BlackRock 20/80 Target Allocation Fund, Investor A (BACPX) N-CSRS Certified semi-annual shareholder report (management investment company)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT

COMPANIES

Investment Company Act file number: 811-05742

Name of Fund: BlackRock Funds

BlackRock Emerging Markets Long/Short Equity Fund

BlackRock Global Long/Short Equity Fund

BlackRock Midcap Index Fund

BlackRock Min Vol EAFE Index

BlackRock Min Vol USA Index

BlackRock MSCI Asia ex Japan Index Fund

BlackRock MSCI World Index Fund

BlackRock Multifactor International Index

BlackRock Multifactor USA Index

BlackRock Small/Mid Cap Index Fund

BlackRock Total Stock Market Index Fund

BlackRock USA Momentum Factor Index Fund

BlackRock USA Quality Factor Index Fund

BlackRock USA Size Factor Index Fund

BlackRock USA Value Factor Index Fund

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock Funds, 55 East 52^nd Street, New York, NY 10055

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

Date of fiscal year end: 07/31/2017

Date of reporting period: 01/31/2017

Item 1 – Report to Stockholders

JANUARY 31, 2017

  SEMI-ANNUAL REPORT (UNAUDITED)  

BlackRock Funds^SM

^Ø   BlackRock Emerging Markets Long/Short Equity Fund

^Ø   BlackRock Global Long/Short Equity Fund

Not FDIC Insured • May Lose Value • No Bank Guarantee

The Markets in Review

Dear Shareholder,

The 12 months ended January 31, 2017 was an exceptionally strong period for risk assets (such as stocks and high yield bonds), while higher-quality assets generated muted returns after struggling in the latter part of 2016. As the period began, worries about slowing growth in China and the instability of oil prices had global equity prices sliding. However, the broad market momentum shifted in the second half of 2016 as reflationary expectations in the United States helped drive a pick-up in global growth.

Markets were remarkably resilient during the period. Big surprises such as the United Kingdom’s vote to leave the European Union and the outcome of the U.S. presidential election brought spikes in equity market volatility, but they were ultimately short-lived. Instead, investors used the sell-offs to seize upon buying opportunities, allowing markets to quickly rebound. We believe this reinforces the case for taking the long view rather than reacting to short-term market noise.

The global reflationary theme — rising nominal growth, wages and inflation — was the dominant driver of asset returns during the period, outweighing significant political upheavals and uncertainty. This trend accelerated after the U.S. election and continued into the beginning of 2017, stoked by expectations for an extra boost to U.S. growth via fiscal policy.

Although economic momentum is gaining traction, the capacity for rapid global growth is restrained by structural factors including an aging population, low productivity growth and excess savings. A tempered economic growth trend and high valuations across most assets have set the stage for muted investment returns going forward.

Equity markets still have room to move, although the disparity between winners and losers is widening, making stock selection increasingly important. Fixed income investors are also facing challenges as bond markets recalibrate to accommodate rising rates and higher inflation expectations. And in a world where political risk and policy uncertainty abound, there is no lack of potential catalysts for higher 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 visit blackrock.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 January 31, 2017
	6-month			12-month
U.S. large cap equities (S&P 500® Index)		5.96	%		20.04	%
U.S. small cap equities (Russell 2000® Index)		12.43			33.53
International equities (MSCI Europe, Australasia, Far East Index)		3.49			12.03
Emerging market equities (MSCI Emerging Markets Index)		4.92			25.41
3-month Treasury bills (BofA Merrill Lynch 3-Month U.S. Treasury Bill Index)		0.20			0.37
U.S. Treasury securities (BofA Merrill Lynch 10-Year U.S. Treasury Index)		(7.87	)		(3.26	)
U.S. investment grade bonds (Bloomberg Barclays U.S. Aggregate Bond Index)		(2.95	)		1.45
Tax-exempt municipal bonds (S&P Municipal Bond Index)		(2.94	)		0.24
U.S. high yield bonds (Bloomberg Barclays U.S. Corporate High Yield 2% Issuer Capped Index)		6.09			20.77
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.

2 THIS PAGE NOT PART OF YOUR FUND REPORT

Table of Contents

	Page
The Markets in Review		2
Semi-Annual Report:
Fund Summaries		4
About Fund Performance		8
Disclosure of Expenses		8
Derivative Financial Instruments		9
Portfolio Information		9
Financial Statements:
Schedules of Investments		10
Statements of Assets and Liabilities		56
Statements of Operations		58
Statements of Changes in Net Assets		59
Financial Highlights		60
Notes to Financial Statements		67
Officers and Trustees		79
Additional Information		80

BLACKROCK FUNDS JANUARY 31, 2017 3

Fund Summary as of January 31, 2017 BlackRock Emerging Markets Long/Short Equity Fund

Investment Objective

BlackRock Emerging Markets Long/Short Equity Fund’s (the “Fund”) investment objective is to seek total return over the long term.

Portfolio Management Commentary

How did the Fund perform?

• For the six-month period ended January 31, 2017, the Fund’s Investor A and Investor C Shares underperformed its benchmark, the BofA Merrill Lynch 3-Month U.S. Treasury Bill Index, while the Fund’s Institutional Shares performed in line.

What factors influenced performance?

• As part of its investment strategy, the Fund uses derivatives, including total return swaps, to achieve exposure to a market or to manage market and/or equity risks. Through its use of total return swaps, the Fund’s performance is attributable to bottom-up security selection and top-down country and industry positioning, coupled with a long-short approach to controlling the Fund’s exposure to the market.

• For the six-month period, positive performance was mainly driven by the Fund’s net long equity market exposure, as emerging market equities finished the period with solid gains. The Fund’s investments in developed market companies that have significant emerging market exposure contributed to performance, after beginning to recover in the third quarter of 2016 and building momentum throughout the period. Stock selection strategies that focus on value- and quality-based stock selection saw strong performance in response to market perceptions of reduced deflationary risk, particularly following the surprising results of the U.S. presidential election. Positions driven by market sentiment also contributed to the Fund’s performance.

• The Fund’s exposure to emerging market countries detracted from performance during the period. Country selection within emerging markets was a key detractor, as an overweight position in Turkey and an underweight position in China both acted as constraints on performance

relative to the benchmark. From a sector perspective, the Fund’s exposures to the materials, telecommunications services, and utilities sectors weighed on performance.

Describe recent portfolio activity.

• The Fund increased its gross exposure during the period. However, net market exposure remained stable, and the Fund’s risk level remained within its target range. No other major changes in positioning occurred during the period.

• The Fund was fully invested throughout the period. The Fund’s cash exposure had no material impact on performance as it was principally in conjunction with the Fund taking long and short positions via the use of derivatives.

Describe portfolio positioning at period end.

• The Fund had an approximately 20% net long market exposure at the end of the period. Reflecting the divergent paths between conflicting high-level macroeconomic factors and the likelihood of heightened financial market volatility, the Fund continued to have well-balanced exposure to different groups of investment insights in both emerging market stocks and developed market stocks with exposure to emerging markets.

• In terms of the Fund’s country positioning, key country weightings continued to be driven by prospects for future outperformance. Overweight positions in Thailand and Turkey were based on potential for reforms, attractive relative valuations, and stable-to-improving fundamentals.

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

4 BLACKROCK FUNDS JANUARY 31, 2017

BlackRock Emerging Markets Long/Short Equity Fund

Total Return Based on a $10,000 Investment

¹  Assuming maximum sales charges, if any, transaction costs and other operating expenses, including investment advisory fees. Institutional Shares do not have a sales charge.

²  Under normal conditions, the Fund invests at least 80% of its total assets in global equity instruments and related derivative instruments issued by, or tied economically to, companies in emerging markets.

³  An unmanaged index that tracks 3-month U.S. Treasury securities.

⁴  Commencement of operations.

Performance Summary for the Period Ended January 31, 2017

				Average Annual Total Returns5
				1 Year						5 Years						Since Inception6
	6-Month Total Returns			w/o sales charge			w/sales charge			w/o sales charge			w/sales charge			w/o sales charge			w/sales charge
Institutional		0.21	%		3.06	%		N/A			(0.33	)%		N/A			0.00	%		N/A
Investor A		0.10			2.87			(2.53	)%		(0.55	)		(1.62	)%		(0.22	)		(1.23	)%
Investor C		(0.32	)		2.08			1.08			(1.31	)		(1.31	)		(0.99	)		(0.99	)
BofA Merrill Lynch 3-Month U.S. Treasury Bill Index		0.20			0.37			N/A			0.13			N/A			0.12			N/A

⁵  Assuming maximum sales charges, if any. Average annual total returns with and without sales charges reflect reductions for distribution and service fees. See “About Fund Performance” on page 8 for a detailed description of share classes, including any related sales charges and fees.

⁶  The Fund commenced operations on October 6, 2011.

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

Past performance is not indicative of future results.

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

Expense Example

	Actual						Hypothetical8
	Beginning Account Value August 1, 2016		Ending Account Value January 31, 2017		Expenses Paid During the Period7		Beginning Account Value August 1, 2016		Ending Account Value January 31, 2017		Expenses Paid During the Period7		Annualized Expense Ratio
Institutional	$	1,000.00	$	1,002.10	$	8.83	$	1,000.00	$	1,016.38	$	8.89		1.75	%
Investor A	$	1,000.00	$	1,001.00	$	10.09	$	1,000.00	$	1,015.12	$	10.16		2.00	%
Investor C	$	1,000.00	$	996.80	$	13.84	$	1,000.00	$	1,011.34	$	13.94		2.75	%

⁷  For each class of the Fund, expenses are equal to the annualized net expense ratio for the class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period shown).

⁸  Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365.

See “Disclosure of Expenses” on page 8 for further information on how expenses were calculated.

BLACKROCK FUNDS JANUARY 31, 2017 5

Fund Summary as of January 31, 2017 BlackRock Global Long/Short Equity Fund

Investment Objective

BlackRock Global Long/Short Equity Fund’s (the “Fund”) investment objective is to seek total return over the long term.

Portfolio Management Commentary

How did the Fund perform?

• For the six-month period ended January 31, 2017, the Fund outperformed its benchmark, the BofA Merrill Lynch 3-Month U.S. Treasury Bill Index.

What factors influenced performance?

• As part of its investment strategy, the Fund uses derivatives, including total return swaps and futures, to achieve exposure to a market or to manage market and/or equity risks. Through its use of derivatives, the Fund’s performance is attributable to stock selection and bet timing based on security analysis coupled with a long-short approach to controlling the Fund’s exposure to trends in global equity markets.

