
Paychex, Inc.		26,239		1,709,471
PayPal Holdings, Inc.(a)(b)		96,603		8,123,346
Total System Services, Inc.		13,760		1,118,550
VeriSign, Inc.(b)		8,704		1,290,716
Visa, Inc., Class A		144,060		19,007,276
Western Union Co. (The)		36,302		619,312
				82,590,947
Leisure Products — 0.1%(a)
Hasbro, Inc.		9,541		775,206
Mattel, Inc.(b)		29,551		295,215
				1,070,421
Life Sciences Tools & Services — 1.0%
Agilent Technologies, Inc.		26,133		1,762,932
Illumina, Inc.(b)		12,051		3,614,456
IQVIA Holdings, Inc.(b)		12,989		1,508,932
Mettler-Toledo International, Inc.(b)		2,053		1,161,136
PerkinElmer, Inc.		9,119		716,297

Security	Shares		Value
Life Sciences Tools & Services (continued)
Thermo Fisher Scientific, Inc.		32,996	$	7,384,175
Waters Corp.(b)		6,210		1,171,517
				17,319,445
Machinery — 1.5%
Caterpillar, Inc.		48,378		6,147,392
Cummins, Inc.		12,110		1,618,380
Deere & Co.		26,446		3,944,950
Dover Corp.		11,997		851,187
Flowserve Corp.(a)		10,379		394,610
Fortive Corp.		24,093		1,630,132
Illinois Tool Works, Inc.		25,025		3,170,417
Ingersoll-Rand plc		20,153		1,838,558
PACCAR, Inc.		28,647		1,636,890
Parker-Hannifin Corp.		10,841		1,616,827
Pentair plc		13,093		494,653
Snap-on, Inc.		4,592		667,172
Stanley Black & Decker, Inc.		12,384		1,482,860
Xylem, Inc.		14,555		971,110
				26,465,138
Media — 1.3%
CBS Corp. (Non-Voting), Class B		27,924		1,220,837
Charter Communications, Inc., Class A(b)		14,451		4,118,101
Comcast Corp., Class A		372,199		12,673,376
Discovery, Inc., Class A(a)(b)		13,205		326,692
Discovery, Inc., Class C(b)		29,533		681,621
DISH Network Corp., Class A(b)		19,097		476,852
Interpublic Group of Cos., Inc. (The)		30,812		635,652
News Corp., Class A		31,580		358,433
News Corp., Class B		10,303		119,000
Omnicom Group, Inc.		18,371		1,345,492
				21,956,056
Metals & Mining — 0.2%
Freeport-McMoRan, Inc.		118,793		1,224,756
Newmont Mining Corp.		43,204		1,497,018
Nucor Corp.		25,737		1,333,434
				4,055,208
Multiline Retail — 0.5%
Dollar General Corp.		21,551		2,329,232
Dollar Tree, Inc.(b)		19,509		1,762,053
Kohl’s Corp.		13,537		898,044
Macy’s, Inc.		25,206		750,635
Nordstrom, Inc.		9,328		434,778
Target Corp.		42,780		2,827,330
				9,002,072
Multi-Utilities — 1.1%
Ameren Corp.		20,028		1,306,427
CenterPoint Energy, Inc.		41,088		1,159,914
CMS Energy Corp.		23,305		1,157,093
Consolidated Edison, Inc.		25,535		1,952,406
Dominion Energy, Inc.		53,818		3,845,834
DTE Energy Co.		14,914		1,645,014
NiSource, Inc.		29,499		747,800
Public Service Enterprise Group, Inc.		41,437		2,156,796
SCANA Corp.		11,692		558,644
Sempra Energy(a)		22,402		2,423,672
WEC Energy Group, Inc.		25,867		1,791,549
				18,745,149
Oil, Gas & Consumable Fuels — 4.8%
Anadarko Petroleum Corp.		41,120		1,802,701
Apache Corp.		31,303		821,704
Cabot Oil & Gas Corp.		35,849		801,225

SCHEDULE OF INVESTMENTS 9

Schedule of Investments  (continued) December 31, 2018 BlackRock S&P 500 Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Oil, Gas & Consumable Fuels (continued)
Chevron Corp.		156,647	$	17,041,627
Cimarex Energy Co.		7,634		470,636
Concho Resources, Inc.(a)(b)		16,403		1,686,064
ConocoPhillips		94,380		5,884,593
Devon Energy Corp.		38,383		865,153
Diamondback Energy, Inc.		12,645		1,172,191
EOG Resources, Inc.		47,541		4,146,051
Exxon Mobil Corp.		347,092		23,668,203
Hess Corp.(a)		20,401		826,241
HollyFrontier Corp.		13,069		668,087
Kinder Morgan, Inc.		156,220		2,402,664
Marathon Oil Corp.(a)		68,149		977,257
Marathon Petroleum Corp.		56,637		3,342,149
Newfield Exploration Co.(b)		17,131		251,140
Noble Energy, Inc.		39,334		737,906
Occidental Petroleum Corp.		61,898		3,799,299
ONEOK, Inc.		33,724		1,819,410
Phillips 66		34,610		2,981,652
Pioneer Natural Resources Co.		13,975		1,837,992
Valero Energy Corp.		34,683		2,600,185
Williams Cos., Inc. (The)		99,127		2,185,750
				82,789,880
Personal Products — 0.1%
Coty, Inc., Class A(a)		38,088		249,857
Estee Lauder Cos., Inc. (The), Class A		18,028		2,345,443
				2,595,300
Pharmaceuticals — 5.2%
Allergan plc		26,006		3,475,962
Bristol-Myers Squibb Co.		133,734		6,951,493
Eli Lilly & Co.		77,291		8,944,115
Johnson & Johnson		219,871		28,374,353
Merck & Co., Inc.		213,181		16,289,160
Mylan NV(b)		42,137		1,154,554
Nektar Therapeutics(b)		14,017		460,739
Perrigo Co. plc(a)		9,995		387,306
Pfizer, Inc.		473,889		20,685,255
Zoetis, Inc.		39,375		3,368,137
				90,091,074
Professional Services — 0.3%
Equifax, Inc.		9,885		920,590
IHS Markit Ltd.(b)		29,406		1,410,606
Nielsen Holdings plc		29,161		680,326
Robert Half International, Inc.		9,909		566,795
Verisk Analytics, Inc.(b)		13,496		1,471,604
				5,049,921
Real Estate Management & Development — 0.1%
CBRE Group, Inc., Class A(b)		25,989		1,040,599
Road & Rail — 1.0%
CSX Corp.		65,765		4,085,979
JB Hunt Transport Services, Inc.		7,160		666,166
Kansas City Southern		8,436		805,216
Norfolk Southern Corp.		22,327		3,338,780
Union Pacific Corp.		60,403		8,349,507
				17,245,648
Semiconductors & Semiconductor Equipment — 3.7%
Advanced Micro Devices, Inc.(b)		72,100		1,330,966
Analog Devices, Inc.(a)		30,346		2,604,597
Applied Materials, Inc.		80,809		2,645,687
Broadcom, Inc.		33,895		8,618,820
Intel Corp.		374,161		17,559,376
KLA-Tencor Corp.		12,424		1,111,824

Security	Shares		Value
Semiconductors & Semiconductor Equipment (continued)
Lam Research Corp.		12,722	$	1,732,355
Maxim Integrated Products, Inc.(a)		22,795		1,159,126
Microchip Technology, Inc.(a)		19,389		1,394,457
Micron Technology, Inc.(b)		91,827		2,913,671
NVIDIA Corp.		50,008		6,676,068
Qorvo, Inc.(b)		10,227		621,086
QUALCOMM, Inc.		99,374		5,655,374
Skyworks Solutions, Inc.		14,554		975,409
Texas Instruments, Inc.		78,746		7,441,497
Xilinx, Inc.		20,745		1,766,851
				64,207,164
Software — 6.1%
Adobe, Inc.(b)		40,018		9,053,672
ANSYS, Inc.(b)		6,850		979,139
Autodesk, Inc.(b)		17,945		2,307,907
Cadence Design Systems, Inc.(b)		23,130		1,005,692
Citrix Systems, Inc.(b)		10,496		1,075,420
Fortinet, Inc.(b)		11,938		840,793
Intuit, Inc.		21,277		4,188,378
Microsoft Corp.		633,624		64,357,190
Oracle Corp.		208,895		9,431,609
Red Hat, Inc.(b)		14,466		2,540,808
salesforce.com, Inc.(b)		62,715		8,590,074
Symantec Corp.(a)		52,377		989,663
Synopsys, Inc.(b)		12,112		1,020,315
				106,380,660
Specialty Retail — 2.3%
Advance Auto Parts, Inc.		6,007		945,862
AutoZone, Inc.(b)		2,067		1,732,849
Best Buy Co., Inc.		19,193		1,016,461
CarMax, Inc.(b)		14,239		893,213
Foot Locker, Inc.		9,331		496,409
Gap, Inc. (The)(a)		17,511		451,084
Home Depot, Inc. (The)		92,600		15,910,532
L Brands, Inc.		18,284		469,350
Lowe’s Cos., Inc.		65,827		6,079,782
O’Reilly Automotive, Inc.(b)		6,610		2,276,021
Ross Stores, Inc.		30,609		2,546,669
Tiffany & Co.		8,894		716,056
TJX Cos., Inc. (The)		101,454		4,539,052
Tractor Supply Co.(a)		10,007		834,984
Ulta Beauty, Inc.(b)		4,598		1,125,774
				40,034,098
Technology Hardware, Storage & Peripherals — 3.8%
Apple, Inc.		369,581		58,297,707
Hewlett Packard Enterprise Co.(a)		116,659		1,541,065
HP, Inc.		130,186		2,663,606
NetApp, Inc.		20,650		1,232,186
Seagate Technology plc(a)		21,351		823,935
Western Digital Corp.(a)		23,727		877,187
Xerox Corp.		16,995		335,821
				65,771,507
Textiles, Apparel & Luxury Goods — 0.7%
Hanesbrands, Inc.		30,369		380,524
Michael Kors Holdings Ltd.(b)		12,316		467,023
NIKE, Inc., Class B(a)		104,367		7,737,769
PVH Corp.		6,209		577,127
Ralph Lauren Corp.		4,473		462,777
Tapestry, Inc.		23,758		801,832
Under Armour, Inc., Class A(a)(b)		16,080		284,133
Under Armour, Inc., Class C(b)		15,770		255,001

10 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock S&P 500 Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Textiles, Apparel & Luxury Goods (continued)
VF Corp.		26,591	$	1,897,002
				12,863,188
Tobacco — 0.9%
Altria Group, Inc.		154,046		7,608,332
Philip Morris International, Inc.		127,336		8,500,951
				16,109,283
Trading Companies & Distributors — 0.2%
Fastenal Co.(a)		23,533		1,230,541
United Rentals, Inc.(b)		6,649		681,722
WW Grainger, Inc.(a)		3,740		1,056,026
				2,968,289
Water Utilities — 0.1%
American Water Works Co., Inc.		14,806		1,343,941
Total Common Stocks — 99.4% (Cost: $967,295,522)				1,724,818,507
Total Long-Term Investments — 99.4% (Cost: $967,295,522)				1,724,818,507

Security	Shares		Value
Short-Term Securities — 2.7%(c)(e)
BlackRock Liquidity Funds, T-Fund, Institutional Class, 2.32%		15,713,324	$	15,713,324
SL Liquidity Series, LLC, Money Market Series, 2.57%(d)		31,575,620		31,572,463
Total Short-Term Securities — 2.7% (Cost: $47,286,759)				47,285,787
Total Investments — 102.1% (Cost: $1,014,582,281)				1,772,104,294
Liabilities in Excess of Other Assets — (2.1)%				(35,766,681	)
Net Assets — 100.0%			$	1,736,337,613

^(a)  Security, or a portion of the security, is on loan.

^(b)  Non-income producing security.

^(c)  Annualized 7-day yield as of period end.

^(d)  Security was purchased with the cash collateral from loaned securities.

^(e)  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:

Affiliated 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		2,592,667		13,120,657	(b)		—			15,713,324	$	15,713,324	$	164,153		$	—	$	—
SL Liquidity Series, LLC, Money Market Series		3,040,710		28,534,910	(b)		—			31,575,620		31,572,463		49,655	(c)		5,020		(972	)
BlackRock, Inc.		1,183		9,369			(576	)		9,976		3,918,772		75,949			159,096		(447,959	)
PNC Financial Services Group, Inc. (The)(d)		4,559		35,385			(2,116	)		37,828		N/A		85,326			152,304		(1,109,827	)
											$	51,204,559	$	375,083		$	316,420	$	(1,558,758	)

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

^(b)  Represents net shares purchased.

^(c)  Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.

^(d)  As of period end, the entity is no longer an affiliate of the Fund.

For Fund compliance purposes, the Fund’s industry classifications refer to one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

Portfolio Abbreviation
S&P	Standard & Poor’s

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

Description	Number of Contracts		Expiration Date		Notional Amount (000)		Value/ Unrealized Appreciation (Depreciation)
Long Contracts
S&P 500 E-Mini Index		141		03/15/19	$	17,662	$	173,170

SCHEDULE OF INVESTMENTS 11

Schedule of Investments  (continued) December 31, 2018 BlackRock S&P 500 Index V.I. Fund

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statement 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)	$	—	$	—	$	173,170	$	—	$	—	$	—	$	173,170

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

For the year ended December 31, 2018, the effect of derivative financial instruments in the Statement of Operations were 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	$	—	$	—	$	(931,129	)	$	—	$	—	$	—	$	(931,129	)
Net Change in Unrealized Appreciation (Depreciation) on:
Futures contracts	$	—	$	—	$	176,825		$	—	$	—	$	—	$	176,825

Average Quarterly Balances of Outstanding Derivative Financial Instruments

Futures contracts:
Average notional value of contracts — long	$	12,904,575

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

Fair Value Hierarchy as of Period End

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

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

	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Long-Term Investments
Common Stocks(a)	$	1,724,818,507	$	—	$	—	$	1,724,818,507
Short-Term Securities		15,713,324		—		—		15,713,324
Subtotal	$	1,740,531,831	$	—	$	—	$	1,740,531,831
Investments valued at NAV(b)							$	31,572,463
Total Investments							$	1,772,104,294
Derivative Financial Instruments(c)
Assets:
Equity contracts	$	173,170	$	—	$	—	$	173,170

^(a)  See above Schedule of Investments for values in each industry.

^(b)  As of December 31, 2018, certain investments of the Fund were fair valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

^(c)  Derivative financial instruments are futures contracts, which 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.

12 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Statement of Assets and Liabilities

December 31, 2018

	BlackRock S&P 500 Index V.I. Fund
ASSETS
Investments at value — unaffiliated (including securities loaned at value of $31,110,553) (cost — $965,238,013)	$	1,720,899,735
Investments at value — affiliated (cost — $49,344,268)		51,204,559
Cash pledged for futures contracts		879,000
Receivables:
Investments sold		521,102
Securities lending income — affiliated		8,249
Capital shares sold		716,255
Dividends — affiliated		26,835
Dividends — unaffiliated		2,006,953
From the Manager		8,037
Variation margin on futures contracts		137,118
Prepaid expenses		11,914
Total assets		1,776,419,757
LIABILITIES
Bank overdraft		166,233
Cash collateral on securities loaned at value		31,569,774
Payables:
Investments purchased		1,165,897
Capital shares redeemed		6,539,380
Distribution fees		64,143
Board realignment and consolidation		7,133
Investment advisory fees		56,036
Directors’ and Officer’s fees		9,296
Other affiliates		3,059
Other accrued expenses		501,193
Total liabilities		40,082,144
NET ASSETS	$	1,736,337,613
NET ASSETS CONSIST OF
Paid-in capital	$	991,957,031
Accumulated earnings		744,380,582
NET ASSETS	$	1,736,337,613
NET ASSET VALUE
Class I — Based on net assets of $1,412,399,695 and 68,891,822 shares outstanding, 100 million shares authorized, $0.10 par value	$	20.50
Class II — Based on net assets of $4,484,593 and 220,702 shares outstanding, 100 million shares authorized, $0.10 par value	$	20.32
Class III — Based on net assets of $319,453,325 and 15,723,188 shares outstanding, 100 million shares authorized, $0.10 par value	$	20.32

See notes to financial statements.

FINANCIAL STATEMENTS 13

Statement of Operations

Year Ended December 31, 2018

	BlackRock S&P 500 Index V.I. Fund
INVESTMENT INCOME
Dividends — affiliated	$	325,428
Dividends — unaffiliated		21,690,340
Securities lending income — affiliated — net		49,655
Total investment income		22,065,423
EXPENSES
Investment advisory		919,907
Distribution — class specific		652,011
Transfer agent — class specific		400,788
Professional		162,790
Reorganization		137,991
Accounting services		103,655
Printing		40,534
Registration		32,806
Directors and Officer		30,003
Custodian		28,035
Offering		17,331
Board realignment and consolidation		7,133
Transfer agent		6,753
Miscellaneous		46,551
Total expenses		2,586,288
Less:
Fees waived and/or reimbursed by the Manager		(237,529	)
Transfer agent fees waived and/or reimbursed — class specific		(119,440	)
Total expenses after fees waived and/or reimbursed		2,229,319
Net investment income		19,836,104
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — affiliated		316,420
Investments — unaffiliated		98,921,438
Futures contracts		(931,129	)
		98,306,729
Net change in unrealized appreciation (depreciation) on:
Investments — affiliated		(1,558,758	)
Investments — unaffiliated		(205,459,514	)
Futures contracts		176,825
		(206,841,447	)
Net realized and unrealized loss		(108,534,718	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(88,698,614	)

See notes to financial statements.

14 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Statements of Changes in Net Assets

	BlackRock S&P 500 Index V.I. Fund
	Year Ended
	12/31/2018			12/31/2017
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income	$	19,836,104		$	3,577,169
Net realized gain		98,306,729			10,983,785
Net change in unrealized appreciation (depreciation)		(206,841,447	)		26,662,306
Net increase (decrease) in net assets resulting from operations		(88,698,614	)		41,223,260
DISTRIBUTIONS TO SHAREHOLDERS(a)(b)
Class I		(80,579,932	)		(12,284,211	)
Class II		(251,963	)		(184,677	)
Class III		(18,332,689	)		—
Decrease in net assets resulting from distributions to shareholders		(99,164,584	)		(12,468,888	)
CAPITAL SHARE TRANSACTIONS
Net increase (decrease) in net assets derived from capital share transactions		1,704,609,344			(6,721,848	)
NET ASSETS(b)
Total increase in net assets		1,516,746,146			22,032,524
Beginning of year		219,591,467			197,558,943
End of year	$	1,736,337,613		$	219,591,467

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

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

See notes to financial statements.

FINANCIAL STATEMENTS 15

Financial Highlights

(For a share outstanding throughout each period)

	BlackRock S&P 500 Index V.I. Fund
	Class I
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	22.82		$	19.90		$	19.08		$	20.63		$	19.43
Net investment income(a)		0.44			0.37			0.37			0.37			0.35
Net realized and unrealized gain (loss)		(1.51	)		3.91			1.85			(0.14	)		2.25
Net increase (decrease) from investment operations		(1.07	)		4.28			2.22			0.23			2.60
Distributions(b)
From net investment income		(0.25	)		(0.39	)		(0.38	)		(0.42	)		(0.36	)
From net realized gain		(1.00	)		(0.97	)		(1.02	)		(1.36	)		(1.04	)
Total distributions		(1.25	)		(1.36	)		(1.40	)		(1.78	)		(1.40	)
Net asset value, end of year	$	20.50		$	22.82		$	19.90		$	19.08		$	20.63
Total Return(c)
Based on net asset value		(4.61	)%		21.50	%		11.60	%		1.05	%		13.30	%
Ratios to Average Net Assets
Total expenses		0.19	%(d)		0.46	%		0.46	%		0.46	%		0.46	%
Total expenses after fees waived and/or reimbursed		0.16	%(d)		0.30	%		0.31	%		0.31	%		0.34	%
Net investment income		1.88	%		1.68	%		1.87	%		1.76	%		1.70	%
Supplemental Data
Net assets, end of year (000)	$	1,412,400		$	216,251		$	195,261		$	187,048		$	204,029
Portfolio turnover rate		5	%		3	%		4	%		4	%		3	%

^(a)  Based on average shares outstanding.

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

^(c)  Where applicable, excludes insurance-related fees and expenses and assumes the reinvestment of distributions.

^(d)  Includes reorganization costs associated with the Fund’s reorganization. Without these costs, total expenses and total expenses after fees waived and/or reimbursed would have been 0.18% and 0.15%, respectively.

See notes to financial statements.

16 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Financial Highlights  (continued)

(For a share outstanding throughout each period)

	BlackRock S&P 500 Index V.I. Fund (continued)
	Class II
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	22.63		$	19.75		$	18.94		$	20.49		$	19.31
Net investment income(a)		0.38			0.34			0.33			0.33			0.32
Net realized and unrealized gain (loss)		(1.47	)		3.87			1.85			(0.13	)		2.22
Net increase (decrease) from investment operations		(1.09	)		4.21			2.18			0.20			2.54
Distributions(b)
From net investment income		(0.22	)		(0.36	)		(0.35	)		(0.39	)		(0.32	)
From net realized gain		(1.00	)		(0.97	)		(1.02	)		(1.36	)		(1.04	)
Total distributions		(1.22	)		(1.33	)		(1.37	)		(1.75	)		(1.36	)
Net asset value, end of year	$	20.32		$	22.63		$	19.75		$	18.94		$	20.49
Total Return(c)
Based on net asset value		(4.74	)%		21.31	%		11.47	%		0.89	%		13.11	%
Ratios to Average Net Assets
Total expenses		0.40	%(d)		0.60	%		0.62	%		0.61	%		0.60	%
Total expenses after fees waived and/or reimbursed		0.33	%(d)		0.45	%		0.46	%		0.46	%		0.48	%
Net investment income		1.64	%		1.54	%		1.71	%		1.61	%		1.55	%
Supplemental Data
Net assets, end of year (000)	$	4,485		$	3,340		$	2,298		$	1,780		$	1,962
Portfolio turnover rate		5	%		3	%		4	%		4	%		3	%

^(a)  Based on average shares outstanding.

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

^(c)  Where applicable, excludes insurance-related fees and expenses and assumes the reinvestment of distributions.

^(d)  Includes reorganization costs associated with the Fund’s reorganization. Without these costs, total expenses and total expenses after fees waived and/or reimbursed would have been 0.39% and 0.33%, respectively.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 17

Financial Highlights  (continued)

(For a share outstanding throughout each period)

	BlackRock S&P 500 Index V.I. Fund (continued)
	Class III
	Period from 02/14/2018 (a) to 12/31/2018
Net asset value, beginning of period	$	22.88
Net investment income(b)		0.34
Net realized and unrealized (loss)		(1.69	)
Net (decrease) from investment operations		(1.35	)
Distributions(c)
From net investment income		(0.21	)
From net realized gain		(1.00	)
Total distributions		(1.21	)
Net asset value, end of period	$	20.32
Total Return(d)
Based on net asset value		(5.82	)%(e)
Ratios to Average Net Assets
Total expenses		0.38	%(f)(g)
Total expenses after fees waived and/or reimbursed		0.36	%(f)(g)
Net investment income		1.64	%(f)
Supplemental Data
Net assets, end of period (000)	$	319,453
Portfolio turnover rate		5	%(h)

^(a)  Recommencement 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 insurance-related fees and expenses and assumes the reinvestment of distributions.

^(e)  Aggregate total return.

^(f)  Annualized.

^(g)  Includes reorganization costs associated with the Fund’s reorganization. Without these costs, total expenses and total expenses after fees waived and/or reimbursed would have been 0.37% and 0.35%, respectively.

^(h)  Portfolio turnover rate is representative of the fund for the entire year.

See notes to financial statements.

18 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements

1. ORGANIZATION

BlackRock Variable Series Funds, Inc. (the “Company”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as anopen-end management investment company. The Company is organized as a Maryland corporation that is comprised of 15 separate portfolios. The funds offer shares to insurance companies for their separate accounts to fund benefits under certain variable annuity and variable life insurance contracts. The financial statements presented are for BlackRock S&P 500 Index V.I. Fund (the “Fund”). The Fund is classified as diversified. Class I, Class II and Class III Shares have equal voting, dividend, liquidation and other rights, except that only shares of the respective classes are entitled to vote on matters concerning only that class. In addition, Class II and Class III Shares bear certain expenses related to the distribution of such shares. Class III Shares recommenced operations on February 14, 2018.

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

Reorganizations

The Board, the Board of the HIMCO Variable Insurance Trust and shareholders of the HIMCO Fund approved the reorganization of the HIMCO Fund into the Fund. As a result, the Fund acquired substantially all of the assets and assumed substantially all of the liabilities of the HIMCO Fund in exchange for an equal aggregate value of newly-issued Class I and Class III Shares of the Fund.

Each shareholder of the HIMCO Fund received shares of the Fund in an amount equal to the aggregate net asset value (“NAV”) of such shareholder’s HIMCO Fund shares, as determined at the close of business on April 20, 2018, less the costs of the HIMCO Fund’s reorganization.

The HIMCO reorganization was accomplished by atax-free exchange of shares of the Fund in the following amounts and at the following conversion ratios:

HIMCO Fund’s Share Class	Shares Prior to HIMCO Reorganization		Conversion Ratio		S&P 500 Index V.I. Fund’s Share Class		Shares of S&P 500 Index V.I. Fund
Class IA		17,179,594		1.83129659		Class I		31,460,932
Class IB		9,244,848		1.81412014		Class III		16,771,265

The HIMCO Fund’s net assets and composition of net assets as of the close of business on April 20, 2018, the valuation date of the HIMCO reorganization were as follows:

HIMCO Fund	Net Assets		Paid-In Capital		Accumulated earnings
HIMCO VIT Index Fund	$	1,100,925,673	$	552,473,484	$	548,452,189

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

The net assets of the Fund before the HIMCO reorganization were $221,043,512. The aggregate net assets of the Fund immediately after the HIMCO reorganization amounted to $1,321,969,185. The HIMCO Fund’s fair value and cost of investments prior to the HIMCO reorganization were as follows:

HIMCO Fund	Fair Value of Investments		Cost of Investments
HIMCO VIT Index Fund	$	1,091,642,970	$	514,211,227

The purpose of the transaction was to combine the assets of the HIMCO Fund with the assets of the Fund. The HIMCO reorganization was a tax-free event and closed on April 23, 2018.

Assuming the acquisition had been completed on January 1, 2018, the beginning of the fiscal reporting period of the Fund, the pro forma results of operations for the year ended December 31, 2018, are as follows:

• Net investment income: $25,009,801

• Net realized and change in unrealized loss on investments: $(108,025,468)

• Net increase in net assets resulting from operations: $(83,015,667)

Because the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of the Fund that have been included in the Fund’s Statement of Operations since April 23, 2018.

The Board, the Board of Trustees of State Farm Variable Product Trust and shareholders of the State Farm Fund approved the reorganization of the State Farm Fund into the Fund. As a result, the Fund acquired substantially all of the assets and assumed substantially all of the liabilities of the State Farm Fund in exchange for an equal aggregate value of newly-issued Class I Shares of the Fund.

Each shareholder of the State Farm Fund received shares of the Fund in an amount equal to the aggregate NAV of such shareholder’s State Farm Fund shares, as determined at the close of business on October 26, 2018, less the costs of the State Farm Fund’s reorganization.

NOTESTO FINANCIAL STATEMENTS 19

Notes to Financial Statements  (continued)

The State Farm reorganization was accomplished by atax-free exchange of shares of the Fund in the following amount and at the following conversion ratio:

State Farm Fund	Shares Prior to State Farm Reorganization		Conversion Ratio		S&P 500 Index V.I. Fund’s Share Class		Shares of S&P 500 Index V.I. Fund
State Farm Large Cap Equity Index Fund		31,060,082		0.87209818		Class I		27,087,441

The State Farm Fund’s net assets and composition of net assets on October 26, 2018, the valuation date of the State Farm reorganization were as follows:

State Farm Fund	Net Assets		Paid-In Capital		Accumulated earnings
State Farm Large Cap Equity Index Fund	$	622,154,676	$	387,022,240	$	235,132,436

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

The net assets of the Fund before the State Farm reorganization were $1,244,306,961. The aggregate net assets of the Fund immediately after the State Farm reorganization amounted to $1,866,461,637. The State Farm Fund’s fair value and cost of investments prior to the reorganization were as follows:

State Farm Fund	Fair Value of Investments		Cost of Investments
State Farm Large Cap Equity Index Fund	$	617,866,688	$	382,357,766

The purpose of the transaction was to combine the assets of the State Farm Fund with the assets of the Fund. The State Farm reorganization was a tax-free event and closed on October 29, 2018.

