UNITEDSTATES
SECURITIESANDEXCHANGECOMMISSION
Washington,D.C.20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-02556
Name of Fund: Ready Assets Prime Money Fund
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: John M. Perlowski, Chief Executive Officer, Ready Assets
Prime Money Fund, 40 East 52nd Street, New York, NY 10022
Registrant’s telephone number, including area code: (800) 626-1960
Date of fiscal year end: 04/30/2011
Date of reporting period: 10/31/2010
Item 1 – Report to Stockholders
Semi-Annual Report (Unaudited)
Ready Assets Prime Money Fund
October 31, 2010
Not FDIC Insured • No Bank Guarantee • May Lose Value
| |
| Table of Contents | |
| | Page |
| Dear Shareholder | 3 |
| Semi-Annual Report: | |
| Fund Information | 4 |
| Disclosure of Expenses | 4 |
| Financial Statements: | |
| Schedule of Investments | 5 |
| Statement of Assets and Liabilities | 8 |
| Statement of Operations | 9 |
| Statements of Changes in Net Assets | 10 |
| Financial Highlights | 11 |
| Notes to Financial Statements | 12 |
| Disclosure of Investment Advisory Agreement and Sub-Advisory Agreement | 14 |
| Officers and Trustees | 18 |
| Additional Information | 19 |
2 READY ASSETS PRIME MONEY FUND
OCTOBER 31, 2010
Dear Shareholder
The global economic recovery that began in 2009 has continued on its choppy course this year, delivering mixed but slowly improving economic data
and gradual if uneven improvement of investor sentiment. The risks of a double-dip recession continue to recede, but the economy remains mired in
a slow-growth environment. In the United States, the National Bureau of Economic Research declared that the “Great Recession” ended in June 2009.
Spanning December 2007 to June 2009, this marked the longest reported recession since the Great Depression. Structural problems of ongoing
deleveraging and weak spending among businesses and households weigh heavily on the pace of economic growth. The unemployment rate remains
stubbornly high in the face of sluggish job gains in the private sector. The US dollar, along with other developed market currencies, has experienced
devaluation resulting from aggressively easy monetary and fiscal policies. Given these long-standing conditions, the Federal Reserve Board has
announced that additional policy action will be taken to combat deflation and unemployment and promote economic growth.
The high levels of volatility experienced in global equity markets throughout 2009 continued into 2010 as mixed economic data and lingering credit
issues caused stocks to trade in both directions, but by the end of the first quarter, most markets had managed to post gains. The second quarter,
in contrast, brought higher levels of volatility and a “flight to quality” as investor sentiment was dominated by fears of a double-dip recession. Global
equity markets saw negative quarterly returns — and for many markets, the first significant downturn since the bull market began in March 2009. In
the third quarter, economic data turned less negative and strong corporate earnings reports became increasingly consistent. These factors, along
with attractive valuations and expectations for additional quantitative easing, drove equity markets higher, with most markets recapturing their second
quarter losses. Stocks continued their rally into the beginning of the fourth quarter, closing out the 12-month period in positive territory. International
equities posted gains on both a six- and 12-month basis. In the United States, both large and small cap equities posted robust gains for the
12-month period, while on a six-month basis, large cap stocks remained relatively flat and small caps turned slightly negative.
In fixed income markets, yields fluctuated but declined significantly over the past 12 months amid heightened uncertainty. Weak economic data,
lingering credit problems and, near the end of the period, the expectation of additional quantitative easing drove interest rates lower and bond prices
higher. Treasuries rallied over the period, modestly outperforming the credit spread sectors of the market. Corporate credit spreads benefited from the
low interest rate environment and high yield fixed income became increasingly attractive due to declining default rates and better-than-expected results
on European bank stress tests. Tax-exempt municipal bonds performed well over the 12-month period, driven primarily by technical factors including
favorable supply-and-demand dynamics.
Cash investments, as represented by the 3-month Treasury bill, returned only a fraction over 0% for the 12-month period as short-term interest rates
remained low. Yields on money market securities remain near all-time lows.
| | |
| Against this backdrop, the major market averages posted the following returns: | | |
| Total Returns as of October 31, 2010 | 6-month | 12-month |
| US large cap equities (S&P 500 Index) | 0.74% | 16.52% |
| US small cap equities (Russell 2000 Index) | (1.24) | 26.58 |
| International equities (MSCI Europe, Australasia, Far East Index) | 5.74 | 8.36 |
| 3-month Treasury bill (BofA Merrill Lynch 3-Month Treasury Bill Index) | 0.08 | 0.12 |
| US Treasury securities (BofA Merrill Lynch 10-Year US Treasury Index) | 10.63 | 10.03 |
| US investment grade bonds (Barclays Capital US Aggregate Bond Index) | 5.33 | 8.01 |
| Tax-exempt municipal bonds (Barclays Capital Municipal Bond Index) | 3.95 | 7.78 |
| US high yield bonds (Barclays Capital US Corporate High Yield 2% Issuer Capped Index) | 6.73 | 19.10 |
Past performance is no guarantee of future results. Index performance shown for illustrative purposes only. You cannot invest directly in an index.
As global economic conditions continue to improve, investors across the world continue to face uncertainty about the future of economic growth.
Through periods of uncertainty, as ever, BlackRock’s full resources are dedicated to the management of our clients’ assets. For additional market
perspective and investment insight, visit www.blackrock.com/shareholdermagazine, where you’ll find the most recent issue of our award-winning
Shareholder® magazine, as well as its quarterly companion newsletter, Shareholder Perspectives. As always, we thank you for entrusting BlackRock
with your investments, and we look forward to your continued partnership in the months and years ahead.
THIS PAGE NOT PART OF YOUR FUND REPORT
3
Fund Information as of October 31, 2010
| | |
| Current 7-Day Yields | | |
| | 7-Day | 7-Day |
| | SEC Yield | Yield |
| Ready Assets Prime Money Fund | 0.00% | 0.02% |
| The 7-Day SEC Yield may differ from the 7-Day Yield shown above due to the fact |
| that the 7-Day SEC Yield excludes distributed capital gains. | |
| Past performance is not indicative of future results. | | |
| |
| Portfolio Composition | |
| | Percent of |
| | Net Assets |
| Commercial Paper | 35% |
| Certificates of Deposit | 25 |
| U.S. Government Sponsored Agency Obligations | 12 |
| U.S. Treasury Obligations | 14 |
| Municipal Bonds | 6 |
| Repurchase Agreements | 5 |
| Corporate Notes | 3 |
| Total | 100% |
Disclosure of Expenses
Shareholders of this Fund may incur the following charges: (a) expenses
related to transactions, including sales charges, redemption fees and
exchange fees; and (b) operating expenses including advisory fees,
distribution fees including 12b-1 fees, and other Fund expenses. The
expense example below (which is based on a hypothetical investment of
$1,000 invested on May 1, 2010 and held through October 31, 2010)
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 table below 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
under the heading entitled “Expenses Paid During the Period.”
The table 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 this
Fund and other funds, compare the 5% hypothetical example with the 5%
hypothetical examples that appear in other funds’ shareholder reports.
The expenses shown in the table are intended to highlight shareholders’
ongoing costs only and do not reflect any transactional expenses, such
as sales charges, redemption fees or exchange fees. 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.
| | | | | | | |
| | | Actual | | | Hypothetical2 | | |
| | Beginning | Ending | | Beginning | Ending | | Annualized |
| | Account Value | Account Value | Expenses Paid | Account Value | Account Value | Expenses Paid | Expense |
| | May 1, 2010 | October 31, 2010 | During the Period1 | May 1, 2010 | October 31, 2010 | During the Period1 | Ratio |
| Ready Assets Prime | | | | | | | |
| Money Fund | $1,000.00 | $1,000.10 | $1.97 | $1,000.00 | $1,023.23 | $1.99 | 0.39% |
1 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).
2 Hypothetical 5% annual return before expenses is calculated by pro rating the number of days in the most recent fiscal half year divided by 365.