• The Fund’s strategies that focus on fundamental business performance were the primary contributor to performance for the period, as a change in market sentiment in September favored positions that benefited from reduced anxiety about deflationary macroeconomic pressure. In particular, stock selection strategies that capture relative valuations drove strong returns, with rising bond yields refocusing attention on balance sheet quality. Short positions in the U.S. retail and consumer durables industries were notably strong contributors to performance, and a negative view toward U.S. real estate investment trusts and other overbought yield-focused investments contributed as well. These positive trends continued through the end of the period, and the Fund’s value-based stock selection strategies benefited as lagging stocks caught up to early leaders during the stock market’s rally. The Fund’s short positions in overextended leading stocks were also rewarded, as many stocks showed signs of fatigue as the rally proceeded.

• The Fund’s strategies focusing on macroeconomic factors and thematic positioning detracted from performance. The market’s reaction to the

surprise result of the U.S. presidential election was contrary to investor expectations, and a short position in U.S. shares based on analysis of investor flows and a less favorable interest rate environment relative to other regions was a key detractor from performance. In addition, a strategy based on sensitivity to Chinese economic conditions underperformed. By January, however, the Fund’s adherence to strategies based on market sentiment began to align with the broader market rally.

Describe recent portfolio activity.

• Over the six-month period, the Fund maintained long positions in the United Kingdom and Japan, but it trimmed its overall short position to U.S. stocks. From a sector perspective, the Fund increased its long position in energy and reduced long exposure to consumer staples, while closing its short position in financials and increasing its short position in the materials sector.

• The Fund was fully invested throughout the period. The Fund’s cash exposure had no material impact on performance as it was principally in conjunction with the Fund taking long and short positions via the use of derivatives.

Describe portfolio positioning at period end.

• The Fund’s positioning at period-end reflected its attempt to benefit from the reflationary theme that evolved during the period. At the industry level, the Fund maintained long positions in the information technology, energy and health care sectors, while remaining short in the materials and telecommunication services sectors. From a geographical perspective, the Fund had long positions in the United Kingdom, Canada and Ireland, and short positions in the Netherlands, the United States and Sweden.

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.

6 BLACKROCK FUNDS JANUARY 31, 2017

BlackRock Global Long/Short Equity Fund

Total Return Based on a $10,000 Investment

¹  Assuming maximum sales charges, if any, transaction costs and other operating expenses, including investment advisory fees. Institutional Shares do not have a sales charge.

²  Under normal conditions, the Fund invests at least 80% of its total assets in equity instruments and related derivative instruments issued by, or tied economically to, companies located in developed markets.

³  An unmanaged index that tracks 3-month U.S. Treasury securities.

⁴  Commencement of operations.

Performance Summary for the Period Ended January 31, 2017

				Average Annual Total Returns5
				1 Year						Since Inception6
	6-Month Total Returns			w/o sales charge			w/sales charge			w/o sales charge			w/sales charge
Institutional		2.94	%		(4.48	)%		N/A			2.85	%		N/A
Investor A		2.86			(4.77	)		(9.77	)%		2.58			1.24	%
Investor C		2.44			(5.49	)		(6.43	)		1.82			1.82
Class K		3.03			(4.38	)		N/A			2.93			N/A
BofA Merrill Lynch 3-Month U.S. Treasury Bill Index		0.20			0.37			N/A			0.13			N/A

⁵  Assuming maximum sales charges, if any. Average annual total returns with and without sales charges reflect reductions for distribution and service fees. See “About Fund Performance” on page 8 for a detailed description of share classes, including any related sales charges and fees.

⁶  The Fund commenced operations on December 20, 2012.

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

Past performance is not indicative of future results.

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

Expense Example

	Actual						Hypothetical8
	Beginning Account Value August 1, 2016		Ending Account Value January 31, 2017		Expenses Paid During the Period7		Beginning Account Value August 1, 2016		Ending Account Value January 31, 2017		Expenses Paid During the Period7		Annualized Expense Ratio
Institutional	$	1,000.00	$	1,029.40	$	8.95	$	1,000.00	$	1,016.38	$	8.89		1.75	%
Investor A	$	1,000.00	$	1,028.60	$	10.23	$	1,000.00	$	1,015.12	$	10.16		2.00	%
Investor C	$	1,000.00	$	1,024.40	$	14.03	$	1,000.00	$	1,011.34	$	13.94		2.75	%
Class K	$	1,000.00	$	1,030.30	$	8.29	$	1,000.00	$	1,017.04	$	8.24		1.62	%

⁷  For each class of the Fund, expenses are equal to the annualized net expense ratio for the class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period shown).

⁸  Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365.

See “Disclosure of Expenses” on page 8 for further information on how expenses were calculated.

BLACKROCK FUNDS JANUARY 31, 2017 7

About Fund Performance

• Institutional and Class K Shares (Class K Shares available only in BlackRock Global Long/Short Equity Fund) are not subject to any sales charge. These shares bear no ongoing distribution or service fees and are available only to certain eligible investors. Prior to the Class K Shares inception date of March 28, 2016, Class K Shares performance results are those of Institutional Shares (which have no distribution or service fees) and were restated to reflect Class K Shares fees.

• Investor A Shares are subject to a maximum initial sales charge (front-end load) of 5.25% and a service fee of 0.25% per year (but no distribution fee). Certain redemptions of these shares may be subject to a contingent deferred sales charge (“CDSC”) where no initial sales charge was paid at the time of purchase. These shares are generally available through financial intermediaries.

• Investor C Shares are subject to a 1.00% CDSC if redeemed within one year of purchase. In addition, these shares are subject to a distribution fee of 0.75% per year and a service fee of 0.25% per year. These shares are generally available through financial intermediaries.

Performance information reflects past performance and does not guarantee future results. Current performance may be lower or higher than

performance data quoted. Refer to www.blackrock.com/funds to obtain performance data current to the most recent month end. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Figures shown in each of the performance tables on the previous pages assume reinvestment of all distributions, if any, at net asset value (“NAV”) on the ex-dividend dates. Investment return and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Distributions paid to each class of shares will vary because of the different levels of service, distribution and transfer agency fees applicable to each class, which are deducted from the income available to be paid to shareholders.

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

Disclosure of Expenses

Shareholders of each Fund may incur the following charges: (a) transactional expenses, such as sales charges; and (b) operating expenses, including investment advisory fees, service and distribution fees, including 12b-1 fees, acquired fund fees and expenses, and other Fund expenses. The expense examples shown on the previous pages (which are based on a hypothetical investment of $1,000 invested on August 1, 2016 and held through January 31, 2017 are intended to assist shareholders both in calculating expenses based on an investment in each Fund and in comparing these expenses with similar costs of investing in other mutual funds.

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

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

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

8 BLACKROCK FUNDS JANUARY 31, 2017

Derivative Financial Instruments

The Funds may invest in various derivative financial instruments. These instruments are used to obtain exposure to a security, commodity, index, market, and/or other assets without owning or taking physical custody of securities, commodities and/or other referenced assets or to manage market, equity, credit, interest rate, foreign currency exchange rate, commodity and/or other risks. Derivative financial instruments may give rise to a form of economic leverage and involve risks, including the imperfect correlation between the value of a derivative financial instrument and the underlying asset, possible default of the counterparty to the

transaction or illiquidity of the instrument. The Funds’ successful use of a derivative financial instrument depends on the investment adviser’s ability to predict pertinent market movements accurately, which cannot be assured. The use of these instruments may result in losses greater than if they had not been used, may limit the amount of appreciation a Fund can realize on an investment and/or may result in lower distributions paid to shareholders. The Funds’ investments in these instruments are discussed in detail in the Notes to Financial Statements.

Portfolio Information as of January 31, 2017

BlackRock Emerging Markets Long/Short Equity Fund

	Percent of Total  Investments1
Geographic Allocation	Long			Short			Total
China		12	%		6	%		18	%
Taiwan		10			4			14
South Korea		8			5			13
Hong Kong		3			5			8
Brazil		3			3			6
Mexico		3			2			5
Thailand		3			2			5
United States		3			2			5
South Africa		3			1			4
Turkey		3			—			3
Russia		2			1			3
Malaysia		2			—			2
Japan		1			1			2
Indonesia		2			—			2
Other2		6			4			10
Total		64	%		36	%		100	%

BlackRock Global Long/Short Equity Fund

	Percent of Total  Investments1
Geographic Allocation	Long			Short			Total
United States		25	%		25	%		50	%
Japan		6			7			13
United Kingdom		4			2			6
Canada		3			2			5
Switzerland		2			2			4
France		2			2			4
Germany		2			2			4
Australia		1			1			2
Sweden		1			1			2
Other2		6			4			10
Total		52	%		48	%		100	%

¹  Total investments include the gross notional values of long and short equity securities of the underlying derivative contracts utilized by the Fund and exclude short-term securities.

²  Includes holdings within countries representing 1% or less of long-term investments. Please refer to the Schedules of Investments for such countries.

BLACKROCK FUNDS JANUARY 31, 2017 9

Schedule of Investments January 31, 2017 (Unaudited) BlackRock Emerging Markets Long/Short Equity Fund (Percentages shown are based on Net Assets)

Short-Term Securities	Shares		Value
BlackRock Liquidity Funds, T-Fund, Institutional Class, 0.40% (a)(b)		148,882,956	$	148,882,956
Total Short-Term Securities (Cost — $148,882,956*) — 96.3%				148,882,956
Other Assets Less Liabilities — 3.7%				5,693,835
Net Assets — 100.0%			$	154,576,791

Portfolio Abbreviations

ADR	American Depository Receipt
CHF	Swiss Franc
CVR	Contingent Value Right
EUR	Euro
GBP	British Pound
GDR	Global Depository Receipt
HIBOR	Hong Kong Interbank Offered Rate

JPY	Japanese Yen
LIBOR	London Interbank Offered Rate
MXN	Mexican Peso
OTC	Over-the-Counter
REIT	Real Estate Investment Trust
S&P	Standard & Poor’s
USD	U.S. Dollar

Notes to Schedule of Investments

* Cost for federal income tax purposes.