Assuming the acquisition had been completed on January 1, 2018, the beginning of the fiscal reporting period of the Fund, the pro forma results of operations for the year ended December 31, 2018, are as follows:

• Net investment income: $29,919,446

• Net realized and change in unrealized gain (loss) on investments: $(105,351,557)

• Net increase in net assets resulting from operations: $(75,432,111)

Because the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of the Fund that have been included in the Fund’s Statement of Operations since October 29, 2018.

State Farm Reorganization costs incurred by the Fund in connection with the State Farm Reorganization were expensed by the Fund. The Manager reimbursed the Fund $111,986, which is included in fees waived and/or reimbursed by the Manager in the Statement 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. The 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 Fund is 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, some 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 security 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: The 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.

The 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 Statement of Operations from

20 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

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. The 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 the Fund enters into certain investments (e.g., futures contracts) that would be treated as “senior securities” for 1940 Act purposes, the Fund may segregate or designate on its books and records cash or liquid assets having a market value at least equal to the amount of its future obligations under such investments. Doing so allows the investment to be excluded from treatment as a “senior security.” Furthermore, if required by an exchange or counterparty agreement, the Fund 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 Fund are recorded on theex-dividend date. Distributions of capital gains are recorded on the ex-dividend date and made at least annually. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP.

Offering Costs:Offering costs are amortized over a12- month period beginning with the commencement of operations of a class of shares.

Recent Accounting Standards: 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 Fund.

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

Other: Expenses directly related to the Fund or its classes are charged to the 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 Fund and other shared expenses prorated to the Fund are allocated daily to each class based on its relative net assets or other appropriate methods.

3. INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS

Investment Valuation Policies: The Fund’s 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 Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Fund determines the fair values of its financial instruments using various independent dealers or pricing services under policies approved by the Board. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) is the committee formed by management to develop global pricing policies and procedures and to oversee the pricing function for all financial instruments.

Fair Value Inputs and Methodologies: The following methods and inputs are used to establish the fair value of the 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.

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

• The Fund values its investment in SL Liquidity Series, LLC, Money Market Series (the “Money Market Series”) at fair value, which is ordinarily based upon its pro rata ownership in the underlying fund’s net assets. The Money Market Series seeks current income consistent with maintaining liquidity and preserving capital. Although the Money Market Series is not registered under the 1940 Act, its investments may follow the parameters of investments by a money market fund that is subject to Rule2a-7 under the 1940 Act.

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

If events (e.g., a company announcement, market volatility or a natural disaster) occur that are expected to materially affect the value of such investments, or in the event that the application of these methods of valuation results in a price for an investment that is deemed not to be representative of the market value of such investment, or if a price is not available, the investment will be valued by the Global Valuation Committee, or its delegate, in accordance with a policy approved by the Board as reflecting fair value (“Fair Valued Investments”). The fair valuation approaches that may be used by the Global Valuation Committee will include market approach, income approach and cost approach. Valuation techniques such as discounted cash flow, use of market comparables and matrix pricing are types of valuation approaches and are typically used in determining fair value. When determining the price for Fair Valued Investments, the Global Valuation Committee, or its delegate, seeks to determine the price that the 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. The pricing of all Fair Valued Investments is subsequently reported to the Board or a committee thereof on a quarterly basis.

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 the 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)

NOTESTO FINANCIAL STATEMENTS 21

Notes to Financial Statements  (continued)

• Level 3 — Unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the 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 privately held companies or funds. 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 the 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.

As of December 31, 2018, certain investments of the Fund were valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

4. SECURITIES AND OTHER INVESTMENTS

Securities Lending: The Fund may lend its securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received by the Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current market value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Fund and any additional required collateral is delivered to the Fund, or excess collateral returned by the Fund, on the next business day. During the term of the loan, the Fund is entitled to all distributions made on or in respect of the loaned securities, but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.

The market value of any securities on loan, all of which were classified as common stocks in the Fund’s Schedule of Investments, and the value of any related collateral are shown separately in the Statement of Assets and Liabilities as a component of investments at value — unaffiliated, and collateral on securities loaned at value, respectively. As of period end, any securities on loan were collateralized by cash and/or U.S. Government obligations. Cash collateral invested by the securities lending agent, BlackRock Investment Management, LLC (“BIM”), if any, is disclosed in the Schedule of Investments.

Securities lending transactions are entered into by the Fund under Master Securities Lending Agreements (each, an “MSLA”), which provide the right, in the event of default (including bankruptcy or insolvency), for thenon-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, the Fund, as lender, would offset the market value of the collateral received against the market value of the securities loaned. When the value of the collateral is greater than that of the market value of the securities loaned, the lender is left with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, absent an event of default, the borrower can resell orre-pledge the loaned securities, and the Fund can reinvest cash collateral received in connection with loaned securities. Upon an event of default, the parties’ obligations to return the securities or collateral to the other party are extinguished, and the parties can resell orre-pledge the loaned securities or the collateral received in connection with the loaned securities in order to satisfy the defaulting party’s net payment obligation for all transactions under the MSLA. The defaulting party remains liable for any deficiency.

As of period end, the following table is a summary of the Fund’s securities lending agreements by counterparty which are subject to offset under an MSLA:

Counterparty	Securities Loaned at Value		Cash Collateral Received (a)			Net Amount
Citigroup Global Markets Inc.	$	7,747,927	$	(7,747,927	)	$	—
Credit Suisse Securities (USA) LLC		3,302,880		(3,302,880	)		—
Deutsche Bank Securities Inc.		2,232,615		(2,232,615	)		—
Fidelity Investments		394,106		(394,106	)		—
Goldman Sachs & Co.		114,885		(114,885	)		—
JP Morgan Securities LLC		13,552,187		(13,552,187	)		—
State Street Bank & Trust Co.		2,785,622		(2,785,622	)		—
Toronto Dominion Bank		542,411		(542,411	)		—
UBS Securities LLC		437,920		(437,920	)		—
	$	31,110,553	$	(31,110,553	)	$	—

^(a)  Cash collateral with a value of $31,569,774 has been received in connection with securities lending agreements. Collateral received in excess of the value of securities loaned from the individual counterparty, if any, is not shown for financial reporting purposes in the table above.

The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Fund benefits from a borrower default indemnity provided by BIM. BIM’s indemnity allows for full replacement of the securities loaned if the collateral received

22 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

does not cover the value on the securities loaned in the event of borrower default. The Fund could incur a loss if the value of an investment purchased with cash collateral falls below the market value of loaned securities or if the value of an investment purchased with cash collateral falls below the value of the original cash collateral received.

5. DERIVATIVE FINANCIAL INSTRUMENTS

The Fund engages in various portfolio investment strategies using derivative contracts both to increase the returns of the Fund and/or to manage its 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 Schedule of Investments. These contracts may be transacted on an exchange orover-the-counter (“OTC”).

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

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

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

6. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

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

For such services, the Fund pays the Manager a monthly fee at an annual rate equal to 0.07% of the average daily value of the Fund’s net assets.

Prior to April 23, 2018, this fee was 0.30% of the average daily value of the Fund’s net assets.

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

	Class I		Class II			Class III
Distribution Fees		N/A		0.15	%		0.25	%

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

	Class II		Class III		Total
Distribution Fees	$	6,138	$	645,873	$	652,011

Transfer Agent: On behalf of the Fund, the Manager entered into agreements with insurance companies and other financial intermediaries (“Service Organizations”), some of which may be affiliates. Pursuant to these agreements, the Service Organizations provide the Fund with administrative, networking, recordkeeping,sub-transfer agency and shareholder services tosub-accounts they service. For these services, the Service Organizations receive an annual fee per shareholder account, which will vary depending on share class and/or net assets of Fund shareholders serviced by the Service Organizations, which is shown as transfer agent — class specific. For the year ended December 31, 2018, the Fund did not pay any amounts to affiliates in return for these services.

In addition, the Fund pays the transfer agent, which is not an affiliate, a fee for the issuance, transfer and redemption of shares and the opening and maintenance of shareholder accounts, which is included in transfer agent in the Statement of Operations.

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

Class I		Class II		Class III		Total
$	381,148	$	2,253	$	17,387	$	400,788

Expense Limitations, Waivers and Reimbursements:Effective April 23, 2018, the contractual advisory fee waiver of 0.10% is discontinued in conjunction with the reduced advisory fee from 0.30% to 0.07%. For the year ended December 31, 2018, the amount waived and/or reimbursed by the Manager pursuant to this contractual waiver was $68,657.

With respect to the Fund, the Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees the 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

NOTESTO FINANCIAL STATEMENTS 23

Notes to Financial Statements  (continued)

expenses made pursuant to the expense limitation will be reduced by the amount of the affiliated money market fund waiver. This amount is included in fees waived and/or reimbursed by the Manager in the Statement of Operations. For the year ended December 31, 2018, the amount waived was $6,903.

The Manager has contractually agreed to waive its investment advisory fee with respect to any portion of the 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, 2021. The contractual agreement may be terminated upon 90 days’ notice by a majority of directors who are not “interested persons” of the Fund, as defined in the 1940 Act (“Independent Directors”), or by a vote of a majority of the outstanding voting securities of the Fund. For the year ended December 31, 2018, there were no fees waived and/or reimbursed by the Manager.

For the year ended December 31, 2018, the Fund reimbursed the Manager $11,758 for certain accounting services, which is included in accounting services in the Statement of Operations.

The Fund has begun to incur expenses in connection with a proposed realignment and consolidation of the boards of directors of certain BlackRock-advised funds. The Manager has voluntarily agreed to reimburse the Fund for all or a portion of such expenses, which amounts are included in fees waived and/or reimbursed by the Manager in the Statement of Operations. For the year ended December 31, 2018, the amount reimbursed was $7,133.

The Manager has contractually agreed to reimburse transfer agent fees in order to limit such expenses to a percentage of average daily net assets as follows:

Class I	0.05	%
Class II	0.05
Class III	0.05

The Manager has agreed not to reduce or discontinue this contractual expense limitation through April 30, 2021, unless approved by the Board, including a majority of the Independent Directors, or by a vote of a majority of the outstanding voting securities of the Fund.

Prior to April 23, 2018, the Manager reimbursed all transfer agent fees — class specific for Class I, Class II and Class III of the Fund.

These amounts waived and/or reimbursed are shown as transfer agent fees waived and/or reimbursed — class specific in the Statement of Operations. For the year ended December 31, 2018, class specific expense waivers and/or reimbursements were as follows:

	Class I		Class II		Class III		Total
Transfer Agent Fees Waived and/or Reimbursed	$	54,123	$	756	$	4,282	$	59,161

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

Class I		Class II		Class III (a)
	0.15%		0.30%		0.40%

^(a)  Class III recommenced operations on February 14, 2018.

Prior to April 23, 2018, Class I, Class II and Class III expense limitations as a percentage of average daily net assets were 1.25%, 1.40% and 1.50%, respectively.

The Manager has agreed not to reduce or discontinue this contractual expense limitation through April 30, 2021, unless approved by the Board, including a majority of the Independent Directors, or by a vote of a majority of the outstanding voting securities of the Fund. For the year ended December 31, 2018, the Manager waived and/or reimbursed $42,850 and $60,279, which is included in fees waived and/or reimbursed by the Manager and transfer agent fees waived and/or reimbursed — class specific, respectively, in the Statement of Operations.

Securities Lending: The U.S. Securities and Exchange Commission (“SEC”) has issued an exemptive order which permits BIM, an affiliate of the Manager, to serve as securities lending agent for the Fund, subject to applicable conditions. As securities lending agent, BIM bears all operational costs directly related to securities lending. The Fund is responsible for expenses in connection with the investment of cash collateral received for securities on loan (the “collateral investment expenses”). The cash collateral is invested in a private investment company managed by the Manager or its affiliates. However, BIM has agreed to cap the collateral investment expenses of the private investment company to an annual rate of 0.04%. The investment adviser to the private investment company will not charge any advisory fees with respect to shares purchased by the Fund. The private investment company in which the cash collateral has been invested may, under certain circumstances, impose a liquidity fee of up to 2% of the value withdrawn or temporarily restrict withdrawals for up to 10 business days during a 90 day period, in the event that the private investment company’s weekly liquid assets fall below certain thresholds.

Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment expenses. The Fund retains a portion of securities lending income and remits a remaining portion to BIM as compensation for its services as securities lending agent.

Pursuant to a securities lending agreement, the Fund retains 71.5% of securities lending income, and this amount retained can never be less than 65% of the total of securities lending income plus the collateral investment expenses.

In addition, commencing the business day following the date that the aggregate securities lending income earned across the Equity-Bond Complex in a calendar year exceeds a specified threshold, the Fund, pursuant to the securities lending agreement, will retain for the remainder of that calendar year securities lending income in an amount equal to 75% of securities lending income, and this amount retained can never be less than 65% of the total of securities lending income plus the collateral investment expenses.

24 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

The share of securities lending income earned by the Fund is shown as securities lending income — affiliated — net in the Statement of Operations. For the year ended December 31, 2018, the Fund paid BIM $17,615 for securities lending agent services.

Interfund Lending: In accordance with an exemptive order (the “Order”) from the SEC, the 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 the Fund’s investment policies and restrictions. The Fund is currently permitted to borrow under the Interfund Lending Program.

A lending BlackRock fund may lend in aggregate up to 15% of its net assets, but may not lend more than 5% of its net assets to any one borrowing fund through the Interfund Lending Program. A borrowing BlackRock fund may not borrow through the Interfund Lending Program or from any other source more than 33 1/3% of its total assets (or any lower threshold provided for by the fund’s investment restrictions). If a borrowing BlackRock fund’s total outstanding borrowings exceed 10% of its total assets, each of its outstanding interfund loans will be subject to collateralization of at least 102% of the outstanding principal value of the loan. All interfund loans are for temporary or emergency purposes and the interest rate to be charged will be the average of the highest current overnight repurchase agreement rate available to a lending fund and the bank loan rate, as calculated according to a formula established by the Board.

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

Directors and Officers: Certain directors and/or officers of the Company are directors and/or officers of BlackRock or its affiliates. The Fund reimburses the Manager for a portion of the compensation paid to the Company’s Chief Compliance Officer, which is included in Directors and Officer in the Statement of Operations.

Other Transactions: The Fund may purchase securities from, or sell securities to, an affiliated fund provided the affiliation is due solely to having a common investment adviser, common officers, or common directors. For the year ended December 31, 2018, the purchase and sale transactions and any net realized gains (losses) with affiliated funds in compliance with Rule17a-7 under the 1940 Act were as follows:

Purchases	$	24,283,155
Sales		11,502,176
Net Realized Gain		3,762,432

7. PURCHASES AND SALES

For the year ended December 31, 2018, purchases and sales of investments, excluding short-term securities, were $59,850,054 and $155,227,291, respectively.

8. INCOME TAX INFORMATION

It is the 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.

The 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 the Fund’s U.S. federal tax returns generally remains open for each of the four years ended December 31, 2018. The statutes of limitations on the 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 Fund as of December 31, 2018, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the Fund’s financial statements.

US 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 difference attributable tonon-deductible expenses was reclassified to the following accounts:

Paid in capital	$	(17,331	)
Accumulated earnings	$	17,331

The tax character of distributions paid was as follows:

	12/31/18		12/31/17
Ordinary income	$	19,423,791	$	3,811,505
Long term capital gains		79,740,793		8,657,383
	$	99,164,584	$	12,468,888

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

Undistributed ordinary income	$	313,990
Undistributed long-term capital gains		17,293,853
Net unrealized gains(a)		726,772,739
	$	744,380,582

^(a)  The difference between book-basis andtax-basisnet unrealized gains was attributable primarily to the tax deferral of losses on wash sales, the realization for tax purposes of unrealized gains/losses on certain futures contracts the timing and recognition of partnership income, and the classification of investments.

NOTESTO FINANCIAL STATEMENTS 25

Notes to Financial Statements  (continued)

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:

Tax cost	$	1,045,623,220
Gross unrealized appreciation	$	807,763,573
Gross unrealized depreciation		(81,282,499	)
Net unrealized appreciation	$	726,481,074

9. BANK BORROWINGS

The Company, on behalf of the Fund, 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 Fund may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Fund, 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. Prior to April 19, 2018, the aggregate commitment amount was $2.1 billion and the fee was 0.12% per annum. 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 Statement 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 Fund did not borrow under the credit agreement.

10. PRINCIPAL RISKS

In the normal course of business, the Fund invests in securities or other instruments and may enter into certain transactions, and such activities subject the 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. The Fund’s prospectus provides details of the risks to which the Fund is subject.

The Fund may be exposed to additional risks when reinvesting cash collateral in money market funds that do not seek to maintain a stable NAV per share of $1.00 and which may be subject to redemption gates or liquidity fees under certain circumstances.

Valuation Risk: The market values of equities, such as common stocks and preferred securities or equity related investments, such as futures and options, may decline due to general market conditions which are not specifically related to a particular company. They may also decline due to factors which affect a particular industry or industries. The Fund may invest in illiquid investments and may experience difficulty in selling those investments in a timely manner at the price that it believes the investments are worth. Prices may fluctuate widely over short or extended periods in response to company, market or economic news. Markets also tend to move in cycles, with periods of rising and falling prices. This volatility may cause the 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 the Fund may lose value, regardless of the individual results of the securities and other instruments in which the Fund invests.

The price the Fund could receive upon the sale of any particular portfolio investment may differ from the 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 the 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 the Fund, and the Fund could realize a greater than expected loss or lesser than expected gain upon the sale of the investment. The Fund’s ability to value its investments may also be impacted by technological issues and/or errors by pricing services or other third party service providers.

Counterparty Credit Risk: The Fund 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 Fund manages 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 Fund to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Fund’s exposure to market, issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Statement of Assets and Liabilities, less any collateral held by the Fund.

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.

With exchange-traded futures, there is less counterparty credit risk to the Fund 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, the Fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency). Additionally, credit risk exists in exchange-traded futures with respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Fund.

26 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

11. CAPITAL SHARE TRANSACTIONS

Transactions in capital shares for each class were as follows:

	Year Ended 12/31/2018(a)						Year Ended 12/31/2017
	Shares			Amount			Shares			Amount
Class I
Shares sold		1,629,081		$	38,154,514			853,159		$	18,530,628
Shares issued in reinvestment of distributions		3,984,526			80,579,932			537,342			12,284,211
Shares issued in reorganization		58,548,373			1,342,478,516			—			—
Shares redeemed		(4,748,491	)		(111,807,406	)		(1,723,846	)		(38,229,011	)
Net increase (decrease)		59,413,489		$	1,349,405,556			(333,345	)	$	(7,414,172	)
Class II
Shares sold		104,448		$	2,472,635			133,824		$	2,754,443
Shares issued in reinvestment of distributions		12,559			251,963			8,145			184,677
Shares redeemed		(43,947	)		(1,018,068	)		(110,703	)		(2,246,796	)
Net increase		73,060		$	1,706,530			31,266		$	692,324
Class III
Shares sold		749,247		$	17,376,769			—		$	—
Shares issued in reinvestment of distributions		912,793			18,332,584			—			—
Shares issued in reorganization		16,771,265			380,601,833			—			—
Shares redeemed		(2,710,117	)		(62,813,928	)		—			—
Net increase		15,723,188		$	353,497,258			—		$	—
Total Net Increase (Decrease)		75,209,737		$	1,704,609,344			(302,079	)	$	(6,721,848	)

^(a)  Period February 14, 2018 (recommencement of operations) to December 31, 2018 for Class III.

As of December 31, 2018, BlackRock Financial Management, Inc, an affiliate of the Fund, owned 437 Class III shares of BlackRock S&P 500 Index V.I. Fund.

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 Fund has adopted the amendments pertinent to RegulationS-X in this shareholder report. The amendments impacted certain disclosure presentation on the Statement 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
Class I	$	(3,518,974	)	$	(8,765,237	)
Class II		(50,068	)		(134,609	)

Undistributed net investment income as of December 31, 2017 was $15,576.

13. SUBSEQUENT EVENTS

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

NOTESTO FINANCIAL STATEMENTS 27

Report of Independent Registered Public Accounting Firm

To the Shareholders of BlackRock S&P 500 Index V.I. Fund and the Board of Directors of BlackRock Variable Series Funds, Inc.:

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying statement of assets and liabilities of BlackRock S&P 500 Index V.I. Fund of BlackRock Variable Series Funds, Inc. (the “Fund”), including the schedule of investments, as of December 31, 2018, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of December 31, 2018, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s 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 Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its 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 Fund’s 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 15, 2019

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

28 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

DECEMBER 31, 2018

ANNUAL REPORT

BlackRock Variable Series Funds, Inc.

^Ø  BlackRock Small Cap Index V.I. Fund

Not FDIC Insured • May Lose Value • No Bank Guarantee

Fund Summary  as of December 31, 2018 BlackRock Small Cap Index V.I. Fund

Investment Objective

BlackRock Small Cap Index V.I. Fund’s (the “Fund”) investment objective is to seek to match the performance of Russell 2000^® Index (the “Russell 2000” or the “Underlying Index”) as closely as possible before the deduction of Fund expenses.

On November 14, 2017, the Board of Directors of the Company (the “Board”) and, on May 23, 2018, the Board of Trustees of State Farm Variable Product Trust each approved a reorganization of the State Farm Small Cap Equity Index Fund (the “Predecessor Fund”), with and into the Fund. At a special shareholder meeting on September 14, 2018, the shareholders of the Predecessor Fund approved the reorganization, which was completed on October 29, 2018.

Portfolio Management Commentary

How did the Fund perform?

For the12-month period ended December 31, 2018, the Fund’s Class I Shares returned (11.25)%. The Russell 2000^® Index returned (11.01)% for the same period. The Russell 2000^® Index is a subset of the Russell 3000^® Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership.

Describe the market environment.

In the beginning of the first quarter of 2018, the low volatility regime that helped global equity markets reach record highs in 2017 continued to support U.S. markets. Further fueled bytax-reform optimism, January saw markets rally, led higher by momentum and information technology names. However, as the first quarter progressed, a combination of economic over-heating concerns, the return of volatility, rising yields and the specter of trade wars weighed on markets.

Contrary to what the U.S. equity market’s lackluster performance would suggest, the U.S. economy remained healthy in the first quarter of 2018. This supported the Fed’s decision to increase interest rates in March and to revise higher their rate hike expectations for 2019.

Despite the fluid headlines and ongoing threats regarding the topic of U.S. protectionism in the second quarter of 2018, investors found confidence in strong U.S. economic data and earnings growth. On the macroeconomic front, the U.S. unemployment rate struck 3.8%, the lowest level since 1975. Economic reports throughout the second quarter of 2018 also indicated strong economic conditions. Additionally, the core personal consumption expenditure hit the Fed’s target rate of 2%, supporting their decision to raise rates in June. From a sector standpoint, energy outperformed as a prolonged period of higher crude oil prices increased the attractiveness of energy company shares.

In the third quarter of 2018, U.S. large cap equities reachedall-time highs as impressive economic growth and earnings results fueledrisk-on appetite and outweighed the specter of trade wars. Despite the announcement of tariffs on $505 billion of Chinese goods and China’s retaliatory measures, U.S. equity volatility was limited. Macroeconomic releases continued to showcase strength in both labor and economic conditions. The strength of the economy allowed the Fed to raise the target range of the benchmark federal funds rate from 2% to 2.25%.

More broadly, concerns over Fed policy, Sino-American trade tensions, and a potential slowdown in growth contributed to investor anxiety throughout the fourth quarter of 2018. The quarter began with Fed Chairman Powell’s comment that the U.S. Federal Funds rate was “a long way from neutral.” The hawkish comment drove a temporarysell-off in Treasuries. However, this was short lived as declines in energy prices and softness in portions of the U.S. economy contributed to a reduction in inflation expectations. This was accompanied by a broad basedrisk-off in December — which was the worst December performance on record since 1931 — and the10-year U.S. Treasury yield ended the quarter lower than its intra-quarter highs.

Describe recent portfolio activity.

During the12-month period, as changes were made to the composition of the Russell 2000^® Index, the Fund purchased and sold securities to maintain its objective of matching the performance of the Underlying Index.

Describe portfolio positioning at period end.

The Fund remains positioned to match the risk characteristics of the Underlying Index, irrespective of the market’s future direction.

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.

2 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Fund Summary  as of December 31, 2018 (continued) BlackRock Small Cap Index V.I. Fund

TOTAL RETURN BASED ON A $10,000 INVESTMENT

^(a)  Assuming transaction costs, if any, and other operating expenses, including investment advisory fees. Does not include insurance-related fees and expenses.

^(b)  Under normal circumstances, the Fund will invest at least 90% of its assets in securities or other financial instruments that are components of or have economic characteristics similar to the securities included in the Russell 2000.

^(c)  An unmanaged index that is a subset of the Russell 3000^® Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership.

Performance Summary for the Period Ended December 31, 2018

	6-Month Total Returns (b)			Average Annual Total Returns
				1 Year (b)			5 Years (b)			10 Years (b)
Class I(a)		(17.48	)%		(11.25	)%		4.08	%		11.53	%
Russell 2000 Index		(17.35	)		(11.01	)		4.41			11.97

^(a) Average annual and cumulative total returns are based on changes in net asset value (“NAV”) for the periods shown, and assume reinvestment of all distributions at NAV on the ex-dividend date. Insurance-related fees and expenses are not reflected in these returns.

^(b)  For a portion of the period, the Fund’s investment adviser waived a portion of its fee. Without such waiver, the Fund’s performance would have been lower.

On October 29, 2018, the Fund acquired all of the assets and assumed certain stated liabilities of the Small Cap Equity Index Fund (the “Predecessor Fund”), a series of State Farm Variable Product Trust, through a tax-free reorganization (the “Reorganization”). The Predecessor Fund is the performance and accounting survivor of the Reorganization; accordingly, the Fund assumed the performance and financial history of the Predecessor Fund upon completion of the Reorganization.

Past performance is not indicative of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

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

Expense Example

	Actual						Hypothetical(a)
	Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Annualized Expense Ratio
Class I	$	1,000.00	$	825.20	$	1.06	$	1,000.00	$	1,024.05	$	1.17		0.23	%

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

^(b)  Expenses are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect theone-half year period shown)

See “Disclosure of Expenses” on the following page for further information on how expenses were calculated.

FUND SUMMARY 3

Fund Summary  as of December 31, 2018 (continued) BlackRock Small Cap Index V.I. Fund

Portfolio Information

SECTOR ALLOCATION

Sector	Percent of Net Assets
Financials		18	%
Health Care		15
Industrials		14
Information Technology		14
Consumer Discretionary		12
Real Estate		7
Materials		4
Utilities		4
Energy		4
Communication Services		3
Consumer Staples		3
Short-Term Securities		2
Other Assets		—	(a)

^(a)  Representing less than 0.5% of the Fund’s net assets.

For Fund compliance purposes, the Fund’s sector classifications refer to one or more of the sectorsub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine sector sub classifications for reporting ease.

Disclosure of Expenses

Shareholders of the Fund may incur the following charges: (a) transactional expenses; and (b) operating expenses, including investment advisory fees, service and distribution fees, including12b-1 fees, acquired fund fees and expenses, and other fund expenses. The expense example shown on the previous page (which is based on a hypothetical investment of $1,000 invested on July 1, 2018 and held through December 31, 2018) is intended to assist shareholders both in calculating expenses based on an investment in the Fund and in comparing these expenses with similar costs of investing in other mutual funds.

The expense example provides 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 share class under the heading entitled “Expenses Paid During the Period.”

The expense example also provides information about hypothetical account values and hypothetical expenses based on the 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 the Fund and other funds, compare the 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.

The expenses shown in the expense example are intended to highlight shareholders’ ongoing costs only and do not reflect any transactional expenses, such as sales charges, if any. Therefore, the hypothetical example is 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 Fund 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 Fund’s 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 the Fund can realize on an investment and/or may result in lower distributions paid to shareholders. The Fund’s investments in these instruments, if any, are discussed in detail in the Notes to Financial Statements.