4 READY ASSETS PRIME MONEY FUND
OCTOBER 31, 2010
Schedule of Investments October 31, 2010 (Unaudited)
(Percentages shown are based on Net Assets)
| | |
| | Par | |
| Certificates of Deposit | (000) | Value |
| Domestic — 1.2% | | |
| State Street Bank & Trust Co.: | | |
| 0.25%, 1/12/11 | $ 10,000 | $ 10,000,000 |
| 0.39%, 2/10/11 | 31,000 | 31,000,000 |
| | | 41,000,000 |
| Yankee — 23.8% (a) | | |
| Abbey National Treasury Services Plc, CT, 0.28%, | | |
| 11/17/10 (b) | 35,000 | 35,000,000 |
| Banco Bilbao Vizcaya Argentaria SA, NY, 0.35%, | | |
| 12/13/10 (b) | 15,200 | 15,200,000 |
| Banco Santander SA, NY, 0.85%, 11/01/10 | 40,000 | 40,000,000 |
| Bank of Montreal, Chicago, 0.31%, 8/29/11 (b) | 14,000 | 14,000,000 |
| Barclays Bank Plc, NY: | | |
| 0.50%, 11/18/10 | 35,000 | 35,000,000 |
| 0.42%, 2/18/11 | 31,000 | 31,000,000 |
| 0.40%, 3/04/11 | 36,000 | 36,000,000 |
| Canadian Imperial Bank of Commerce, NY, | | |
| 0.42%, 1/31/11 (b) | 24,000 | 24,000,000 |
| Credit Agricole CIB, NY, 0.41%, 4/08/11 (b) | 30,000 | 30,000,000 |
| Credit Industriel et Commercial, NY: | | |
| 0.51%, 2/09/11 | 12,000 | 12,000,000 |
| 0.54%, 3/04/11 | 25,000 | 25,000,000 |
| Dexia Credit Local, NY, 1.69%, 11/17/10 (c) | 58,500 | 58,500,000 |
| KBC Bank NV, NY, 0.61%, 12/01/10 | 29,000 | 29,000,477 |
| Lloyd's TSB Bank Plc, NY, 0.62%, 2/11/11 | 30,000 | 30,000,000 |
| Rabobank Nederland NV, NY: | | |
| 0.26%, 1/10/11 (b) | 22,000 | 22,000,000 |
| 0.26%, 1/13/11 (b) | 35,500 | 35,500,000 |
| 0.57%, 1/18/11 | 22,000 | 22,000,000 |
| 0.35%, 9/15/11 (b) | 30,000 | 30,000,000 |
| Royal Bank of Canada, NY (b): | | |
| 0.26%, 11/17/10 | 40,000 | 40,000,000 |
| 0.37%, 10/14/11 | 30,000 | 30,000,000 |
| Royal Bank of Scotland Plc, CT: | | |
| 0.51%, 2/01/11 (c) | 11,000 | 11,000,000 |
| 0.51%, 2/24/11 | 38,000 | 38,000,000 |
| 0.49%, 4/19/11 | 30,000 | 30,000,000 |
| Societe Generale, NY, 0.41%, 4/21/11 (b) | 35,000 | 35,000,000 |
| Toronto-Dominion Bank, NY (b): | | |
| 0.26%, 11/05/10 | 35,00 | 35,000,000 |
| 0.26%, 2/04/11 | 13,000 | 13,000,000 |
| UBS AG, Stamford, 0.59%, 11/18/10 | 15,000 | 15,000,000 |
| UniCredit SpA, NY: | | |
| 0.53%, 11/10/10 | 30,000 | 30,000,000 |
| 0.68%, 11/10/10 | 37,000 | 37,000,000 |
| | | 838,200,477 |
| Total Certificates of Deposit — 25.0% | | 879,200,477 |
| | |
| | Par | |
| Commercial Paper (d) | (000) | Value |
| Antalis U.S. Funding Corp.: | | |
| 0.39%, 11/17/10 | $ 12,000 | $ 11,997,920 |
| 0.29% — 0.35%, 11/22/10 | 75,000 | 74,986,087 |
| 0.34%, 1/06/11 | 30,060 | 30,041,263 |
| 0.33%, 1/18/11 | 22,500 | 22,483,912 |
| Argento Variable Funding Co., LLC: | | |
| 0.41%, 11/02/10 | 16,000 | 15,999,818 |
| 0.28%, 11/23/10 | 21,000 | 20,996,407 |
| BNP Paribas Finance Inc.: | | |
| 0.49%, 2/11/11 | 30,000 | 29,958,350 |
| 0.42%, 3/01/11 | 12,000 | 11,983,200 |
| BNZ International Funding Ltd., 0.34% 2/04/11 (b) | 33,500 | 33,500,881 |
| BPCE SA: | | |
| 0.46%, 11/03/10 | 15,000 | 14,999,617 |
| 0.32%, 1/18/11 | 35,000 | 34,976,112 |
| Barton Capital Corp., 0.30%, 1/05/11 | 13,500 | 13,492,687 |
| CAFCO LLC: | | |
| 0.37%, 11/02/10 | 48,000 | 47,999,507 |
| 0.30%, 1/25/11 | 16,900 | 16,888,029 |
| CHARTA LLC, 0.30%, 2/17/11 | 15,000 | 14,986,500 |
| Cancara Asset Securitization LLC: | | |
| 0.38%, 11/03/10 | 20,500 | 20,499,567 |
| 0.26%, 11/22/10 | 11,000 | 10,998,332 |
| 0.30%, 1/24/11 | 12,000 | 11,991,600 |
| 0.35%, 2/17/11 | 15,500 | 15,483,725 |
| Ciesco LLC, 0.37%, 11/03/10 | 28,000 | 27,999,424 |
| Clipper Receivables Co., LLC, 0.44%, 2/15/11 | 36,000 | 35,953,360 |
| DANSKE Corp., 0.38%, 11/12/10 | 36,000 | 35,995,820 |
| Fairway Finance Co., LLC, 0.31%, 1/06/11 | 25,000 | 24,985,792 |
| Falcon Asset Securitization Co., 0.27%, 1/12/11 | 23,000 | 22,987,580 |
| Govco LLC, 0.28%, 1/14/11 | 40,000 | 39,976,978 |
| Grampian Funding LLC, 0.28%, 11/19/10 | 13,000 | 12,998,180 |
| ING (U.S.), Funding LLC, 0.43%, 4/05/11 | 35,000 | 34,935,201 |
| Jupiter Securitization Co., LLC, 0.24%, 11/12/10 | 75,000 | 74,994,500 |
| Manhattan Asset Funding Co., LLC, 0.26%, 11/16/10 | 30,000 | 29,996,750 |
| MetLife Short-Term Funding LLC, 0.31%, 1/21/11 | 25,000 | 24,982,562 |
| Mont Blanc Capital Corp.: | | |
| 0.28%, 11/15/10 | 10,000 | 9,998,911 |
| 0.26%, 11/16/10 | 30,022 | 30,018,748 |
| 0.30%, 1/10/11 | 35,000 | 34,979,583 |
| Nieuw Amsterdam Receivables Corp., 0.30%, 1/04/11 | 35,000 | 34,981,333 |
| Romulus Funding Corp.: | | |
| 0.35%, 11/01/10 | 15,000 | 15,000,000 |
| 0.33%, 12/01/10 | 5,000 | 4,998,625 |
| Scaldis Capital LLC: | | |
| 0.35%, 11/12/10 | 30,000 | 29,996,792 |
| 0.31%, 1/26/11 | 33,000 | 32,975,562 |
| Solitaire Funding LLC, 0.26%, 11/16/10 | 28,000 | 27,996,967 |
| | | |
| Portfolio Abbreviations | | |
| To simplify the listing of portfolio holdings in the Schedule of Investments, the | HFA | Housing Finance Agency |
| names and descriptions of many of the securities have been abbreviated according | HRB | Housing Revenue Bonds |
| to the following list: | LOC | Letter of Credit |
| AGM | Assured Guaranty Municipal Corp. | RB | Revenue Bonds |
| AMT | Alternative Minimum Tax (subject to) | SBPA | Stand-by Purchase Agreement |
| COP | Certificates of Participation | VRDN | Variable Rate Demand Notes |