(a) During the six months ended January 31, 2017, 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 July 31, 2016		Net Activity			Shares Held at January 31, 2017		Value at January 31, 2017		Income		Net Realized Gain1		Change in Unrealized Appreciation (Depreciation)
BlackRock Liquidity Funds, TempFund Institutional Class		190,126,929		(190,126,929	)		—		—	$	60,882		—		—
BlackRock Liquidity Funds, T-Fund, Institutional Class		—		148,882,956			148,882,956	$	148,882,956		183,041	$	803		—
Total								$	148,882,956	$	243,923	$	803		—
1    Includes net capital gain distributions.

(b) Represents the current yield as of report date.

Derivative Financial Instruments Outstanding as of Period End

OTC Total Return Swaps
Reference Entity	Fixed Amount1		Counterparty		Effective Date		Expiration Date		Notional Amount (000)		Value			Premiums Paid (Received)		Unrealized Depreciation
MSCI Emerging Markets Index	$	32,000,079		Goldman Sachs International		5/23/16		5/23/17	$	93,747	$	(5,442,046	)		—	$	(5,442,046	)
MSCI Emerging Markets Index	$	27,515,258		UBS AG		8/08/16		2/08/17	$	69,446		(208,038	)		—		(208,038	)
Total											$	(5,650,084	)		—	$	(5,650,084	)
1    Fund pays the total return of the reference entity and receives the fixed amount. Net payment made at termination.

See Notes to Financial Statements.

10 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Emerging Markets Long/Short Equity Fund

OTC Total Return Swaps1
Reference Entity	Counterparty	Expiration Date	Net Notional Amount			Unrealized Appreciation			Net Value of Reference Entities
Equity Securities Long/Short	Goldman Sachs & Co.	1/05/17 - 8/29/18	$	30,545,796		$	3,150,686	2	$	33,211,526
	Goldman Sachs & Co.	3/01/17 - 8/29/18		(159,961	)		192,857	3		(1,042	)
	Morgan Stanley & Co, Inc.	10/11/17 - 8/28/19		26,583,454			7,105,859	4		33,308,307
	Morgan Stanley & Co, Inc.	3/30/17 - 3/01/18		(205,245	)		233,622	5		14,692
	UBS AG	5/19/17		(296,372	)		244,814	6		(47,728	)
	UBS AG	5/19/17		27,390,105			5,801,743	7		32,909,435
Total						$	16,729,581		$	99,395,190
1    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 of 19 — 1,807 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:
EUR 1 Week; EUR Overnight.
GBP 1 Week; GBP Overnight
JPY Spot Next
MXN Spot Next
USD 1 Week; USD Spot Next
Overnight Bank Funding Rate
Bank of Canada Overnight Repo Rate
Hong Kong Dollar HIBOR Fixings 2 Week
2    Amount includes $484,956 of net dividends and financing fees.
3    Amount includes $33,938 of net dividends and financing fees.
4    Amount includes $381,006 of net dividends and financing fees.
5    Amount includes $13,685 of net dividends and financing fees.
6    Amount includes $(3,830) of net dividends and financing fees.
7    Amount includes $282,413 of net dividends and financing fees.

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 11

Schedule of Investments (continued) BlackRock Emerging Markets Long/Short Equity Fund

The following table represents the individual long and short positions and related values of equity securities underlying the total return swap with Goldman Sachs & Co. as of January 31, 2017, expiration dates 1/05/17 — 8/29/18:
	Shares		Value
Reference Entity — Long
Brazil
Braskem SA — ADR		762	$	15,766
Braskem SA, Preference A Shares		23,300		240,609
Cia de Saneamento Basico do Estado de Sao Paulo — ADR		17,165		170,963
Engie Brasil Energia SA		9,100		103,386
Fleury SA		93,600		1,128,154
Hypermarcas SA		93,700		831,111
Itau Unibanco Holding SA, Preference Shares		6,610		78,118
Magazine Luiza SA		900		36,556
Marfrig Global Foods SA		21,800		44,692
Multiplus SA		39,100		441,490
Tim Participacoes SA — ADR		4,694		66,326
				3,157,171
Chile
Empresa Nacional de Electricidad SA — ADR		63,485		1,230,339
Enersis SA — ADR		81,392		734,970
				1,965,309
China
Bank of China Ltd., Class H		1,714,000		776,299
China Biologic Products, Inc.		6,784		772,969
China Cinda Asset Management Co. Ltd.		1,085,000		375,882
China Communications Services Corp. Ltd., Class H		826,000		561,491
China Construction Bank Corp., Class H		1,163,000		862,235
China Lesso Group Holdings, Ltd.		150,000		102,278
China Mobile Ltd.		39,500		444,479
China Pacific Insurance Group Co. Ltd., Class H		134,000		475,969
China Petroleum & Chemical Corp. — ADR		7,126		570,365
China Petroleum & Chemical Corp. Class H		464,000		366,526
China Railway Group Ltd., Class H		958,000		838,549
China Telecom Corp. Ltd., Class H		86,000		40,604
CNOOC Ltd.		79,000		98,652
Datang International Power Generation Co. Ltd., Class H		118,000		30,597
Dongfang Electric Corp. Ltd.		73,800		74,417
Great Wall Motor Co. Ltd., Class H		102,000		102,202
Guangzhou Automobile Group Co. Ltd., Class H		298,000		406,416
Guangzhou Pharmaceutical Co. Ltd.		78,000		190,738
Industrial and Commercial Bank of China Ltd., Class H		704,000		430,415
Jiangsu Expressway Co. Ltd. Class H		206,000		257,996
Longfor Properties Co. Ltd.		243,500		350,562
Maanshan Iron & Steel		52,000		19,056
Metallurgical Corp. of China, Ltd.		85,000		30,819
People’s Insurance Co. Group of China Ltd., Class H		1,586,000		617,784
Shanghai Pharmaceuticals Holding Co. Ltd., Class H		39,100		99,578
Sinopec Shanghai Petrochemical Co. Ltd. — ADR		210		13,070
Sinopec Shanghai Petrochemical Co. Ltd., Class H		834,000		516,423
Sinopharm Group Co., Class H		59,600		272,367
Sinotrans Ltd., Class H		593,000		247,256
Sohu.com, Inc.		10,461		414,988
Tencent Holdings, Ltd.		89,000		2,326,937
Tianjin Capital Environmental Protection Group Co. Ltd.		352,000		189,207
Tianneng Power International Ltd.		210,000		184,923
Weichai Power Co. Ltd., Class H		432,000		765,507
ZTE Corp., Class H		492,800		766,197
				14,593,753

	Shares		Value
Reference Entity — Long (continued)
Egypt
Global Telecom Holding — GDR		109,690	$	198,539
Hong Kong
China Mobile, Ltd.		32,133		1,831,581
China Overseas Land & Investment Ltd.		4,000		11,746
China Resources Cement Holdings Ltd.		226,000		104,685
China Resources Land Ltd.		60,000		148,413
ENN Energy Holdings Ltd.		10,000		49,300
Geely Automobile Holdings Ltd.		195,000		230,475
Haier Electronics Group Co. Ltd.		290,000		510,111
KWG Property Holding Ltd.		202,500		116,367
Nine Dragons Paper Holdings Ltd.		61,000		70,207
Shenzhen Investment Ltd.		66,000		26,837
Shimao Property Holdings Ltd.		44,000		58,946
Skyworth Digital Holdings Ltd.		1,068,000		704,456
				3,863,124
Indonesia
Bank Central Asia Tbk PT		26,600		30,488
Gudang Garam Tbk PT		58,100		268,651
Matahari Department Store Tbk PT		1,528,300		1,691,955
Telekomunikasi Indonesia Persero Tbk PT		994,800		288,378
Telekomunikasi Indonesia Persero Tbk PT — ADR		53,841		1,584,002
Unilever Indonesia Tbk PT		11,100		34,228
				3,897,702
Malaysia
Astro Malaysia Holdings Bhd		337,100		207,001
IOI Corp. Bhd		565,500		563,174
MISC Bhd		174,400		288,221
				1,058,396
Mexico
Alfa SAB de C.V., Series A		502,600		652,186
America Movil SAB de C.V., Series L		487,800		307,368
Gruma SAB de C.V. Class B		10,385		139,723
Grupo Aeroportuario del Centro Norte SAB de C.V. —ADR		2,053		70,233
Grupo Bimbo SAB de C.V., Series A		535,292		1,186,686
Industrias Penoles SAB de C.V.		56,880		1,345,088
Kimberly-Clark de Mexico SAB de C.V.		149,700		268,912
Wal-Mart de Mexico SAB de C.V.		201,100		355,844
				4,326,040
Netherlands
Yandex NV		55,740		1,289,823
Peru
Compania de Minas Buenaventura SA — ADR		668		9,212
Poland
KGHM Polska Miedz SA		1,168		36,226
Polskie Gornictwo Naftowe i Gazownictwo SA		298,081		409,342
				445,568
Russia
Aeroflot — Russian Airlines OJSC		53,900		155,743
AK Transneft OAO, Preference Shares		32		109,245
Alrosa AO		73,000		128,603
Lukoil PJSC — ADR		2,280		128,489
Mobile Telesystems OJSC — ADR		1,117		11,695
Sberbank of Russia — ADR		55,232		647,607
Severstal OAO		430		6,851
Severstal PAO — GDR		288		4,575
Sistema JSFC — GDR		6,521		62,406
Tatneft PAO — ADR		66		2,690
Uralkali PJSC — GDR		10,897		154,837
				1,412,741

See Notes to Financial Statements.