4 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments December 31, 2018 BlackRock Small Cap Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Common Stocks — 97.4%
Aerospace & Defense — 1.2%
AAR Corp.		4,315	$	161,122
Aerojet Rocketdyne Holdings, Inc.(a)		9,489		334,297
Aerovironment, Inc.(a)		2,816		191,347
Astronics Corp.(a)		2,809		85,534
Axon Enterprise, Inc.(a)		7,633		333,944
Cubic Corp.		3,363		180,728
Ducommun, Inc.(a)		1,390		50,485
Engility Holdings, Inc.(a)		2,410		68,589
Esterline Technologies Corp.(a)		3,475		422,039
KeyW Holding Corp. (The)(a)		6,461		43,224
Kratos Defense & Security Solutions, Inc.(a)		11,698		164,825
Maxar Technologies Ltd.		7,523		89,975
Mercury Systems, Inc.(a)		6,240		295,090
Moog, Inc., Class A		4,262		330,220
National Presto Industries, Inc.		659		77,050
Sparton Corp.(a)		1,194		21,719
Triumph Group, Inc.		6,473		74,439
Vectrus, Inc.(a)		1,481		31,960
Wesco Aircraft Holdings, Inc.(a)		7,195		56,840
				3,013,427
Air Freight & Logistics — 0.3%
Air Transport Services Group, Inc.(a)		7,752		176,823
Atlas Air Worldwide Holdings, Inc.(a)		3,145		132,688
Echo Global Logistics, Inc.(a)		3,715		75,526
Forward Air Corp.		3,897		213,750
Hub Group, Inc., Class A(a)		4,340		160,884
Radiant Logistics, Inc.(a)		4,623		19,648
				779,319
Airlines — 0.5%
Allegiant Travel Co.		1,713		171,677
Hawaiian Holdings, Inc.		6,210		164,006
Mesa Air Group, Inc.(a)		1,597		12,313
SkyWest, Inc.		6,766		300,884
Spirit Airlines, Inc.(a)		9,114		527,883
				1,176,763
Auto Components — 1.0%
American Axle & Manufacturing Holdings, Inc.(a)		14,800		164,280
Cooper Tire & Rubber Co.		6,737		217,807
Cooper-Standard Holdings, Inc.(a)		2,353		146,168
Dana, Inc.		19,425		264,763
Dorman Products, Inc.(a)		3,567		321,101
Fox Factory Holding Corp.(a)		4,791		282,046
Gentherm, Inc.(a)		4,499		179,870
LCI Industries		3,245		216,766
Modine Manufacturing Co.(a)		6,578		71,108
Motorcar Parts of America, Inc.(a)		2,527		42,049
Shiloh Industries, Inc.(a)		2,418		14,097
Standard Motor Products, Inc.		2,820		136,573
Stoneridge, Inc.(a)		3,648		89,923
Superior Industries International, Inc.		3,141		15,108
Tenneco, Inc., Class A		6,755		185,020
Tower International, Inc.		2,633		62,666
				2,409,345
Automobiles — 0.0%
Winnebago Industries, Inc.		4,108		99,455
Banks — 9.4%
1st Constitution Bancorp		1,123		22,381
1st Source Corp.		2,084		84,069
Access National Corp.		2,020		43,087
ACNB Corp.		927		36,385

Security	Shares		Value
Banks (continued)
Allegiance Bancshares, Inc.(a)		1,563	$	50,594
Amalgamated Bank, Class A		1,454		28,353
American National Bankshares, Inc.		1,030		30,189
Ameris Bancorp		5,629		178,270
Ames National Corp.		1,036		26,335
Arrow Financial Corp.		1,621		51,904
Atlantic Capital Bancshares, Inc.(a)		3,388		55,462
Auburn National Bancorporation, Inc.		372		11,778
Banc of California, Inc.		5,714		76,053
BancFirst Corp.		2,394		119,461
Bancorp, Inc. (The)(a)		6,694		53,284
BancorpSouth Bank		12,508		326,959
Bank of Commerce Holdings		2,460		26,962
Bank of Marin Bancorp		1,806		74,479
Bank of NT Butterfield & Son Ltd. (The)		7,251		227,319
Bank of Princeton (The)		507		14,145
Bankwell Financial Group, Inc.		917		26,327
Banner Corp.		4,257		227,664
Bar Harbor Bankshares		2,025		45,421
Baycom Corp.(a)		1,265		29,209
BCB Bancorp, Inc.		1,943		20,343
Berkshire Hills Bancorp, Inc.		5,408		145,854
Blue Hills Bancorp, Inc.		3,054		65,172
Boston Private Financial Holdings, Inc.		11,065		116,957
Bridge Bancorp, Inc.		2,203		56,154
Brookline Bancorp, Inc.		10,494		145,027
Bryn Mawr Bank Corp.		2,648		91,091
Business First Bancshares, Inc.		1,521		36,854
Byline Bancorp, Inc.(a)		2,043		34,036
C&F Financial Corp.		505		26,871
Cadence BanCorp		9,606		161,189
Cambridge Bancorp		419		34,882
Camden National Corp.		2,044		73,523
Capital Bancorp, Inc.(a)		578		6,595
Capital City Bank Group, Inc.		1,346		31,241
Capstar Financial Holdings, Inc.		807		11,887
Carolina Financial Corp.		2,791		82,586
Cathay General Bancorp		10,273		344,454
CB Financial Services, Inc.		738		18,288
CBTX, Inc.		2,475		72,765
CenterState Bank Corp.		12,172		256,099
Central Pacific Financial Corp.		3,817		92,944
Central Valley Community Bancorp		1,361		25,682
Century Bancorp, Inc., Class A		369		24,992
Chemical Financial Corp.		9,475		346,880
Chemung Financial Corp.		478		19,746
Citizens & Northern Corp.		1,454		38,429
City Holding Co.		1,993		134,707
Civista Bancshares, Inc.		1,670		29,091
CNB Financial Corp.		1,929		44,271
Coastal Financial Corp.(a)		887		13,509
Codorus Valley Bancorp, Inc.		727		15,449
Columbia Banking System, Inc.		9,712		352,448
Community Bank System, Inc.		6,671		388,919
Community Bankers Trust Corp.(a)		2,249		16,238
Community Financial Corp. (The)		631		18,450
Community Trust Bancorp, Inc.		2,058		81,517
ConnectOne Bancorp, Inc.		4,011		74,083
County Bancorp, Inc.		714		12,402
Customers Bancorp, Inc.(a)		3,896		70,907
CVB Financial Corp.		14,863		300,679
Eagle Bancorp, Inc.(a)		4,237		206,384
Enterprise Bancorp, Inc.		1,279		41,133
Enterprise Financial Services Corp.		3,022		113,718

SCHEDULE OF INVESTMENTS 5

Schedule of Investments  (continued) December 31, 2018 BlackRock Small Cap Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Banks (continued)
Equity Bancshares, Inc., Class A(a)		1,775	$	62,569
Esquire Financial Holdings, Inc.(a)		828		17,968
Evans Bancorp, Inc.		525		17,068
Farmers & Merchants Bancorp, Inc.		1,151		44,302
Farmers National Banc Corp.		3,365		42,870
FB Financial Corp.		2,172		76,063
Fidelity D&D Bancorp, Inc.		358		22,976
Fidelity Southern Corp.		2,898		75,406
Financial Institutions, Inc.		2,039		52,402
First Bancorp		3,886		126,917
First BanCorp		28,388		244,137
First Bancorp, Inc.		1,269		33,375
First Bancshares, Inc. (The)		1,644		49,731
First Bank		2,179		26,409
First Busey Corp.		5,806		142,479
First Business Financial Services, Inc.		706		13,774
First Choice Bancorp		1,078		24,363
First Commonwealth Financial Corp.		13,259		160,169
First Community Bancshares, Inc.		2,145		67,525
First Community Corp.		1,128		21,917
First Financial Bancorp		12,683		300,841
First Financial Bankshares, Inc.		8,359		482,231
First Financial Corp.		1,582		63,517
First Financial Northwest, Inc.		1,367		21,147
First Foundation, Inc.(a)		5,059		65,059
First Guaranty Bancshares, Inc.		671		15,574
First Internet Bancorp		1,295		26,470
First Interstate BancSystem, Inc., Class A		4,369		159,731
First Merchants Corp.		6,559		224,777
FirstMid-Illinois Bancshares, Inc.		1,659		52,955
First Midwest Bancorp, Inc.		13,607		269,555
First Northwest Bancorp		1,103		16,357
First of Long Island Corp. (The)		3,259		65,017
First Savings Financial Group, Inc.		233		12,102
First United Corp.		1,064		16,939
Flushing Financial Corp.		3,641		78,391
Franklin Financial Network, Inc.(a)		1,674		44,143
Fulton Financial Corp.		22,888		354,306
German American Bancorp, Inc.		2,794		77,589
Glacier Bancorp, Inc.		11,278		446,834
Great Southern Bancorp, Inc.		1,466		67,480
Great Western Bancorp, Inc.		7,868		245,875
Green Bancorp, Inc.		3,330		57,076
Guaranty Bancorp		3,405		70,654
Guaranty Bancshares, Inc.		856		25,526
Hancock Whitney Corp.		11,305		391,718
Hanmi Financial Corp.		4,239		83,508
HarborOne Bancorp, Inc.(a)		2,088		33,178
Heartland Financial USA, Inc.		3,900		171,405
Heritage Commerce Corp.		5,306		60,170
Heritage Financial Corp.		4,855		144,291
Hilltop Holdings, Inc.		9,558		170,419
Home BancShares, Inc.		21,163		345,803
HomeTrust Bancshares, Inc.		2,326		60,895
Hope Bancorp, Inc.		16,538		196,141
Horizon Bancorp, Inc.		4,916		77,574
Howard Bancorp, Inc.(a)		1,497		21,407
IBERIABANK Corp.		7,139		458,895
Independent Bank Corp.		6,531		315,416
Independent Bank Group, Inc.		2,807		128,476
International Bancshares Corp.		7,344		252,634
Investar Holding Corp.		1,325		32,860
Investors Bancorp, Inc.		30,791		320,226
Lakeland Bancorp, Inc.		5,976		88,505

Security	Shares		Value
Banks (continued)
Lakeland Financial Corp.		3,240	$	130,118
LCNB Corp.		1,299		19,680
LegacyTexas Financial Group, Inc.		6,317		202,713
Level One Bancorp, Inc.		552		12,381
Live Oak Bancshares, Inc.		3,380		50,058
Macatawa Bank Corp.		3,277		31,525
MB Financial, Inc.		11,029		437,079
MBT Financial Corp.		1,859		17,289
Mercantile Bank Corp.		2,155		60,900
Metropolitan Bank Holding Corp.(a)		804		24,803
Mid Penn Bancorp, Inc.		581		13,375
Middlefield Banc Corp.		421		17,863
Midland States Bancorp, Inc.		2,801		62,574
MidSouth Bancorp, Inc.		2,223		23,564
MidWestOne Financial Group, Inc.		1,481		36,773
MutualFirst Financial, Inc.		727		19,316
MVB Financial Corp.		1,269		22,893
National Bank Holdings Corp., Class A		3,818		117,862
National Bankshares, Inc.		802		29,217
National Commerce Corp.(a)		2,367		85,212
NBT Bancorp, Inc.		5,660		195,779
Nicolet Bankshares, Inc.(a)		1,104		53,875
Northeast Bancorp		860		14,388
Northrim BanCorp, Inc.		807		26,526
Norwood Financial Corp.		659		21,747
Oak Valley Bancorp		869		15,903
OFG Bancorp		5,752		94,678
Ohio Valley Banc Corp.		644		22,791
Old Line Bancshares, Inc.		2,081		54,772
Old National Bancorp		20,071		309,093
Old Second Bancorp, Inc.		3,856		50,128
Opus Bank		2,618		51,287
Origin Bancorp, Inc.		2,319		79,032
Orrstown Financial Services, Inc.		1,094		19,922
Pacific City Financial Corp.		1,353		21,174
Pacific Mercantile Bancorp(a)		2,339		16,724
Pacific Premier Bancorp, Inc.(a)		6,053		154,473
Park National Corp.		1,824		154,949
Parke Bancorp, Inc.		1,005		18,809
Peapack Gladstone Financial Corp.		2,433		61,263
Penns Woods Bancorp, Inc.		573		23,058
Peoples Bancorp of North Carolina, Inc.		740		18,100
Peoples Bancorp, Inc.		2,347		70,645
Peoples Financial Services Corp.		912		40,183
People’s Utah Bancorp		2,042		61,566
Preferred Bank		1,851		80,241
Premier Financial Bancorp, Inc.		1,798		26,808
QCR Holdings, Inc.		1,736		55,708
RBB Bancorp		1,796		31,556
Reliant Bancorp, Inc.		1,213		27,948
Renasant Corp.		6,401		193,182
Republic Bancorp, Inc., Class A		1,275		49,368
Republic First Bancorp, Inc.(a)		5,329		31,814
S&T Bancorp, Inc.		4,572		173,004
Sandy Spring Bancorp, Inc.		4,601		144,195
SB One Bancorp		1,132		23,138
Seacoast Banking Corp. of Florida(a)		6,106		158,878
Select Bancorp, Inc.(a)		1,428		17,679
ServisFirst Bancshares, Inc.		6,178		196,893
Shore Bancshares, Inc.		1,949		28,338
Sierra Bancorp		1,873		45,008
Simmons First National Corp., Class A		12,022		290,091
SmartFinancial, Inc.(a)		1,370		25,030
South State Corp.		4,854		290,997

6 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Small Cap Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Banks (continued)
Southern First Bancshares, Inc.(a)		846	$	27,131
Southern National Bancorp of Virginia, Inc.		2,595		34,306
Southside Bancshares, Inc.		4,412		140,081
Spirit of Texas Bancshares, Inc.(a)		1,001		22,803
State Bank Financial Corp.		5,010		108,166
Stock Yards Bancorp, Inc.		2,861		93,841
Summit Financial Group, Inc.		1,321		25,509
Tompkins Financial Corp.		1,958		146,870
Towne Bank		8,752		209,610
TriCo Bancshares		3,389		114,514
TriState Capital Holdings, Inc.(a)		3,258		63,401
Triumph Bancorp, Inc.(a)		3,185		94,595
Trustmark Corp.		8,378		238,187
UMB Financial Corp.		6,021		367,100
Union Bankshares Corp.		8,698		245,545
Union Bankshares, Inc.		589		28,125
United Bankshares, Inc.		13,275		412,985
United Community Banks, Inc.		10,415		223,506
United Security Bancshares		2,059		19,725
Unity Bancorp, Inc.		1,215		25,223
Univest Corp. of Pennsylvania		3,830		82,613
Valley National Bancorp		42,865		380,641
Veritex Holdings, Inc.(a)		3,086		65,979
Washington Trust Bancorp, Inc.		1,999		95,012
WesBanco, Inc.		6,941		254,665
West Bancorporation, Inc.		2,109		40,261
Westamerica Bancorp		3,422		190,537
				22,803,490
Beverages — 0.3%
Boston Beer Co., Inc. (The), Class A(a)		1,072		258,180
Castle Brands, Inc.(a)		14,031		11,933
Celsius Holdings, Inc.(a)		3,655		12,683
Coca-Cola Bottling Co. Consolidated		624		110,685
Craft Brew Alliance, Inc.(a)		1,925		27,547
MGP Ingredients, Inc.		1,756		100,180
National Beverage Corp.		1,562		112,105
Primo Water Corp.(a)		4,353		60,986
				694,299
Biotechnology — 6.1%(a)
Abeona Therapeutics, Inc.		3,822		27,289
ACADIA Pharmaceuticals, Inc.		13,068		211,310
Acceleron Pharma, Inc.		5,138		223,760
Achaogen, Inc.		5,460		6,716
Achillion Pharmaceuticals, Inc.		18,054		28,706
Acorda Therapeutics, Inc.		5,787		90,161
Adamas Pharmaceuticals, Inc.		2,917		24,911
ADMA Biologics, Inc.		3,050		7,289
Aduro Biotech, Inc.		8,518		22,487
Adverum Biotechnologies, Inc.		7,091		22,337
Aeglea BioTherapeutics, Inc.		2,623		19,646
Agenus, Inc.		12,282		29,231
AgeX Therapeutics, Inc.		1,338		4,001
Aimmune Therapeutics, Inc.		5,750		137,540
Akebia Therapeutics, Inc.		11,391		62,992
Albireo Pharma, Inc.		1,158		28,406
Alder Biopharmaceuticals, Inc.		7,736		79,294
Aldeyra Therapeutics, Inc.		2,564		21,281
Allakos, Inc.		1,089		56,922
Allena Pharmaceuticals, Inc.		1,874		10,213
Allogene Therapeutics, Inc.		2,624		70,664
AMAG Pharmaceuticals, Inc.		4,557		69,221
Amicus Therapeutics, Inc.		25,134		240,784
AnaptysBio, Inc.		2,735		174,466

Security	Shares		Value
Biotechnology (continued)
Apellis Pharmaceuticals, Inc.		4,795	$	63,246
Aptinyx, Inc.		1,740		28,780
Arbutus Biopharma Corp.		4,663		17,859
Arcus Biosciences, Inc.		3,867		41,648
Ardelyx, Inc.		5,362		9,598
Arena Pharmaceuticals, Inc.		6,591		256,719
ArQule, Inc.		14,398		39,882
Array BioPharma, Inc.		27,072		385,776
Arrowhead Pharmaceuticals, Inc.		11,557		143,538
Arsanis, Inc.		688		1,596
Atara Biotherapeutics, Inc.		5,569		193,467
Athenex, Inc.		5,837		74,072
Athersys, Inc.		16,463		23,707
Audentes Therapeutics, Inc.		4,757		101,419
AVEO Pharmaceuticals, Inc.		13,375		21,400
Avid Bioservices, Inc.		6,678		27,380
Avrobio, Inc.		763		12,704
Bellicum Pharmaceuticals, Inc.		4,801		14,019
BioCryst Pharmaceuticals, Inc.		14,488		116,918
Biohaven Pharmaceutical Holding Co. Ltd.		3,773		139,526
BioSpecifics Technologies Corp.		764		46,298
BioTime, Inc.		13,380		12,216
Blueprint Medicines Corp.		5,490		295,966
Calithera Biosciences, Inc.		3,313		13,285
Calyxt, Inc.		767		7,946
Cara Therapeutics, Inc.		4,325		56,225
CareDx, Inc.		4,720		118,661
CASI Pharmaceuticals, Inc.		6,101		24,526
Catalyst Biosciences, Inc.		1,915		15,109
Catalyst Pharmaceuticals, Inc.		12,807		24,589
Celcuity, Inc.		620		14,874
Cellular Biomedicine Group, Inc.		1,644		29,033
ChemoCentryx, Inc.		2,624		28,628
Chimerix, Inc.		4,712		12,110
Clovis Oncology, Inc.		6,322		113,543
Cohbar, Inc.		3,582		11,140
Coherus Biosciences, Inc.		6,892		62,373
Concert Pharmaceuticals, Inc.		2,754		34,563
Corbus Pharmaceuticals Holdings, Inc.		6,623		38,678
Corvus Pharmaceuticals, Inc.		2,229		8,180
Crinetics Pharmaceuticals, Inc.		868		26,031
CTI BioPharma Corp.		8,191		6,009
Cue Biopharma, Inc.		2,851		13,400
Cytokinetics, Inc.		6,105		38,584
CytomX Therapeutics, Inc.		5,910		89,241
Deciphera Pharmaceuticals, Inc.		1,256		26,363
Denali Therapeutics, Inc.		6,050		124,993
Dicerna Pharmaceuticals, Inc.		6,914		73,911
Dynavax Technologies Corp.		8,278		75,744
Eagle Pharmaceuticals, Inc.		1,403		56,527
Editas Medicine, Inc.		6,060		137,865
Eidos Therapeutics, Inc.		1,097		15,095
Emergent BioSolutions, Inc.		5,907		350,167
Enanta Pharmaceuticals, Inc.		2,224		157,526
Epizyme, Inc.		6,947		42,793
Equillium, Inc.		675		5,508
Esperion Therapeutics, Inc.		3,038		139,748
Evelo Biosciences, Inc.		1,646		21,414
Fate Therapeutics, Inc.		7,900		101,357
Fennec Pharmaceuticals, Inc.		1,819		11,605
FibroGen, Inc.		9,926		459,375
Five Prime Therapeutics, Inc.		4,430		41,199
Flexion Therapeutics, Inc.		4,460		50,487
Fortress Biotech, Inc.		5,274		4,536

SCHEDULE OF INVESTMENTS 7

Schedule of Investments  (continued) December 31, 2018 BlackRock Small Cap Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Biotechnology (continued)
Forty Seven, Inc.		911	$	14,321
G1 Therapeutics, Inc.		3,024		57,910
Genomic Health, Inc.		2,783		179,253
Geron Corp.		22,429		22,429
Global Blood Therapeutics, Inc.		6,634		272,326
GlycoMimetics, Inc.		4,523		42,833
Gritstone Oncology, Inc.		840		12,978
GTx, Inc.		742		579
Halozyme Therapeutics, Inc.		16,568		242,390
Heron Therapeutics, Inc.		9,152		237,403
Homology Medicines, Inc.		2,211		49,438
Idera Pharmaceuticals, Inc.		2,969		8,224
Immune Design Corp.		5,369		6,980
ImmunoGen, Inc.		19,060		91,488
Immunomedics, Inc.		19,275		275,054
Inovio Pharmaceuticals, Inc.		10,948		43,792
Insmed, Inc.		10,168		133,404
Insys Therapeutics, Inc.		3,942		13,797
Intellia Therapeutics, Inc.		4,411		60,210
Intercept Pharmaceuticals, Inc.		2,908		293,097
Intrexon Corp.		9,776		63,935
Invitae Corp.		8,711		96,344
Iovance Biotherapeutics, Inc.		13,740		121,599
Ironwood Pharmaceuticals, Inc.		18,394		190,562
Jounce Therapeutics, Inc.		2,248		7,576
Kadmon Holdings, Inc.		12,712		26,441
Karyopharm Therapeutics, Inc.		6,437		60,315
Kezar Life Sciences, Inc.		790		18,644
Kindred Biosciences, Inc.		4,119		45,103
Kiniksa Pharmaceuticals Ltd., Class A		979		27,500
Kodiak Sciences, Inc.		1,090		7,739
Kura Oncology, Inc.		4,007		56,258
La Jolla Pharmaceutical Co.		2,847		26,847
Lexicon Pharmaceuticals, Inc.		5,737		38,094
Ligand Pharmaceuticals, Inc.		2,778		376,975
LogicBio Therapeutics, Inc.		830		8,632
Loxo Oncology, Inc.		3,571		500,190
MacroGenics, Inc.		5,205		66,103
Madrigal Pharmaceuticals, Inc.		921		103,815
MannKind Corp.		17,212		18,245
MediciNova, Inc.		5,240		42,811
Mersana Therapeutics, Inc.		2,099		8,564
Minerva Neurosciences, Inc.		4,064		27,391
Miragen Therapeutics, Inc.		4,150		12,574
Mirati Therapeutics, Inc.		2,678		113,601
Molecular Templates, Inc.		1,461		5,902
Momenta Pharmaceuticals, Inc.		10,188		112,475
Mustang Bio, Inc.		2,441		7,177
Myriad Genetics, Inc.		9,141		265,729
NantKwest, Inc.		4,937		5,727
Natera, Inc.		4,371		61,019
NewLink Genetics Corp.		4,970		7,554
Novavax, Inc.		50,615		93,132
Nymox Pharmaceutical Corp.		4,564		5,979
OPKO Health, Inc.		42,711		128,560
Organovo Holdings, Inc.		12,101		11,582
Ovid therapeutics, Inc.		1,840		4,453
Palatin Technologies, Inc.		28,574		20,242
PDL BioPharma, Inc.		17,793		51,600
Pfenex, Inc.		3,440		10,974
Pieris Pharmaceuticals, Inc.		6,594		17,540
PolarityTE, Inc.		1,393		18,792
Portola Pharmaceuticals, Inc.		8,645		168,750
Principia Biopharma, Inc.		689		18,872

Security	Shares		Value
Biotechnology (continued)
Progenics Pharmaceuticals, Inc.		10,680	$	44,856
Proteostasis Therapeutics, Inc.		4,096		13,271
Prothena Corp. plc		5,335		54,950
PTC Therapeutics, Inc.		6,012		206,332
Puma Biotechnology, Inc.		3,866		78,673
Ra Pharmaceuticals, Inc.		1,710		31,122
Radius Health, Inc.		5,373		88,601
Recro Pharma, Inc.		2,169		15,400
REGENXBIO, Inc.		4,205		176,400
Repligen Corp.		5,190		273,721
Replimune Group, Inc.		1,163		11,630
Retrophin, Inc.		5,372		121,568
Rhythm Pharmaceuticals, Inc.		2,021		54,324
Rigel Pharmaceuticals, Inc.		22,292		51,272
Rocket Pharmaceuticals, Inc.		2,771		41,066
Rubius Therapeutics, Inc.		1,472		23,670
Sangamo Therapeutics, Inc.		13,466		154,590
Savara, Inc.		4,017		30,409
Scholar Rock Holding Corp.		946		21,730
Selecta Biosciences, Inc.		2,360		6,278
Seres Therapeutics, Inc.		2,927		13,230
Solid Biosciences, Inc.		1,618		43,362
Sorrento Therapeutics, Inc.		14,516		34,838
Spark Therapeutics, Inc.		4,176		163,449
Spectrum Pharmaceuticals, Inc.		13,388		117,145
Spero Therapeutics, Inc.		999		6,144
Spring Bank Pharmaceuticals, Inc.		1,607		16,697
Stemline Therapeutics, Inc.		3,754		35,663
Surface Oncology, Inc.		1,176		4,986
Sutro Biopharma, Inc.		719		6,485
Syndax Pharmaceuticals, Inc.		2,072		9,220
Synergy Pharmaceuticals, Inc.		33,003		3,759
Synlogic, Inc.		1,715		12,022
Syros Pharmaceuticals, Inc.		3,105		17,295
T2 Biosystems, Inc.		4,091		12,314
TG Therapeutics, Inc.		7,636		31,308
Tocagen, Inc.		2,703		22,192
Translate Bio, Inc.		1,447		10,852
Twist Bioscience Corp.		580		13,392
Tyme Technologies, Inc.		13,196		48,693
Ultragenyx Pharmaceutical, Inc.		6,243		271,446
UNITY Biotechnology, Inc.		3,184		51,772
Unum Therapeutics, Inc.		2,001		8,804
Vanda Pharmaceuticals, Inc.		6,818		178,154
Veracyte, Inc.		3,799		47,791
Verastem, Inc.		9,123		30,653
Vericel Corp.		5,705		99,267
Viking Therapeutics, Inc.		7,718		59,043
Vital Therapies, Inc.		4,896		912
Voyager Therapeutics, Inc.		2,848		26,771
Xencor, Inc.		6,136		221,878
XOMA Corp.		1,034		13,080
Y-mAbs Therapeutics, Inc.		775		15,763
Zafgen, Inc.		3,975		19,676
ZIOPHARM Oncology, Inc.		17,470	��	32,669
				14,760,713
Building Products — 1.2%
AAON, Inc.		5,480		192,129
Advanced Drainage Systems, Inc.		4,807		116,570
American Woodmark Corp.(a)		1,876		104,456
Apogee Enterprises, Inc.		3,676		109,729
Armstrong Flooring, Inc.(a)		2,814		33,318
Builders FirstSource, Inc.(a)		15,008		163,737
Caesarstone Ltd.		3,044		41,337

8 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Small Cap Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Building Products (continued)
Continental Building Products, Inc.(a)		4,936	$	125,621
CSW Industrials, Inc.(a)		2,063		99,746
Gibraltar Industries, Inc.(a)		4,240		150,902
Griffon Corp.		4,596		48,028
Insteel Industries, Inc.		2,420		58,758
JELD-WEN Holding, Inc.(a)		9,181		130,462
Masonite International Corp.(a)		3,212		143,994
NCI Building Systems, Inc.(a)		5,660		41,035
Patrick Industries, Inc.(a)		3,163		93,656
PGT Innovations, Inc.(a)		7,035		111,505
Quanex Building Products Corp.		4,636		63,003
Simpson Manufacturing Co., Inc.		5,504		297,932
Trex Co., Inc.(a)		7,851		466,035
Universal Forest Products, Inc.		7,963		206,719
				2,798,672
Capital Markets — 1.3%
Arlington Asset Investment Corp., Class A		3,742		27,092
Artisan Partners Asset Management, Inc., Class A		6,381		141,084
Ashford, Inc.		131		6,799
Associated Capital Group, Inc., Class A		197		6,940
B. Riley Financial, Inc.		2,716		38,567
Blucora, Inc.(a)		6,320		168,365
BrightSphere Investment Group plc		10,686		114,127
Cohen & Steers, Inc.		2,963		101,690
Cowen, Inc.(a)		3,561		47,504
Diamond Hill Investment Group, Inc.		433		64,712
Donnelley Financial Solutions, Inc.(a)		4,471		62,728
Federated Investors, Inc., Class B		12,863		341,513
Focus Financial Partners, Inc., Class A(a)		2,499		65,799
GAIN Capital Holdings, Inc.		3,963		24,412
Greenhill & Co., Inc.		2,253		54,973
Hamilton Lane, Inc., Class A		1,981		73,297
Houlihan Lokey, Inc.		4,435		163,208
INTL. FCStone, Inc.(a)		2,037		74,513
Investment Technology Group, Inc.		4,328		130,879
Ladenburg Thalmann Financial Services, Inc.		13,284		30,952
Moelis & Co., Class A		5,922		203,598
Oppenheimer Holdings, Inc., Class A		1,284		32,806
Piper Jaffray Cos.		1,702		112,060
PJT Partners, Inc., Class A		2,648		102,636
Pzena Investment Management, Inc., Class A		2,576		22,282
Safeguard Scientifics, Inc.(a)		2,163		18,645
Siebert Financial Corp.(a)		1,073		15,516
Silvercrest Asset Management Group, Inc., Class A		794		10,505
Stifel Financial Corp.		9,217		381,768
Value Line, Inc.		315		8,193
Virtus Investment Partners, Inc.		921		73,155
Waddell & Reed Financial, Inc., Class A		10,329		186,748
Westwood Holdings Group, Inc.		1,082		36,788
WisdomTree Investments, Inc.		15,530		103,275
				3,047,129
Chemicals — 1.8%
Advanced Emissions Solutions, Inc.		685		7,227
AdvanSix, Inc.(a)		4,079		99,283
AgroFresh Solutions, Inc.(a)		3,507		13,292
American Vanguard Corp.		3,869		58,770
Amyris, Inc.(a)		3,882		12,966
Balchem Corp.		4,259		333,693
Chase Corp.		962		96,248
Ferro Corp.(a)		10,196		159,873
Flotek Industries, Inc.(a)		9,338		10,178
FutureFuel Corp.		3,429		54,384
GCP Applied Technologies, Inc.(a)		9,550		234,452