| See Notes to Financial Statements. | | |
READY ASSETS PRIME MONEY FUND
OCTOBER 31, 2010
5
Schedule of Investments (continued)
(Percentages shown are based on Net Assets)
| | | |
| | | Par | |
| Commercial Paper (d) (concluded) | | (000) | Value |
| State Street Corp., 0.31%, 2/22/11 | $ 30,000 | $ 29,970,808 |
| Thames Asset Global Securitization No. 1, Inc., | | | |
| 0.41%, 4/01/11 | | 42,000 | 41,927,772 |
| Unicredit Delaware, Inc.: | | | |
| 0.47%, 1/14/11 | | 39,000 | 38,962,322 |
| 0.45%, 1/27/11 | | 19,000 | 18,979,337 |
| Westpac Trust Securities NZ Ltd., 0.38%, 11/05/10 (b) | 39,550 | 39,550,000 |
| Windmill Funding Corp., 0.31%, 1/10/11 | | 10,000 | 9,993,972 |
| Total Commercial Paper — 34.7% | | | 1,220,400,393 |
| Corporate Notes | | | |
| Commonwealth Bank of Australia, 0.28%, | | | |
| 11/22/10 (b)(e) | | 25,500 | 25,500,000 |
| KBC Bank NV, NY, 1.62%, 11/01/10 (c) | | 27,600 | 27,600,000 |
| Rabobank Nederland NV, 1.79%, 1/07/11 (c)(e) | | 52,100 | 52,100,000 |
| Total Corporate Notes — 3.0% | | | 105,200,000 |
| Municipal Bonds (c) | | | |
| California HFA, RB, VRDN, AMT (Fannie Mae LOC, | | | |
| Freddie Mac LOC), Home Mortgage: | | | |
| Series F, 0.27%, 11/05/10 | | 23,000 | 23,000,000 |
| Series U, 0.26%, 11/05/10 | | 16,580 | 16,580,000 |
| California Health Facilities Financing Authority, RB, | | | |
| VRDN, Scripps Health, Series B (JPMorgan Chase | | | |
| Bank LOC), 0.24%, 11/05/10 | | 14,000 | 14,000,000 |
| California Pollution Control Financing Authority, | | | |
| Refunding RB, VRDN, Pacific Gas & Electric Co., | | | |
| Series E (JPMorgan Chase Bank LOC), | | | |
| 0.25%, 11/01/10 | | 8,300 | 8,300,000 |
| Indiana Finance Authority, Refunding RB, VRDN, | | | |
| Sisters of St. Francis, Series B (JPMorgan Chase | | | |
| Bank LOC), 0.26%, 11/05/10 | | 6,000 | 6,000,000 |
| Los Angeles Community Redevelopment Agency | | | |
| California, RB, VRDN, Hollywood & Vine Apartments, | | |
| Series A, AMT (Fannie Mae Liquidity Facility), | | | |
| 0.28%, 11/05/10 | | 13,000 | 13,000,000 |
| Metropolitan Transportation Authority, Refunding RB, | | | |
| VRDN, Series B (AGM Insurance, Dexia Credit Local | | |
| SBPA), 0.35%, 11/05/10 | | 20,000 | 20,000,000 |
| New Jersey Transportation Trust Fund Authority, RB, | | | |
| VRDN, Transportation System, Series C (JPMorgan | | | |
| Chase Bank LOC), 0.24%, 11/05/10 | | 8,000 | 8,000,000 |
| New York City Industrial Development Agency, RB, | | | |
| VRDN, USA Waste Services, New York City Project, | | | |
| AMT (JPMorgan Chase Bank LOC), 0.29%, 11/05/10 | 9,600 | 9,600,000 |
| New York State HFA, HRB, VRDN, Series A, AMT (Fannie | | |
| Mae Liquidity Facility), 0.26%, 11/05/10 | | 22,900 | 22,900,000 |
| New York State HFA, RB, VRDN, AMT (Fannie Mae | | | |
| Liquidity Facility), Series A: | | | |
| 125 West 31st Street Housing, 0.26%, 11/05/10 | 13,000 | 13,000,000 |
| 316 11th Avenue Housing, 0.26%, 11/05/10 | | 21,500 | 21,500,000 |
| East 39th Street Housing, 0.26%, 11/05/10 | | 16,000 | 16,000,000 |
| New York State HFA, Refunding RB, VRDN, Series L | | | |
| (Bank of America NA LOC), 0.26%, 11/05/10 | | 10,500 | 10,500,000 |
| | |
| | Par | |
| Municipal Bonds (c) (concluded) | (000) | Value |
| Palm Beach County School District, COP, VRDN, | | |
| Series B (AGM Insurance, Dexia Credit Local SBPA), | | |
| 0.28%, 11/05/10 | $ 5,000 | $ 5,000,000 |
| Total Municipal Bonds — 5.9% | | 207,380,000 |
| U.S. Government Sponsored Agency Obligations | | |
| Fannie Mae Discount Notes (d): | | |
| 0.29%, 11/10/10 | 23,000 | 22,998,333 |
| 0.18%, 12/22/10 | 32,415 | 32,406,734 |
| Fannie Mae Variable Rate Notes, | | |
| 0.25%, 7/26/12 (b) | 35,500 | 35,487,704 |
| Federal Home Loan Bank Variable Rate Notes, | | |
| 0.23%, 10/06/11 (b) | 50,000 | 49,981,126 |
| Freddie Mac Discount Notes, 0.18%, 12/06/10 (d) | 24,000 | 23,995,800 |
| Freddie Mac Variable Rate Notes (b): | | |
| 0.33%, 2/14/11 | 116,130 | 116,124,740 |
| 0.35%, 4/01/11 | 30,000 | 30,012,534 |
| 0.32%, 5/05/11 | 70,000 | 69,989,291 |
| 0.21%, 12/29/11 | 25,000 | 24,985,369 |
| 0.23%, 4/03/12 | 10,000 | 9,994,230 |
| Total U.S. Government Sponsored Agency Obligations — 11.9% | 415,975,861 |
| U.S. Treasury Obligations | | |
| U.S. Treasury Bills (d): | | |
| 0.22%, 11/12/10 | 24,000 | 23,998,387 |
| 0.21%, 11/26/10 | 23,000 | 22,996,614 |
| 0.15%, 12/23/10 | 40,000 | 39,991,275 |
| 0.20%, 1/27/11 | 37,000 | 36,982,117 |
| 0.19%, 2/24/11 | 38,000 | 37,977,240 |
| 0.20%, 3/17/11 | 36,000 | 35,973,480 |
| 0.17%, 4/21/11 | 32,000 | 31,973,704 |
| U.S. Treasury Notes: | | |
| 0.88%, 1/31/11 | 36,000 | 36,055,888 |
| 0.88%, 2/28/11 | 91,000 | 91,188,502 |
| 4.50%, 2/28/11 | 37,500 | 38,023,717 |
| 0.88%, 3/31/11 | 47,000 | 47,122,023 |
| 4.88%, 5/31/11 | 27,000 | 27,721,470 |
| 1.13%, 6/30/11 | 26,500 | 26,650,032 |
| Total U.S. Treasury Obligations — 14.1% | | 496,654,449 |
| Repurchase Agreements | | |
| Barclays Capital Inc., 0.22%, 11/01/10 (Purchased on | | |
| 10/29/10 to be repurchased at $100,001,833, | | |
| collateralized by U.S. Treasury Note, 2.38%, due | | |
| 8/31/14, par and fair value of $96,102,200, | | |
| $102,000,074, respectively) | 100,000 | 100,000,000 |
See Notes to Financial Statements.