12 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Emerging Markets Long/Short Equity Fund

	Shares		Value
Reference Entity — Long (continued)
South Africa
Clicks Group Ltd.		65,883	$	596,492
Investec Ltd.		21,043		148,736
Kumba Iron Ore Ltd.		7,549		116,432
Life Healthcare Group Holdings Ltd.		17,018		42,434
Mondi Ltd.		20,450		449,323
Nedbank Group Ltd.		3,137		54,110
Netcare Ltd.		226,174		543,991
Pick n Pay Stores Ltd.		44,281		224,642
Sappi Ltd.		116,739		750,609
Spar Group Ltd.		4,569		64,593
Standard Bank Group Ltd.		4,497		48,090
Telkom SA SOC Ltd.		28,657		157,048
Tsogo Sun Holdings, Ltd.		24,795		48,657
Vodacom Group Ltd.		11,027		123,576
				3,368,733
South Korea
Byucksan Corp.		8,988		29,674
CJ Corp.		718		112,740
Daewoo International Corp.		6,929		152,040
Hanjin Kal Corp.		1		13
Hanwha Corp.		4,224		128,182
Hyundai Development Co-Engineering & Construction		5,143		193,516
Hyundai Engineering & Construction Co. Ltd.		19,204		687,426
Kia Motors Corp.		7,298		228,739
Korea Electric Power Corp.		1,809		66,251
Korea Investment Holdings Co. Ltd.		9,520		381,818
KT Corp.		43,291		1,095,600
KT Corp. — ADR		70,949		1,055,012
LG Electronics, Inc.		11,692		558,760
LG International Corp.		5,466		152,099
LG Uplus Corp.		4,409		43,307
Lotte Chemical Corp.		952		308,503
LS Corp.		5,163		279,091
NAVER Corp.		422		275,656
NongShim Co. Ltd.		188		51,445
Poongsan Corp.		4,316		161,721
POSCO		451		105,410
Samsung Electronics Co. Ltd.		433		736,436
Shinhan Financial Group Co. Ltd.		3,556		140,541
SK Hynix, Inc.		1,233		56,945
SK Innovation Co. Ltd.		1,617		219,055
SK Networks Co. Ltd.		7,118		40,543
				7,260,523
Taiwan
AU Optronics Corp.		124,000		51,345
Cathay Financial Holding Co. Ltd.		105,000		159,902
Chen Full International Co. Ltd.		49,000		78,226
Chimei Innolux Corp.		345,000		146,147
China Life Insurance Co. Ltd.		32,000		31,318
CTCI Corp.		63,000		98,080
Elite Advanced Laser Corp.		46,600		185,451
Everlight Electronics Co. Ltd.		267,000		417,695
Feng TAY Enterprise Co. Ltd.		216		944
First Financial Holding Co. Ltd.		1,551,825		865,990
Formosa Chemicals & Fibre Corp.		102,000		316,193
Formosa Petrochemical Corp.		37,000		126,391
Fubon Financial Holding Co. Ltd.		278,000		451,820
Hon Hai Precision Industry Co. Ltd.		845,875		2,268,449
Hon Hai Precision Industry Co. Ltd. — GDR		10,417		54,793
Inventec Co. Ltd.		534,000		401,620
Lite-On Technology Corp.		788,914		1,191,613
MediaTek, Inc.		194,000		1,328,142
Novatek Microelectronics Corp.		39,000		138,135

	Shares			Value
Reference Entity — Long (continued)
Taiwan (continued)
Pegatron Corp.		191,000		$	459,945
Radiant Opto-Electronics Corp.		181,000			329,049
Taiwan Semiconductor Manufacturing Co. Ltd. — ADR		28,596			883,902
Taiwan Semiconductor Manufacturing Co. Ltd.		125,000			744,858
Uni-President Enterprises Corp.		253,000			434,008
WPG Holdings Ltd.		21,000			25,135
					11,189,151
Thailand
Charoen Pokphand Foods PCL		883,900			715,454
Glow Energy PCL, Foreign Registered Shares		4,500			9,969
PTT Exploration & Production PCL		193,800			539,404
PTT Global Chemical PCL		53,200			102,366
PTT PCL		18,800			215,711
Thai Oil PCL		236,100			481,118
Thanachart Capital PCL		156,000			210,452
					2,274,474
Turkey
Arcelik AS		70,900			430,042
Eregli Demir ve Celik Fabrikalari TAS		450,936			694,849
KOC Holding AS		182,604			735,584
Turkiye Is Bankasi (Isabank), C Shares		1,201,308			1,898,874
					3,759,349
United Kingdom
Anglo American PLC		13,764			237,316
United States
Genpact Ltd.		23,670			584,175
Total Reference Entity — Long					64,891,099
Reference Entity — Short
Brazil
AMBEV SA — ADR		(250,199	)		(1,348,573	)
BRF SA — ADR		(4,479	)		(63,288	)
Cosan SA Industria e Comercio		(10,300	)		(131,630	)
Embraer SA — ADR		(52,131	)		(1,191,715	)
Klabin SA		(17,600	)		(90,706	)
Petroleo Brasileiro SA — ADR		(22,221	)		(211,322	)
Rumo Logistica Operadora Multimodal SA		(97,300	)		(231,586	)
Suzano Papel e Celulose SA, Preference ‘A’ Shares		(1,200	)		(5,103	)
WEG SA		(2,500	)		(12,622	)
					(3,286,545	)
China
58.com, Inc. — ADR		(1,092	)		(31,865	)
Agricultural Bank of China, Ltd.		(1,339,000	)		(559,329	)
AviChina Industry & Technology Co. Ltd.		(1,060,000	)		(778,110	)
CGN Power Co. Ltd.		(1,205,000	)		(339,788	)
China Conch Venture Holdings, Ltd.		(65,500	)		(125,758	)
China Longyuan Power Group Corp., Class H		(53,000	)		(43,291	)
China Medical System Holdings Ltd.		(22,000	)		(35,850	)
China National Building Material Co. Ltd. Class H		(232,000	)		(135,680	)
China Oilfield Services, Ltd.		(10,000	)		(10,667	)
China Shanshui Cement Group Ltd.		(2,165,000	)		(139,517	)
Ctrip.com International, Ltd. — ADR		(13,210	)		(570,804	)
Fosun International Ltd.		(193,500	)		(293,682	)
Hollysys Automation Technologies Ltd.		(7,305	)		(123,455	)
Huatai Securities Co. Ltd.		(46,600	)		(89,871	)
New China Life Insurance Co. Ltd.		(79,300	)		(382,618	)
New Oriental Education & Technology Group, Inc. — ADR		(21,975	)		(1,044,911	)

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 13

Schedule of Investments (continued) BlackRock Emerging Markets Long/Short Equity Fund

	Shares			Value
Reference Entity — Short (continued)
China (continued)
Semiconductor Manufacturing International Corp.		(100	)	$	(137	)
Shanghai Fosun Pharmaceutical Group Co. Ltd.		(5,000	)		(16,588	)
SOHO China Ltd.		(738,000	)		(373,358	)
Sunac China Holdings Ltd.		(740,000	)		(657,371	)
TAL Education Group — ADR		(9,807	)		(794,269	)
Zhuzhou CSR Times Electric Co. Ltd.		(4,000	)		(22,790	)
Zoomlion Heavy Industry Science and Technology Co. Ltd., Class H		(791,200	)		(400,241	)
					(6,969,950	)
Colombia
Bancolombia SA — ADR		(21,505	)		(814,179	)
Hong Kong
Beijing Enterprises Water Group Ltd.		(484,000	)		(335,693	)
China Everbright International Ltd.		(65,000	)		(78,832	)
China Gas Holdings Ltd.		(136,000	)		(196,881	)
China Mengniu Dairy Co. Ltd.		(35,000	)		(65,333	)
China Merchants Holdings International Co. Ltd.		(71,932	)		(192,298	)
China Resources Gas Group Ltd.		(16,000	)		(50,566	)
China Unicom Hong Kong, Ltd. — ADR		(12,379	)		(148,177	)
CITIC, Ltd.		(4,000	)		(5,930	)
COSCO Pacific Ltd.		(42,000	)		(41,737	)
Guangdong Investment Ltd.		(42,000	)		(52,118	)
Hopewell Highway Infrastructure Ltd.		(786,000	)		(414,038	)
Shenzhen International Holdings Ltd.		(20,000	)		(28,779	)
Tongda Group Holdings Ltd.		(4,920,000	)		(1,374,818	)
					(2,985,200	)
India
Reliance Industries, Ltd. — GDR		(3,989	)		(123,659	)
Mexico
Grupo Aeroportuario del Sureste SAB de C.V. — ADR		(976	)		(141,393	)
Grupo Carso SAB de C.V.		(172,237	)		(692,136	)
Grupo Financiero Inbursa SAB de C.V.		(279,783	)		(414,707	)
Grupo Mexico SAB de C.V.		(127,500	)		(382,375	)
Grupo Televisa SAB		(5,200	)		(23,193	)
Grupo Televisa SAB — ADR		(71,625	)		(1,604,400	)
Infraestructura Energetica Nova SAB de C.V.		(302,352	)		(1,334,620	)
Mexichem SAB de C.V.		(923,637	)		(2,188,896	)
					(6,781,720	)
Peru
Hochschild Mining PLC		(68,613	)		(213,838	)
Poland
Orange Polska SA		(38,485	)		(51,924	)
Romania
New Europe Property Investments PLC		(10,336	)		(120,427	)
Singapore
IGG, Inc.		(568,000	)		(423,252	)
South Africa
Discovery Holdings Ltd.		(24,525	)		(209,308	)
Impala Platinum Holdings Ltd.		(27,928	)		(111,299	)
Sasol, Ltd. — ADR		(59,180	)		(1,767,115	)
					(2,087,722	)
South Korea
Dongsuh Cos., Inc.		(1,925	)		(42,406	)
KB Financial Group, Inc. — ADR		(10,706	)		(434,664	)
Korea Aerospace Industries Ltd.		(859	)		(45,856	)
Samsung Biologics Co. Ltd.		(6,452	)		(893,875	)
Samsung Techwin Co. Ltd.		(2,389	)		(85,826	)
Soulbrain Co. Ltd.		(423	)		(19,598	)
					(1,522,225	)

	Shares			Value
Reference Entity — Short (continued)
Taiwan
Cheng Shin Rubber Industry Co. Ltd.		(216,000	)	$	(430,013	)
China Development Financial Holding Corp.		(188,000	)		(48,053	)
Delta Electronics Inc.		(165,000	)		(921,590	)
E.Sun Financial Holding Co. Ltd.		(73,000	)		(43,121	)
Mega Financial Holding Co. Ltd.		(378,000	)		(281,794	)
Shin Kong Financial Holding Co. Ltd.		(42,000	)		(10,788	)
Siliconware Precision Industries Co.		(57,000	)		(86,822	)
SinoPac Financial Holdings Co. Ltd.		(1,425,000	)		(420,419	)
Taiwan Cooperative Financial Holding Co. Ltd.		(1,555,000	)		(710,586	)
United Microelectronics Corp.		(1,036,000	)		(376,202	)
United Microelectronics Corp. — ADR		(54,933	)		(99,429	)
					(3,428,817	)
Thailand
IRPC PCL		(565,100	)		(83,457	)
Minor International PCL		(89,200	)		(88,034	)
Siam Commercial Bank PCL		(503,000	)		(2,157,143	)
TPI Polene PCL		(1,275,424	)		(85,683	)
					(2,414,317	)
Turkey
Tofas Turk Otomobil Fabrikasi		(66,005	)		(455,798	)
Total Reference Entity — Short					(31,679,573	)
Net Value of Reference Entity — Goldman Sachs & Co.				$	33,211,526
The following table represents the individual long and short positions and related values of equity securities underlying the total return swap with Goldman Sachs & Co. as of January 31, 2017, expiration dates 3/01/17 — 8/29/18:
Reference Entity — Long
Australia
Amcor Ltd.		491			5,329
Boral Ltd.		1,836			8,114
Mineral Resources Ltd.		693			6,471
					19,914
Austria
Andritz AG		164			8,864
OMV AG		143			5,005
Wienerberger AG		1,452			28,028
					41,897
Canada
Bank of Nova Scotia		52			3,107
Celestica, Inc.		2,181			30,287
Finning International, Inc.		768			15,546
Gibson Energy, Inc.		310			4,515
Husky Energy, Inc.		589			7,600
Kinross Gold Corp.		1,321			5,147
Pan American Silver Corp.		1,231			23,991
Yamana Gold, Inc.		2,261			7,471
					97,664
Denmark
GN Store Nord A/S		721			16,104
Finland
Nokian Renkaat OYJ		611			22,921
UPM-Kymmene OYJ		1,745			39,576
					62,497
France
Arkema SA		592			58,467
Cie Generale des Etablissements Michelin		344			36,957

See Notes to Financial Statements.