Security	Shares		Value
Chemicals (continued)
Hawkins, Inc.		1,286	$	52,662
HB Fuller Co.		6,726		286,998
Ingevity Corp.(a)		5,631		471,258
Innophos Holdings, Inc.		2,585		63,410
Innospec, Inc.		3,218		198,744
Intrepid Potash, Inc.(a)		12,511		32,529
Koppers Holdings, Inc.(a)		2,735		46,604
Kraton Corp.(a)		4,116		89,893
Kronos Worldwide, Inc.		2,830		32,602
LSB Industries, Inc.(a)		2,515		13,883
Marrone Bio Innovations, Inc.(a)		8,606		12,651
Minerals Technologies, Inc.		4,700		241,298
OMNOVA Solutions, Inc.(a)		5,813		42,609
PolyOne Corp.		10,606		303,332
PQ Group Holdings, Inc.(a)		4,859		71,962
Quaker Chemical Corp.		1,734		308,149
Rayonier Advanced Materials, Inc.		6,728		71,653
Sensient Technologies Corp.		5,651		315,608
Stepan Co.		2,692		199,208
Trecora Resources(a)		2,581		20,132
Tredegar Corp.		3,437		54,511
Trinseo SA		5,690		260,488
Tronox Ltd., Class A		12,434		96,736
Valhi, Inc.		4,603		8,884
				4,376,170
Commercial Services & Supplies — 2.5%
ABM Industries, Inc.		8,788		282,183
ACCO Brands Corp.		13,745	��	93,191
Advanced Disposal Services, Inc.(a)		9,624		230,399
Brady Corp., Class A		6,234		270,930
BrightView Holdings, Inc.(a)		3,277		33,458
Brink’s Co. (The)		6,677		431,668
Casella Waste Systems, Inc., Class A(a)		5,293		150,798
CECO Environmental Corp.(a)		3,524		23,787
Cimpress NV(a)		2,925		302,503
Covanta Holding Corp.		15,614		209,540
Deluxe Corp.		5,793		222,683
Ennis, Inc.		3,378		65,026
Essendant, Inc.		4,882		61,416
Healthcare Services Group, Inc.		9,839		395,331
Heritage-Crystal Clean, Inc.(a)		1,914		44,041
Herman Miller, Inc.		7,899		238,945
HNI Corp.		5,765		204,254
Interface, Inc.		7,844		111,777
Kimball International, Inc., Class B		4,802		68,140
Knoll, Inc.		6,430		105,966
LSC Communications, Inc.		4,353		30,471
Matthews International Corp., Class A		4,144		168,329
McGrath RentCorp		3,201		164,787
Mobile Mini, Inc.		5,901		187,357
MSA Safety, Inc.		4,528		426,855
Multi-Color Corp.		1,842		64,636
NL Industries, Inc.(a)		1,105		3,878
PICO Holdings, Inc.(a)		2,314		21,150
Pitney Bowes, Inc.		24,989		147,685
Quad/Graphics, Inc.		4,149		51,116
RR Donnelley & Sons Co.		9,380		37,145
SP Plus Corp.(a)		3,006		88,797
Steelcase, Inc., Class A		11,268		167,104
Team, Inc.(a)		3,929		57,560
Tetra Tech, Inc.		7,361		381,079
UniFirst Corp.		2,026		289,860
US Ecology, Inc.		2,910		183,272
Viad Corp.		2,703		135,393

SCHEDULE OF INVESTMENTS 9

Schedule of Investments  (continued) December 31, 2018 BlackRock Small Cap Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Commercial Services & Supplies (continued)
VSE Corp.		1,151	$	34,426
				6,186,936
Communications Equipment — 1.6%
Acacia Communications, Inc.(a)		3,634		138,092
ADTRAN, Inc.		6,361		68,317
Aerohive Networks, Inc.(a)		5,096		16,613
Applied Optoelectronics, Inc.(a)		2,492		38,452
CalAmp Corp.(a)		4,560		59,326
Calix, Inc.(a)		5,782		56,375
Casa Systems, Inc.(a)		3,595		47,202
Ciena Corp.(a)		18,645		632,252
Clearfield, Inc.(a)		1,205		11,954
Comtech Telecommunications Corp.		3,053		74,310
DASAN Zhone Solutions, Inc.(a)		917		12,756
Digi International, Inc.(a)		3,277		33,065
Extreme Networks, Inc.(a)		15,241		92,970
Finisar Corp.(a)		15,584		336,614
Harmonic, Inc.(a)		10,793		50,943
Infinera Corp.(a)		20,030		79,920
InterDigital, Inc.		4,596		305,312
KVH Industries, Inc.(a)		1,815		18,676
Lumentum Holdings, Inc.(a)		9,747		409,471
NETGEAR, Inc.(a)		4,149		215,872
NetScout Systems, Inc.(a)		9,737		230,085
Plantronics, Inc.		4,404		145,772
Quantenna Communications, Inc.(a)		4,485		64,360
Ribbon Communications, Inc.(a)		6,644		32,024
ViaSat, Inc.(a)		7,353		433,459
Viavi Solutions, Inc.(a)		30,194		303,450
				3,907,642
Construction & Engineering — 1.0%
Aegion Corp.(a)		4,260		69,523
Ameresco, Inc., Class A(a)		2,301		32,444
Argan, Inc.		1,944		73,561
Comfort Systems USA, Inc.		4,866		212,547
Dycom Industries, Inc.(a)		4,011		216,754
EMCOR Group, Inc.		7,352		438,841
Granite Construction, Inc.		5,838		235,155
Great Lakes Dredge & Dock Corp.(a)		7,081		46,876
HC2 Holdings, Inc.(a)		5,263		13,894
IES Holdings, Inc.(a)		1,246		19,375
Infrastructure and Energy Alternatives, Inc.(a)		2,738		22,424
KBR, Inc.		18,732		284,352
MasTec, Inc.(a)		8,043		326,224
MYR Group, Inc.(a)		2,137		60,199
Northwest Pipe Co.(a)		973		22,661
NV5 Global, Inc.(a)		1,245		75,385
Orion Group Holdings, Inc.(a)		3,358		14,406
Primoris Services Corp.		5,552		106,210
Sterling Construction Co., Inc.(a)		3,409		37,124
Tutor Perini Corp.(a)		4,970		79,371
Willscot Corp.(a)		4,737		44,623
				2,431,949
Construction Materials — 0.1%
Forterra, Inc.(a)		2,002		7,527
Summit Materials, Inc., Class A(a)		14,892		184,661
United States Lime & Minerals, Inc.		211		14,981
US Concrete, Inc.(a)		2,136		75,358
				282,527
Consumer Finance — 0.7%
Curo Group Holdings Corp.(a)		1,533		14,548
Elevate Credit, Inc.(a)		3,330		14,918

Security	Shares		Value
Consumer Finance (continued)
Encore Capital Group, Inc.(a)		3,454	$	81,169
Enova International, Inc.(a)		4,420		86,013
EZCORP, Inc., Class A(a)		6,650		51,405
FirstCash, Inc.		5,772		417,604
Green Dot Corp., Class A(a)		6,249		496,920
LendingClub Corp.(a)		41,984		110,418
Nelnet, Inc., Class A		2,471		129,332
PRA Group, Inc.(a)		5,926		144,417
Regional Management Corp.(a)		1,370		32,949
World Acceptance Corp.(a)		816		83,444
				1,663,137
Containers & Packaging — 0.1%
Greif, Inc., Class A		3,397		126,063
Greif, Inc., Class B		740		32,856
Myers Industries, Inc.		4,675		70,639
UFP Technologies, Inc.(a)		582		17,483
				247,041
Distributors — 0.1%
Core-Mark Holding Co., Inc.		6,062		140,942
Funko, Inc., Class A(a)		1,362		17,910
Weyco Group, Inc.		783		22,840
				181,692
Diversified Consumer Services — 0.9%
Adtalem Global Education, Inc.(a)		7,616		360,389
American Public Education, Inc.(a)		2,128		60,563
Career Education Corp.(a)		9,025		103,065
Carriage Services, Inc.		2,465		38,207
Chegg, Inc.(a)		14,400		409,248
Houghton Mifflin Harcourt Co.(a)		13,742		121,754
K12, Inc.(a)		4,888		121,174
Laureate Education, Inc., Class A(a)		11,978		182,545
Regis Corp.(a)		4,701		79,682
Sotheby’s(a)		4,414		175,412
Strategic Education, Inc.		2,775		314,741
Weight Watchers International, Inc.(a)		5,118		197,299
				2,164,079
Diversified Financial Services — 0.2%
Banco Latinoamericano de Comercio Exterior SA, Class E		4,064		70,307
Cannae Holdings, Inc.(a)		9,156		156,751
FGL Holdings(a)		18,831		125,414
Marlin Business Services Corp.		926		20,678
On Deck Capital, Inc.(a)		6,433		37,955
				411,105
Diversified Telecommunication Services — 0.5%
ATN International, Inc.		1,387		99,212
Cincinnati Bell, Inc.(a)		6,091		47,388
Cogent Communications Holdings, Inc.		5,562		251,458
Consolidated Communications Holdings, Inc.		9,318		92,062
Frontier Communications Corp.		13,854		32,973
Intelsat SA(a)		7,398		158,243
Iridium Communications, Inc.(a)		12,748		235,201
Ooma, Inc.(a)		2,141		29,717
ORBCOMM, Inc.(a)		9,715		80,246
pdvWireless, Inc.(a)		1,167		43,634
Vonage Holdings Corp.(a)		29,366		256,365
Windstream Holdings, Inc.(a)		4,969		10,385
				1,336,884
Electric Utilities — 1.2%
ALLETE, Inc.		6,843		521,573
El Paso Electric Co.		5,378		269,599
IDACORP, Inc.		6,631		617,081

10 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Small Cap Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Electric Utilities (continued)
MGE Energy, Inc.		4,637	$	278,035
Otter Tail Corp.		5,233		259,766
PNM Resources, Inc.		10,573		434,445
Portland General Electric Co.		11,690		535,986
Spark Energy, Inc., Class A		1,626		12,081
				2,928,566
Electrical Equipment — 0.7%
Allied Motion Technologies, Inc.		928		41,472
Atkore International Group, Inc.(a)		5,182		102,811
AZZ, Inc.		3,438		138,758
Babcock & Wilcox Enterprises, Inc.(a)		5,219		2,037
Encore Wire Corp.		2,704		135,687
Energous Corp.(a)		2,722		15,760
EnerSys		5,594		434,150
Enphase Energy, Inc.(a)		11,487		54,334
FuelCell Energy, Inc.(a)		12,967		7,138
Generac Holdings, Inc.(a)		8,055		400,334
Plug Power, Inc.(a)		27,322		33,879
Powell Industries, Inc.		1,149		28,736
Preformed Line Products Co.		463		25,118
Sunrun, Inc.(a)		12,837		139,795
Thermon Group Holdings, Inc.(a)		4,303		87,265
TPI Composites, Inc.(a)		1,934		47,538
Vicor Corp.(a)		2,319		87,635
Vivint Solar, Inc.(a)		4,915		18,726
				1,801,173
Electronic Equipment, Instruments & Components — 2.4%
Anixter International, Inc.(a)		3,914		212,569
Arlo Technologies, Inc.(a)		1,873		18,693
AVX Corp.		6,197		94,504
Badger Meter, Inc.		3,793		186,654
Bel Fuse, Inc., Class B		1,475		27,170
Belden, Inc.		5,367		224,180
Benchmark Electronics, Inc.		5,514		116,787
Control4 Corp.(a)		3,455		60,808
CTS Corp.		4,344		112,466
Daktronics, Inc.		4,775		35,335
Electro Scientific Industries, Inc.(a)		4,290		128,528
ePlus, Inc.(a)		1,777		126,469
Fabrinet(a)		4,787		245,621
FARO Technologies, Inc.(a)		2,232		90,708
Fitbit, Inc., Class A(a)		27,994		139,130
II-VI, Inc.(a)		8,209		266,464
Insight Enterprises, Inc.(a)		4,666		190,140
Iteris, Inc.(a)		3,745		13,969
Itron, Inc.(a)		4,502		212,900
KEMET Corp.		7,492		131,410
Kimball Electronics, Inc.(a)		3,440		53,286
Knowles Corp.(a)		11,603		154,436
Maxwell Technologies, Inc.(a)		5,060		10,474
Mesa Laboratories, Inc.		447		93,150
Methode Electronics, Inc.		4,786		111,466
MTS Systems Corp.		2,373		95,229
Napco Security Technologies, Inc.(a)		1,375		21,656
nLight, Inc.(a)		2,856		50,780
Novanta, Inc.(a)		4,349		273,987
OSI Systems, Inc.(a)		2,231		163,532
PAR Technology Corp.(a)		1,351		29,384
Park Electrochemical Corp.		2,399		43,350
PC Connection, Inc.		1,532		45,546
Plexus Corp.(a)		3,899		199,161
Rogers Corp.(a)		2,438		241,508
Sanmina Corp.(a)		9,003		216,612

Security	Shares		Value
Electronic Equipment, Instruments & Components (continued)
ScanSource, Inc.(a)		3,345	$	115,001
SYNNEX Corp.		5,522		446,398
Tech Data Corp.(a)		5,078		415,431
TTM Technologies, Inc.(a)		12,459		121,226
Vishay Intertechnology, Inc.		17,600		316,976
Vishay Precision Group, Inc.(a)		1,373		41,506
				5,894,600
Energy Equipment & Services — 1.2%
Archrock, Inc.		16,889		126,499
Basic Energy Services, Inc.(a)		2,825		10,848
Bristow Group, Inc.(a)		4,368		10,614
C&J Energy Services, Inc.(a)		8,566		115,641
Cactus, Inc., Class A(a)		5,045		138,283
CARBO Ceramics, Inc.(a)		2,993		10,416
Covia Holdings Corp.(a)		4,017		13,738
Dawson Geophysical Co.(a)		3,303		11,164
Diamond Offshore Drilling, Inc.(a)		8,606		81,241
Dril-Quip, Inc.(a)		4,324		129,850
Era Group, Inc.(a)		2,446		21,378
Exterran Corp.(a)		4,303		76,163
Forum Energy Technologies, Inc.(a)		10,760		44,439
Frank’s International NV(a)		9,722		50,749
FTS International, Inc.(a)		4,077		28,987
Helix Energy Solutions Group, Inc.(a)		18,686		101,091
Independence Contract Drilling, Inc.(a)		4,876		15,213
ION Geophysical Corp.(a)		1,706		8,837
Keane Group, Inc.(a)		7,147		58,462
Key Energy Services, Inc.(a)		1,659		3,434
KLX Energy Services Holdings, Inc.(a)		2,671		62,635
Liberty Oilfield Services, Inc., Class A(a)		5,882		76,172
Mammoth Energy Services, Inc.		1,616		29,056
Matrix Service Co.(a)		3,515		63,059
McDermott International, Inc.(a)		23,828		155,835
Natural Gas Services Group, Inc.(a)		1,654		27,192
NCS Multistage Holdings, Inc.(a)		1,349		6,866
Newpark Resources, Inc.(a)		11,838		81,327
Nine Energy Service, Inc.(a)		1,942		43,773
Noble Corp. plc(a)		32,761		85,834
Oceaneering International, Inc.(a)		13,131		158,885
Oil States International, Inc.(a)		7,918		113,069
PHI, Inc.(Non-Voting)(a)		2,033		3,761
Pioneer Energy Services Corp.(a)		8,780		10,799
Profire Energy, Inc.(a)		3,741		5,424
ProPetro Holding Corp.(a)		9,414		115,981
Quintana Energy Services, Inc.(a)		958		3,315
RigNet, Inc.(a)		2,020		25,533
Rowan Cos. plc, Class A(a)		16,928		142,026
SEACOR Holdings, Inc.(a)		2,273		84,101
SEACOR Marine Holdings, Inc.(a)		2,193		25,790
Select Energy Services, Inc., Class A(a)		5,996		37,895
Smart Sand, Inc.(a)		3,545		7,870
Solaris Oilfield Infrastructure, Inc., Class A		3,457		41,795
Superior Energy Services, Inc.(a)		20,368		68,233
TETRA Technologies, Inc.(a)		16,166		27,159
Tidewater, Inc.(a)		3,825		73,172
Unit Corp.(a)		6,950		99,246
US Silica Holdings, Inc.		10,400		105,872
				2,838,722
Entertainment — 0.6%
AMC Entertainment Holdings, Inc., Class A		6,901		84,744
Eros International plc(a)		4,749		39,369
Glu Mobile, Inc.(a)		14,816		119,565
IMAX Corp.(a)		7,122		133,965

SCHEDULE OF INVESTMENTS 11

Schedule of Investments  (continued) December 31, 2018 BlackRock Small Cap Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Entertainment (continued)
Liberty Media Corp-Liberty Braves, Class A(a)		1,017	$	25,364
Liberty Media Corp-Liberty Braves, Class C(a)		4,734		117,829
LiveXLive Media, Inc.(a)		3,650		18,068
Marcus Corp. (The)		2,561		101,160
Pandora Media, Inc.(a)		34,016		275,189
Reading International, Inc., Class A(a)		2,052		29,836
Rosetta Stone, Inc.(a)		2,617		42,919
World Wrestling Entertainment, Inc., Class A		5,714		426,950
				1,414,958
Equity Real Estate Investment Trusts (REITs) — 6.5%
Acadia Realty Trust		10,699		254,208
Agree Realty Corp.		4,386		259,300
Alexander & Baldwin, Inc.(a)		9,070		166,707
Alexander’s, Inc.		283		86,241
American Assets Trust, Inc.		5,112		205,349
Americold Realty Trust		11,463		292,765
Armada Hoffler Properties, Inc.		6,459		90,814
Ashford Hospitality Trust, Inc.		11,284		45,136
Bluerock Residential Growth REIT, Inc.		2,866		25,851
Braemar Hotels & Resorts, Inc.		3,885		34,693
BRT Apartments Corp.		1,299		14,861
CareTrust REIT, Inc.		10,674		197,042
CatchMark Timber Trust, Inc., Class A		6,522		46,306
CBL & Associates Properties, Inc.		22,490		43,181
Cedar Realty Trust, Inc.		11,410		35,827
Chatham Lodging Trust		6,008		106,221
Chesapeake Lodging Trust		7,879		191,854
City Office REIT, Inc.		4,712		48,298
Clipper Realty, Inc.		1,689		22,075
Community Healthcare Trust, Inc.		2,314		66,713
CoreCivic, Inc.		15,775		281,268
CorEnergy Infrastructure Trust, Inc.		1,576		52,134
CorePoint Lodging, Inc.		5,495		67,314
Cousins Properties, Inc.		55,854		441,247
DiamondRock Hospitality Co.		27,535		250,018
Easterly Government Properties, Inc.		8,040		126,067
EastGroup Properties, Inc.		4,672		428,563
Farmland Partners, Inc.		3,891		17,665
First Industrial Realty Trust, Inc.		16,544		477,460
Four Corners Property Trust, Inc.		8,997		235,721
Franklin Street Properties Corp.		13,847		86,267
Front Yard Residential Corp.		6,550		57,182
GEO Group, Inc. (The)		15,962		314,451
Getty Realty Corp.		4,350		127,934
Gladstone Commercial Corp.		3,734		66,913
Gladstone Land Corp.		1,281		14,706
Global Medical REIT, Inc.		2,205		19,603
Global Net Lease, Inc.		9,535		168,007
Government Properties Income Trust		13,004		89,338
Hannon Armstrong Sustainable Infrastructure Capital, Inc.		6,858		130,645
Healthcare Realty Trust, Inc.		16,469		468,378
Hersha Hospitality Trust		4,729		82,947
Independence Realty Trust, Inc.		11,585		106,350
Industrial Logistics Properties Trust		8,582		168,807
InfraREIT, Inc.		5,872		123,429
Innovative Industrial Properties, Inc.		811		36,811
Investors Real Estate Trust		1,593		78,159
iStar, Inc.		8,643		79,256
Jernigan Capital, Inc.		2,400		47,568
Kite Realty Group Trust		10,990		154,849
Lexington Realty Trust		26,927		221,071
LTC Properties, Inc.		5,225		217,778
Mack-Cali Realty Corp.		12,017		235,413
MedEquities Realty Trust, Inc.		3,754		25,677

Security	Shares		Value
Equity Real Estate Investment Trusts (REITs) (continued)
Monmouth Real Estate Investment Corp.		10,904	$	135,210
National Health Investors, Inc.		5,431		410,258
National Storage Affiliates Trust		7,519		198,953
New Senior Investment Group, Inc.		9,678		39,873
NexPoint Residential Trust, Inc.		2,444		85,662
NorthStar Realty Europe Corp.		5,933		86,266
One Liberty Properties, Inc.		1,988		48,149
Pebblebrook Hotel Trust		18,026		510,316
Pennsylvania REIT		9,137		54,274
Physicians Realty Trust		24,262		388,920
Piedmont Office Realty Trust, Inc., Class A		17,020		290,021
PotlatchDeltic Corp.		8,850		280,014
Preferred Apartment Communities, Inc., Class A		5,305		74,588
PS Business Parks, Inc.		2,644		346,364
QTS Realty Trust, Inc., Class A		6,767		250,717
Ramco-Gershenson Properties Trust		10,536		125,905
Retail Opportunity Investments Corp.		14,755		234,309
Rexford Industrial Realty, Inc.		12,058		355,349
RLJ Lodging Trust		23,096		378,774
Ryman Hospitality Properties, Inc.		5,941		396,205
Sabra Health Care REIT, Inc.		23,630		389,422
Safety Income & Growth, Inc.		872		16,402
Saul Centers, Inc.		1,567		73,994
Select Income REIT		11,745		86,443
Seritage Growth Properties, Class A		4,338		140,248
Spirit MTA REIT		5,716		40,755
STAG Industrial, Inc.		12,421		309,035
Summit Hotel Properties, Inc.		13,734		133,632
Sunstone Hotel Investors, Inc.		30,311		394,346
Tanger Factory Outlet Centers, Inc.		12,206		246,805
Terreno Realty Corp.		7,619		267,960
Tier REIT, Inc.		6,713		138,489
UMH Properties, Inc.		4,411		52,226
Universal Health Realty Income Trust		1,702		104,452
Urban Edge Properties		14,530		241,489
Urstadt Biddle Properties, Inc., Class A		3,926		75,458
Washington Prime Group, Inc.		24,825		120,650
Washington REIT		10,467		240,741
Whitestone REIT		5,069		62,146
Xenia Hotels & Resorts, Inc.		14,966		257,415
				15,814,673
Food & Staples Retailing — 0.6%
Andersons, Inc. (The)		3,613		107,993
BJ’s Wholesale Club Holdings, Inc.(a)		9,415		208,636
Chefs’ Warehouse, Inc. (The)(a)		2,887		92,326
Ingles Markets, Inc., Class A		1,873		50,983
Natural Grocers by Vitamin Cottage, Inc.(a)		1,090		16,710
Performance Food Group Co.(a)		13,528		436,549
PriceSmart, Inc.		2,937		173,577
Rite Aid Corp.(a)		139,772		99,000
Smart & Final Stores, Inc.(a)		2,571		12,187
SpartanNash Co.		4,730		81,261
United Natural Foods, Inc.(a)		6,695		70,900
Village Super Market, Inc., Class A		1,016		27,168
Weis Markets, Inc.		1,268		60,585
				1,437,875
Food Products — 1.2%
Alico, Inc.		327		9,647
B&G Foods, Inc.		8,728		252,326
Calavo Growers, Inc.		2,106		153,654
Cal-Maine Foods, Inc.		4,143		175,249
Darling Ingredients, Inc.(a)		21,768		418,816
Dean Foods Co.		12,114		46,154

12 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Small Cap Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Food Products (continued)
Farmer Brothers Co.(a)		1,208	$	28,183
Fresh Del Monte Produce, Inc.		4,041		114,239
Freshpet, Inc.(a)		3,485		112,078
Hostess Brands, Inc.(a)		13,109		143,412
J&J Snack Foods Corp.		1,996		288,602
John B Sanfilippo & Son, Inc.		1,140		63,452
Lancaster Colony Corp.		2,509		443,742
Landec Corp.(a)		3,600		42,624
Limoneira Co.		1,952		38,162
Sanderson Farms, Inc.		2,712		269,274
Schuman, Inc., CVR(a)(b)		4,294		8,202
Seneca Foods Corp., Class A(a)		860		24,269
Simply Good Foods Co. (The)(a)		8,008		151,351
Tootsie Roll Industries, Inc.		2,172		72,545
				2,855,981
Gas Utilities — 1.1%
Chesapeake Utilities Corp.		2,101		170,811
New Jersey Resources Corp.		11,585		529,087
Northwest Natural Holding Co.		3,802		229,869
ONE Gas, Inc.		6,836		544,146
RGC Resources, Inc.		909		27,234
South Jersey Industries, Inc.		11,396		316,809
Southwest Gas Holdings, Inc.		6,373		487,534
Spire, Inc.		6,450		477,816
				2,783,306
Health Care Equipment & Supplies — 3.6%
Accuray, Inc.(a)		10,460		35,669
AngioDynamics, Inc.(a)		4,838		97,389
Anika Therapeutics, Inc.(a)		1,892		63,590
Antares Pharma, Inc.(a)		19,168		52,137
AtriCure, Inc.(a)		4,699		143,789
Atrion Corp.		189		140,064
Avanos Medical, Inc.(a)		6,225		278,818
AxoGen, Inc.(a)		4,502		91,976
Axonics Modulation Technologies, Inc.(a)		821		12,405
Cardiovascular Systems, Inc.(a)		4,311		122,820
Cerus Corp.(a)		17,622		89,344
CONMED Corp.		3,349		215,006
CryoLife, Inc.(a)		4,723		134,039
CryoPort, Inc.(a)		3,179		35,064
Cutera, Inc.(a)		1,750		29,785
CytoSorbents Corp.(a)		3,801		30,712
ElectroCore, Inc.(a)		865		5,415
Endologix, Inc.(a)		13,356		9,563
FONAR Corp.(a)		988		19,997
GenMark Diagnostics, Inc.(a)		6,775		32,926
Glaukos Corp.(a)		4,498		252,653
Globus Medical, Inc., Class A(a)		9,655		417,868
Haemonetics Corp.(a)		6,729		673,236
Helius Medical Technologies, Inc.(a)		2,208		20,225
Heska Corp.(a)		884		76,112
Inogen, Inc.(a)		2,342		290,806
Integer Holdings Corp.(a)		4,132		315,106
IntriCon Corp.(a)		957		25,246
Invacare Corp.		4,375		18,813
iRadimed Corp.(a)		560		13,698
iRhythm Technologies, Inc.(a)		3,202		222,475
Lantheus Holdings, Inc.(a)		4,932		77,186
LeMaitre Vascular, Inc.		2,092		49,455
LivaNova plc(a)		6,357		581,475
Meridian Bioscience, Inc.		5,517		95,775
Merit Medical Systems, Inc.(a)		7,078		395,023
Natus Medical, Inc.(a)		4,280		145,648