6 READY ASSETS PRIME MONEY FUND
OCTOBER 31, 2010
Schedule of Investments (concluded)
(Percentages shown are based on Net Assets)
| | | |
| | | Par | |
| Repurchase Agreements (concluded) | | (000) | Value |
| Deutsche Bank Securities, Inc., 0.21%, 11/01/10 | | | |
| (Purchased on 10/29/10 to be repurchased at | | | |
| $97,969,714, collateralized by Federal Home Loan | | | |
| Bank, 0.00%, due 9/15/11, par and fair value of | | | |
| $99,990,000, $99,929,079, respectively) | $ 97,968 | $ 97,968,000 |
| Total Repurchase Agreements — 5.6% | | | 197,968,000 |
| Total Investments (Cost — $3,522,779,180*) — 100.2% | | 3,522,779,180 |
| Liabilities in Excess of Other Assets — (0.2)% | | | (7,090,779) |
| Net Assets — 100.0% | | | $3,515,688,401 |
* Cost for federal income tax purposes.
(a) Issuer is a US branch of foreign domiciled bank.
(b) Variable rate security. Rate shown is as of report date.
(c) Variable rate security. Rate shown is as of report date and maturity shown is the
date the principal owed can be recovered through demand.
(d) Rates shown are discount rates or a range of discount rates paid at the time
of purchase.
(e) Security exempt from registration under Rule 144A of the Securities Act of 1933.
These securities may be resold in transactions exempt from registration to quali-
fied institutional investors.
• Fair Value Measurements — Various inputs are used in determining the fair value
of investments, which are as follows:
• Level 1 — price quotations in active markets/exchanges for identical assets
and liabilities
• 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 inputs or methodologies used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities. For information
about the Fund's policy regarding valuation of investments and other significant
accounting policies, please refer to Note 1 of the Notes to Financial Statements.
The following table summarizes the inputs used as of October 31, 2010 in deter-
mining the fair valuation of the Fund's investments:
| | | | |
| Valuation Inputs | Level 1 | Level 2 | Level 3 | Total |
| Assets: | | | | |
| Investments | | | | |
| in securities: | | | | |
| Short-Term | | | | |
| Securities1 | — | $3,522,779,180 | — | $3,522,779,180 |
1 See above Schedule of Investments for values in each security type.
See Notes to Financial Statements.
READY ASSETS PRIME MONEY FUND
OCTOBER 31, 2010
7
| |
| Statement of Assets and Liabilities | |
| October 31, 2010 (Unaudited) | |
| Assets | |
| Investments at value — unaffiliated (cost — $3,522,779,180) | $ 3,522,779,180 |
| Cash | 949 |
| Capital shares sold receivable | 7,999,167 |
| Interest receivable | 2,090,322 |
| Distribution fees receivable | 31 |
| Prepaid expenses | 142,003 |
| Total assets | 3,533,011,652 |
| Liabilities | |
| Capital shares redeemed payable | 15,465,881 |
| Investment advisory fees payable | 679,514 |
| Other affiliates payable | 24,476 |
| Officer's and Trustees' fees payable | 1,029 |
| Income dividends payable | 61 |
| Other accrued expenses payable | 1,152,290 |
| Total liabilities | 17,323,251 |
| Net Assets | $ 3,515,688,401 |
| Net Assets Consist of | |
| Paid-in capital | $ 3,515,614,448 |
| Undistributed net realized gain | 73,953 |
| Net Assets — $1.00 net asset value per share, 3,515,614,447 shares outstanding, unlimited number of shares authorized, $0.10 par value | $ 3,515,688,401 |
See Notes to Financial Statements.
8 READY ASSETS PRIME MONEY FUND
OCTOBER 31, 2010
| |
| Statement of Operations | |
| Six Months Ended October 31, 2010 (Unaudited) | |
| Investment Income | |
| Interest | $ 7,307,442 |
| Expenses | |
| Investment advisory | 7,012,935 |
| Transfer agent | 2,869,878 |
| Distribution | 2,297,579 |
| Accounting services | 128,955 |
| Printing | 62,907 |
| Professional | 58,528 |
| Custodian | 54,539 |
| Registration | 48,144 |
| Officer and Trustees | 46,990 |
| Miscellaneous | 53,590 |
| Total expenses | 12,634,045 |
| Less fees waived by advisor | (3,029,024) |
| Less distribution fees waived | (2,297,579) |
| Total expenses after fees waived | 7,307,442 |
| Net investment income | — |
| Realized Gain | |
| Net realized gain from investments | 22,212 |
| Net Increase in Net Assets Resulting from Operations | $ 22,212 |
See Notes to Financial Statements.
READY ASSETS PRIME MONEY FUND
OCTOBER 31, 2010
9
| | |
| Statements of Changes in Net Assets | | |
| | Six Months | |
| | Ended | |
| | October 31, | Year Ended |
| | 2010 | April 30, |
| Increase (Decrease) in Net Assets | (Unaudited) | 2010 |
| Operations | | |
| Net investment income | — | $ 1,866,090 |
| Net realized gain | $ 22,212 | 159,810 |
| Net increase in net assets resulting from operations | 22,212 | 2,025,900 |
| Dividends and Distributions to Shareholders From | | |
| Net investment income | — | (2,270,898) |
| Net realized gain | (212,282) | (21,987) |
| Decrease in net assets resulting from dividends and distributions to shareholders | (212,282) | (2,292,885) |
| Capital Share Transactions | | |
| Net Proceeds from sale of shares | 1,491,840,789 | 4,297,016,778 |
| Reinvestment of dividends and distributions | 206,967 | 2,291,010 |
| Cost of shares redeemed | (1,910,573,856) | (5,273,690,492) |
| Net decrease in net assets derived from capital share transactions | (418,526,100) | (974,382,704) |
| Net Assets | | |
| Total decrease in net assets | (418,716,170) | (974,649,689) |
| Beginning of period | 3,934,404,571 | 4,909,054,260 |
| End of period | $3,515,688,401 | $3,934,404,571 |
See Notes to Financial Statements.
10 READY ASSETS PRIME MONEY FUND
OCTOBER 31, 2010
| | | | | | | |
| Financial Highlights | | | | | | | |
| | Six Months | | Period | | | | |
| | Ended | | January 1, | | | | |
| | October 31, | Year Ended | 2009 | | | | |
| | 2010 | April 30, | to April 30, | | Year Ended December 31, | |
| | (Unaudited) | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 |
| Per Share Operating Performance | | | | | | | |
| Net asset value, beginning of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
| Net investment income | — | 0.0005 | 0.0019 | 0.0258 | 0.0470 | 0.0432 | 0.0258 |
| Net realized and unrealized gain (loss) | — | — | — | 0.0000 | 0.0001 | (0.0006) | (0.0000) |
| Net increase from investment operations | — | 0.0005 | 0.0019 | 0.0258 | 0.0471 | 0.0426 | 0.0258 |
| Dividends and distributions from: | | | | | | | |
| Net investment income | — | (0.0005) | (0.0019) | (0.0258) | (0.0470) | (0.0432) | (0.0258) |
| Net realized gain | (0.0001) | — | — | — | — | (0.0000) | (0.0000) |
| Total dividends and distributions | (0.0001) | (0.0005) | (0.0019) | (0.0258) | (0.0470) | (0.0432) | (0.0258) |
| Net asset value, end of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
| Total Investment Return1 | | | | | | | |
| Total investment return | 0.01%2 | 0.05% | 0.19%2 | 2.62% | 4.81% | 4.41% | 2.61% |
| Ratios to Average Net Assets | | | | | | | |
| Total expenses | 0.68%3 | 0.68% | 0.69%3 | 0.65% | 0.65% | 0.66% | 0.66% |
| Total expenses after fees waived | 0.39%3 | 0.41% | 0.69%3 | 0.65% | 0.65% | 0.66% | 0.66% |
| Net investment income | 0.00%3 | 0.04% | 0.57%3 | 2.57% | 4.70% | 4.34% | 2.57% |
| Supplemental Data | | | | | | | |
| Net assets, end of period (000) | $3,515,688 | $3,934,405 | $4,909,054 | $5,054,948 | $5,032,673 | $4,392,407 | $3,983,769 |
1 Where applicable, total investment returns include the reinvestment of dividends and distributions.
2 Aggregate total investment return.
3 Annualized.
See Notes to Financial Statements.