14 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Emerging Markets Long/Short Equity Fund

	Shares		Value
Reference Entity — Long (continued)
France (continued)
Danone SA		481	$	30,153
Faurecia		1,766		76,732
LVMH Moet Hennessy Louis Vuitton SE		577		116,279
Peugeot SA		193		3,592
Plastic Omnium SA		393		13,333
Renault SA		422		37,998
Safran SA		46		3,118
SEB SA		44		5,533
Sodexo SA		852		94,216
Thales SA		416		39,027
Valeo SA		1,542		94,247
				609,652
Germany
Deutsche Lufthansa AG, Registered Shares		3,546		47,370
Duerr AG		1,446		125,443
Evonik Industries AG		142		4,610
Hannover Rueck SE		704		77,545
Hochtief AG		287		40,912
Lanxess AG		1,036		75,391
Talanx AG		72		2,478
Wacker Chemie AG		252		30,456
				404,205
Hong Kong
CLP Holdings Ltd.		1,000		9,761
New World Development Co. Ltd.		63,000		72,689
Sun Hung Kai Properties Ltd.		1,000		13,761
Texwinca Holdings Ltd.		50,000		32,037
				128,248
Ireland
CRH PLC		284		9,851
Japan
Amada Holdings Co. Ltd.		1,400		16,455
Astellas Pharma, Inc.		900		12,080
Bridgestone Corp.		2,400		88,022
Citizen Holdings Co. Ltd.		5,700		35,396
Daicel Corp.		1,800		19,904
Daido Steel Co. Ltd.		2,000		9,082
Dowa Holdings Co. Ltd.		1,000		8,487
FANUC Corp.		200		39,265
Hitachi Ltd.		6,000		34,353
Ibiden Co. Ltd.		200		2,844
IHI Corp.		6,000		16,157
Inpex Corp.		200		1,963
Japan Steel Works Ltd.		1,000		18,777
JTEKT Corp.		100		1,642
Kao Corp.		1,400		69,278
Mazda Motor Corp.		100		1,472
MISUMI Group, Inc.		500		9,342
Mitsubishi Chemical Holdings Corp.		15,100		105,322
Mitsui Chemicals, Inc.		3,000		14,108
NSK Ltd.		1,400		16,995
Panasonic Corp.		100		1,040
Pigeon Corp.		400		10,867
SMC Corp.		200		54,596
Sumitomo Chemical Co. Ltd.		9,000		47,952
Taiyo Yuden Co Ltd.		2,600		31,710
Teijin Ltd.		2,000		42,214
TonenGeneral Sekiyu KK		7,000		82,321
				791,644
Netherlands
Akzo Nobel NV		254		17,238
ASM International NV		979		48,268

	Shares		Value
Reference Entity — Long (continued)
Netherlands (continued)
BE Semiconductor Industries NV		423	$	15,274
Koninklijke DSM NV		584		37,230
				118,010
Norway
Subsea 7 SA		68		925
Portugal
Jeronimo Martins SGPS SA		377		6,381
Singapore
Hutchison Port Holdings Trust		70,300		29,901
Venture Corp. Ltd.		19,200		138,894
				168,795
Spain
ACS Actividades de Construccion y Servicios SA		7,072		110,569
Sweden
Atlas Copco AB, A Shares		1,276		40,923
Electrolux AB, Class B		2,541		67,568
Saab AB		2,013		82,207
				190,698
Switzerland
Coca-Cola HBC AG		1,261		28,824
Georg Fischer AG, Registered Shares		80		65,931
Glencore PLC		5,778		23,931
IWG PLC		49,377		155,554
Logitech International SA, Registered Shares		186		5,327
Schindler Holding AG, Participation Certificates		203		38,695
Straumann Holding AG, Registered Shares		56		22,600
TE Connectivity Ltd.		812		60,372
				401,234
United Kingdom
Anglo American PLC		752		12,963
British American Tobacco PLC		2,284		140,987
Croda International PLC		372		15,708
Dialog Semiconductor PLC		511		23,778
Inchcape PLC		14,775		133,725
Intertek Group PLC		1,140		48,800
Rolls-Royce Holdings PLC		8,905		75,003
Spirax-Sarco Engineering PLC		897		48,721
TechnipFMC PLC		314		10,291
UBM PLC		312		2,772
				512,748
United States
Amdocs Ltd.		186		10,920
American Express Co.		33		2,521
Amphenol Corp., Class A		471		31,788
Analog Devices, Inc.		508		38,070
Applied Materials, Inc.		1,030		35,277
Archer-Daniels-Midland Co.		434		19,209
Baxter International, Inc.		192		9,199
Bristol-Myers Squibb Co.		418		20,549
C.R. Bard, Inc.		441		104,663
Cabot Corp.		1,928		106,753
Celanese Corp., Series A		248		20,931
Citrix Systems, Inc.		1,193		108,790
Diamond Offshore Drilling, Inc.		1,742		28,534
Dril-Quip, Inc.		10		622
Eastman Chemical Co.		1,337		103,617
Energen Corp.		181		9,754
Estee Lauder Cos., Inc., Class A		120		9,745
Expeditors International of Washington, Inc.		1,952		101,660
Fluor Corp.		755		41,902
Hasbro, Inc.		212		17,492

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 15

Schedule of Investments (continued) BlackRock Emerging Markets Long/Short Equity Fund

	Shares			Value
Reference Entity — Long (continued)
United States (continued)
Hawaiian Holdings, Inc.		147		$	7,490
HP, Inc.		8,599			129,415
Ingredion, Inc.		689			88,323
Newmont Mining Corp.		758			27,500
Occidental Petroleum Corp.		1,926			130,525
Praxair, Inc.		269			31,860
Teradata Corp.		815			23,928
Texas Instruments, Inc.		638			48,195
VeriSign, Inc.		1,417			113,658
VMware, Inc., Class A		80			7,003
Xerox Corp.		2,163			14,990
Xilinx, Inc.		1,001			58,258
					1,503,141
Total Reference Entity — Long					5,194,177
Reference Entity — Short
Australia
ALS Ltd.		(4,431	)		(19,918	)
Brambles Ltd.		(540	)		(4,268	)
Iluka Resources Ltd.		(1,735	)		(9,957	)
Incitec Pivot Ltd.		(27,071	)		(79,118	)
					(113,261	)
Austria
Ams AG		(152	)		(5,236	)
Belgium
Anheuser-Busch InBev NV		(2,907	)		(303,543	)
Groupe Bruxelles Lambert SA		(250	)		(21,306	)
					(324,849	)
Canada
Centerra Gold, Inc.		(2,389	)		(11,805	)
Parex Resources, Inc.		(2,597	)		(30,216	)
					(42,021	)
Denmark
NKT Holding A/S		(57	)		(4,407	)
Finland
Metsa Board OYJ		(17,523	)		(119,696	)
Nokia OYJ		(32,514	)		(145,993	)
					(265,689	)
France
Accor SA		(406	)		(16,454	)
Air Liquide SA		(752	)		(81,189	)
Bollore SA		(25,331	)		(101,311	)
Bollore SA — New		(39	)		(160	)
Eutelsat Communications SA		(1,180	)		(20,127	)
Ingenico Group SA		(961	)		(81,037	)
JCDecaux SA		(254	)		(8,131	)
Pernod Ricard SA		(601	)		(70,301	)
Suez Environnement Co.		(2,610	)		(39,535	)
					(418,245	)
Germany
Axel Springer SE		(545	)		(28,727	)
Bayerische Motoren Werke AG		(1,306	)		(111,045	)
GEA Group AG		(240	)		(9,945	)
HeidelbergCement AG		(300	)		(28,981	)
Hella KGaA Hueck & Co.		(985	)		(40,260	)
Krones AG		(26	)		(2,658	)
Volkswagen AG		(205	)		(32,788	)
					(254,404	)