Security	Shares		Value
Health Care Equipment & Supplies (continued)
Neogen Corp.(a)		6,677	$	380,589
Neuronetics, Inc.(a)		983		19,021
Nevro Corp.(a)		3,865		150,310
Novocure Ltd.(a)		9,771		327,133
NuVasive, Inc.(a)		6,828		338,396
Nuvectra Corp.(a)		2,233		36,487
NxStage Medical, Inc.(a)		8,611		246,447
OraSure Technologies, Inc.(a)		7,990		93,323
Orthofix Medical, Inc.(a)		2,322		121,882
OrthoPediatrics Corp.(a)		821		28,636
Oxford Immunotec Global plc(a)		3,370		43,069
Pulse Biosciences, Inc.(a)		1,231		14,107
Quidel Corp.(a)		4,539		221,594
Rockwell Medical, Inc.(a)		5,557		12,559
RTI Surgical, Inc.(a)		7,485		27,695
SeaSpine Holdings Corp.(a)		1,822		33,233
Senseonics Holdings, Inc.(a)		11,315		29,306
SI-BONE, Inc.(a)		981		20,493
Sientra, Inc.(a)		3,081		39,160
STAAR Surgical Co.(a)		5,837		186,259
Surmodics, Inc.(a)		1,722		81,382
Tactile Systems Technology, Inc.(a)		2,334		106,314
Tandem Diabetes Care, Inc.(a)		6,770		257,057
TransEnterix, Inc.(a)		21,215		47,946
Utah Medical Products, Inc.		456		37,884
Varex Imaging Corp.(a)		5,069		120,034
ViewRay, Inc.(a)		8,006		48,596
Wright Medical Group NV(a)		16,511		449,429
				8,829,649
Health Care Providers & Services — 1.9%
AAC Holdings, Inc.(a)		2,368		3,315
Addus HomeCare Corp.(a)		1,256		85,257
Amedisys, Inc.(a)		3,551		415,858
American Renal Associates Holdings, Inc.(a)		1,636		18,847
AMN Healthcare Services, Inc.(a)		6,021		341,150
Apollo Medical Holdings, Inc.(a)		509		10,104
BioScrip, Inc.(a)		16,802		59,983
BioTelemetry, Inc.(a)		4,310		257,393
Brookdale Senior Living, Inc.(a)		24,828		166,348
Capital Senior Living Corp.(a)		2,932		19,938
Civitas Solutions, Inc.(a)		1,450		25,389
Community Health Systems, Inc.(a)		10,916		30,783
CorVel Corp.(a)		1,206		74,434
Cross Country Healthcare, Inc.(a)		4,593		33,667
Diplomat Pharmacy, Inc.(a)		7,537		101,448
Ensign Group, Inc. (The)		6,545		253,881
Genesis Healthcare, Inc.(a)		8,928		10,535
Guardant Health, Inc.(a)		1,819		68,376
HealthEquity, Inc.(a)		7,190		428,883
LHC Group, Inc.(a)		3,915		367,540
Magellan Health, Inc.(a)		3,269		185,973
National HealthCare Corp.		1,611		126,383
National Research Corp.		1,465		55,875
Owens & Minor, Inc.		8,111		51,343
Patterson Cos., Inc.		10,889		214,078
PetIQ, Inc.(a)		2,023		47,480
Providence Service Corp. (The)(a)		1,481		88,890
Quorum Health Corp.(a)		4,554		13,161
R1 RCM, Inc.(a)		13,668		108,661
RadNet, Inc.(a)		5,263		53,525
Select Medical Holdings Corp.(a)		14,398		221,009
Surgery Partners, Inc.(a)		2,431		23,799
Tenet Healthcare Corp.(a)		11,115		190,511
Tivity Health, Inc.(a)		5,310		131,741

SCHEDULE OF INVESTMENTS 13

Schedule of Investments  (continued) December 31, 2018 BlackRock Small Cap Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Health Care Providers & Services (continued)
Triple-S Management Corp., Class B(a)		2,933	$	51,005
US Physical Therapy, Inc.		1,655		169,389
Vapotherm, Inc.(a)		498		9,935
				4,515,887
Health Care Technology — 1.1%
Allscripts Healthcare Solutions, Inc.(a)		23,142		223,089
Castlight Health, Inc., Class B(a)		8,716		18,914
Computer Programs & Systems, Inc.		1,438		36,094
Evolent Health, Inc., Class A(a)		9,051		180,567
HealthStream, Inc.		3,440		83,076
HMS Holdings Corp.(a)		11,004		309,542
Inovalon Holdings, Inc., Class A(a)		9,148		129,719
Inspire Medical Systems, Inc.(a)		1,531		64,685
Medidata Solutions, Inc.(a)		7,523		507,201
NantHealth, Inc.(a)		2,817		1,533
NextGen Healthcare Information Systems LLC(a)		7,059		106,944
Omnicell, Inc.(a)		5,144		315,018
Simulations Plus, Inc.		1,344		26,746
Tabula Rasa HealthCare, Inc.(a)		2,325		148,242
Teladoc Health, Inc.(a)		8,899		441,123
Vocera Communications, Inc.(a)		3,957		155,708
				2,748,201
Hotels, Restaurants & Leisure — 2.9%
BBX Capital Corp.		8,715		49,937
Belmond Ltd., Class A(a)		11,898		297,807
Biglari Holdings, Inc., Class A(a)		15		8,815
BJ’s Restaurants, Inc.		2,745		138,815
Bloomin’ Brands, Inc.		11,128		199,080
Bluegreen Vacations Corp.		1,041		13,460
Bojangles’, Inc.(a)		2,077		33,398
Boyd Gaming Corp.		10,937		227,271
Brinker International, Inc.		5,036		221,483
Carrols Restaurant Group, Inc.(a)		4,613		45,392
Century Casinos, Inc.(a)		3,588		26,515
Cheesecake Factory, Inc. (The)		5,485		238,652
Churchill Downs, Inc.		1,565		381,766
Chuy’s Holdings, Inc.(a)		2,223		39,436
Cracker Barrel Old Country Store, Inc.		2,557		408,762
Dave & Buster’s Entertainment, Inc.		5,292		235,811
Del Frisco’s Restaurant Group, Inc.(a)		3,871		27,678
Del Taco Restaurants, Inc.(a)		3,868		38,641
Denny’s Corp.(a)		8,234		133,473
Dine Brands Global, Inc.		2,225		149,831
Drive Shack, Inc.(a)		8,029		31,474
El Pollo Loco Holdings, Inc.(a)		2,493		37,819
Eldorado Resorts, Inc.(a)		8,745		316,656
Empire Resorts, Inc.(a)		502		5,085
Fiesta Restaurant Group, Inc.(a)		3,154		48,919
Golden Entertainment, Inc.(a)		2,413		38,656
Habit Restaurants, Inc. (The), Class A(a)		2,656		27,888
International Speedway Corp., Class A		3,217		141,098
J Alexander’s Holdings, Inc.(a)		1,396		11,489
Jack in the Box, Inc.		3,611		280,322
Lindblad Expeditions Holdings, Inc.(a)		2,560		34,458
Marriott Vacations Worldwide Corp.		5,168		364,396
Monarch Casino & Resort, Inc.(a)		1,502		57,286
Nathan’s Famous, Inc.		366		24,321
Noodles & Co.(a)		1,864		13,029
OBH, Inc.(a)		101		11,472
Papa John’s International, Inc.		2,949		117,400
Penn National Gaming, Inc.(a)		14,319		269,627
Planet Fitness, Inc., Class A(a)		11,578		620,812
PlayAGS, Inc.(a)		2,917		67,091

Security	Shares		Value
Hotels, Restaurants & Leisure (continued)
Potbelly Corp.(a)		3,040	$	24,472
RCI Hospitality Holdings, Inc.		1,101		24,585
Red Lion Hotels Corp.(a)		1,917		15,719
Red Robin Gourmet Burgers, Inc.(a)		1,725		46,092
Red Rock Resorts, Inc., Class A		9,232		187,502
Ruth’s Hospitality Group, Inc.		3,835		87,170
Scientific Games Corp., Class A(a)		7,299		130,506
SeaWorld Entertainment, Inc.(a)		7,292		161,080
Shake Shack, Inc., Class A(a)		3,274		148,705
Speedway Motorsports, Inc.		1,307		21,265
Texas Roadhouse, Inc.		8,888		530,614
Town Sports International Holdings, Inc.(a)		2,279		14,586
Wingstop, Inc.		3,857		247,581
				7,075,198
Household Durables — 1.5%
Bassett Furniture Industries, Inc.		1,195		23,948
Beazer Homes USA, Inc.(a)		4,174		39,569
Cavco Industries, Inc.(a)		1,136		148,112
Century Communities, Inc.(a)		3,474		59,961
Ethan Allen Interiors, Inc.		3,176		55,866
Flexsteel Industries, Inc.		891		19,673
GoPro, Inc., Class A(a)		14,999		63,596
Green Brick Partners, Inc.(a)		2,967		21,481
Hamilton Beach Brands Holding Co., Class A		1,018		23,882
Helen of Troy Ltd.(a)		3,517		461,360
Hooker Furniture Corp.		1,537		40,485
Hovnanian Enterprises, Inc., Class A(a)		13,660		9,342
Installed Building Products, Inc.(a)		2,917		98,274
iRobot Corp.(a)		3,544		296,775
KB Home		11,411		217,950
La-Z-Boy, Inc.		6,200		171,802
LGI Homes, Inc.(a)		2,456		111,060
Lifetime Brands, Inc.		1,738		17,432
Lovesac Co. (The)(a)		847		19,430
M/I Homes, Inc.(a)		3,678		77,312
MDC Holdings, Inc.		6,021		169,250
Meritage Homes Corp.(a)		4,800		176,256
New Home Co., Inc. (The)(a)		2,045		10,695
Purple Innovation, Inc.(a)		885		5,213
Roku, Inc.(a)		5,755		176,333
Skyline Champion Corp.		3,832		56,292
Sonos, Inc.(a)		2,457		24,128
Taylor Morrison Home Corp., Class A(a)		15,333		243,795
TopBuild Corp.(a)		4,710		211,950
TRI Pointe Group, Inc.(a)		17,901		195,658
Tupperware Brands Corp.		6,306		199,080
Turtle Beach Corp.(a)		1,254		17,895
Universal Electronics, Inc.(a)		1,789		45,226
Vuzix Corp.(a)		3,746		18,018
William Lyon Homes, Class A(a)		4,242		45,347
ZAGG, Inc.(a)		3,629		35,492
				3,607,938
Household Products — 0.2%
Central Garden & Pet Co.(a)		1,274		43,890
Central Garden & Pet Co., Class A(a)		5,377		168,031
Oil-Dri Corp. of America		585		15,502
WD-40 Co.		1,812		332,067
				559,490
Independent Power and Renewable Electricity Producers — 0.3%
Atlantic Power Corp.(a)		15,883		34,466
Clearway Energy, Inc.		13,867		237,679
Ormat Technologies, Inc.		5,287		276,510
Pattern Energy Group, Inc., Class A		10,741		199,998

14 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Small Cap Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Independent Power and Renewable Electricity Producers (continued)
TerraForm Power, Inc., Class A		9,713	$	108,980
				857,633
Industrial Conglomerates — 0.1%
Raven Industries, Inc.		4,761		172,301
Insurance — 2.8%
Ambac Financial Group, Inc.(a)		6,015		103,699
American Equity Investment Life Holding Co.		11,897		332,402
AMERISAFE, Inc.		2,537		143,823
Argo Group International Holdings Ltd.		4,305		289,511
Citizens, Inc.(a)		6,570		49,406
CNO Financial Group, Inc.		21,825		324,756
Crawford & Co., Class B		1,060		9,540
Donegal Group, Inc., Class A		1,325		18,080
eHealth, Inc.(a)		2,491		95,704
EMC Insurance Group, Inc.		1,156		36,819
Employers Holdings, Inc.		4,281		179,674
Enstar Group Ltd.(a)		1,599		267,944
FBL Financial Group, Inc., Class A		1,313		86,198
FedNat Holding Co.		1,367		27,231
Genworth Financial, Inc., Class A(a)		66,959		312,029
Global Indemnity Ltd.		1,088		39,418
Goosehead Insurance, Inc., Class A(a)		1,220		32,074
Greenlight Capital Re Ltd., Class A(a)		3,963		34,161
Hallmark Financial Services, Inc.(a)		1,538		16,441
HCI Group, Inc.		877		44,560
Health Insurance Innovations, Inc., Class A(a)		1,696		45,334
Heritage Insurance Holdings, Inc.		2,640		38,861
Horace Mann Educators Corp.		5,465		204,664
Independence Holding Co.		533		18,762
Investors Title Co.		168		29,682
James River Group Holdings Ltd.		3,445		125,880
Kemper Corp.		7,003		464,859
Kingstone Cos., Inc.		1,471		26,022
Kinsale Capital Group, Inc.		2,592		144,011
Maiden Holdings Ltd.		10,151		16,749
MBIA, Inc.(a)		11,754		104,846
National General Holdings Corp.		8,492		205,591
National Western Life Group, Inc., Class A		303		91,112
Navigators Group, Inc. (The)		2,751		191,167
NI Holdings, Inc.(a)		1,086		17,083
Primerica, Inc.		5,566		543,854
ProAssurance Corp.		7,051		285,989
Protective Insurance Corp., Class B		1,131		18,831
RLI Corp.		5,209		359,369
Safety Insurance Group, Inc.		1,948		159,366
Selective Insurance Group, Inc.		7,709		469,786
State Auto Financial Corp.		2,218		75,501
Stewart Information Services Corp.		3,108		128,671
Third Point Reinsurance Ltd.(a)		8,914		85,931
Tiptree, Inc.		3,208		17,933
Trupanion, Inc.(a)		3,346		85,189
United Fire Group, Inc.		2,793		154,872
United Insurance Holdings Corp.		2,729		45,356
Universal Insurance Holdings, Inc.		4,202		159,340
				6,758,081
Interactive Media & Services — 0.5%(a)
Care.com, Inc.		2,614		50,476
Cargurus, Inc.		6,644		224,102
Cars.com, Inc.		8,957		192,575
Liberty TripAdvisor Holdings, Inc., Class A		9,645		153,259
Meet Group, Inc. (The)		8,941		41,397
QuinStreet, Inc.		5,750		93,323
Travelzoo		766		7,530

Security	Shares		Value
Interactive Media & Services (continued)
TrueCar, Inc.		12,283	$	111,284
Yelp, Inc.		10,772		376,912
				1,250,858
Internet & Direct Marketing Retail — 1.0%
1-800-Flowers.com, Inc., Class A(a)		3,304		40,408
Duluth Holdings, Inc., Class B(a)		992		25,028
Etsy, Inc.(a)		15,709		747,277
Gaia, Inc.(a)		1,765		18,286
Groupon, Inc.(a)		58,566		187,411
Lands’ End, Inc.(a)		1,541		21,898
Leaf Group Ltd.(a)		2,590		17,742
Liberty Expedia Holdings, Inc., Class A(a)		7,235		282,961
Liquidity Services, Inc.(a)		3,193		19,701
Nutrisystem, Inc.		3,918		171,922
Overstock.com, Inc.(a)		2,752		37,372
PetMed Express, Inc.		2,650		61,639
Quotient Technology, Inc.(a)		10,590		113,101
Remark Holdings, Inc.(a)		4,410		5,336
Shutterfly, Inc.(a)		4,386		176,580
Shutterstock, Inc.		2,498		89,953
Stamps.com, Inc.(a)		2,335		363,419
				2,380,034
IT Services — 2.0%
Brightcove, Inc.(a)		4,472		31,483
CACI International, Inc., Class A(a)		3,174		457,151
Carbonite, Inc.(a)		4,167		105,258
Cardtronics plc, Class A(a)		5,269		136,994
Cass Information Systems, Inc.		1,904		100,781
ConvergeOne Holdings, Inc.		3,935		48,715
CSG Systems International, Inc.		4,413		140,201
Endurance International Group Holdings, Inc.(a)		9,321		61,985
Everi Holdings, Inc.(a)		8,662		44,609
EVERTEC, Inc.		8,093		232,269
Evo Payments, Inc., Class A(a)		2,917		71,962
Exela Technologies, Inc.(a)		6,071		23,616
ExlService Holdings, Inc.(a)		4,433		233,264
GTT Communications, Inc.(a)		5,635		133,324
Hackett Group, Inc. (The)		3,187		51,024
I3 Verticals, Inc., Class A(a)		1,168		28,149
Information Services Group, Inc.(a)		5,071		21,501
Internap Corp.(a)		2,478		10,284
Limelight Networks, Inc.(a)		14,509		33,951
LiveRamp Holdings, Inc.(a)		10,208		394,335
ManTech International Corp., Class A		3,514		183,765
MAXIMUS, Inc.		8,318		541,419
MoneyGram International, Inc.(a)		4,673		9,346
NIC, Inc.		8,547		106,667
Perficient, Inc.(a)		3,793		84,432
Perspecta, Inc.		19,081		328,575
PFSweb, Inc.(a)		2,384		12,230
Presidio, Inc.		4,762		62,144
PRGX Global, Inc.(a)		2,445		23,154
Science Applications International Corp.		5,627		358,440
ServiceSource International, Inc.(a)		8,665		9,358
Sykes Enterprises, Inc.(a)		5,252		129,882
Travelport Worldwide Ltd.		16,667		260,339
TTEC Holdings, Inc.		1,879		53,683
Tucows, Inc., Class A(a)		1,263		75,856
Unisys Corp.(a)		6,703		77,956
Virtusa Corp.(a)		3,775		160,777
				4,838,879
Leisure Products — 0.4%
Acushnet Holdings Corp.		4,596		96,838
American Outdoor Brands Corp.(a)		7,134		91,743

SCHEDULE OF INVESTMENTS 15

Schedule of Investments  (continued) December 31, 2018 BlackRock Small Cap Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Leisure Products (continued)
Callaway Golf Co.		12,480	$	190,944
Clarus Corp.		2,481		25,108
Escalade, Inc.		1,657		18,973
Johnson Outdoors, Inc., Class A		647		38,005
Malibu Boats, Inc., Class A(a)		2,718		94,586
Marine Products Corp.		921		15,574
MCBC Holdings, Inc.(a)		2,448		45,778
Nautilus, Inc.(a)		3,825		41,692
Sturm Ruger & Co., Inc.		2,233		118,840
Vista Outdoor, Inc.(a)		7,581		86,044
YETI Holdings, Inc.(a)		1,878		27,870
				891,995
Life Sciences Tools & Services — 0.5%
Accelerate Diagnostics, Inc.(a)		3,461		39,801
Cambrex Corp.(a)		4,370		165,011
ChromaDex Corp.(a)		6,178		21,191
Codexis, Inc.(a)		6,761		112,909
Enzo Biochem, Inc.(a)		5,170		14,373
Fluidigm Corp.(a)		2,929		25,248
Harvard Bioscience, Inc.(a)		5,161		16,412
Luminex Corp.		5,506		127,244
Medpace Holdings, Inc.(a)		2,886		152,756
NanoString Technologies, Inc.(a)		3,450		51,163
NeoGenomics, Inc.(a)		8,428		106,277
Pacific Biosciences of California, Inc.(a)		17,866		132,208
Quanterix Corp.(a)		1,281		23,455
Syneos Health, Inc.(a)		8,235		324,047
				1,312,095
Machinery — 3.6%
Actuant Corp., Class A		8,096		169,935
Alamo Group, Inc.		1,279		98,892
Albany International Corp., Class A		3,813		238,046
Altra Industrial Motion Corp.		7,968		200,395
Astec Industries, Inc.		3,042		91,838
Barnes Group, Inc.		6,348		340,380
Blue Bird Corp.(a)		1,933		35,161
Briggs & Stratton Corp.		5,511		72,084
Chart Industries, Inc.(a)		4,091		266,038
CIRCOR International, Inc.(a)		2,159		45,987
Columbus McKinnon Corp.		2,965		89,365
Commercial Vehicle Group, Inc.(a)		3,913		22,304
DMC Global, Inc.		1,896		66,588
Douglas Dynamics, Inc.		2,949		105,840
Eastern Co. (The)		893		21,593
Energy Recovery, Inc.(a)		4,540		30,554
EnPro Industries, Inc.		2,750		165,275
ESCO Technologies, Inc.		3,381		222,977
Evoqua Water Technologies Corp.(a)		10,052		96,499
Federal Signal Corp.		7,890		157,011
Franklin Electric Co., Inc.		6,160		264,141
FreightCar America, Inc.(a)		1,439		9,627
Gencor Industries, Inc.(a)		1,255		13,767
Global Brass & Copper Holdings, Inc.		2,889		72,658
Gorman-Rupp Co. (The)		2,343		75,937
Graham Corp.		1,423		32,501
Greenbrier Cos., Inc. (The)		4,203		166,187
Harsco Corp.(a)		10,688		212,264
Hillenbrand, Inc.		8,338		316,260
Hurco Cos., Inc.		746		26,632
Hyster-Yale Materials Handling, Inc.		1,377		85,319
John Bean Technologies Corp.		4,158		298,586
Kadant, Inc.		1,452		118,280
Kennametal, Inc.		10,820		360,090

Security	Shares		Value
Machinery (continued)
LB Foster Co., Class A(a)		1,317	$	20,940
Lindsay Corp.		1,425		137,156
Lydall, Inc.(a)		2,247		45,637
Manitex International, Inc.(a)		2,276		12,928
Manitowoc Co., Inc. (The)(a)		4,691		69,286
Meritor, Inc.(a)		10,393		175,746
Milacron Holdings Corp.(a)		9,209		109,495
Miller Industries, Inc.		1,464		39,528
Mueller Industries, Inc.		7,529		175,877
Mueller Water Products, Inc., Class A		20,543		186,941
Navistar International Corp.(a)		6,534		169,557
NN, Inc.		4,895		32,845
Omega Flex, Inc.		370		20,006
Park-Ohio Holdings Corp.		1,153		35,386
Proto Labs, Inc.(a)		3,599		405,931
RBC Bearings, Inc.(a)		3,173		415,980
REV Group, Inc.		3,979		29,882
Rexnord Corp.(a)		13,884		318,638
Spartan Motors, Inc.		4,530		32,752
SPX Corp.(a)		5,718		160,161
SPX FLOW, Inc.(a)		5,598		170,291
Standex International Corp.		1,691		113,601
Sun Hydraulics Corp.		3,796		125,989
Tennant Co.		2,371		123,553
Titan International, Inc.		6,671		31,087
TriMas Corp.(a)		6,087		166,114
Twin Disc, Inc.(a)		1,346		19,853
Wabash National Corp.		7,510		98,231
Watts Water Technologies, Inc., Class A		3,690		238,116
Woodward, Inc.		6,904		512,898
				8,783,416
Marine — 0.1%
Costamare, Inc.		6,059		26,599
Eagle Bulk Shipping, Inc.(a)		5,652		26,056
Genco Shipping & Trading Ltd.(a)		1,183		9,334
Matson, Inc.		5,626		180,144
Safe Bulkers, Inc.(a)		7,634		13,589
Scorpio Bulkers, Inc.		7,727		42,730
				298,452
Media — 1.4%
Beasley Broadcast Group, Inc., Class A		779		2,921
Boston Omaha Corp., Class A(a)		807		18,884
Cardlytics, Inc.(a)		772		8,361
Central European Media Enterprises Ltd., Class A(a)		10,652		29,612
Clear Channel Outdoor Holdings, Inc., Class A		4,190		21,746
Daily Journal Corp.(a)		144		33,696
Emerald Expositions Events, Inc.		3,293		40,636
Entercom Communications Corp., Class A		17,002		97,081
Entravision Communications Corp., Class A		8,032		23,373
EW Scripps Co. (The), Class A		6,057		95,277
Fluent, Inc.(a)		5,182		18,655
Gannett Co., Inc.		15,045		128,334
Gray Television, Inc.(a)		10,610		156,391
Hemisphere Media Group, Inc.(a)		2,547		30,920
Liberty Latin America Ltd., Class A(a)		5,770		83,550
Liberty Latin America Ltd., Class C(a)		15,100		220,007
Loral Space & Communications, Inc.(a)		1,705		63,511
MDC Partners, Inc., Class A(a)		7,197		18,784
Meredith Corp.		5,238		272,062
MSG Networks, Inc., Class A(a)		7,859		185,158
National CineMedia, Inc.		10,245		66,388
New Media Investment Group, Inc.		7,919		91,623
New York Times Co. (The), Class A		17,448		388,916

16 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Small Cap Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Media (continued)
Nexstar Media Group, Inc., Class A		5,811	$	456,977
Saga Communications, Inc., Class A		599		19,905
Scholastic Corp.		3,740		150,572
Sinclair Broadcast Group, Inc., Class A		8,626		227,209
TechTarget, Inc.(a)		2,698		32,943
TEGNA, Inc.		28,796		313,012
Tribune Publishing Co.(a)		2,161		24,506
WideOpenWest, Inc.(a)		3,932		28,035
				3,349,045
Metals & Mining — 1.2%
AK Steel Holding Corp.(a)		41,835		94,129
Allegheny Technologies, Inc.(a)		16,674		362,993
Carpenter Technology Corp.		6,195		220,604
Century Aluminum Co.(a)		6,633		48,487
Cleveland-Cliffs, Inc.(a)		39,545		304,101
Coeur Mining, Inc.(a)		24,633		110,109
Commercial Metals Co.		15,466		247,765
Compass Minerals International, Inc.		4,526		188,689
Gold Resource Corp.		6,157		24,628
Haynes International, Inc.		1,648		43,507
Hecla Mining Co.		60,193		142,055
Kaiser Aluminum Corp.		1,992		177,866
Livent Corp.(a)		2,230		30,774
Materion Corp.		2,672		120,213
Olympic Steel, Inc.		1,022		14,584
Ramaco Resources, Inc.(a)		928		4,594
Ryerson Holding Corp.(a)		2,354		14,924
Schnitzer Steel Industries, Inc., Class A		3,479		74,972
SunCoke Energy, Inc.(a)		8,629		73,778
Synalloy Corp.		1,286		21,335
Tahoe Resources, Inc.(a)		41,247		150,552
TimkenSteel Corp.(a)		5,311		46,418
Universal Stainless & Alloy Products, Inc.(a)		1,112		18,026
Warrior Met Coal, Inc.		5,735		138,271
Worthington Industries, Inc.		5,577		194,303
				2,867,677
Mortgage Real Estate Investment Trusts (REITs) — 1.1%
AG Mortgage Investment Trust, Inc.		3,731		59,435
Anworth Mortgage Asset Corp.		12,933		52,249
Apollo Commercial Real Estate Finance, Inc.		16,380		272,891
Arbor Realty Trust, Inc.		7,864		79,190
Ares Commercial Real Estate Corp.		3,558		46,396
ARMOUR Residential REIT, Inc.		5,526		113,283
Blackstone Mortgage Trust, Inc., Class A		14,850		473,121
Capstead Mortgage Corp.		12,221		81,514
Cherry Hill Mortgage Investment Corp.		2,191		38,430
Colony Credit Real Estate, Inc.		11,153		176,106
Dynex Capital, Inc.		7,751		44,336
Exantas Capital Corp.		4,032		40,401
Granite Point Mortgage Trust, Inc.		5,699		102,753
Great Ajax Corp.		2,117		25,510
Invesco Mortgage Capital, Inc.		14,923		216,085
KKR Real Estate Finance Trust, Inc.		2,532		48,488
Ladder Capital Corp.		11,995		185,563
New York Mortgage Trust, Inc.		19,676		115,892
Orchid Island Capital, Inc.		6,950		44,410
PennyMac Mortgage Investment Trust		7,959		148,197
Ready Capital Corp.		2,193		30,329
Redwood Trust, Inc.		10,915		164,489
TPG RE Finance Trust, Inc.		4,668		85,331
Western Asset Mortgage Capital Corp.		5,372		44,802
				2,689,201