READY ASSETS PRIME MONEY FUND
OCTOBER 31, 2010
11
Notes to Financial Statements (Unaudited)
1. Organization and Significant Accounting Policies:
Ready Assets Prime Money Fund (the “Fund”) is registered under the
Investment Company Act of 1940, as amended (the “1940 Act”), as a
diversified, open-end management investment company. The Fund is
organized as a Massachusetts business trust. The Fund's financial state-
ments are prepared in conformity with accounting principles generally
accepted in the United States of America ("US GAAP"), which may
require management to make estimates and assumptions that affect the
reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
The following is a summary of significant accounting policies followed by
the Fund:
Valuation: The Fund fair values its financial instruments at market value
using independent dealers or pricing services under policies approved
by the Board of Trustees. The Fund's investments are valued under the
amortized cost method which approximates current market value in
accordance with Rule 2a-7 of the 1940 Act. Under this method, invest-
ments are valued at cost when purchased and thereafter, a constant
proportionate accretion and amortization of any discounts and premi-
ums are recorded until the maturity of the security. The Fund seeks to
maintain its net asset value per share at $1.00, although there is no
assurance that it will be able to do so on a continuing basis.
Repurchase Agreements: The Fund may invest in repurchase agree-
ments. In a repurchase agreement, the Fund purchases a security from
a counterparty who agrees to repurchase the same security at a mutu-
ally 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 repurchase amount. The agreements are condi-
tioned upon the collateral being deposited under the Federal Reserve
book entry system or held in a segregated account by the Fund's custo-
dian or designated sub-custodians under tri-party repurchase agree-
ments. In the event the counterparty defaults and the fair value of the
collateral declines, the Fund could experience losses, delays and costs
in liquidating the collateral.
Investment Transactions and Investment Income: For financial reporting
purposes, investment transactions are recorded on the dates the trans-
actions 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, is recognized on the accrual basis.
Dividends and Distributions: Dividends from net investment income are
declared daily and paid monthly. Distributions of capital gains are
recorded on the ex-dividend dates. The amount and timing of dividends
and distributions are determined in accordance with federal income tax
regulations, which may differ from US GAAP.
Income Taxes: 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 federal income
tax provision is required.
The Fund files US federal and various state and local tax returns. No
income tax returns are currently under examination. The statute of limita-
tions on the Fund’s US federal tax returns remains open for the year
ended April 30, 2010, the period ended April 30, 2009 and each of the
two years ended December 31, 2008. The statutes of limitations on the
Fund’s state and local tax returns may remain open for an additional
year depending upon the jurisdiction. There are no uncertain tax posi-
tions that require recognition of a tax liability.
Other: Expenses directly related to the Fund are charged to the Fund.
Other operating expenses shared by several funds are pro rated among
those funds on the basis of relative net assets or other appropriate
methods. The Fund has an arrangement with the custodian whereby fees
may be reduced by credits earned on uninvested cash balances, which
if applicable are shown as fees paid indirectly in the Statement of
Operations. The custodian imposes fees on overdrawn cash balances,
which can be offset by accumulated credits earned or may result in
additional custody charges.
2. Investment Advisory Agreement and Other Transactions
with Affiliates:
The PNC Financial Services Group, Inc. ("PNC"), Bank of America
Corporation ("BAC") and Barclays Bank PLC ("Barclays") are the largest
stockholders of BlackRock, Inc. ("BlackRock"). Due to the ownership
structure, PNC is an affiliate of the Fund for 1940 Act purposes, but BAC
and Barclays are not.
The Fund entered into an Investment Advisory Agreement with BlackRock
Advisors, LLC (the “Manager”), the Fund's investment advisor, an indirect,
wholly owned subsidiary of BlackRock, to provide investment advisory
and administration services. The Manager is responsible for the manage-
ment of the Fund's portfolio and provides the necessary personnel, facil-
ities, equipment and certain other services necessary to the operations
of the Fund. For such services, the Fund pays the Manager a monthly fee
at the following annual rates of the Fund's average daily net assets
as follows:
| |
| Portion of Average Daily Value of Net Assets: | Rate |
| Not exceeding $500 million | 0.500% |
| In excess of $500 million but not exceeding $1 billion | 0.400% |
| In excess of $1 billion but not exceeding $5 billion | 0.350% |
| In excess of $5 billion but not exceeding $10 billion | 0.325% |
| In excess of $10 billion but not exceeding $15 billion | 0.300% |
| In excess of $15 billion but not exceeding $20 billion | 0.275% |
| In excess of $20 billion | 0.250% |
12 READY ASSETS PRIME MONEY FUND
OCTOBER 31, 2010
Notes to Financial Statements (concluded)
The Manager entered into a sub-advisory agreement with BlackRock
Institutional Management Corporation (“BIMC”), an affiliate of the
Manager. The Manager pays BIMC for services it provides, a monthly
fee that is a percentage of the investment advisory fees paid by the
Fund to the Manager.
For the six months ended October 31, 2010, the Fund reimbursed the
Manager $37,612 for certain accounting services, which is included in
accounting services in the Statement of Operations.
The Fund entered into a Distribution Agreement and Distribution and
Service Plan with BlackRock Investments, LLC (”BRIL“), an affiliate of
BlackRock. Pursuant to the Distribution and Service Plan and in accor-
dance with Rule 12b-1 under the 1940 Act, the Fund pays BRIL ongoing
distribution fees. The fees are accrued daily and paid monthly at the
annual rate of 0.125% based upon the average daily net assets of the
shares of the Fund.
The Manager and BRIL voluntarily agreed to waive management and
distribution fees and reimburse operating expenses to enable the Fund
to maintain a minimum daily net investment income dividend. These
amounts are reported in the Statement of Operations as fees waived by
advisor and distribution fees waived. The Manager and BRIL may discon-
tinue the waiver or reimbursement at any time.
Certain officers and/or trustees of the Fund are officers and/or directors
of BlackRock or its affiliates. The Fund reimburses the Manager for com-
pensation paid to the Fund's Chief Compliance Officer.
3. Market and Credit Risk:
In the normal course of business, the Fund invests in securities and
enters into transactions where risks exist due to fluctuations in the mar-
ket (market risk) or failure of the issuer of a security to meet all its obli-
gations (issuer credit risk). The value of securities held by the Fund may
decline in response to certain events, including those directly involving
the issuers whose securities are owned by the Fund; conditions affecting
the general economy; overall market changes; local, regional or global
political, social or economic instability; and currency and interest rate
and price fluctuations. Similar to issuer credit risk, the Fund may be
exposed to counterparty credit risk, or the risk that an entity with which
the Fund has unsettled or open transactions may fail to or be unable to
perform on its commitments. The Fund manages counterparty credit risk
by entering into transactions only with counterparties that it 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
generally approximated by their value recorded in the Fund's Statement
of Assets and Liabilities, less any collateral held by the Fund.
4. Capital Share Transactions:
The number of shares sold, reinvested and redeemed corresponds to the
net proceeds from the sale of shares, reinvestment of dividends and dis-
tributions and cost of shares redeemed, respectively, since shares are
sold and redeemed at $1.00 per share.
5. 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.
READY ASSETS PRIME MONEY FUND
OCTOBER 31, 2010
13
Disclosure of Investment Advisory Agreement and Sub-Advisory Agreement
The Board of Trustees (the “Board,” and the members of which are
referred to as “Board Members”) of Ready Assets Prime Money Fund
(the “Fund”) met on April 20, 2010 and May 18 — 19, 2010 to
consider the approval of the Fund’s investment advisory agreement (the
“Advisory Agreement”) with BlackRock Advisors, LLC (the “Manager”),
the Fund’s investment advisor. The Board also considered the approval
of the sub-advisory agreement (the “Sub-Advisory Agreement”) between
the Manager and BlackRock Institutional Management Corporation
(the “Sub-Advisor”), with respect to the Fund. The Manager and the
Sub-Advisor are referred to herein as “BlackRock.” The Advisory
Agreement and the Sub-Advisory Agreement are referred to herein
as the “Agreements.”