	Shares			Value
Reference Entity — Short (continued)
Hong Kong
Cathay Pacific Airways Ltd.		(29,000	)	$	(39,277	)
Esprit Holdings Ltd.		(5	)		(4	)
Hong Kong & China Gas Co. Ltd.		(1,200	)		(2,260	)
Jardine Matheson Holdings Ltd.		(600	)		(37,005	)
Jardine Strategic Holdings Ltd.		(1,000	)		(38,111	)
Shangri-La Asia Ltd.		(10,000	)		(11,123	)
					(127,780	)
Ireland
Adient PLC		(22	)		(1,397	)
Kerry Group PLC		(61	)		(4,287	)
					(5,684	)
Israel
Frutarom Industries Ltd.		(630	)		(33,286	)
Italy
Finmeccanica SpA		(9,942	)		(128,087	)
Parmalat SpA		(419	)		(1,352	)
					(129,439	)
Japan
Ajinomoto Co. Inc.		(400	)		(7,895	)
Alps Electric Co. Ltd.		(600	)		(15,981	)
Asahi Intecc Co. Ltd.		(100	)		(4,070	)
Asics Corp.		(900	)		(17,532	)
Brother Industries, Ltd.		(1,100	)		(20,304	)
Calsonic Kansei Corp.		(2,000	)		(31,795	)
Daifuku Co. Ltd.		(300	)		(6,632	)
Daikin Industries Ltd.		(800	)		(79,410	)
Hitachi Kokusai Electric, Inc.		(600	)		(13,475	)
Isuzu Motors Ltd.		(300	)		(4,025	)
JGC Corp.		(3,200	)		(55,550	)
Kansai Paint Co. Ltd.		(3,500	)		(67,991	)
Kirin Holdings Co. Ltd.		(800	)		(13,109	)
Koito Manufacturing Co. Ltd.		(900	)		(47,741	)
Konica Minolta, Inc.		(1,100	)		(11,395	)
Kyocera Corp.		(2,000	)		(104,122	)
Mitsubishi Motors Corp.		(200	)		(1,083	)
Nihon Kohden Corp.		(200	)		(4,589	)
Nippon Electric Glass Co. Ltd.		(1,000	)		(5,756	)
Nippon Kayaku Co. Ltd.		(5,000	)		(65,348	)
Nippon Paint Co. Ltd.		(1,000	)		(29,170	)
Nippon Steel & Sumitomo Metal Corp.		(400	)		(9,663	)
Pilot Corp.		(200	)		(8,115	)
Rinnai Corp.		(100	)		(8,498	)
Shiseido Co. Ltd.		(1,000	)		(27,949	)
Stanley Electric Co. Ltd.		(500	)		(14,086	)
Sumitomo Electric Industries Ltd.		(100	)		(1,455	)
Tadano Ltd.		(300	)		(3,679	)
TDK Corp.		(300	)		(21,563	)
Terumo Corp.		(1,900	)		(70,288	)
Tokuyama Corp.		(2,000	)		(8,951	)
Trend Micro, Inc.		(1,200	)		(46,568	)
Yokohama Rubber Co. Ltd.		(700	)		(12,311	)
					(840,099	)
Netherlands
Koninklijke Boskalis Westminster NV		(1,457	)		(53,906	)
Royal Dutch Shell PLC, B Shares		(2,622	)		(74,057	)
SBM Offshore NV		(2,984	)		(48,542	)
TomTom NV		(8,420	)		(77,186	)
					(253,691	)
Norway
Yara International ASA		(3,811	)		(160,693	)

See Notes to Financial Statements.

16 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Emerging Markets Long/Short Equity Fund

	Shares			Value
Reference Entity — Short (continued)
Singapore
UOL Group Ltd.		(100	)	$	(453	)
Wing Tai Holdings Ltd.		(3,300	)		(4,069	)
					(4,522	)
Spain
Ferrovial SA		(2,194	)		(39,826	)
Tecnicas Reunidas SA		(390	)		(15,486	)
					(55,312	)
Sweden
Alfa Laval AB		(2,858	)		(53,434	)
Autoliv, Inc.		(15	)		(1,735	)
Fingerprint Cards AB		(5,869	)		(35,721	)
					(90,890	)
Switzerland
Chocoladefabriken Lindt & Spruengli AG		(10	)		(55,504	)
Cie Financiere Richemont SA		(873	)		(67,989	)
OC Oerlikon Corp. AG		(968	)		(10,981	)
Swatch Group AG		(388	)		(137,509	)
U-Blox Holding AG		(43	)		(7,763	)
					(279,746	)
United Kingdom
Capita PLC		(3,272	)		(20,644	)
John Wood Group PLC		(5,951	)		(62,955	)
Kazakhmys PLC		(12,563	)		(74,544	)
Marks & Spencer Group PLC		(3,360	)		(14,242	)
Micro Focus International PLC		(4,736	)		(128,107	)
Next PLC		(1,592	)		(76,815	)
Rio Tinto PLC		(576	)		(25,518	)
Rotork PLC		(4,656	)		(15,000	)
Unilever PLC		(550	)		(22,278	)
WS Atkins PLC		(621	)		(11,452	)
					(451,555	)
United States
ANSYS, Inc.		(871	)		(81,229	)
Avnet, Inc.		(1,500	)		(69,660	)
Ball Corp.		(106	)		(8,084	)
Bio-Rad Laboratories, Inc.		(380	)		(72,230	)
Cavium, Inc.		(45	)		(2,979	)
CF Industries Holdings, Inc.		(2,886	)		(101,847	)
Chemours Co.		(1,881	)		(49,696	)
Coty, Inc., Class A		(254	)		(4,877	)
Cypress Semiconductor Corp.		(8,192	)		(96,666	)
Dentsply Sirona, Inc.		(200	)		(11,340	)
Diebold, Inc.		(636	)		(17,299	)
EI du Pont de Nemours & Co.		(376	)		(28,388	)
Flowserve Corp.		(975	)		(47,931	)
Freeport-McMoRan, Inc.		(285	)		(4,745	)
Halliburton Co.		(337	)		(19,064	)
Hecla Mining Co.		(2,238	)		(14,413	)
Hess Corp.		(19	)		(1,029	)
Illumina, Inc.		(186	)		(29,779	)
Integrated Device Technology, Inc.		(2,508	)		(63,177	)
John Bean Technologies Corp.		(999	)		(86,264	)
Keysight Technologies, Inc.		(204	)		(7,562	)
Lumentum Holdings, Inc.		(82	)		(3,112	)
M/A-COM Technology Solutions Holdings, Inc.		(159	)		(7,560	)
Newell Rubbermaid, Inc.		(1,260	)		(59,636	)
PerkinElmer, Inc.		(1,244	)		(66,168	)
Platform Specialty Products Corp.		(500	)		(6,070	)
Procter & Gamble Co.		(1,334	)		(116,858	)
Symantec Corp.		(2,012	)		(55,431	)
Terex Corp.		(557	)		(17,713	)

	Shares			Value
Reference Entity — Short (continued)
United States (continued)
Total System Services, Inc.		(545	)	$	(27,621	)
Verint Systems, Inc.		(45	)		(1,681	)
VWR Corp.		(689	)		(17,852	)
WABCO Holdings, Inc.		(280	)		(30,528	)
Western Digital Corp.		(487	)		(38,828	)
Zimmer Biomet Holdings, Inc.		(567	)		(67,093	)
					(1,334,410	)
Total Reference Entity — Short					(5,195,219	)
Net Value of Reference Entity — Goldman Sachs & Co.					(1,042	)
The following table represents the individual long and short positions and related values of equity securities underlying the total return swap with Morgan Stanley & Co., Inc. as of January 31, 2017, expiration dates 10/11/17 — 8/28/19:
Reference Entity — Long
Brazil
Banco Bradesco SA — ADR		1,951			20,154
Braskem SA — ADR		17,698			366,172
Braskem SA, Preference A Shares		1,300			13,424
Cia Energetica de Minas Gerais, Preference Shares		100			290
Cia Energetica de Sao Paulo, Preference ‘B’ Shares		42,500			234,680
Companhia de Saneamento Basico do Estado de Sao Paulo		44,100			438,747
CPFL Energia SA		1,700			13,665
Fleury SA		1,200			14,463
Itau Unibanco Holding SA, Preference Shares		45,200			534,178
Itau Unibanco Holding SA, Preference Shares — ADR		49,132			580,249
JBS SA		61,000			230,364
Localiza Rent a Car SA		5,800			67,827
M Dias Branco SA		2,500			98,315
Marfrig Global Foods SA		134,100			274,915
Smiles SA		30,300			500,016
Tim Participacoes SA		5,600			15,906
Tim Participacoes SA — ADR		9,145			129,219
					3,532,584
Chile
Empresa Nacional de Electricidad SA		1,080,612			694,211
Empresa Nacional de Electricidad SA — ADR		18,368			355,972
					1,050,183
China
Air China Ltd., Class H		100,000			71,553
Alibaba Group Holding Ltd. — ADR		5,682			575,643
Anhui Conch Cement Co. Ltd., Class H		33,000			106,193
Anhui Expressway Co. Ltd., Class H		120,000			89,091
Bank of China Ltd., Class H		120,000			54,350
China Biologic Products, Inc.		3,688			420,211
China Communications Construction Co. Ltd., Class H		418,000			503,100
China Communications Services Corp. Ltd., Class H		2,012,000			1,367,700
China Lesso Group Holdings Ltd.		277,000			188,874
China Pacific Insurance Group Co. Ltd., Class H		93,000			330,337
China Petroleum & Chemical Corp. — ADR		11,559			925,182
China Petroleum & Chemical Corp., Class H		912,000			720,413
China Railway Construction Corp. Ltd., Class H		328,000			455,101
China Railway Group Ltd., Class H		822,000			719,506
China Vanke Co. Ltd., Class H		23,600			59,867
CNOOC Ltd.		35,000			43,706
Datang International Power Generation Co. Ltd., Class H		1,020,000			264,482
Great Wall Motor Co. Ltd., Class H		117,000			117,232
Guangzhou Automobile Group Co. Ltd., Class H		124,000			169,113

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 17

Schedule of Investments (continued) BlackRock Emerging Markets Long/Short Equity Fund