Security	Shares		Value
Multiline Retail — 0.3%
Big Lots, Inc.		5,334	$	154,259
Dillard’s, Inc., Class A		1,546		93,239
JC Penney Co., Inc.(a)		41,696		43,364
Ollie’s Bargain Outlet Holdings, Inc.(a)		6,602		439,099
				729,961
Multi-Utilities — 0.5%
Avista Corp.		8,706		369,831
Black Hills Corp.		7,116		446,742
NorthWestern Corp.		6,713		399,021
Unitil Corp.		1,933		97,887
				1,313,481
Oil, Gas & Consumable Fuels — 2.3%
Abraxas Petroleum Corp.(a)		20,376		22,210
Adams Resources & Energy, Inc.		325		12,581
Alta Mesa Resources, Inc., Class A(a)		13,047		13,047
Approach Resources, Inc.(a)		6,960		6,069
Arch Coal, Inc., Class A		2,188		181,582
Ardmore Shipping Corp.(a)		4,945		23,093
Berry Petroleum Corp.		1,549		13,554
Bonanza Creek Energy, Inc.(a)		2,503		51,737
California Resources Corp.(a)		6,001		102,257
Callon Petroleum Co.(a)		30,327		196,822
Carrizo Oil & Gas, Inc.(a)		11,610		131,077
Clean Energy Fuels Corp.(a)		18,219		31,337
Cloud Peak Energy, Inc.(a)		7,969		2,919
CONSOL Energy, Inc.(a)		3,730		118,278
CVR Energy, Inc.		2,305		79,476
Delek US Holdings, Inc.		10,456		339,925
Denbury Resources, Inc.(a)		61,047		104,390
DHT Holdings, Inc.		12,204		47,840
Dorian LPG Ltd.(a)		3,080		17,956
Earthstone Energy, Inc., Class A(a)		2,843		12,850
Eclipse Resources Corp.(a)		14,180		14,889
Energy Fuels, Inc.(a)		11,654		33,214
EP Energy Corp., Class A(a)		6,343		4,440
Evolution Petroleum Corp.		3,310		22,574
Frontline Ltd.(a)		10,214		56,483
GasLog Ltd.		5,410		89,049
Golar LNG Ltd.		12,565		273,414
Goodrich Petroleum Corp.(a)		1,356		18,306
Green Plains, Inc.		5,233		68,605
Gulfport Energy Corp.(a)		23,199		151,953
Halcon Resources Corp.(a)		17,721		30,126
Hallador Energy Co.		2,493		12,640
HighPoint Resources Corp.(a)		14,441		35,958
International Seaways, Inc.(a)		2,888		48,634
Isramco, Inc.(a)		61		7,229
Jagged Peak Energy, Inc.(a)		8,525		77,748
Laredo Petroleum, Inc.(a)		20,657		74,778
Lilis Energy, Inc.(a)		6,885		9,432
Matador Resources Co.(a)		13,996		217,358
Midstates Petroleum Co., Inc.(a)		2,475		18,587
NACCO Industries, Inc., Class A		369		12,509
NextDecade Corp.(a)		1,214		6,556
Nordic American Tankers Ltd.		16,520		33,040
Northern Oil and Gas, Inc.(a)		25,823		58,360
Oasis Petroleum, Inc.(a)		35,789		197,913
Overseas Shipholding Group, Inc., Class A(a)		9,123		15,144
Panhandle Oil and Gas, Inc., Class A		2,093		32,442
Par Pacific Holdings, Inc.(a)		4,130		58,563
PDC Energy, Inc.(a)		8,802		261,948
Peabody Energy Corp.		10,403		317,083
Penn Virginia Corp.(a)		1,648		89,091

SCHEDULE OF INVESTMENTS 17

Schedule of Investments  (continued) December 31, 2018 BlackRock Small Cap Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Oil, Gas & Consumable Fuels (continued)
Renewable Energy Group, Inc.(a)		4,902	$	125,981
Resolute Energy Corp.(a)		2,900		84,042
REX American Resources Corp.(a)		756		51,491
Ring Energy, Inc.(a)		7,602		38,618
Sanchez Energy Corp.(a)		8,564		2,312
SandRidge Energy, Inc.(a)		3,997		30,417
Scorpio Tankers, Inc.		57,383		100,994
SemGroup Corp., Class A		10,507		144,787
Ship Finance International Ltd.		9,683		101,962
SilverBow Resources, Inc.(a)		792		18,723
Southwestern Energy Co.(a)		78,311		267,041
SRC Energy, Inc.(a)		32,129		151,006
Talos Energy, Inc.(a)		2,676		43,672
Teekay Corp.		9,099		30,391
Teekay Tankers Ltd., Class A		22,004		20,420
Tellurian, Inc.(a)		11,306		78,577
Ultra Petroleum Corp.(a)		14,328		10,891
Uranium Energy Corp.(a)		20,527		25,659
W&T Offshore, Inc.(a)		12,348		50,874
WildHorse Resource Development Corp.(a)		3,625		51,149
World Fuel Services Corp.		8,898		190,506
Zion Oil & Gas, Inc.(a)		8,539		3,564
				5,480,143
Paper & Forest Products — 0.4%
Boise Cascade Co.		5,163		123,137
Clearwater Paper Corp.(a)		2,145		52,274
Louisiana-Pacific Corp.		18,139		403,049
Neenah, Inc.		2,215		130,508
PH Glatfelter Co.		5,770		56,315
Schweitzer-Mauduit International, Inc.		4,080		102,204
Verso Corp., Class A(a)		4,578		102,547
				970,034
Personal Products — 0.4%
Edgewell Personal Care Co.(a)		7,167		267,688
elf Beauty, Inc.(a)		2,958		25,616
Inter Parfums, Inc.		2,311		151,532
Medifast, Inc.		1,552		194,031
Natural Health Trends Corp.		841		15,550
Nature’s Sunshine Products, Inc.(a)		635		5,175
Revlon, Inc., Class A(a)		1,015		25,568
USANA Health Sciences, Inc.(a)		1,682		198,022
				883,182
Pharmaceuticals — 1.9%
Aclaris Therapeutics, Inc.(a)		4,586		33,891
Aerie Pharmaceuticals, Inc.(a)		4,723		170,500
Akcea Therapeutics, Inc.(a)		1,693		51,027
Akorn, Inc.(a)		12,399		42,033
Amneal Pharmaceuticals, Inc.(a)		11,541		156,150
Amphastar Pharmaceuticals, Inc.(a)		4,721		93,948
Ampio Pharmaceuticals, Inc.(a)		12,735		5,028
ANI Pharmaceuticals, Inc.(a)		1,045		47,046
Aquestive Therapeutics, Inc.(a)		785		4,945
Aratana Therapeutics, Inc.(a)		6,581		40,342
Arvinas, Inc.(a)		821		10,550
Assembly Biosciences, Inc.(a)		2,791		63,132
Assertio Therapeutics, Inc.(a)		6,607		23,851
Clearside Biomedical, Inc.(a)		4,517		4,833
Collegium Pharmaceutical, Inc.(a)		3,896		66,894
Corcept Therapeutics, Inc.(a)		12,970		173,279
Corium International, Inc., CVR(a)		3,221		580
Cymabay Therapeutics, Inc.(a)		7,824		61,575
Dermira, Inc.(a)		4,525		32,535
Dova Pharmaceuticals, Inc.(a)		1,449		10,983

Security	Shares		Value
Pharmaceuticals (continued)
Durect Corp.(a)		17,057	$	8,240
Eloxx Pharmaceuticals, Inc.(a)		2,875		34,529
Endo International plc(a)		29,752		217,190
Evolus, Inc.(a)		1,430		17,017
Horizon Pharma plc(a)		21,956		429,020
Innovate Biopharmaceuticals, Inc.(a)		2,975		6,872
Innoviva, Inc.(a)		9,153		159,720
Intersect ENT, Inc.(a)		3,975		112,016
Intra-Cellular Therapies, Inc.(a)		5,947		67,736
Kala Pharmaceuticals, Inc.(a)		1,535		7,506
Lannett Co., Inc.(a)		4,575		22,692
Liquidia Technologies, Inc.(a)		751		16,267
Mallinckrodt plc(a)		10,930		172,694
Marinus Pharmaceuticals, Inc.(a)		4,783		13,727
Medicines Co. (The)(a)		9,140		174,940
Melinta Therapeutics, Inc.(a)		3,241		2,569
Menlo Therapeutics, Inc.(a)		995		4,099
MyoKardia, Inc.(a)		4,517		220,701
Neos Therapeutics, Inc.(a)		4,198		6,927
Ocular Therapeutix, Inc.(a)		3,929		15,637
Odonate Therapeutics, Inc.(a)		1,000		14,080
Omeros Corp.(a)		6,084		67,776
Optinose, Inc.(a)		2,599		16,114
Osmotica Pharmaceuticals plc(a)		920		7,130
Pacira Pharmaceuticals, Inc.(a)		5,298		227,920
Paratek Pharmaceuticals, Inc.(a)		4,042		20,735
Phibro Animal Health Corp., Class A		2,650		85,224
Prestige Brands Holdings, Inc.(a)		6,909		213,350
Reata Pharmaceuticals, Inc., Class A(a)		2,483		139,296
resTORbio, Inc.(a)		962		8,292
Revance Therapeutics, Inc.(a)		4,357		87,706
scPharmaceuticals, Inc.(a)		1,083		4,072
Sienna Biopharmaceuticals, Inc.(a)		2,341		5,431
SIGA Technologies, Inc.(a)		6,893		54,455
Supernus Pharmaceuticals, Inc.(a)		6,502		215,996
Teligent, Inc.(a)		6,748		9,245
Tetraphase Pharmaceuticals, Inc.(a)		8,084		9,135
TherapeuticsMD, Inc.(a)		24,257		92,419
Theravance Biopharma, Inc.(a)		5,690		145,607
Tricida, Inc.(a)		1,534		36,172
Verrica Pharmaceuticals, Inc.(a)		870		7,091
WaVe Life Sciences Ltd.(a)		2,340		98,374
Xeris Pharmaceuticals, Inc.(a)		1,029		17,493
Zogenix, Inc.(a)		5,573		203,192
Zomedica Pharmaceuticals Corp.(a)		4,780		5,879
				4,595,405
Professional Services — 1.5%
Acacia Research Corp.(a)		5,266		15,693
ASGN, Inc.(a)		6,739		367,276
Barrett Business Services, Inc.		932		53,357
BG Staffing, Inc.		1,131		23,355
CBIZ, Inc.(a)		6,852		134,984
CRA International, Inc.		1,043		44,380
Exponent, Inc.		6,853		347,516
Forrester Research, Inc.		1,362		60,881
Franklin Covey Co.(a)		1,117		24,943
FTI Consulting, Inc.(a)		5,046		336,265
GP Strategies Corp.(a)		1,543		19,457
Heidrick & Struggles International, Inc.		2,480		77,351
Huron Consulting Group, Inc.(a)		2,936		150,646
ICF International, Inc.		2,401		155,537
InnerWorkings, Inc.(a)		5,175		19,355
Insperity, Inc.		5,090		475,202
Kelly Services, Inc., Class A		4,153		85,053

18 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Small Cap Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Professional Services (continued)
Kforce, Inc.		3,061	$	94,646
Korn/Ferry International		7,624		301,453
Mistras Group, Inc.(a)		2,325		33,434
Navigant Consulting, Inc.		5,418		130,303
Resources Connection, Inc.		3,958		56,204
TriNet Group, Inc.(a)		5,793		243,016
TrueBlue, Inc.(a)		5,348		118,993
Upwork, Inc.(a)		1,303		23,597
WageWorks, Inc.(a)		5,269		143,106
Willdan Group, Inc.(a)		1,172		40,997
				3,577,000
Real Estate Management & Development — 0.6%
Altisource Portfolio Solutions SA(a)		1,184		26,628
Consolidated-Tomoka Land Co.		457		23,992
Cushman & Wakefield plc(a)		6,031		87,269
Essential Properties Realty Trust, Inc.		4,727		65,422
Forestar Group, Inc.(a)		1,390		19,252
FRP Holdings, Inc.(a)		876		40,305
Griffin Industrial Realty, Inc.		166		5,295
HFF, Inc., Class A		4,986		165,336
Kennedy-Wilson Holdings, Inc.		16,641		302,367
Marcus & Millichap, Inc.(a)		2,582		88,640
Maui Land & Pineapple Co., Inc.(a)		1,072		10,634
Newmark Group, Inc., Class A		19,826		159,005
RE/MAX Holdings, Inc., Class A		2,368		72,816
Redfin Corp.(a)		10,515		151,416
RMR Group, Inc. (The), Class A		935		49,630
St Joe Co. (The)(a)		4,678		61,609
Stratus Properties, Inc.(a)		638		15,299
Tejon Ranch Co.(a)		2,793		46,308
Transcontinental Realty Investors, Inc.(a)		242		6,853
Trinity Place Holdings, Inc.(a)		1,862		8,081
				1,406,157
Road & Rail — 0.5%
ArcBest Corp.		3,409		116,792
Avis Budget Group, Inc.(a)		8,866		199,308
Covenant Transportation Group, Inc., Class A(a)		1,638		31,450
Daseke, Inc.(a)		5,272		19,401
Heartland Express, Inc.		6,208		113,606
Hertz Global Holdings, Inc.(a)		7,281		99,386
Marten Transport Ltd.		5,193		84,075
PAM Transportation Services, Inc.(a)		341		13,439
Saia, Inc.(a)		3,404		190,011
Universal Logistics Holdings, Inc.		980		17,728
US Xpress Enterprises, Inc., Class A(a)		2,495		13,997
USA Truck, Inc.(a)		1,261		18,877
Werner Enterprises, Inc.		5,814		171,746
YRC Worldwide, Inc.(a)		4,269		13,447
				1,103,263
Semiconductors & Semiconductor Equipment — 2.7%
ACM Research, Inc., Class A(a)		1,284		13,970
Adesto Technologies Corp.(a)		2,873		12,641
Advanced Energy Industries, Inc.(a)		4,761		204,390
Alpha & Omega Semiconductor Ltd.(a)		2,486		25,332
Ambarella, Inc.(a)		3,992		139,640
Amkor Technology, Inc.(a)		13,591		89,157
Aquantia Corp.(a)		2,609		22,881
Axcelis Technologies, Inc.(a)		4,256		75,757
AXT, Inc.(a)		4,613		20,067
Brooks Automation, Inc.		9,230		241,641
Cabot Microelectronics Corp.		3,772		359,660
CEVA, Inc.(a)		2,930		64,724
Cirrus Logic, Inc.(a)		7,635		253,329

Security	Shares		Value
Semiconductors & Semiconductor Equipment (continued)
Cohu, Inc.		5,261	$	84,544
Cree, Inc.(a)		13,150		562,491
Diodes, Inc.(a)		5,335		172,107
Entegris, Inc.		18,853		525,905
FormFactor, Inc.(a)		9,820		138,364
Ichor Holdings Ltd.(a)		3,191		52,013
Impinj, Inc.(a)		2,157		31,384
Inphi Corp.(a)		5,768		185,441
Integrated Device Technology, Inc.(a)		17,018		824,181
Kopin Corp.(a)		9,119		9,110
Lattice Semiconductor Corp.(a)		15,549		107,599
MACOM Technology Solutions Holdings, Inc.(a)		6,018		87,321
MaxLinear, Inc.(a)		8,302		146,115
Nanometrics, Inc.(a)		3,026		82,701
NeoPhotonics Corp.(a)		5,049		32,718
NVE Corp.		634		55,500
PDF Solutions, Inc.(a)		3,267		27,541
Photronics, Inc.(a)		9,016		87,275
Power Integrations, Inc.		3,804		231,968
Rambus, Inc.(a)		14,154		108,561
Rudolph Technologies, Inc.(a)		4,184		85,647
Semtech Corp.(a)		8,643		396,454
Silicon Laboratories, Inc.(a)		5,703		449,454
SMART Global Holdings, Inc.(a)		1,322		39,263
SunPower Corp.(a)		8,181		40,660
Synaptics, Inc.(a)		4,429		164,803
Ultra Clean Holdings, Inc.(a)		5,104		43,231
Veeco Instruments, Inc.(a)		6,420		47,572
Xperi Corp.		6,505		119,627
				6,462,739
Software — 5.3%
8x8, Inc.(a)		12,215		220,359
A10 Networks, Inc.(a)		6,329		39,493
ACI Worldwide, Inc.(a)		15,239		421,663
Agilysys, Inc.(a)		1,822		26,127
Alarm.com Holdings, Inc.(a)		4,092		212,252
Altair Engineering, Inc., Class A(a)		3,172		87,484
Alteryx, Inc., Class A(a)		3,884		230,981
Amber Road, Inc.(a)		2,860		23,538
American Software, Inc., Class A		3,796		39,668
Anaplan, Inc.(a)		2,308		61,254
Appfolio, Inc., Class A(a)		2,013		119,210
Apptio, Inc., Class A(a)		4,570		173,477
Asure Software, Inc.(a)		1,580		8,026
Avalara, Inc.(a)		1,108		34,514
Avaya Holdings Corp.(a)		13,905		202,457
Benefitfocus, Inc.(a)		2,977		136,108
Blackbaud, Inc.		6,409		403,126
Blackline, Inc.(a)		4,774		195,495
Bottomline Technologies DE, Inc.(a)		5,497		263,856
Box, Inc., Class A(a)		16,389		276,646
Carbon Black, Inc.(a)		4,830		64,819
ChannelAdvisor Corp.(a)		3,104		35,230
Cision Ltd.(a)		8,204		95,987
Cloudera, Inc.(a)		13,727		151,821
CommVault Systems, Inc.(a)		5,221		308,509
Cornerstone OnDemand, Inc.(a)		7,223		364,256
Coupa Software, Inc.(a)		7,183		451,523
Digimarc Corp.(a)		1,625		23,562
Domo, Inc., Class B(a)		1,025		20,121
Ebix, Inc.		3,196		136,022
eGain Corp.(a)		2,825		18,560
Ellie Mae, Inc.(a)		4,539		285,185
Envestnet, Inc.(a)		5,867		288,598

SCHEDULE OF INVESTMENTS 19

Schedule of Investments  (continued) December 31, 2018 BlackRock Small Cap Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Software (continued)
Everbridge, Inc.(a)		3,564	$	202,293
Five9, Inc.(a)		7,616		332,972
ForeScout Technologies, Inc.(a)		3,989		103,674
Fusion Connect, Inc.(a)		3,294		5,534
Hortonworks, Inc.(a)		9,378		135,231
HubSpot, Inc.(a)		4,872		612,557
Imperva, Inc.(a)		4,627		257,678
Instructure, Inc.(a)		4,219		158,255
j2 Global, Inc.		6,222		431,682
LivePerson, Inc.(a)		7,700		145,222
Majesco(a)		949		6,728
MicroStrategy, Inc., Class A(a)		1,261		161,093
MINDBODY, Inc., Class A(a)		5,787		210,647
Mitek Systems, Inc.(a)		4,222		45,640
MobileIron, Inc.(a)		9,510		43,651
Model N, Inc.(a)		3,426		45,326
Monotype Imaging Holdings, Inc.		5,502		85,391
New Relic, Inc.(a)		5,887		476,670
OneSpan, Inc.(a)		4,185		54,196
Park City Group, Inc.(a)		2,134		12,740
Paylocity Holding Corp.(a)		3,848		231,688
Progress Software Corp.		5,802		205,913
PROS Holdings, Inc.(a)		4,132		129,745
Q2 Holdings, Inc.(a)		4,863		240,962
QAD, Inc., Class A		1,364		53,646
Qualys, Inc.(a)		4,478		334,686
Rapid7, Inc.(a)		4,850		151,126
Rimini Street, Inc.(a)		1,362		7,014
SailPoint Technologies Holding, Inc.(a)		9,065		212,937
SecureWorks Corp., Class A(a)		805		13,596
SendGrid, Inc.(a)		3,839		165,730
ShotSpotter, Inc.(a)		974		30,369
SPS Commerce, Inc.(a)		2,242		184,696
SVMK, Inc.(a)		1,816		22,282
Telaria, Inc.(a)		6,978		19,050
Telenav, Inc.(a)		4,426		17,970
Tenable Holdings, Inc.(a)		1,672		37,102
TiVo Corp.		16,037		150,908
Trade Desk, Inc. (The), Class A(a)		4,382		508,575
Upland Software, Inc.(a)		2,088		56,752
Varonis Systems, Inc.(a)		3,749		198,322
Verint Systems, Inc.(a)		8,456		357,773
Veritone, Inc.(a)		1,146		4,355
VirnetX Holding Corp.(a)		8,291		19,898
Workiva, Inc.(a)		3,782		135,736
Yext, Inc.(a)		10,781		160,098
Zix Corp.(a)		7,316		41,921
Zscaler, Inc.(a)		7,986		313,131
				12,953,088
Specialty Retail — 2.9%
Aaron’s, Inc.		9,195		386,650
Abercrombie & Fitch Co., Class A		8,643		173,292
American Eagle Outfitters, Inc.		21,424		414,126
America’sCar-Mart, Inc.(a)		794		57,525
Asbury Automotive Group, Inc.(a)		2,493		166,183
Ascena Retail Group, Inc.(a)		23,254		58,368
At Home Group, Inc.(a)		5,871		109,553
Barnes & Noble Education, Inc.(a)		4,763		19,100
Barnes & Noble, Inc.		7,917		56,132
Bed Bath & Beyond, Inc.		17,862		202,198
Big 5 Sporting Goods Corp.		3,207		8,306
Boot Barn Holdings, Inc.(a)		3,674		62,568
Buckle, Inc. (The)		3,825		73,976
Caleres, Inc.		5,590		155,570

Security	Shares		Value
Specialty Retail (continued)
Camping World Holdings, Inc., Class A		4,304	$	49,367
Carvana Co.(a)		4,300		140,653
Cato Corp. (The), Class A		2,996		42,753
Chico’s FAS, Inc.		16,976		95,405
Children’s Place, Inc. (The)		2,056		185,225
Citi Trends, Inc.		1,638		33,399
Conn’s, Inc.(a)		2,609		49,206
Container Store Group, Inc. (The)(a)		1,695		8,085
DSW, Inc., Class A		9,122		225,313
Express, Inc.(a)		9,666		49,393
Five Below, Inc.(a)		7,150		731,588
Francesca’s Holdings Corp.(a)		3,745		3,636
GameStop Corp., Class A		13,315		168,035
Genesco, Inc.(a)		2,581		114,338
GNC Holdings, Inc., Class A(a)		10,811		25,622
Group 1 Automotive, Inc.		2,293		120,887
Guess?, Inc.		7,648		158,849
Haverty Furniture Cos., Inc.		2,509		47,119
Hibbett Sports, Inc.(a)		2,507		35,850
Hudson Ltd., Class A(a)		5,283		90,603
J. Jill, Inc.(a)		2,734		14,572
Kirkland’s, Inc.(a)		1,703		16,230
Lithia Motors, Inc., Class A		2,828		215,861
Lumber Liquidators Holdings, Inc.(a)		3,779		35,976
MarineMax, Inc.(a)		2,532		46,361
Monro, Inc.		4,228		290,675
Murphy USA, Inc.(a)		3,995		306,177
National Vision Holdings, Inc.(a)		7,877		221,895
New York & Co., Inc.(a)		4,547		12,868
Office Depot, Inc.		70,614		182,184
Party City Holdco, Inc.(a)		7,527		75,119
Pier 1 Imports, Inc.		13,599		4,159
Rent-A-Center, Inc.(a)		5,892		95,391
RH(a)		2,618		313,689
Sally Beauty Holdings, Inc.(a)		16,008		272,936
Shoe Carnival, Inc.		1,364		45,708
Signet Jewelers Ltd.		6,755		214,606
Sleep Number Corp.(a)		4,161		132,029
Sonic Automotive, Inc., Class A		3,164		43,537
Sportsman’s Warehouse Holdings, Inc.(a)		4,205		18,418
Tailored Brands, Inc.		6,597		89,983
Tile Shop Holdings, Inc.		4,709		25,805
Tilly’s, Inc., Class A		2,457		26,683
Winmark Corp.		311		49,449
Zumiez, Inc.(a)		2,465		47,254
				7,116,438
Technology Hardware, Storage & Peripherals — 0.3%
3D Systems Corp.(a)		14,499		147,455
Avid Technology, Inc.(a)		3,792		18,012
Cray, Inc.(a)		5,368		115,895
Diebold Nixdorf, Inc.		10,128		25,219
Eastman Kodak Co.(a)		2,849		7,265
Electronics For Imaging, Inc.(a)		5,519		136,871
Immersion Corp.(a)		3,092		27,704
Stratasys Ltd.(a)		6,728		121,171
USA Technologies, Inc.(a)		7,063		27,475
				627,067
Textiles, Apparel & Luxury Goods — 0.9%
Crocs, Inc.(a)		8,661		225,013
Culp, Inc.		1,410		26,649
Deckers Outdoor Corp.(a)		3,808		487,233
Fossil Group, Inc.(a)		6,059		95,308
G-III Apparel Group Ltd.(a)		5,774		161,037

20 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Small Cap Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Textiles, Apparel & Luxury Goods (continued)
Movado Group, Inc.		2,089	$	66,054
Oxford Industries, Inc.		2,223		157,922
Rocky Brands, Inc.		742		19,292
Steven Madden Ltd.		11,569		350,078
Superior Group of Cos., Inc.		1,315		23,210
Unifi, Inc.(a)		2,074		47,370
Vera Bradley, Inc.(a)		3,000		25,710
Wolverine World Wide, Inc.		12,264		391,099
				2,075,975
Thrifts & Mortgage Finance — 2.3%
Axos Financial, Inc.(a)		7,860		197,915
BankFinancial Corp.		1,581		23,636
Beneficial Bancorp, Inc.		9,062		129,496
Bridgewater Bancshares, Inc.(a)		1,922		20,277
BSB Bancorp, Inc.(a)		1,030		28,902
Capitol Federal Financial, Inc.		17,112		218,520
Columbia Financial, Inc.(a)		6,597		100,868
Dime Community Bancshares, Inc.		4,308		73,150
Entegra Financial Corp.(a)		1,049		21,767
ESSA Bancorp, Inc.		1,222		19,075
Essent Group Ltd.(a)		12,756		436,000
Federal Agricultural Mortgage Corp., Class C		1,192		72,044
First Defiance Financial Corp.		2,648		64,902
Flagstar Bancorp, Inc.(a)		3,924		103,594
FS Bancorp, Inc.		493		21,140
Greene County Bancorp, Inc.		388		12,075
Hingham Institution for Savings		156		30,847
Home Bancorp, Inc.		1,018		36,037
HomeStreet, Inc.(a)		3,310		70,271
Impac Mortgage Holdings, Inc.(a)		1,386		5,239
Kearny Financial Corp.		11,117		142,520
LendingTree, Inc.(a)		1,058		232,305
Luther Burbank Corp.		2,629		23,714
Malvern Bancorp, Inc.(a)		1,026		20,243
Merchants Bancorp		2,139		42,694
Meridian Bancorp, Inc.		6,383		91,405
Meta Financial Group, Inc.		3,708		71,898
MGIC Investment Corp.(a)		48,047		502,572
Mr Cooper Group, Inc.(a)		9,637		112,464
NMI Holdings, Inc., Class A(a)		8,265		147,530
Northfield Bancorp, Inc.		5,768		78,156
Northwest Bancshares, Inc.		12,707		215,257
OceanFirst Financial Corp.		6,307		141,971
Ocwen Financial Corp.(a)		15,605		20,911
OP Bancorp(a)		1,864		16,534
Oritani Financial Corp.		5,330		78,617
PCSB Financial Corp.		2,088		40,841
PDL Community Bancorp(a)		1,335		17,008
PennyMac Financial Services, Inc.		2,351		49,982
Provident Bancorp, Inc.(a)		658		14,265
Provident Financial Services, Inc.		8,238		198,783
Prudential Bancorp, Inc.		1,270		22,352
Radian Group, Inc.		28,697		469,483
Riverview Bancorp, Inc.		3,056		22,248
SI Financial Group, Inc.		1,654		21,055
Southern Missouri Bancorp, Inc.		872		29,561
Sterling Bancorp, Inc.		2,960		20,572
Territorial Bancorp, Inc.		922		23,954
Timberland Bancorp, Inc.		982		21,899
TrustCo Bank Corp.		12,433		85,290
United Community Financial Corp.		6,439		56,985
United Financial Bancorp, Inc.		6,735		99,004
Walker & Dunlop, Inc.		3,675		158,944
Washington Federal, Inc.		11,090		296,214
Waterstone Financial, Inc.		3,350		56,146

Security	Shares		Value
Thrifts & Mortgage Finance (continued)
Western New England Bancorp, Inc.		3,480	$	34,939
WSFS Financial Corp.		4,004		151,792
				5,515,863
Tobacco — 0.2%
22nd Century Group, Inc.(a)		14,966		37,265
Pyxus International, Inc.(a)		953		11,303
Turning Point Brands, Inc.		976		26,567
Universal Corp.		3,281		177,666
Vector Group Ltd.		13,602		132,347
				385,148
Trading Companies & Distributors — 1.2%
Aircastle Ltd.		6,453		111,250
Applied Industrial Technologies, Inc.		5,068		273,368
Beacon Roofing Supply, Inc.(a)		9,055		287,225
BlueLinx Holdings, Inc.(a)		1,118		27,626
BMC Stock Holdings, Inc.(a)		8,952		138,577
CAI International, Inc.(a)		2,260		52,500
DXP Enterprises, Inc.(a)		2,114		58,854
EVI Industries, Inc.		557		18,576
Foundation Building Materials, Inc.(a)		1,782		14,808
GATX Corp.		4,992		353,484
General Finance Corp.(a)		1,474		14,902
GMS, Inc.(a)		4,325		64,270
H&E Equipment Services, Inc.		4,225		86,275
Herc Holdings, Inc.(a)		3,189		82,882
Kaman Corp.		3,667		205,682
Lawson Products, Inc.(a)		1,004		31,726
MRC Global, Inc.(a)		11,161		136,499
Nexeo Solutions, Inc.(a)		4,348		37,349
NOW, Inc.(a)		14,327		166,766
Rush Enterprises, Inc., Class A		3,991		137,609
Rush Enterprises, Inc., Class B		483		17,195
SiteOne Landscape Supply, Inc.(a)		5,304		293,152
Systemax, Inc.		1,623		38,773
Textainer Group Holdings Ltd.(a)		3,621		36,065
Titan Machinery, Inc.(a)		2,475		32,546
Triton International Ltd.		6,552		203,571
Veritiv Corp.(a)		1,528		38,154
Willis Lease Finance Corp.(a)		459		15,881
				2,975,565
Water Utilities — 0.5%
American States Water Co.		4,860		325,814
AquaVenture Holdings Ltd.(a)		1,279		24,160
Artesian Resources Corp., Class A		936		32,638
Cadiz, Inc.(a)		3,363		34,639
California Water Service Group		6,378		303,976
Connecticut Water Service, Inc.		1,600		106,992
Consolidated Water Co. Ltd.		1,787		20,836
Global Water Resources, Inc.		1,267		12,847
Middlesex Water Co.		2,114		112,782
Pure Cycle Corp.(a)		2,648		26,295
SJW Group		2,288		127,259
York Water Co. (The)		1,710		54,823
				1,183,061
Wireless Telecommunication Services — 0.2%
Boingo Wireless, Inc.(a)		5,448		112,065
Gogo, Inc.(a)		7,458		22,299
NII Holdings, Inc.(a)		11,793		52,007
Shenandoah Telecommunications Co.		6,200		274,350
Spok Holdings, Inc.		2,221		29,451
				490,172
Total Common Stocks — 97.4% (Cost: $220,208,668)				236,171,400

SCHEDULE OF INVESTMENTS 21

Schedule of Investments  (continued) December 31, 2018 BlackRock Small Cap Index V.I. Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Investment Companies — 0.0%
Ferroglobe Representation & Warranty Insurance Trust — Beneficial Interest Units(b)		10,979	$	—
Total Investment Companies — 0.0% (Cost: $—)				—
Total Long-Term Investments — 97.4% (Cost: $220,208,668)				236,171,400
Short-Term Securities — 2.3%(c)
BlackRock Liquidity Funds,T-Fund, Institutional Class, 2.32%(d)		5,505,930		5,505,930
JPMorgan US Treasury Plus Money Market Fund, Agency Class, 2.24%		58		58
Total Short-Term Securities — 2.3% (Cost: $5,505,988)				5,505,988
Total Investments — 99.7% (Cost: $225,714,656)				241,677,388
Other Assets Less Liabilities — 0.3%				622,317
Net Assets — 100.0%			$	242,299,705

^(a)  Non-income producing security.