Activities and Composition of the Board
The Board consists of thirteen individuals, eleven of whom are not
“interested persons” of the Fund as defined in the Investment Company
Act of 1940, as amended (the “1940 Act”) (the “Independent Board
Members). The Board Members are responsible for the oversight of the
operations of the Fund and perform the various duties imposed on the
directors of investment companies by the 1940 Act. The Independent
Board Members have retained independent legal counsel to assist
them in connection with their duties. The Co-Chairs of the Board are
each Independent Board Members. The Board has established five
standing committees: an Audit Committee, a Governance and
Nominating Committee, a Compliance Committee, a Performance
Oversight and Contract Committee and an Executive Committee, each
of which is composed of Independent Board Members (except for the
Executive Committee, which also has one interested Board Member)
and is chaired by Independent Board Members.
The Agreements
Pursuant to the 1940 Act, the Board is required to consider the
continuation of the Agreements on an annual basis. In connection
with this process, the Board assessed, among other things, the nature,
scope and quality of the services provided to the Fund by the personnel
of BlackRock and its affiliates, including investment management,
administrative and shareholder services, oversight of fund accounting
and custody, marketing services and assistance in meeting applicable
legal and regulatory requirements.
From time to time throughout the year, the Board, acting directly
and through its committees, considers at each of its meetings factors
that are relevant to its annual consideration of the renewal of the
Agreements, including the services and support provided by BlackRock
to the Fund and its shareholders. Among the matters the Board con-
sidered were: (a) investment performance for one-, three- and five-year
periods, as applicable, against peer funds, and applicable benchmarks,
if any, as well as senior management’s and portfolio managers’ analysis
of the reasons for any over performance or underperformance against its
peers and/or benchmark, as applicable; (b) fees, including advisory,
administration, if applicable, and other amounts paid to BlackRock
and its affiliates by the Fund for services, such as transfer agency,
marketing and distribution, call center and fund accounting; (c) Fund
operating expenses; (d) the resources devoted to and compliance
reports relating to the Fund’s investment objective, policies and restric-
tions, (e) the Fund’s compliance with its Code of Ethics and compliance
policies and procedures; (f) the nature, cost and character of non-invest-
ment management services provided by BlackRock and its affiliates;
(g) BlackRock’s and other service providers’ internal controls; (h)
BlackRock’s implementation of the proxy voting policies approved by
the Board; (i) execution quality of portfolio transactions; (j) BlackRock’s
implementation of the Fund’s valuation and liquidity procedures;
(k) an analysis of contractual and actual management fees for prod-
ucts with similar investment objectives across the open-end fund and
institutional account product channels, as applicable; and (l) periodic
updates on BlackRock’s business.
Board Considerations in Approving the Agreements
The Approval Process: Prior to the April 20, 2010 meeting, the Board
requested and received materials specifically relating to the Agreements.
The Board is engaged in a process with BlackRock to periodically review
the nature and scope of the information provided to better assist its
deliberations. The materials provided in connection with the April meet-
ing included (a) information independently compiled and prepared by
Lipper, Inc. (“Lipper”) on Fund fees and expenses, and the investment
performance of the Fund as compared with a peer group of funds as
determined by Lipper (collectively, “Peers”); (b) information on the prof-
itability of the Agreements to BlackRock and a discussion of fall-out
benefits to BlackRock and its affiliates and significant shareholders; (c)
a general analysis provided by BlackRock concerning investment advi-
sory fees charged to other clients, such as institutional clients, under
similar investment mandates, as well as the performance of such other
clients, as applicable; (d) the impact of economies of scale; (e) a sum-
mary of aggregate amounts paid by the Fund to BlackRock; (f) sales
and redemption data regarding the Fund’s shares; and (g) if applicable,
a comparison of management fees to similar BlackRock open-end
funds, as classified by Lipper.
At an in-person meeting held on April 20, 2010, the Board reviewed
materials relating to its consideration of the Agreements. As a result
of the discussions that occurred during the April 20, 2010 meeting,
the Board presented BlackRock with questions and requests for addi-
tional information and BlackRock responded to these requests with
additional written information in advance of the May 18 — 19, 2010
Board meeting.
At an in-person meeting held on May 18 — 19, 2010, the Board,
including the Independent Board Members, unanimously approved the
14 READY ASSETS PRIME MONEY FUND
OCTOBER 31, 2010
Disclosure of Investment Advisory Agreement and Sub-Advisory Agreement (continued)
continuation of the Advisory Agreement between the Manager and the
Fund and the Sub-Advisory Agreement between the Manager and the
Sub-Advisor with respect to the Fund, each for a one-year term ending
June 30, 2011. In approving the continuation of the Agreements, the
Board considered: (a) the nature, extent and quality of the services pro-
vided by BlackRock; (b) the investment performance of the Fund and
BlackRock; (c) the advisory fee and the cost of the services and profits
to be realized by BlackRock and its affiliates from their relationship with
the Fund; (d) economies of scale; and (e) other factors deemed relevant
by the Board Members.
The Board also considered other matters it deemed important to the
approval process, such as payments made to BlackRock or its affiliates
relating to the distribution of Fund shares, services related to the
valuation and pricing of Fund portfolio holdings, direct and indirect
benefits to BlackRock and its affiliates and significant shareholders
from their relationship with the Fund and advice from independent
legal counsel with respect to the review process and materials submit-
ted 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 controlling, and
each Board Member may have attributed different weights to the
various items considered.
A. Nature, Extent and Quality of the Services Provided by BlackRock:
The Board, including the Independent Board Members, reviewed the
nature, extent and quality of services provided by BlackRock, including
the investment advisory services and the resulting performance of the
Fund. Throughout the year, the Board compared Fund performance to
the performance of a comparable group of mutual funds, and the
performance of a relevant benchmark, if any. The Board met with
BlackRock’s senior management personnel responsible for investment
operations, including the senior investment officers. The Board also
reviewed the materials provided by the Fund’s portfolio management
team discussing Fund performance and the Fund’s investment objective,
strategies and outlook.
The Board considered, among other factors, the number, education
and experience of BlackRock’s investment personnel generally and the
Fund’s portfolio management team, investments by portfolio managers
in the funds they manage, BlackRock’s portfolio trading capabilities,
BlackRock’s use of technology, BlackRock’s commitment to compliance,
BlackRock’s credit analysis capabilities, BlackRock’s risk analysis capa-
bilities and BlackRock’s approach to training and retaining portfolio
managers and other research, advisory and management personnel.
The Board also reviewed a general description of BlackRock’s compen-
sation structure with respect to the Fund’s portfolio management team
and BlackRock’s ability to attract and retain high-quality talent.
In addition to advisory services, the Board considered the quality of the
administrative and non-investment advisory services provided to the
Fund. BlackRock and its affiliates and significant shareholders provide
the Fund with certain administrative, transfer agency, shareholder and
other services (in addition to any such services provided to the Fund
by third parties) and officers and other personnel as are necessary for
the operations of the Fund. In addition to investment advisory services,
BlackRock and its affiliates provide the Fund with other services, includ-
ing (i) preparing disclosure documents, such as the prospectus, the
statement of additional information and periodic shareholder reports;
(ii) assisting with daily accounting and pricing; (iii) overseeing and coor-
dinating the activities of other service providers; (iv) organizing Board
meetings and preparing the materials for such Board meetings;
(v) providing legal and compliance support; and (vi) performing
other administrative functions necessary for the operation of the
Fund, such as tax reporting, fulfilling regulatory filing requirements,
and call center services. The Board reviewed the structure and duties
of BlackRock’s fund administration, accounting, legal and compliance
departments and considered BlackRock’s policies and procedures for
assuring compliance with applicable laws and regulations.