	Shares		Value
Reference Entity — Long (continued)
China (continued)
Guangzhou Baiyunshan Pharmaceutical Holdings Co. Ltd., Class H		78,000	$	190,738
Industrial & Commercial Bank of China Ltd., Class H		1,008,000		616,276
Jiangxi Copper Co. Ltd., Class H		131,000		226,228
Lenovo Group Ltd.		1,004,000		657,638
Longfor Properties Co. Ltd.		227,000		326,807
Lonking Holdings Ltd.		549,000		143,836
Maanshan Iron & Steel		288,000		105,541
Metallurgical Corp. of China Ltd.		54,000		19,579
NetEase, Inc. — ADR		11,019		2,797,724
People’s Insurance Co. Group of China Ltd., Class H		744,000		289,805
Ping An Insurance Group Co. of China Ltd., Class H		238,000		1,220,886
Shanghai Pharmaceuticals Holding Co. Ltd., Class H		75,700		192,790
Sino-Ocean Land Holdings Ltd.		353,000		152,027
Sinopec Shanghai Petrochemical Co. Ltd. — ADR		571		35,539
Sinopec Shanghai Petrochemical Co. Ltd., Class H		992,000		614,259
Sinopharm Group Co. Ltd., Class H		173,600		793,337
Sinotrans Ltd., Class H		341,000		142,183
Sohu.com, Inc.		25,545		1,013,370
Tencent Holdings Ltd.		18,600		486,304
Tianjin Capital Environmental Protection Group Co. Ltd.		92,000		49,452
Tianneng Power International, Ltd.		550,000		484,321
Weichai Power Co. Ltd., Class H		661,000		1,171,297
Zhejiang Expressway Co. Ltd., Class H		292,000		293,296
ZTE Corp., Class H		117,400		182,532
				19,387,419
Czech Republic
Czech Republic AS		20,796		215,180
Egypt
Global Telecom Holding — GDR		79,398		143,710
Hong Kong
Belle International Holdings Ltd.		335,000		204,198
China Mobile Ltd. — ADR		14,896		849,072
China Overseas Land & Investment Ltd.		98,000		287,772
China Power International Development Ltd.		326,000		117,483
China Resources Cement Holdings Ltd.		856,000		396,507
China Resources Land Ltd.		314,000		776,696
Geely Automobile Holdings Ltd.		155,000		183,198
Haier Electronics Group Co. Ltd.		385,000		677,217
KWG Property Holding Ltd.		858,000		493,052
Nine Dragons Paper Holdings Ltd.		501,000		576,618
Shenzhen Investment Ltd.		328,000		133,369
				4,695,182
Hungary
MOL Hungarian Oil & Gas PLC		11,522		811,965
Richter Gedeon Nyrt		57,659		1,241,820
				2,053,785
Indonesia
Adaro Energy Tbk PT		579,700		73,679
Astra International Tbk PT		90,400		53,892
Jasa Marga Persero Tbk PT		152,800		48,330
Matahari Department Store Tbk PT		118,400		131,079
Telekomunikasi Indonesia Persero Tbk PT		740,500		214,660
United Tractors Tbk PT		154,500		252,852
				774,492
Malaysia
Astro Malaysia Holdings Bhd		242,400		148,849
IOI Corp. Bhd		506,500		504,416
MISC Bhd		215,900		356,806
Sime Darby Bhd		909,800		1,829,254
Tenaga Nasional Bhd		75,800		229,113
				3,068,438

	Shares		Value
Reference Entity — Long (continued)
Mexico
Alfa SAB de C.V., Series A		140,573	$	182,411
America Movil SAB de C.V., Series L		123,800		78,008
America Movil SAB de C.V., Series L — ADR		9,560		120,552
Cemex SAB de C.V.		379,274		350,292
Coca-Cola Femsa SAB de C.V., Series L		3,500		21,716
El Puerto de Liverpool SAB de C.V., Series C1		26,540		167,460
Gruma SAB de C.V.		87,338		1,175,075
Grupo Aeroportuario del Centro Norte SAB de C.V. — ADR		2,290		78,341
Grupo Bimbo SAB de C.V., Series A		392,583		870,315
Industrias Penoles SAB de C.V.		6,320		149,454
Kimberly-Clark de Mexico SAB de C.V., Class A		393,835		707,462
Wal-Mart de Mexico SAB de C.V.		719,300		1,272,792
				5,173,878
Netherlands
Yandex NV, Class A		50,767		1,174,748
Philippines
Robinsons Land Corp.		105,500		53,261
Poland
Polskie Gornictwo Naftowe i Gazownictwo SA		119,894		164,645
Qatar
Ooredoo QSC		2,607		75,178
Russia
Aeroflot — Russian Airlines OJSC		40,050		115,724
Alrosa PJSC		163,100		287,330
Lukoil PJSC		1,915		107,821
Lukoil PJSC — ADR		398		22,429
Magnitogorsk Iron & Steel Works OJSC		503,000		328,385
Mail.ru Group Ltd. — GDR		17,602		319,476
Mobile TeleSystems OJSC		3,990		18,401
Mobile TeleSystems PJSC — ADR		2,250		23,558
Severstal PAO — GDR		4,596		73,006
Severstal PJSC		910		14,499
Sistema PJSC FC — GDR		28,976		277,300
Tatneft PAO — ADR		3,537		144,193
Tatneft PJSC		16,870		114,575
Uralkali PJSC — GDR		1,989		28,262
				1,874,959
South Africa
Barloworld Ltd.		58,295		479,305
Gold Fields Ltd.		5,166		17,864
Gold Fields Ltd. — ADR		40,031		140,509
Growthpoint Properties Ltd.		10,331		20,212
Hyprop Investments, Ltd.		22,055		196,192
Imperial Holdings Ltd.		3,902		48,446
Investec Ltd.		6,921		48,919
Mondi Ltd.		43,906		964,694
Pick n Pay Stores Ltd.		38,467		195,147
Redefine Properties Ltd.		61,877		51,260
Sanlam Ltd.		53,663		259,238
Sappi Ltd.		148,093		952,210
Spar Group Ltd.		4,888		69,103
Standard Bank Group Ltd.		16,144		172,639
Tsogo Sun Holdings Ltd.		45,835		89,945
Vodacom Group Ltd.		25,446		285,164
				3,990,847
South Korea
Able C&C Co. Ltd.		2,728		43,791
Byucksan Corp.		16,246		53,636
E-Mart, Inc.		1,915		335,243
Hyundai Development Co-Engineering & Construction		10,760		404,867

See Notes to Financial Statements.

18 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Emerging Markets Long/Short Equity Fund

	Shares		Value
Reference Entity — Long (continued)
South Korea (continued)
Hyundai Glovis Co. Ltd.		1,673	$	224,027
Hyundai Mobis Co. Ltd.		3,072		639,087
Industrial Bank of Korea		11,807		128,972
Kia Motors Corp.		40,893		1,281,696
KT Corp.		46,860		1,185,924
KT Corp. — ADR		14,642		217,727
LG Electronics, Inc.		10,032		479,429
LG International Corp.		24,848		691,432
LG Uplus Corp.		1,064		10,451
Lotte Chemical Corp.		180		58,331
NAVER Corp.		1,641		1,071,923
Poongsan Corp.		3,529		132,232
POSCO		3,251		759,840
POSCO — ADR		7,893		456,847
Posco Daewoo Corp.		24,706		542,113
S&T Motiv Co. Ltd.		4,669		182,926
Samsung Securities Co. Ltd.		6,284		175,457
Samsung Securities Co. Ltd., Rights (Expires 03/08/17)		846		4,441
Shinhan Financial Group Co. Ltd.		17,882		706,737
Shinhan Financial Group Co. Ltd. — ADR		4,839		191,334
SK Hynix, Inc.		4,850		223,992
SK Innovation Co. Ltd.		86		11,650
SK Networks Co. Ltd.		7,417		42,246
				10,256,351
Taiwan
AU Optronics Corp. — ADR		27,375		114,701
Cathay Financial Holding Co. Ltd.		704,000		1,072,107
China Life Insurance Co. Ltd.		858,000		839,705
China Steel Corp.		1,201,000		972,407
CTBC Financial Holding Co. Ltd.		4,876,680		2,777,823
Elite Advanced Laser Corp.		160		637
Everlight Electronics Co. Ltd.		105,000		164,262
First Financial Holding Co. Ltd.		677,000		377,797
Formosa Chemicals & Fibre Corp.		725,000		2,247,453
Formosa Petrochemical Corp.		260,000		888,153
Formosa Plastics Corp.		116,000		335,174
Fubon Financial Holding Co. Ltd.		955,000		1,552,114
Hon Hai Precision Industry Co. Ltd.		152,000		407,630
Hon Hai Precision Industry Co. Ltd. — GDR		11,715		61,621
Innolux Corp.		2,073,000		878,155
Inventec Co. Ltd.		18,000		13,538
Lite-On Technology Corp.		161,803		244,395
Novatek Microelectronics Corp.		112,000		396,694
Pegatron Corp.		351,000		845,240
President Chain Store Corp.		34,000		254,322
Quanta Computer, Inc.		100,000		203,884
Sercomm Corp.		133,000		340,020
Taiwan Semiconductor Manufacturing Co. Ltd.		398,000		2,371,627
Taiwan Semiconductor Manufacturing Co. Ltd. — ADR		45,263		1,399,079
WPG Holdings Ltd.		567,000		678,642
				19,437,180
Thailand
Glow Energy PCL, Foreign Registered Shares		18,500		40,983
Indorama Ventures PCL		21,200		21,074
PTT Exploration & Production PCL, Foreign Registered Shares		245,200		682,465
PTT Global Chemical PCL, Foreign Registered Shares		208,700		401,574
PTT PCL		135,700		1,557,024
Siam Cement PCL, Foreign Registered Shares		7,450		107,108
Thai Oil PCL — NVDR		616,400		1,256,083
				4,066,311