^(b)  Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy.

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

^(d)  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		—		5,505,930		5,505,930	$	5,505,930	$	22,616	$	—	$	—

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

For Fund compliance purposes, the Fund’s industry classifications refer to one or more of the industrysub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment advisor. These definitions may not apply for purposes of this report, which may combine such industrysub-classifications for reporting ease.

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

Description	Number of Contracts		Expiration Date		Notional Amount (000)		Value/ Unrealized Appreciation (Depreciation)
Long Contracts
Russell 2000E-Mini Index		93		03/15/19	$	6,273	$	(199,145	)

22 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Small Cap Index V.I. Fund

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statement of Assets and Liabilities were as follows:    

	Commodity Contracts		Credit Contracts		Equity Contracts		Foreign Currency Exchange Contracts		Interest Rate Contracts		Other Contracts		Total
Liabilities — Derivative Financial Instruments
Futures contracts
Net unrealized depreciation(a)	$	—	$	—	$	199,145	$	—	$	—	$	—	$	199,145

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

For the year ended December 31, 2018, the effect of derivative financial instruments in the Statement of Operations were 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	$	—	$	—	$	(652,193	)	$	—	$	—	$	—	$	(652,193	)
Net Change in Unrealized Appreciation (Depreciation) on:
Futures contracts	$	—	$	—	$	(227,515	)	$	—	$	—	$	—	$	(227,515	)

Average Quarterly Balances of Outstanding Derivative Financial Instruments

Futures contracts:
Average notional value of contracts — long	$	4,916,540

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

Fair Value Hierarchy as of Period End

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

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

	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Long-Term Investments
Common Stocks:
Aerospace & Defense	$	3,013,427	$	—	$	—	$	3,013,427
Air Freight & Logistics		779,319		—		—		779,319
Airlines		1,176,763		—		—		1,176,763
Auto Components		2,409,345		—		—		2,409,345
Automobiles		99,455		—		—		99,455
Banks		22,803,490		—		—		22,803,490
Beverages		694,299		—		—		694,299
Biotechnology		14,760,713		—		—		14,760,713
Building Products		2,798,672		—		—		2,798,672
Capital Markets		3,047,129		—		—		3,047,129
Chemicals		4,376,170		—		—		4,376,170
Commercial Services & Supplies		6,186,936		—		—		6,186,936
Communications Equipment		3,907,642		—		—		3,907,642
Construction & Engineering		2,431,949		—		—		2,431,949
Construction Materials		282,527		—		—		282,527
Consumer Finance		1,663,137		—		—		1,663,137
Containers & Packaging		247,041		—		—		247,041
Distributors		181,692		—		—		181,692
Diversified Consumer Services		2,164,079		—		—		2,164,079
Diversified Financial Services		411,105		—		—		411,105

SCHEDULE OF INVESTMENTS 23

Schedule of Investments  (continued) December 31, 2018 BlackRock Small Cap Index V.I. Fund

Fair Value Hierarchy as of Period End (continued)

	Level 1			Level 2		Level 3		Total
Diversified Telecommunication Services	$	1,336,884		$	—	$	—	$	1,336,884
Electric Utilities		2,928,566			—		—		2,928,566
Electrical Equipment		1,801,173			—		—		1,801,173
Electronic Equipment, Instruments & Components		5,894,600			—		—		5,894,600
Energy Equipment & Services		2,838,722			—		—		2,838,722
Entertainment		1,414,958			—		—		1,414,958
Equity Real Estate Investment Trusts (REITs)		15,814,673			—		—		15,814,673
Food & Staples Retailing		1,437,875			—		—		1,437,875
Food Products		2,847,779			—		8,202		2,855,981
Gas Utilities		2,783,306			—		—		2,783,306
Health Care Equipment & Supplies		8,829,649			—		—		8,829,649
Health Care Providers & Services		4,515,887			—		—		4,515,887
Health Care Technology		2,748,201			—		—		2,748,201
Hotels, Restaurants & Leisure		7,075,198			—		—		7,075,198
Household Durables		3,607,938			—		—		3,607,938
Household Products		559,490			—		—		559,490
Independent Power and Renewable Electricity Producers		857,633			—		—		857,633
Industrial Conglomerates		172,301			—		—		172,301
Insurance		6,758,081			—		—		6,758,081
Interactive Media & Services		1,250,858			—		—		1,250,858
Internet & Direct Marketing Retail		2,380,034			—		—		2,380,034
IT Services		4,838,879			—		—		4,838,879
Leisure Products		891,995			—		—		891,995
Life Sciences Tools & Services		1,312,095			—		—		1,312,095
Machinery		8,783,416			—		—		8,783,416
Marine		298,452			—		—		298,452
Media		3,349,045			—		—		3,349,045
Metals & Mining		2,867,677			—		—		2,867,677
Mortgage Real Estate Investment Trusts (REITs)		2,689,201			—		—		2,689,201
Multiline Retail		729,961			—		—		729,961
Multi-Utilities		1,313,481			—		—		1,313,481
Oil, Gas & Consumable Fuels		5,480,143			—		—		5,480,143
Paper & Forest Products		970,034			—		—		970,034
Personal Products		883,182			—		—		883,182
Pharmaceuticals		4,594,825			580		—		4,595,405
Professional Services		3,577,000			—		—		3,577,000
Real Estate Management & Development		1,406,157			—		—		1,406,157
Road & Rail		1,103,263			—		—		1,103,263
Semiconductors & Semiconductor Equipment		6,462,739			—		—		6,462,739
Software		12,953,088			—		—		12,953,088
Specialty Retail		7,116,438			—		—		7,116,438
Technology Hardware, Storage & Peripherals		627,067			—		—		627,067
Textiles, Apparel & Luxury Goods		2,075,975			—		—		2,075,975
Thrifts & Mortgage Finance		5,515,863			—		—		5,515,863
Tobacco		385,148			—		—		385,148
Trading Companies & Distributors		2,975,565			—		—		2,975,565
Water Utilities		1,183,061			—		—		1,183,061
Wireless Telecommunication Services		490,172			—		—		490,172
Short-Term Securities		5,505,988			—		—		5,505,988
	$	241,668,606		$	580	$	8,202	$	241,677,388
Derivative Financial Instruments(a)
Liabilities:
Equity contracts	$	(199,145	)	$	—	$	—	$	(199,145	)

^(a)  Derivative financial instruments are futures contracts. Futures 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.

24 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Statement of Assets and Liabilities

December 31, 2018

	BlackRock Small Cap Index V.I. Fund
ASSETS
Investments at value — unaffiliated (cost — $220,208,726)	$	236,171,458
Investments at value — affiliated (cost — $5,505,930)		5,505,930
Cash pledged for futures contracts		330,000
Receivables:
Investments sold		189,159
Capital shares sold		152,021
Dividends — affiliated		10,720
Dividends — unaffiliated		341,778
From the Manager		4,234
Variation margin on futures contracts		36,353
Deferred offering cost		27,309
Prepaid expenses		245
Total assets		242,769,207
LIABILITIES
Bank overdraft		15,597
Payables:
Investments purchased		38,939
Pricing fees		99,817
Capital shares redeemed		145,317
Printing fees		35,075
Professional fees		53,460
Investment advisory fees		33,166
Directors’ and Officer’s fees		5,191
Other accrued expenses		42,940
Total liabilities		469,502
NET ASSETS	$	242,299,705
NET ASSETS CONSIST OF
Paid-in capital	$	226,076,259
Accumulated earnings		16,223,446
NET ASSETS	$	242,299,705
Class I — Based on net assets of $242,299,705 and 25,230,797 shares outstanding, 100 million shares number of shares authorized, par value $0.10 per share	$	9.60

See notes to financial statements.

FINANCIAL STATEMENTS 25

Statement of Operations

Year Ended December 31, 2018

	BlackRock Small Cap Index V.I. Fund
INVESTMENT INCOME
Dividends — affiliated	$	22,616
Dividends — unaffiliated		4,572,938
Interest — unaffiliated		58,509
Foreign taxes withheld		(1,323	)
Total investment income		4,652,740
EXPENSES
Investment advisory		418,524
Reorganization		160,359
License		154,900
Professional		63,736
Printing		56,482
Custodian		36,995
Transfer agent		24,389
Directors and Officer		14,125
Accounting services		10,169
Registration		6,736
Offering		5,826
Miscellaneous		54,154
Total expenses		1,006,395
Less:
Fees waived and/or reimbursed by the Manager or Predecessor Manager		(218,538	)
Transfer agent fees waived and/or reimbursed		(23,136	)
Total expenses after fees waived and/or reimbursed		764,721
Net investment income		3,888,019
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — unaffiliated		57,418,437
Futures contracts		(652,193	)
		56,766,244
Net change in unrealized appreciation (depreciation) on:
Investments — unaffiliated		(84,616,728	)
Futures contracts		(227,515	)
		(84,844,243	)
Net realized and unrealized loss		(28,077,999	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(24,189,980	)

See notes to financial statements.

26 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Statements of Changes in Net Assets

	BlackRock Small Cap Index V.I. Fund
	Year Ended December 31,
	2018			2017
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income	$	3,888,019		$	3,561,877
Net realized gain		56,766,244			19,364,819
Net change in unrealized appreciation (depreciation)		(84,844,243	)		21,040,994
Net increase (decrease) in net assets resulting from operations		(24,189,980	)		43,967,690
DISTRIBUTIONS TO SHAREHOLDERS(a)(b)
Decrease in net assets resulting from distributions to shareholders		(62,190,705	)		(22,853,721	)
CAPITAL SHARE TRANSACTIONS
Shares sold		3,317,952			2,037,902
Shares issued in reinvestment of distributions		62,190,568			22,853,721
Shares redeemed		(77,181,228	)		(20,927,858	)
Net increase (decrease) in net assets derived from capital share transactions		(11,672,708	)		3,963,765
NET ASSETS(b)
Total increase (decrease) in net assets		(98,053,393	)		25,077,734
Beginning of year		340,353,098			315,275,364
End of year	$	242,299,705		$	340,353,098

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

^(b)  Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year RegulationS-X presentation changes. Refer to Note 11 for this prior year information.

See notes to financial statements.

FINANCIAL STATEMENTS 27

Financial Highlights

(For a share outstanding throughout each period)

	BlackRock Small Cap Index V.I. Fund(a)
	Class I
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	14.57		$	13.63		$	11.78		$	13.46		$	13.99
Net investment income(b)		0.18			0.16			0.15			0.11			0.11
Net realized and unrealized gain (loss)		(1.86	)		1.83			2.33			(0.74	)		0.51
Net increase (decrease) from investment operations		(1.68	)		1.99			2.48			(0.63	)		0.62
Distributions(c)
From net investment income		(0.19	)		(0.16	)		(0.16	)		(0.12	)		(0.11	)
From net realized gain		(3.10	)		(0.89	)		(0.47	)		(0.93	)		(1.04	)
Total distributions		(3.29	)		(1.05	)		(0.63	)		(1.05	)		(1.15	)
Net asset value, end of year	$	9.60		$	14.57		$	13.63		$	11.78		$	13.46
Total Return(d)
Based on net asset value		(11.25	)%		14.55	%		20.96	%		(4.86	)%		4.37	%
Ratios to Average Net Assets
Total expenses		0.30	%(e)		0.23	%		0.31	%		0.50	%		0.49	%
Total expenses after fees waived and/or reimbursed		0.23	%(e)		0.22	%		0.30	%		0.49	%		0.48	%
Net investment income		1.17	%		1.11	%		1.23	%		0.84	%		0.76	%
Supplemental Data
Net assets, end of year (000)	$	242,300		$	340,353		$	315,275		$	276,199		$	306,195
Portfolio turnover rate		17	%		12	%		15	%		14	%		15	%

^(a) On October 29, 2018, the Fund acquired all of the assets and assumed certain stated liabilities of the Small Cap Equity Index Fund (the “Predecessor Fund”), a series of State Farm Variable Product Trust, through a tax-free reorganization (the “Reorganization”). The Predecessor Fund is the performance and accounting survivor of the Reorganization.

^(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 insurance-related fees and expenses and assumes the reinvestment of distributions.

^(e)  Includes reorganization costs associated with the Fund’s reorganization. Without these costs, total expenses and total expenses after fees waived and/or reimbursed would have been 0.27% and 0.23%, respectively.

See notes to financial statements.

28 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements

1. ORGANIZATION

BlackRock Variable Series Funds, Inc. (the “Company”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as anopen-end management investment company. The Company is organized as a Maryland corporation that is comprised of 15 separate portfolios. The funds offer shares to insurance companies for their separate accounts to fund benefits under certain variable annuity and variable life insurance contracts. The financial statements presented are for BlackRock Small Cap Index V.I. Fund (the “Fund”). The Fund is classified as diversified.

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

Reorganization: On October 29, 2018, the Small Cap Equity Index Fund (the “Predecessor Fund”), a series of State Farm Variable Product Trust, reorganized into the Fund (the “Reorganization”) pursuant to an Agreement and Plan of Reorganization. The Reorganization closed immediately before the opening of business on October 29, 2018 and was approved by shareholders of the Predecessor Fund.

The Predecessor Fund is the performance and accounting survivor of the Reorganization; accordingly, Fund assumed the performance and financial history of the Predecessor Fund upon completion of the Reorganization. The Reorganization was tax-free, meaning that the Predecessor Fund’s shareholders became shareholders of the Fund without realizing any gain or loss for federal income tax purposes.

As a result, the Fund acquired all of the assets and assumed certain stated liabilities of the Predecessor Fund in exchange for an equal aggregate value of newly-issued shares of the Fund. Each shareholder of the Predecessor Fund received shares of the Fund in an amount equal to the aggregate net asset value (“NAV”) of such shareholder’s Predecessor Fund shares, as determined at the close of business on October 26, 2018.

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

Predecessor Fund	Shares Prior to Reorganization		Conversion Ratio		Shares Post-Reorganization
Small Cap Equity Index Fund, a series of State Farm Variable Product Trust		19,044,278		1		19,044,278

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

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

Predecessor Fund	Net Assets		Fair Value of Investments		Cost of Investments
Small Cap Equity Index Fund, a series of State Farm Variable Product Trust	$	268,225,204	$	262,372,806	$	221,728,024

Reorganization costs incurred by the Fund in connection with the Reorganization were expensed by the Fund. The Manager or Predecessor Manager reimbursed the Fund $160,359, which is included in fees waived and/or reimbursed by the Manager or Predecessor Manager in the Statement 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. The 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 Fund is 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. Interest income, including amortization and accretion of premiums and discounts on debt security is recognized on an accrual basis.

Foreign Currency Translation: The 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.

The 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 Statement of Operations from

NOTESTO FINANCIAL STATEMENTS 29

Notes to Financial Statements  (continued)

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. The 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 the Fund enters into certain investments (e.g., futures contracts) that would be treated as “senior securities” for 1940 Act purposes, the Fund may segregate or designate on its books and records cash or liquid assets having a market value at least equal to the amount of its future obligations under such investments. Doing so allows the investment to be excluded from treatment as a “senior security.” Furthermore, if required by an exchange or counterparty agreement, the Fund 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.

Offering Costs:Offering costs are amortized over a12- month period beginning with the commencement of operations of a class of shares.

Distributions: Distributions paid by the Fund are recorded on theex-dividend date. Distributions of capital gains are recorded on the ex-dividend date and made at least annually. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP.

Recent Accounting Standards: 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 Fund.

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

Other: Expenses directly related to the Fund are charged to the Fund. Other operating expenses shared by several funds, including other funds managed by the Manager, are prorated among those funds on the basis of relative net assets or other appropriate methods.

3. INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS

Investment Valuation Policies: The Fund’s 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 Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Fund determines the fair values of its financial instruments using various independent dealers or pricing services under policies approved by the Board of Directors of the Company (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 the Fund’s assets and liabilities:

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

• Generally, trading in foreign instruments is substantially completed each day at various times prior to the close of trading on the NYSE. Occasionally, events affecting the values of such instruments may occur between the foreign market close and the close of trading on the NYSE that may not be reflected in the computation of the Fund’s net assets. Each business day, the Fund uses a pricing service to assist with the valuation of certain foreign exchange-traded equity securities and foreign exchange-traded and over-the-counter (“OTC”) options (the “Systematic Fair Value Price”). Using current market factors, the Systematic Fair Value Price is designed to value such foreign securities and foreign options at fair value as of the close of trading on the NYSE, which follows the close of the local markets.

• Investments 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.

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 the Fund might reasonably expect to receive or pay from the current sale or purchase of that asset or liability in an arm’s-length transaction. Fair value determinations shall be based upon all available factors that the Global Valuation Committee, or its delegate, deems relevant and consistent with the principles of fair value measurement.

The 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 the 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

30 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

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)  recentmarket 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 the Fund. Typically, the most recently available information by a Private Company is as of a date that is earlier than the date the Fund is calculating its NAV. This factor may result in a difference between the value of the investment and the price the 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 the Fund has the ability to access

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

• Level 3 — Unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the 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 or funds. 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 the 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. DERIVATIVE FINANCIAL INSTRUMENTS

The Fund engages in various portfolio investment strategies using derivative contracts both to increase the returns of the Fund and/or to manage its 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 Schedule 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).

NOTESTO FINANCIAL STATEMENTS 31

Notes to Financial Statements  (continued)

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

Securities deposited as initial margin are designated in the Schedule of Investments and cash deposited, if any, is shown as cash pledged for futures contracts in the Statement of Assets and Liabilities. Pursuant to the contract, the Funds agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in market value of the contract (“variation margin”). Variation margin is recorded as unrealized appreciation (depreciation) and, if any, shown as variation margin receivable (or payable) on futures contracts in the Statement of Assets and Liabilities. When the contract is closed, a realized gain or loss is recorded in the Statement 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.

5. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

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

For such services, the Fund paid the Manager a monthly fee at an annual rate equal to 0.08% of the average daily value of the Fund’s net assets for the period October 28, 2018 through December 31, 2018.

Prior to October 29, 2018, the Predecessor Fund paid State Farm Investment Management Corp. (“SFIMC” or “Predecessor Manager”), the investment adviser to the Predecessor Fund, an effective investment advisory fee of 0.13%.

SFIMC engaged BlackRock Fund Advisors (“BFA”) as the investment sub-adviser to provide day-to-day portfolio management for the Predecessor Fund. Sub-advisory fees for managing the portfolio were paid by SFIMC. No additional advisory fees were charged to the Predecessor Fund for the services of the sub-adviser.

For the period January 1, 2018 through October 26, 2018, BFA earned $94,925 of fees for sub-advisory services which is included in Investment advisory in the Statement of Operations.

Prior to October 29, 2018, the Predecessor Fund did not pay any direct or indirect discount, commission or other compensation for transfer agent services provided by SFIMC or for distribution and underwriting services provided by State Farm VP Management Corp.

Transfer Agent: On behalf of the Fund, the Manager entered into agreements with insurance companies and other financial intermediaries (“Service Organizations”), some of which may be affiliates. Pursuant to these agreements, the Service Organizations provide the Fund with administrative, networking, recordkeeping,sub-transfer agency and shareholder services tosub-accounts they service. For these services, the Service Organizations receive an annual fee per shareholder account, which will vary depending on share class and/or net assets of Fund shareholders serviced by the Service Organizations, which is shown as transfer agent — class specific. For the period October 29, 2018 to December 31, 2018, the Fund did not pay any amounts to affiliates in return for these services.

In addition, the Fund pays the transfer agent, which is not an affiliate, a fee for the issuance, transfer and redemption of shares and the opening and maintenance of shareholder accounts, which is included in transfer agent in the Statement of Operations. For the period October 29, 2018 to December 31, 2018, the Fund had no class specific transfer agent fees.

Expense Limitations, Waivers and Reimbursements:With respect to the Fund, effective October 29, 2018, the Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees the 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. This amount is included in fees waived and/or reimbursed by the Manager or Predecessor Manager in the Statement of Operations. For the year ended December 31, 2018, the amount waived was $695.

Effective October 29, 2018, the Manager has contractually agreed to waive its investment advisory fee with respect to any portion of the 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, 2021. The contractual agreement may be terminated upon 90 days’ notice by a majority of directors who are not “interested persons” of the Fund, as defined in the 1940 Act (“Independent Directors”) or by a vote of a majority of the outstanding voting securities of the Fund. For the year ended December 31, 2018, there were no fees waived by the Manager.

With respect to the Fund, effective October 29, 2018, the Manager has contractually agreed to waive and/or reimburse fees or expenses in order to limit expenses, excluding interest expense, dividend expense, acquired fund fees and expenses, and certain other fund expenses, which constitute extraordinary expenses not incurred in the ordinary course of the Fund’s business (“expense limitation”). The expense limitation as a percentage of average daily net assets is 0.22%. The Manager has agreed not to reduce or discontinue this contractual expense limitation through April 30, 2021, unless approved by the Board, including a majority of the Independent Directors, or by a vote of a majority of the outstanding voting securities of the Fund. For the year ended December 31, 2018, the fees waived and/or reimbursed by the Manager was $23,988. These amounts are shown as transfer agent fees waived and/or reimbursed in the Statement of Operations. For the year ended December 31, 2018, the fees waived and/or reimbursed were $23,136.

In addition, effective October 29, 2018, the Manager has contractually agreed to waive and/or reimburse fees or expenses in order to limit fees paid by the Fund for operational and recordkeeping services to 0.05% of average daily net assets. These amounts are shown as transfer agent fees waived and/or reimbursed in the Statement of Operations. For the year ended December 31, 2018, there were no fees waived and/or reimbursed pursuant to this arrangement.

32 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

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

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

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

On December 31, 2018, the 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
	2020
Fund level	$	23,988
Class I		23,136

Prior to October 26, 2018, SFIMC reimbursed expenses incurred by the Predecessor Fund (other than the investment advisory and management services fee, acquired fund fees and expenses and custody fees) that exceeded 0.10% of the Predecessor Fund’s average daily net assets. SFIMC also reimbursed all custody fees. Prior-year reimbursements and waivers are not subject to recoupment. For the period January 1, 2018 through October 26, 2018, the amount waived was $33,496, which is included in fees waived and/or reimbursed by the Manager or Predecessor Manager in the Statement of Operations.

Interfund Lending: In accordance with an exemptive order (the “Order”) from the SEC, the 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 the Fund’s investment policies and restrictions. The 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 33¹⁄₃% 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 Fund did not participate in the Interfund Lending Program.

Directors and Officers: Certain directors and/or officers of the Company are directors and/or officers of BlackRock or its affiliates. The Fund reimburses the Manager for a portion of the compensation paid to the Company’s Chief Compliance Officer, which is included in Directors and Officer in the Statement of Operations.

Other Transactions: The Fund may purchase securities from, or sell securities to, an affiliated fund provided the affiliation is due solely to having a common investment adviser, common officers, or common directors. For the year ended December 31, 2018, the purchase and sale transactions and any net realized gains (losses) with an affiliated fund in compliance with Rule17a-7 under the 1940 Act were as follows:

Purchases	$	6,529
Sales		12,753
Net Realized Loss		(1,146	)

6. PURCHASES AND SALES

For the year ended December 31, 2018, purchases and sales of investments, excluding short-term securities, were $53,697,959 and $124,854,643, respectively.

7. INCOME TAX INFORMATION

It is the 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.

The 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 the Fund’s U.S. federal tax returns generally remains open for each of the four years ended December 31, 2018. The statutes of limitations on the 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 Fund as of December 31, 2018, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the Fund’s financial statements.

NOTESTO FINANCIAL STATEMENTS 33

Notes to Financial Statements  (continued)

US 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 difference attributable to non-deductible expenses was reclassified to the following accounts:

Paid in capital	$	(5,826	)
Accumulated earnings	$	5,826

The tax character of distributions paid was as follows:

	12/31/18		12/31/17
Ordinary income	$	6,107,960	$	5,409,376
Long term capital gains		56,082,745		17,444,345
	$	62,190,705	$	22,853,721

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

Undistributed ordinary income	$	181,471
Undistributed long-term capital gains		202,849
Net unrealized gains(a)		15,839,126
	$	16,223,446

^(a)  The difference between book-basis and tax-basis net unrealized gains was attributable primarily to the tax deferral of losses on wash sales, the realization for tax purposes of unrealized gains on investments in passive foreign investment companies, the realization for tax purposes of unrealized gains/losses on certain futures contracts and the classification of investments.

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:

Tax cost	$	225,838,261
Gross unrealized appreciation	$	65,514,156
Gross unrealized depreciation		(49,675,030	)
Net unrealized appreciation	$	15,839,126

8. BANK BORROWINGS

The Company, on behalf of the Fund, 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 Fund may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Fund, 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. Prior to April 19, 2018, the aggregate commitment amount was $2.1 billion and the fee was 0.12% per annum. 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 Statement 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 Fund did not borrow under the credit agreement.

9. PRINCIPAL RISKS

In the normal course of business, the Fund invests in securities or other instruments and may enter into certain transactions, and such activities subject the 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. The Fund’s prospectus provides details of the risks to which the Fund is subject.

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. The Fund may invest in illiquid investments and may experience difficulty in selling those investments in a timely manner at the price that it believes the investments are worth. Prices may fluctuate widely over short or extended periods in response to company, market or economic news. Markets also tend to move in cycles, with periods of rising and falling prices. This volatility may cause the 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 the Fund may lose value, regardless of the individual results of the securities and other instruments in which the Fund invests.

34 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

The price the Fund could receive upon the sale of any particular portfolio investment may differ from the 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 the 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 the Fund, and the Fund could realize a greater than expected loss or lesser than expected gain upon the sale of the investment. The Fund’s ability to value its investments may also be impacted by technological issues and/or errors by pricing services or other third party service providers.

Counterparty Credit Risk: The Fund 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 Fund manages 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 Fund to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Fund’s exposure to market, issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Statement of Assets and Liabilities, less any collateral held by the Fund.

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.

With exchange-traded futures, there is less counterparty credit risk to the Fund 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, the Fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency). Additionally, credit risk exists in exchange-traded futures with respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Fund.

10. CAPITAL SHARE TRANSACTIONS

Transactions in capital shares were as follows:

	Year Ended 12/31/2018 (a)						Year Ended 12/31/2017
	Shares			Amount			Shares			Amount
Class I
Shares sold		226,594		$	3,317,952			141,872		$	2,037,902
Shares issued in reinvestment of distributions		6,509,197			62,190,568			1,561,047			22,853,721
Shares redeemed		(4,870,048	)		(77,181,228	)		(1,463,353	)		(20,927,858	)
Net increase (decrease)		1,865,743		$	(11,672,708	)		239,566		$	3,963,765

^(a) Includes the activity of the Predecessor Fund prior to the Reorganization on October 29, 2018. Excludes the exchange of shares of the Predecessor Fund for shares of the Fund during the Reorganization. The Predecessor Fund is the performance and accounting survivor of the Reorganization.