B. The Investment Performance of the Fund and BlackRock: The Board,
including the Independent Board Members, also reviewed and consid-
ered the performance history of the Fund. In preparation for the April 20,
2010 meeting, the Board was provided with reports, independently pre-
pared by Lipper, which included a comprehensive analysis of the Fund’s
performance. The Board also reviewed a narrative and statistical analysis
of the Lipper data that was prepared by BlackRock, which analyzed
various factors that affect Lipper’s rankings. In connection with its review,
the Board received and reviewed information regarding the investment
performance of the Fund as compared to a representative group of
similar funds as determined by Lipper and to all funds in the Fund’s
applicable Lipper category. The Board was provided with a description
of the methodology used by Lipper to select peer funds. The Board regu-
larly reviews the performance of the Fund throughout the year. The Board
attaches more importance to performance over relatively long periods of
time, typically three to five years.
The Board noted that, in general, the Fund performed better than its
Peers in that the Fund’s performance was at or above the median of its
Lipper Performance Universe in each of the one-, three- and five-year
periods reported.
C. Consideration of the Advisory Fees and the Cost of the Services
and Profits to be Realized by BlackRock and its Affiliates from their
Relationship with the Fund: The Board, including the Independent
Board Members, reviewed the Fund’s contractual advisory fee rate
compared with the other funds in its Lipper category. It also compared
the Fund’s total expenses, as well as actual management fees, to those
of other funds in its Lipper category. The Board considered the services
READY ASSETS PRIME MONEY FUND
OCTOBER 31, 2010
15
Disclosure of Investment Advisory Agreement and Sub-Advisory Agreement (continued)
provided and the fees charged by BlackRock to other types of clients
with similar investment mandates, including separately managed
institutional accounts.
The Board received and reviewed statements relating to BlackRock’s
financial condition and profitability with respect to the services it
provided the Fund. The Board was also provided with a profitability
analysis that detailed the revenues earned and the expenses incurred
by BlackRock for services provided to the Fund. The Board reviewed
BlackRock’s profitability with respect to the Fund and other funds the
Board currently oversees for the year ended December 31, 2009 com-
pared to available aggregate profitability data provided for the year
ended December 31, 2008. The Board reviewed BlackRock’s profitability
with respect to other fund complexes managed by the Manager and/or
its affiliates. The Board reviewed BlackRock’s assumptions and method-
ology of allocating expenses in the profitability analysis, noting the inher-
ent limitations in allocating costs among various advisory products. The
Board recognized that profitability may be affected by numerous factors
including, among other things, fee waivers and expense reimbursements
by the Manager, the types of funds managed, expense allocations and
business mix, and the difficulty of comparing profitability as a result of
those factors.
The Board noted that, in general, individual fund or product line prof-
itability of other advisors is not publicly available. Nevertheless, to the
extent such information was available, the Board considered BlackRock’s
operating margin, in general, compared to the operating margin for lead-
ing investment management firms whose operations include advising
open-end funds, among other product types. That data indicates that
operating margins for BlackRock with respect to its registered funds are
generally consistent with margins earned by similarly situated publicly
traded competitors. In addition, the Board considered, among other
things, certain third party data comparing BlackRock’s operating margin
with that of other publicly-traded asset management firms. That third
party data indicates that larger asset bases do not, in themselves, trans-
late to higher profit margins.
In addition, the Board considered the cost of the services provided to
the Fund by BlackRock, and BlackRock’s and its affiliates’ profits relating
to the management and distribution of the Fund and the other funds
advised by BlackRock and its affiliates. As part of its analysis, the Board
reviewed BlackRock’s methodology in allocating its costs to the manage-
ment of the Fund. The Board also considered whether BlackRock has the
financial resources necessary to attract and retain high quality invest-
ment management personnel to perform its obligations under the
Agreements and to continue to provide the high quality of services that
is expected by the Board.
The Board noted that the Fund’s contractual advisory fee rate was above
the median contractual advisory fee rate paid by the Fund’s Peers, in
each case before taking into account any expense reimbursements or
fee waivers. The Board also noted, however, that the Fund’s actual total
expenses, after giving effect to any expense reimbursements or fee
waivers by BlackRock, and/or other parties if applicable, were lower
than or equal to the median actual total expenses paid by the Fund’s
Peers, after giving effect to any expense reimbursement or fee waivers.
The Board additionally noted that the Fund has an advisory fee arrange-
ment that includes breakpoints that adjust the fee rate downward as the
size of the Fund increases above certain contractually specified levels.
The Board further noted that BlackRock and the Fund’s distributor have
voluntarily agreed to waive a portion of their respective fees and/or
reimburse operating expenses to enable the Fund to maintain minimum
levels of daily net investment income. This waiver and/or reimbursement
may be discontinued at any time without notice.
D. Economies of Scale: The Board, including the Independent Board
Members, considered the extent to which economies of scale might be
realized as the assets of the Fund increase. The Board also considered
the extent to which the Fund benefits from such economies and whether
there should be changes in the advisory fee rate or structure in order to
enable the Fund to participate in these economies of scale, for example
through the use of revised breakpoints in the advisory fee based upon
the asset level of the Fund.
E. Other Factors Deemed Relevant by the Board Members: The Board,
including the Independent Board Members, also took into account
other ancillary or “fall-out” benefits that BlackRock or its affiliates and
significant shareholders may derive from their respective relationships
with the Fund, both tangible and intangible, such as BlackRock’s ability
to leverage its investment professionals who manage other portfolios,
an increase in BlackRock’s profile in the investment advisory community,
and the engagement of BlackRock’s affiliates and significant sharehold-
ers as service providers to the Fund, including for administrative, transfer
agency and distribution 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 BlackRock may use
and benefit from third party research obtained by soft dollars generated
by certain mutual fund transactions to assist in managing all or a num-
ber of its other client accounts. The Board further noted that BlackRock
completed the acquisition of a complex of exchange-traded funds
(“ETFs”) on December 1, 2009, and that BlackRock’s funds may invest
in such ETFs without any offset against the management fees payable by
the funds to BlackRock.
In connection with its consideration of the Agreements, the Board also
received information regarding BlackRock’s brokerage and soft dollar
practices. The Board received reports from BlackRock which included
information on brokerage commissions and trade execution practices
throughout the year.
16 READY ASSETS PRIME MONEY FUND
OCTOBER 31, 2010
Disclosure of Investment Advisory Agreement and Sub-Advisory Agreement (concluded)
The Board noted the competitive nature of the open-end fund market-
place, and that shareholders are able to redeem their Fund shares if
they believe that the Fund’s fees and expenses are too high or if they
are dissatisfied with the performance of the Fund.
Conclusion
The Board, including the Independent Board Members, unanimously
approved the continuation of the Advisory Agreement between the
Manager and the Fund for a one-year term ending June 30, 2011 and
the Sub-Advisory Agreement between the Manager and the Sub-Advisor,
with respect to the Fund, for a one-year term ending June 30, 2011.
Based upon its evaluation of all of the aforementioned factors in their
totality, the Board, including the Independent Board Members, was
satisfied that the terms of the Agreements were fair and reasonable
and in the best interest of the Fund and its shareholders. In arriving
at a decision to approve the Agreements, the Board did not identify
any single factor or group of factors as all-important or controlling,
but considered all factors together, and different Board Members may
have attributed different weights to the various factors considered. The
Independent Board Members were also assisted by the advice of inde-
pendent legal counsel in making this determination. The contractual fee
arrangements for the Fund reflect the results of several years of review
by the Board Members and predecessor Board Members, and discus-
sions between such Board Members (and predecessor Board Members)
and BlackRock. Certain aspects of the arrangements may be the subject
of more attention in some years than in others, and the Board Members’
conclusions may be based in part on their consideration of these
arrangements in prior years.
READY ASSETS PRIME MONEY FUND
OCTOBER 31, 2010
17
Officers and Trustees
Ronald W. Forbes, Co-Chairman of the Board and Trustee
Rodney D. Johnson, Co-Chairman of the Board and Trustee
David O. Beim, Trustee
Richard S. Davis, Trustee
Henry Gabbay, Trustee
Dr. Matina S. Horner, Trustee
Herbert I. London, Trustee and Member of the Audit Committee
Cynthia A. Montgomery, Trustee
Joseph P. Platt, Trustee
Robert C. Robb, Jr., Trustee
Toby Rosenblatt, Trustee
Kenneth L. Urish, Chairman of the Audit Committee and Trustee
Frederick W. Winter, Trustee and Member of the Audit Committee
John M. Perlowski, President and Chief Executive Officer
Richard Hoerner, Vice President
Jeffrey Holland, Vice President
Brendan Kyne, Vice President
Simon Mendelson, Vice President
Brian Schmidt, Vice President
Christopher Stavrakos, CFA, Vice President
Neal Andrews, Chief Financial Officer
Jay Fife, Treasurer
Brian Kindelan, Chief Compliance Officer
Howard Surloff, Secretary
Investment Advisor
BlackRock Advisors, LLC
Wilmington, DE 19809
Sub-Advisor
BlackRock Institutional Management Corporation
Wilmington, DE 19809
Custodian
The Bank of New York Mellon
New York, NY 10286
Transfer Agent
Financial Data Services, Inc.
Jacksonville, FL 32246
Accounting Agent
State Street Bank and Trust Company
Princeton, NJ 08540
Distributor
BlackRock Investments, LLC
New York, NY 10022
Independent Registered Public Accounting Firm
Deloitte & Touche LLP
Princeton, NJ 08540
Legal Counsel
Sidley Austin LLP
New York, NY 10019
Address of the Fund
100 Bellevue Parkway
Wilmington, DE 19809
Effective September 24, 2010, John M. Perlowski became
President and Chief Executive Officer of the Fund.
18 READY ASSETS PRIME MONEY FUND
OCTOBER 31, 2010
Additional Information
General Information
Electronic Delivery
Electronic copies of most financial reports and prospectuses are avail-
able on the Fund’s website (http://www.blackrock.com/moneymarketre-
ports) or shareholders can sign up for e-mail notifications of quarterly
statements, annual and semi-annual reports and prospectuses by
enrolling in the Fund’s electronic delivery program.
Shareholders Who Hold Accounts with Investment Advisors, Banks or
Brokerages:
Please contact your financial advisor to enroll. Please note that not all
investment advisors, banks or brokerages may offer this service.
Householding
The Fund will mail only one copy of shareholder documents, including
annual and semi-annual reports and proxy statements, to shareholders
with multiple accounts at the same address. This practice is commonly
called “householding” and it is intended to reduce expenses and elimi-
nate 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
contact the Transfer Agent at (800) 221-7210.
Availability of Quarterly Portfolio Schedule of Investments
The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission (the “SEC”) for the first and third
quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are
available on the SEC’s website at http://www.sec.gov and may also be
reviewed and copied at the SEC’s Public Reference Room in Washington,
D.C. Information on the operation of the Public Reference Room may be
obtained by calling (800) SEC-0330. The Fund’s Forms N-Q may also be
obtained upon request and without charge by calling (800) 626-1960.
Availability of Proxy Voting Policies and Procedures
A description of the policies and procedures that the Fund uses to
determine how to vote proxies relating to portfolio securities is available
(1) without charge, upon request, by calling (800) 626-1960; (2) at
http://www.blackrock.com; and (3) on the SEC’s website at
http://www.sec.gov.
Availability of Proxy Voting Record
Information about how the Fund voted proxies relating to securities
held in the Fund’s portfolio during the most recent 12-month period
ended June 30 is available upon request and without charge (1) at
http://www.blackrock.com or by calling (800) 626-1960 and (2) on
the SEC’s website at http://www.sec.gov.
BlackRock Privacy Principles
BlackRock is committed to maintaining the privacy of its current and for-
mer fund investors and individual clients (collectively, “Clients”) and to
safeguarding their non-public personal information. The following infor-
mation is provided to help you understand what personal information
BlackRock collects, how we protect that information and why in certain
cases we share such information with select parties.
If you are located in a jurisdiction where specific laws, rules or regulations
require BlackRock to provide you with additional or different privacy-
related rights beyond what is set forth below, then BlackRock will comply
with those specific laws, rules or regulations.
BlackRock obtains or verifies personal non-public information from and
about you from different sources, including the following: (i) information
we receive from you or, if applicable, your financial intermediary, on appli-
cations, forms or other documents; (ii) information about your transac-
tions with us, our affiliates, or others; (iii) information we receive from a
consumer reporting agency; and (iv) from visits to our websites.
BlackRock does not sell or disclose to non-affiliated third parties any
non-public personal information about its Clients, except as permitted by
law or as is necessary to respond to regulatory requests or to service
Client accounts. These non-affiliated third parties are required to protect
the confidentiality and security of this information and to use it only for
its intended purpose.
We may share information with our affiliates to service your account
or to provide you with information about other BlackRock products or
services that may be of interest to you. In addition, BlackRock restricts
access to non-public personal information about its Clients to those
BlackRock employees with a legitimate business need for the informa-
tion. BlackRock maintains physical, electronic and procedural safeguards
that are designed to protect the non-public personal information of its
Clients, including procedures relating to the proper storage and disposal
of such information.
READY ASSETS PRIME MONEY FUND
OCTOBER 31, 2010
19
This report is transmitted to shareholders only. It is not
authorized for use as an offer of sale or solicitation of an
offer to buy shares of the Fund unless accompanied or
preceded by the Fund’s current prospectus. An investment
in the Fund is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government
agency. Although the Fund seeks to preserve the value of
your investment at $1.00 per share, it is possible to lose
money by investing in the Fund. Total return information
assumes reinvestment of all distributions. Past performance
results shown in this report should not be considered a rep-
resentation of future performance. For current month-end
performance information, call (800) 626-1960. The Fund’s
current 7-day yield more closely reflects the current earn-
ings of the Fund than the total returns quoted. Statements
and other information herein are as dated and are subject
to change.
Item 2 – Code of Ethics – Not Applicable to this semi-annual report
Item 3 – Audit Committee Financial Expert – Not Applicable to this semi-annual report
Item 4 – Principal Accountant Fees and Services – Not Applicable to this semi-annual report
Item 5 – Audit Committee of Listed Registrants – Not Applicable
Item 6 – Investments
(a) The registrant’s Schedule of Investments is included as part of the Report to
Stockholders filed under Item 1 of this form.
(b) Not Applicable due to no such divestments during the semi-annual period covered since
the previous Form N-CSR filing.
Item 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management
Investment Companies – Not Applicable
Item 8 – Portfolio Managers of Closed-End Management Investment Companies – Not Applicable
Item 9 – Purchases of Equity Securities by Closed-End Management Investment Company and
Affiliated Purchasers – Not Applicable
Item 10 – Submission of Matters to a Vote of Security Holders – The registrant’s Nominating and
Governance Committee will consider nominees to the board of directors recommended by
shareholders when a vacancy becomes available. Shareholders who wish to recommend a
nominee should send nominations that include biographical information and set forth the
qualifications of the proposed nominee to the registrant’s Secretary. There have been no
material changes to these procedures.
Item 11 – Controls and Procedures
11(a) – The registrant’s principal executive and principal financial officers or persons performing
similar functions have concluded that the registrant’s disclosure controls and procedures (as
defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the
“1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the
evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act
and Rule 15d-15(b) under the Securities Exchange Act of 1934, as amended.
11(b) – There were no changes in the registrant’s internal control over financial reporting (as
defined in Rule 30a-3(d) under the 1940 Act) that occurred during the 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 – Exhibits attached hereto
12(a)(1) – Code of Ethics – Not Applicable to this semi-annual report
12(a)(2) – Certifications – Attached hereto
12(a)(3) – Not Applicable
12(b) – Certifications – Attached hereto
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.
Ready Assets Prime Money Fund
By: /s/ John M. Perlowski
John M. Perlowski
Chief Executive Officer of
Ready Assets Prime Money Fund
Date: January 5, 2011
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
Ready Assets Prime Money Fund
Date: January 5, 2011
By: /s/ Neal J. Andrews
Neal J. Andrews
Chief Financial Officer (principal financial officer) of
Ready Assets Prime Money Fund
Date: January 5, 2011