As of December 31, 2018, BlackRock Financial Management, Inc., an affiliate of the Fund, owned 710 Class I Shares of BlackRock Small Cap Index V.I. Fund.

11. 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 Fund has adopted the amendments pertinent to RegulationS-X in this shareholder report. The amendments impacted certain disclosure presentation on the Statement 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
	Class I		(3,509,680	)		(19,344,041	)

Undistributed net investment income as of December 31, 2017 was $867.

12. SUBSEQUENT EVENTS

Management has evaluated the impact of all subsequent events on the Fund 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.

NOTESTO FINANCIAL STATEMENTS 35

Report of Independent Registered Public Accounting Firm

To the Shareholders of BlackRock Small Cap Index V.I. Fund and the Board of Directors of BlackRock Variable Series Funds, Inc.:

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying statement of assets and liabilities of BlackRock Small Cap Index V.I. Fund (formerly, Small Cap Equity Index Fund of State Farm Variable Product Trust) of BlackRock Variable Series Funds, Inc. (the “Fund”), including the schedule of investments, as of December 31, 2018, the related statements of operations, changes in net assets, and the financial highlights for the year 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 Fund as of December 31, 2018, and the results of its operations, the changes in its net assets, and the financial highlights for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

The statements of changes in net assets for the year ended December 31, 2017 and the financial highlights for each of the four years in the period ended December 31, 2017 of the Fund were audited by other auditors whose report dated February 23, 2018, expressed an unqualified opinion on those financial statements and financial highlights.

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements and financial highlights based on our audit. 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 Fund 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 audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit 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 Fund’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit 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 audit 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 audit provides a reasonable basis for our opinion.

Deloitte & Touche LLP

Boston, Massachusetts

February 15, 2019

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

36 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Disclosure of Investment Advisory Agreement

The Board of Directors (the “Board,” the members of which are referred to as “Board Members”) of BlackRock Variable Series Funds, Inc. (the “Company”) met in person on November 14, 2017 (the “Meeting”) to consider the approval of the proposed investment advisory agreement (the “Advisory Agreement” or the “Agreement”) between the Company, on behalf of the BlackRock International Index V.I. Fund (the “International Fund”) and BlackRock Small Cap Index V.I. Fund (the “Small Cap Fund”) (each, a “Fund” and together, the “Funds”), and BlackRock Advisors, LLC (the “Manager” or “BlackRock”) as each Fund’s investment advisor. The Funds commenced operations in October 2018.

Activities and Composition of the Board

On the date of the Meeting, the Board consisted of eleven individuals, nine of whom were not “interested persons” of the Company 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 each 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 Committee and an Executive Committee, each of which is chaired by an Independent Board Member and composed of Independent Board Members (except for the Performance Oversight Committee and the Executive Committee, each of which also has one interested Board Member).

The Agreement

Pursuant to the 1940 Act, the Board is required to consider the initial approval of the Agreement. The Board’s consideration of the Agreement is a deliberative process, during which the Board assessed, among other things, the nature, extent and quality of the services to be provided to each Fund by BlackRock, BlackRock’s personnel and affiliates, including (as applicable): investment management; accounting, administrative and shareholder services; oversight of each 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 Agreement

The Approval Process: At the Meeting, the Board reviewed materials relating to its consideration of the Agreement. The Board considered all factors it believed relevant with respect to the Company and each Fund, including, among other factors: (a) the nature, extent and quality of the services to be provided by BlackRock; (b) the investment performance of BlackRock portfolio management; (c) the advisory fee and the estimated cost of the services and estimated profits to be realized by BlackRock and its affiliates from their relationship with each Fund; (d) the sharing of potential economies of scale; (e) potentialfall-out benefits to BlackRock and its affiliates as a result of BlackRock’s relationship with each Fund; and (g) other factors deemed relevant by the Board Members.

In determining whether to approve the Agreement, 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 Agreement. The Board received materials in advance of the Meeting relating to its consideration of the Agreement, including, among other things, (a) information independently compiled and prepared by Broadridge Financial Solutions, Inc. (“Broadridge”), based on either a Lipper classification or Morningstar category, regarding each Fund’s estimated fees and expenses as compared with a peer group of funds as determined by Broadridge (“Expense Peers”) and other metrics, as applicable; (b) information regarding BlackRock’s economic outlook for each 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 noted information received 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, reviewed the nature, extent and quality of services to be provided by BlackRock, including the investment advisory services to be provided to each Fund. The Board received information concerning the investment philosophy and investment process to be used by BlackRock in managing each Fund, as well as a description of the capabilities, personnel and services of BlackRock. In connection with this review, the Board considered BlackRock’sin-house research capabilities as well as other resources available to its personnel. The Board considered the scope of the services to be provided by BlackRock to each Fund under the Agreement relative to services typically provided by third parties to other funds. The Board noted that the standard of care applicable under the Agreement was comparable to that found generally in investment company advisory agreements. The Board concluded that the scope of BlackRock’s services to be provided to each Fund was consistent with each Fund’s operational requirements, including, in addition to seeking to meet its investment objective, compliance with investment restrictions, tax and reporting requirements and related shareholder services.

The Board, including the Independent Board Members, also considered the quality of the administrative and othernon-investment advisory services to be provided by BlackRock and its affiliates to each Fund. The Board evaluated the procedures of BlackRock designed to fulfill its fiduciary duty to each Fund with respect to possible conflicts of interest, including BlackRock’s code of ethics (regulating the personal trading of BlackRock’s officers and employees), the procedures by which BlackRock allocates trades among its various investment advisory clients, the integrity of the systems in place to ensure compliance with the foregoing and the record of BlackRock in these matters. The Board also noted information received at prior Board meetings concerning the standards of BlackRock with respect to the execution of portfolio transactions.

The Board, including the Independent Board Members, considered, among other factors, with respect to BlackRock: the number, education and experience of investment personnel generally and each Fund’s portfolio management team; BlackRock’s research capabilities; investments by portfolio managers in the funds they manage;

DISCLOSUREOF INVESTMENT ADVISORY AGREEMENT 37

Disclosure of Investment Advisory Agreement  (continued)

portfolio trading capabilities; use of technology; commitment to compliance; credit analysis capabilities; risk analysis and oversight capabilities; and the approach to training and retaining portfolio managers and other research, advisory and management personnel. The Board also considered BlackRock’s overall risk management program, including the continued efforts of BlackRock and its affiliates to address cybersecurity risks and the role of BlackRock’s Risk & Quantitative Analysis Group. The Board engaged in a review of BlackRock’s compensation structure with respect to each Fund’s portfolio management team and BlackRock’s ability to attract and retain high-quality talent and create performance incentives. The Board also considered the business reputation of BlackRock and its financial resources and concluded that BlackRock would be able to meet any reasonably foreseeable obligation under the Agreement.

In addition to investment advisory services, the Board, including the Independent Board Members, considered the quality of the administrative and othernon-investment advisory services to be provided by BlackRock and its affiliates to each Fund. The Board noted that BlackRock and its affiliates will provide each Fund with certain administrative, shareholder and other services (in addition to any such services to be provided to each Fund by third parties) and officers and other personnel as are necessary for the operations of each Fund. In particular, the Board noted that BlackRock and its affiliates will provide each 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, each Fund’s custodian, fund accountant, transfer agent, and auditor; (v) organizing Board meetings and preparing the materials for such Board meetings; (vi) providing legal and compliance support; (vii) furnishing analytical and other support to assist the Board in its consideration of strategic issues such as the merger, consolidation or repurposing of certainopen-end funds; and (viii) performing administrative functions necessary for the operation of each Fund, such as tax reporting, expense management, fulfilling regulatory filing requirements, overseeing each Fund’s distribution partners, and shareholder call center and other services. The Board reviewed the structure and duties of BlackRock’s fund administration, shareholder services, and legal & compliance departments and considered BlackRock’s policies and procedures for assuring compliance with applicable laws and regulations.

B. The Investment Performance of each Fund and BlackRock: The Board, including the Independent Board Members, previously received and considered information about BlackRock’s investment performance for other funds. The Board, however, could not consider the performance history of the Funds because the Funds were not yet organized and had not yet commenced operations as of the date of the Meeting.

C. Consideration of the Advisory/Management Fees and the Cost of the Services to be Provided and Estimated Profits to be Realized by BlackRock and its Affiliates from their Relationship with each Fund: In connection with the initial approval of the Agreement, the Board, including the Independent Board Members, reviewed each Fund’s proposed contractual management fee rate compared with those of its Expense Peers. The contractual management fee rate represents a combination of the advisory fee and any administrative fees, before taking into account any reimbursements or fee waivers. In addition, the Board, including the Independent Board Members, considered each Fund’s estimated total expense ratio, as well as its actual management fee rate, to those of its Expense Peers. The estimated total expense ratio represents a fund’s total net operating expenses, including any12b-1 or non12b-1 service fees. The estimated 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 andsub-advised mutual funds (including mutual funds sponsored by third parties).

The Board noted that each Fund’s contractual management fee rate and actual management fee rate ranked in the first quartile, and that each Fund’s estimated total expense ratio ranked in the first quartile, relative to each Fund’s Expense Peers. The Board further noted that BlackRock and the Board have contractually agreed to a cap on each Fund’s total expenses as a percentage of each Fund’s average daily net assets. Additionally, the Board noted that BlackRock and the Board have contractually agreed to a cap on certain operational and recordkeeping fees for each of the Funds.

Following consideration of this information, the Board, including the Independent Board Members, concluded that the fees to be paid pursuant to the Agreement were fair and reasonable in light of the services provided.

As the Funds had not commenced operations as of the date of the Meeting, BlackRock was not able to provide the Board with specific information concerning the expected profits to be realized by BlackRock and its affiliates from their relationships with the Funds. BlackRock, however, will provide the Board with such information at future meetings.

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 each Fund increase. The Board also noted the existence of fee waivers and/or expense caps, noting that any contractual fee waivers and expense caps would be approved by the Board.

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 each Fund, both tangible and intangible, such as BlackRock’s ability to leverage its investment professionals who manage other portfolios and risk management personnel, an increase in BlackRock’s profile in the investment advisory community, and the engagement of BlackRock’s affiliates as service providers to each 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 noted that, subject to applicable law, BlackRock may use and benefit from third party research obtained by soft dollars generated by certain registered fund transactions to assist in managing all or a number of its other client accounts.

The Board, including all of the Independent Board Members, concluded that these potential ancillary benefits that BlackRock and its affiliates could receive with regard to providing investment advisory and other services to each Fund were consistent with those generally available to other mutual fund sponsors.

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

38 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Disclosure of Investment Advisory Agreement  (continued)

Conclusion    

The Board, including the Independent Board Members, approved the Advisory Agreement between the Manager and the Company, on behalf of each Fund, for atwo-year term beginning on the effective date of the 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 Agreement were fair and reasonable and in the best interest of each Fund and its shareholders. In arriving at its decision to approve the Agreement, the Board did not identify any single factor or group of factors asall-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 AGREEMENT 39

Glossary of Terms Used in this Report

Currency
USD	United States Dollar
Portfolio Abbreviations
CLO	Collateralized Loan Obligation
REIT	Real Estate Investment Trust

40 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Director and Officer Information

Independent Directors (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
Robert M. Hernandez 1944	Chair of the Board and Director (Since 2007)	Director, Vice Chairman and Chief Financial Officer of USX Corporation (energy and steel business) from 1991 to 2001; Director andnon-executive Chairman, RTI International Metals, Inc. from 1990 to 2015; Director, TE Connectivity (electronics) from 2006 to 2012.	32 RICs consisting of 95 Portfolios	Chubb Limited (insurance company); Eastman Chemical Company
James H. Bodurtha 1944	Director (Since 2007)	Director, The China Business Group, Inc. (consulting and investing firm) from 1996 to 2013 and Executive Vice President thereof from 1996 to 2003; Chairman of the Board, Berkshire Holding Corporation since 1980; Director, ICI Mutual since 2010.	32 RICs consisting of 95 Portfolios	None
Bruce R. Bond 1946	Director (Since 2007)	Board Member, Amsphere Limited (software) since 2018; Trustee and Member of the Governance Committee, State Street Research Mutual Funds from 1997 to 2005; Board Member of Governance, Audit and Finance Committee, Avaya Inc. (computer equipment) from 2003 to 2007.	32 RICs consisting of 95 Portfolios	None
Honorable Stuart E. Eizenstat 1943	Director (Since 2007)	Senior Counsel of Covington and Burling LLP (law firm) since 2016; Head of International Practice thereof since 2001, and Partner thereof from 2001 to 2016; Advisory Board Member, OCP S.A. (phosphates) since 2010; International Advisory Board Member, The Coca-Cola Company from 2002 to 2011; Advisory Board Member, Veracity Worldwide, LLC (risk management) from 2007 to 2012; Member of the International Advisory Board, GML Ltd. (energy) since 2003; Board of Directors, Ferroglobe (silicon metals) since 2016.	32 RICs consisting of 95 Portfolios	Alcatel-Lucent (telecommunications); Global Specialty Metallurgical; UPS Corporation (delivery service)
Henry Gabbay 1947	Director (Since 2007)	Board Member, Equity-Liquidity andClosed-End Fund Boards from 2007 through 2014; Consultant, BlackRock, Inc. from 2007 to 2008; Managing Director, BlackRock, Inc. from 1989 to 2007; Chief Administrative Officer, BlackRock Advisors, LLC from 1998 to 2007; President of BlackRock Funds and BlackRock Allocation Target Shares (formerly, BlackRock Bond Allocation Target Shares) from 2005 to 2007 and Treasurer of certainclosed-end funds in the BlackRock fund complex from 1989 to 2006.	32 RICs consisting of 95 Portfolios	None
Lena G. Goldberg 1949	Director (Since 2016)	Senior Lecturer, Harvard Business School since 2008; Director, Charles Stark Draper Laboratory, Inc. since 2013; FMR LLC/Fidelity Investments (financial services) from 1996 to 2008, serving in various senior roles including Executive Vice President — Strategic Corporate Initiatives and Executive Vice President and General Counsel; Partner, Sullivan & Worcester LLP from 1985 to 1996 and Associate thereof from 1979 to 1985.	32 RICs consisting of 95 Portfolios	None

DIRECTORAND OFFICER INFORMATION

Director and Officer Information  (continued)

Independent Directors (a)(continued)
Name Year of Birth (b)	Position(s) Held (Length of Service) (c)	Principal Occupation(s) During Past Five Years	Number of BlackRock-Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen	Public Company and Other Investment Company Directorships Held During Past Five Years
Henry R. Keizer 1956	Director (Since 2016)	Director, Park Indemnity Ltd. (captive insurer) since 2010; Director, MUFG Americas Holdings Corporation and MUFG Union Bank, N.A. (financial and bank holding company) from 2014 to 2016; Director, American Institute of Certified Public Accountants from 2009 to 2011; Director, KPMG LLP (audit, tax and advisory services) from 2004 to 2005 and 2010 to 2012; Director, KPMG International in 2012, Deputy Chairman and Chief Operating Officer thereof from 2010 to 2012 and U.S. Vice Chairman of Audit thereof from 2005 to 2010; Global Head of Audit, KPMGI (consortium of KPMG firms) from 2006 to 2010; Director, YMCA of Greater New York from 2006 to 2010.	32 RICs consisting of 95 Portfolios	Hertz Global Holdings (car rental); Montpelier Re Holdings, Ltd. (publicly held property and casual reinsurance) from 2013 until 2015; Sealed Air Corp. (packaging); WABCO (commercial vehicle safety systems)
John F O’Brien 1943	Director (Since 2007)	Trustee, Woods Hole Oceanographic Institute since 2003 and Chairman thereof from 2009 to 2015;Co-Founder and Managing Director, Board Leaders LLC (director education) since 2005.	32 RICs consisting of 95 Portfolios	Cabot Corporation (chemicals); LKQ Corporation (auto parts manufacturing); TJX Companies, Inc. (retailer)
Donald C. Opatrny 1952	Director (Since 2015)	Trustee, Vice Chair, Member of the Executive Committee and Chair of the Investment Committee, Cornell University since 2004; President, Trustee and Member of the Investment Committee, The Aldrich Contemporary Art Museum from 2007 to 2014; Member of the Board and Investment Committee, University School from 2007 to 2018; Member of the Investment Committee, Mellon Foundation from 2009 to 2015; Trustee, Artstor (a Mellon Foundation affiliate) from 2010 to 2015; President and Trustee, the Center for the Arts, Jackson Hole from 2011 to 2018; Director, Athena Capital Advisors LLC (investment management firm) since 2013; Trustee and Chair of the Investment Committee, Community Foundation of Jackson Hole since 2014; Member of Affordable Housing Supply Board of Jackson, Wyoming since 2017; Member, Investment Funds Committee, State of Wyoming since 2017; Trustee, Phoenix Art Museum since 2018.	32 RICs consisting of 95 Portfolios	None
Interested Directors (a)(d)
Name Year of Birth (b)	Position(s) Held (Length of Service) (c)	Principal Occupation(s) During Past Five Years	Number of BlackRock-Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen	Public Company and Other Investment Company Directorships Held During Past Five Years
Robert Fairbairn 1965	Director (Since 2015)	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

2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Director and Officer Information  (continued)

Interested Directors (a)(d)(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
John M. Perlowski 1964	Director (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 Director is c/o BlackRock, Inc., 55 East 52nd Street, New York, NY 10055.
(b) Each Independent Director holds office until his or her successor is duly elected and qualifies or until his or her earlier death, resignation, retirement or removal as provided by the Company’sby-laws or charter or statute, or until December 31 of the year in which he or she turns 75. The Board may determine to extend the terms of Independent Directors on acase-by-case basis, as appropriate. Interested Directors serve until their successor is duly elected and qualifies or until their earlier death, resignation, retirement or removal as provided by the Company’sby-laws or statute, or until December 31 of the year in which they turn 72.
(c) Following the combination of Merrill Lynch Investment Managers, L.P. (“MLIM”) and BlackRock, Inc. in September 2006, the various legacy MLIM and legacy BlackRock fund boards were realigned and consolidated into three new fund boards in 2007. As a result, although the chart shows certain Independent Directors as joining the Company’s board in 2007, those Directors first became members of the boards of other legacy MLIM or legacy BlackRock funds as follows: James H. Bodurtha, 1995; Bruce R. Bond, 2005; Honorable Stuart E. Eizenstat, 2001; Robert M. Hernandez, 1996; and John F. O’Brien, 2005. For BlackRock Total Return V.I. Fund, BlackRock High Yield V.I Fund, and BlackRock U.S. Government Bond V.I Fund, Length of Service includes service as director of the Predecessor/Target Funds.
(d) Mr. Fairbairn and Mr. Perlowski are both “interested persons,” as defined in the 1940 Act, of the Company based on their positions with BlackRock, Inc. and its affiliates. Mr. Fairbairn and Mr. Perlowski are also board members of the BlackRockClosed-End Complex and the BlackRock Equity-Liquidity Complex.

DIRECTORAND OFFICER INFORMATION

Director and Officer Information  (continued)

Officers Who Are Not Directors (a)
Name Year of Birth (b)	Position(s) Held (Length of Service)	Principal Occupation(s) During Past Five Years
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 Company serve at the pleasure of the Board.

Further information about the Company’s Directors and Officers is available in the Company’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 Directors who took office on January 1, 2019. For BlackRock Variable Series Funds, Inc., the newly elected Directors include seven former Directors and eight individuals who served as directors/trustees of the funds in the BlackRock Equity-Liquidity Complex. For BlackRock Variable Series Funds II, Inc., the newly elected Directors include three former Directors and eight individuals who served as directors/trustees of the funds in the BlackRockClosed-End Complex. Information regarding the individuals who began serving as Directors 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

BlackRock Advisors, LLC

Wilmington, DE 19809

Accounting Agent

JPMorgan Chase Bank, N.A.

New York, NY 10179

Transfer Agent

BNY Mellon Investment Servicing (US) Inc.

Wilmington, DE 19809

Custodians

JPMorgan Chase Bank, N.A.^(c)

New York, NY 10179

Brown Brothers Harriman & Co.^(d)

Boston, MA 02109

Sub-Advisers

BlackRock International Limited^(a)

Edinburgh, Scotland EH3 8BL

BlackRock Asset Management

North Asia Limited^(b)

Hong Kong

BlackRock (Singapore) Limited^(b)

079912 Singapore

Independent Registered Public Accounting Firm

Deloitte & Touche LLP

Boston, MA 02116

Distributor

BlackRock Investments, LLC

New York, NY 10022

Legal Counsel

Willkie Farr & Gallagher LLP

New York, NY 10019

Address of the Funds

100 Bellevue Parkway

Wilmington, DE 19809

^(a)  For BlackRock International V.I. Fund and BlackRock Managed Volatility V.I Fund.

^(b)  For BlackRock Managed Volatility V.I. Fund.

^(c)  For all Funds except BlackRock Global Allocation V.I. Fund, BlackRock International V.I. Fund and BlackRock Large Cap Focus Growth V.I. Fund.

^(d)  For BlackRock Global Allocation V.I. Fund, BlackRock International V.I. Fund and BlackRock Large Cap Focus Growth V.I. Fund.

2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Additional Information

Proxy Results

BlackRock Variable Series Funds, Inc.

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

Shareholders approved the Directors* of BlackRock Variable Series Funds, Inc. with voting results as follows:

	Votes For		Votes Against		Votes Abstained
Bruce R. Bond		853,415,418		20,821,487		54,328,090
Susan J. Carter		859,039,119		17,819,914		51,705,962
Collette Chilton		856,423,656		20,742,083		51,399,256
Neil A. Cotty		852,591,474		20,690,305		55,283,216
Robert Fairbairn		852,542,660		20,795,311		55,227,025
Lena G. Goldberg		854,847,802		21,644,125		52,073,069
Robert M. Hernandez		850,400,415		23,756,329		54,408,250
Henry R. Keizer		852,907,817		20,662,329		54,994,850
Cynthia A. Montgomery		858,485,209		18,681,453		51,398,333
Donald C. Opatrny		852,092,270		20,950,922		55,521,803
John M. Perlowski		853,364,573		20,553,365		54,647,057
Joseph P. Platt		852,037,460		22,003,638		54,523,898
Mark Stalnecker		853,005,625		20,799,654		54,759,717
Kenneth L. Urish		851,983,013		21,087,065		55,494,917
Claire A. Walton		858,718,970		18,461,950		51,384,075

* Denotes Company-wide proposal and voting results.

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

BlackRock Variable Series Funds II, Inc.

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

Shareholders approved the Directors* of BlackRock Variable Series Funds II, Inc. with voting results as follows:

	Votes For		Votes Against		Votes Abstained
Michael J. Castellano		59,887,070		1,387,922		4,893,829
Richard E. Cavanagh		59,649,768		1,455,828		5,063,225
Cynthia L. Egan		59,918,319		1,345,231		4,905,271
Frank J. Fabozzi		59,851,485		1,328,783		4,988,553
Robert Fairbairn		59,950,088		1,221,911		4,996,822
Henry Gabbay		59,979,137		1,094,954		5,094,730
R. Glenn Hubbard		60,054,180		1,149,136		4,965,505
W. Carl Kester		59,878,572		1,214,536		5,075,713
Catherine A. Lynch		60,029,677		1,220,289		4,918,855
John M. Perlowski		60,044,864		1,136,151		4,987,806
Karen P. Robards		60,316,551		1,000,326		4,851,944

* Denotes Company-wide proposal and voting results.

The above Directors, referred to as the BlackRock Fixed-Income Board, have also been elected to serve as directors for other BlackRock-advised non-index fixed-income mutual funds and all of the BlackRock-advised closed-end 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.

ADDITIONAL INFORMATION

Additional Information  (continued)

Availability of Quarterly Schedule of Investments

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

Availability of Proxy Voting Policies and Procedures

A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available upon request and without charge (1) by calling (800)441-7762; (2) athttp://www.blackrock.com/prospectus/insurance; 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 recent12-month period ended June 30 is available upon request and without charge (1) athttp://www.blackrock.com/prospectus/insurance 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 ofopen-end mutual funds crossing all investment styles and managed by experts in equity, fixed-income andtax-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 safe-guarding theirnon-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 personalnon-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 tonon-affiliated third parties anynon-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. Thesenon-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 tonon-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 thenon-public personal information of its Clients, including procedures relating to the proper storage and disposal of such information.

2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

This report is only for distribution to shareholders of the Funds of BlackRock Variable Series Funds, Inc. Past performance results shown in this report should not be considered a representation of future performance. Investment return and principal value of non-money market fund shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. An investment in the BlackRock Government Money Market V.I. Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the money market fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in money market funds. Statements and other information herein are as dated and are subject to change.

VS-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 experts serving on its audit committee and (ii) each audit committee financial expert is independent:

Robert M. Hernandez

Henry R. Keizer

Bruce R. Bond

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 LLP (“D&T”) in each of the last two fiscal years for the services rendered to the Fund:

	(a) Audit Fees		(b) Audit-Related Fees1		(c) Tax Fees2		(d) All Other Fees
Entity Name	Current Fiscal Year End	Previous Fiscal Year End	Current Fiscal Year End	Previous Fiscal Year End	Current Fiscal Year End	Previous Fiscal Year End	Current Fiscal Year End	Previous Fiscal Year End
BlackRock Advantage Large Cap Core V.I. Fund	$30,294	$30,286	$38	$4,000	$13,100	$13,107	$0	$0
BlackRock Advantage Large Cap Value V.I. Fund	$22,032	$22,024	$38	$4,000	$13,100	$13,107	$0	$0
BlackRock Advantage U.S. Total Market V.I. Fund	$27,234	$27,226	$0	$4,000	$13,100	$13,107	$0	$0
BlackRock Basic Value V.I. Fund	$37,536	$37,528	$0	$0	$13,100	$13,107	$0	$0
BlackRock Capital Appreciation V.I. Fund	$24,684	$24,701	$0	$0	$13,100	$13,107	$0	$0
BlackRock Equity Dividend V.I. Fund	$19,584	$19,627	$0	$0	$8,200	$8,160	$0	$0

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BlackRock Global Allocation V.I. Fund	$51,306	$51,332	$0	$0	$20,000	$20,000	$0	$0
BlackRock Government Money Market V.I. Fund	$26,520	$24,302	$0	$0	$9,800	$9,792	$0	$0
BlackRock International V.I. Fund	$30,090	$30,107	$38	$0	$14,100	$14,127	$0	$0
BlackRock International Index V.I. Fund	$30,294	$0	$0	$0	$14,100	$0	$0	$0
BlackRock iShares Dynamic Allocation V.I. Fund	$20,400	$29,006	$38	$0	$13,900	$13,850	$0	$0
BlackRock Large Cap Focus Growth V.I. Fund	$22,032	$22,024	$38	$4,000	$13,100	$13,107	$0	$0
BlackRock Managed Volatility V.I. Fund	$34,680	$29,427	$0	$0	$9,000	$8,976	$0	$0
BlackRock S&P 500 Index V.I. Fund	$30,294	$30,286	$4,000	$0	$13,100	$13,107	$0	$0
BlackRock Small Cap Index V.I. Fund	$27,540	$0	$0	$0	$13,100	$0	$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
(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 other non-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)

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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 minimis 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 Advantage Large Cap Core V.I. Fund	$13,138	$17,107
BlackRock Advantage Large Cap Growth V.I. Fund	$13,138	$17,107
BlackRock Advantage U.S. Total Market V.I. Fund	$13,100	$17,107
BlackRock Basic Value V.I. Fund	$13,100	$13,107
BlackRock Capital Appreciation V.I. Fund	$13,100	$13,107
BlackRock Equity Dividend V.I. Fund	$8,200	$8,160
BlackRock Global Allocation V.I. Fund	$20,000	$20,000
BlackRock Government Money Market V.I. Fund	$9,800	$9,792
BlackRock International V.I. Fund	$14,138	$14,127
BlackRock International Index V.I. Fund	$14,100	$0
BlackRock iShares Dynamic Allocation V.I. Fund	$13,938	$13,850

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BlackRock Large Cap Focus Growth V.I. Fund	$13,138	$17,107
BlackRock Managed Volatility V.I. Fund	$9,000	$8,976
BlackRock S&P 500 Index V.I. Fund	$17,100	$13,107
BlackRock Small Cap Index V.I. Fund	$13,100	$0

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

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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.

(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

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Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BlackRock Variable Series Funds, Inc.
By:	/s/ John M. Perlowski
	John M. Perlowski Chief Executive Officer (principal executive officer) of BlackRock Variable Series Funds, Inc.

Date: February 28, 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 Variable Series Funds, Inc.

Date: February 28, 2019

By:	/s/ Neal J. Andrews
	Neal J. Andrews Chief Financial Officer (principal financial officer) of BlackRock Variable Series Funds, Inc.

Date: February 28, 2019

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