	Shares			Value
Reference Entity — Long (continued)
Turkey
Arcelik AS		18,143		$	110,046
Eregli Demir ve Celik Fabrikalari TAS		946,475			1,458,428
KOC Holding AS		401,272			1,616,445
TAV Havalimanlari Holding AS		111,645			459,496
Turkiye Is Bankasi, Class C		116,975			184,899
Turkiye Sise ve Cam Fabrikalari AS		27,024			28,965
					3,858,279
United Arab Emirates
Aldar Properties PJSC		257,380			179,250
United Kingdom
Anglo American PLC		7,980			137,590
United States
Genpact Ltd.		25,619			632,277
Yum China Holdings, Inc.		35,945			987,768
					1,620,045
Total Reference Entity — Long					86,983,495
Reference Entity — Short
Brazil
BRF SA — ADR		(65,375	)		(923,749	)
Cia Paranaense de Energia — ADR		(14,180	)		(144,778	)
Cielo SA		(224,309	)		(1,885,673	)
Embraer SA — ADR		(25,483	)		(582,541	)
Fibria Celulose SA — ADR		(2,171	)		(20,017	)
Gerdau SA — ADR		(9,106	)		(34,876	)
Itausa — Investimentos Itau SA		(4,500	)		(13,252	)
Klabin SA		(25,300	)		(130,390	)
Petroleo Brasileiro SA — ADR		(84,799	)		(806,438	)
Rumo Logistica Operadora Multimodal SA		(5,300	)		(12,615	)
Suzano Papel e Celulose SA, Preference ‘A’ Shares		(100,200	)		(426,099	)
WEG SA		(4,300	)		(21,711	)
					(5,002,139	)
Chile
Cia Cervecerias Unidas SA — ADR		(3,607	)		(81,482	)
Sociedad Quimica y Minera de Chile SA — ADR		(17,264	)		(557,973	)
					(639,455	)
China
58.com, Inc. — ADR		(1,008	)		(29,414	)
AAC Technologies Holdings, Inc.		(51,000	)		(523,754	)
Agricultural Bank of China Ltd.		(266,000	)		(111,114	)
AviChina Industry & Technology Co. Ltd., Class H		(268,000	)		(196,730	)
CGN Power Co. Ltd.		(3,293,000	)		(928,566	)
China Conch Venture Holdings Ltd.		(255,500	)		(490,551	)
China Longyuan Power Group Corp., Class H		(430,000	)		(351,232	)
China Medical System Holdings Ltd.		(223,000	)		(363,386	)
China Molybdenum Co. Ltd., Class H		(1,545,000	)		(449,058	)
China National Building Material Co. Ltd., Class H		(330,000	)		(192,993	)
China Oilfield Services Ltd.		(244,000	)		(260,282	)
China Shanshui Cement Group Ltd.		(1,350,000	)		(86,997	)
Country Garden Holdings Co. Ltd.		(1,000,000	)		(573,413	)
Fang Holdings Ltd. — ADR		(150,885	)		(574,872	)
Fosun International Ltd.		(845,000	)		(1,282,485	)
Huaneng Renewables Corp. Ltd.		(184,000	)		(57,102	)
Li Ning Co. Ltd.		(107,000	)		(67,901	)
New China Life Insurance Co. Ltd.		(5,300	)		(25,572	)
Semiconductor Manufacturing International Corp.		(100	)		(137	)
Shandong Weigao Group Medical Polymer Co. Ltd., Class H		(108,000	)		(70,650	)
Shanghai Fosun Pharmaceutical Group Co. Ltd.		(16,500	)		(54,740	)
Sichuan Expressway Co. Ltd.		(594,000	)		(226,258	)

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 19

Schedule of Investments (continued) BlackRock Emerging Markets Long/Short Equity Fund

	Shares			Value
Reference Entity — Short (continued)
China (continued)
SOHO China Ltd.		(1,318,500	)	$	(667,036	)
Sunac China Holdings Ltd.		(79,000	)		(70,179	)
TravelSky Technology Ltd.		(40,000	)		(89,848	)
Zhuzhou CSR Times Electric Co. Ltd.		(165,000	)		(940,093	)
Zoomlion Heavy Industry Science and Technology Co. Ltd., Class H		(31,600	)		(15,985	)
					(8,700,348	)
Czech Republic
CEZ		(33,914	)		(580,884	)
Moneta Money Bank		(47,659	)		(157,572	)
					(738,456	)
Hong Kong
Alibaba Pictures Group Ltd.		(3,630,000	)		(609,852	)
Beijing Enterprises Water Group Ltd.		(2,758,000	)		(1,912,896	)
Brilliance China Automotive Holdings Ltd.		(1,056,000	)		(1,487,629	)
China Everbright International Ltd.		(707,000	)		(857,453	)
China Everbright Ltd.		(44,000	)		(84,006	)
China Gas Holdings Ltd.		(410,000	)		(593,537	)
China Mengniu Dairy Co. Ltd.		(575,000	)		(1,073,321	)
China Merchants Holdings International Co. Ltd.		(890,081	)		(2,379,488	)
China Resources Gas Group Ltd.		(14,000	)		(44,245	)
China Traditional Chinese Medicine Co. Ltd.		(334,000	)		(157,391	)
China Travel International Investment Hong Kong Ltd.		(182,000	)		(50,910	)
China Unicom Hong Kong Ltd.		(214,000	)		(252,589	)
CITIC Ltd.		(1,775,000	)		(2,631,434	)
COSCO Pacific Ltd.		(1,265,043	)		(1,257,110	)
Far East Horizon Ltd.		(341,000	)		(310,865	)
Guangdong Investment Ltd.		(276,000	)		(342,489	)
Hopewell Highway Infrastructure Ltd.		(17,500	)		(9,218	)
Kunlun Energy Co. Ltd.		(1,010,000	)		(802,142	)
Shenzhen International Holdings Ltd.		(89,719	)		(129,101	)
Tongda Group Holdings Ltd.		(820,000	)		(229,136	)
					(15,214,812	)
Mexico
Grupo Aeroportuario del Sureste SAB de C.V.		(9,175	)		(132,929	)
Grupo Financiero Inbursa SAB de C.V.		(93,000	)		(137,849	)
Grupo Mexico SAB de C.V.		(198,600	)		(595,605	)
Grupo Televisa SAB		(57,953	)		(258,480	)
Grupo Televisa SAB — ADR		(25,350	)		(567,840	)
Mexichem SAB de C.V.		(66,698	)		(158,065	)
					(1,850,768	)
Peru
Hochschild Mining PLC		(6,350	)		(19,790	)
Poland
Orange Polska SA		(158,374	)		(213,679	)
Powszechna Kasa Oszczednosci Bank Polski SA		(9,412	)		(72,209	)
Tauron Polska Energia SA		(137,656	)		(101,402	)
					(387,290	)
Republic of Korea
Kolon Industries, Inc.		(877	)		(56,050	)
Russia
Gazprom PAO — ADR		(7,907	)		(39,232	)
South Africa
Impala Platinum Holdings Ltd.		(1,579	)		(6,293	)
Sasol, Ltd. — ADR		(18,981	)		(566,773	)
Truworths International Ltd.		(2,832	)		(17,023	)
					(590,089	)

	Shares			Value
Reference Entity — Short (continued)
South Korea
Amorepacific Corp.		(1,006	)	$	(155,475	)
BNK Financial Group, Inc.		(8,311	)		(60,998	)
Cheil Industries, Inc.		(280	)		(30,381	)
Dongsuh Cos., Inc.		(1,304	)		(28,726	)
GS Holdings		(1,619	)		(71,289	)
GS Retail Co. Ltd.		(1,146	)		(51,411	)
Halla Holdings Corp.		(3,073	)		(159,719	)
Halla Visteon Climate Control Corp.		(31,673	)		(248,020	)
Hanssem Co. Ltd.		(270	)		(48,499	)
Hyundai Motor Co.		(14,039	)		(1,690,130	)
KB Financial Group, Inc. — ADR		(168	)		(6,821	)
KB Insurance Co. Ltd.		(16,069	)		(340,536	)
KCC Corp.		(3,387	)		(1,012,588	)
KEPCO Plant Service & Engineering Co. Ltd.		(177	)		(8,330	)
Korea Aerospace Industries Ltd.		(21,093	)		(1,126,009	)
KT&G Corp.		(1,170	)		(101,350	)
Kumho Petrochemical Co. Ltd.		(2,045	)		(144,944	)
Lotte Chilsung Beverage Co. Ltd.		(55	)		(68,651	)
NCSoft Corp.		(1,637	)		(428,586	)
Samsung Electro-Mechanics Co. Ltd.		(44,889	)		(2,192,259	)
Samsung Life Insurance Co. Ltd.		(6,534	)		(624,319	)
Samsung SDI Co. Ltd.		(11,484	)		(1,141,243	)
Samsung Techwin Co. Ltd.		(322	)		(11,568	)
Shinsegae Co. Ltd.		(386	)		(58,451	)
SK Holdings Co. Ltd.		(837	)		(155,953	)
SK Materials Co. Ltd.		(1,328	)		(227,801	)
Soulbrain Co. Ltd.		(5,016	)		(232,394	)
					(10,426,451	)
Switzerland
Luxoft Holding Inc.		(3,888	)		(228,809	)
Taiwan
Chang Hwa Commercial Bank		(2,252,655	)		(1,250,905	)
China Development Financial Holding Corp.		(3,374,000	)		(862,402	)
Chunghwa Telecom Co. Ltd.		(565,000	)		(1,842,860	)
Delta Electronics, Inc.		(3,000	)		(16,756	)
E.Sun Financial Holding Co. Ltd.		(1,540,000	)		(909,683	)
Largan Precision Co. Ltd.		(2,000	)		(286,073	)
Mega Financial Holding Co. Ltd.		(274,000	)		(204,263	)
Ruentex Development Co. Ltd.		(295,000	)		(359,458	)
Shin Kong Financial Holding Co. Ltd.		(1,244,000	)		(319,528	)
Taiwan Business Bank		(1,332,000	)		(347,991	)
Taiwan Cooperative Financial Holding Co. Ltd.		(158,000	)		(72,201	)
Taiwan Mobile Co. Ltd.		(186,000	)		(621,266	)
United Microelectronics Corp.		(3,868,000	)		(1,404,586	)
Walsin Technology Corp.		(81,000	)		(100,275	)
					(8,598,247	)
Thailand
Advanced Info Service PCL		(28,300	)		(127,796	)
BTS Group Holdings PCL		(852,100	)		(202,075	)
IRPC PCL		(588,000	)		(86,839	)
Minor International PCL		(698,900	)		(689,769	)
True Corp. PCL		(412,700	)		(76,773	)
					(1,183,252	)
Total Reference Entity — Short					(53,675,188	)
Net Value of Reference Entity — Morgan Stanley & Co., Inc.					33,308,307

See Notes to Financial Statements.

20 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Emerging Markets Long/Short Equity Fund

The following table represents the individual long and short positions and related values of equity securities underlying the total return swap with Morgan Stanley & Co., Inc. as of January 31, 2017, expiration dates 3/30/17 — 3/01/18:
	Shares		Value
Reference Entity — Long
Australia
Amcor Ltd.		2,036	$	22,099
Boral Ltd.		4,689		20,722
Coca-Cola Amatil Ltd.		424		3,136
Mineral Resources Ltd.		1,244		11,615
Whitehaven Coal Ltd.		363		784
				58,356
Austria
OMV AG		907		31,743
Vienna Insurance Group AG		614		14,964
Wienerberger AG		2,340		45,170
				91,877
Belgium
NV Bekaert SA		280		12,152
Bermuda
Nabors Industries, Ltd.		1,299		21,109
Canada
Air Canada		3,597		36,958
Bank of Nova Scotia		2,237		133,679
Finning International, Inc.		1,076		21,780
				192,417
Denmark
Carlsberg A/S, Class B		499		45,143
GN Store Nord A/S		1,624		36,273
				81,416
Finland
Nokian Renkaat OYJ		597		22,396
UPM-Kymmene OYJ		1,055		23,927
				46,323
France
Arkema SA		260		25,678
Cie Generale des Etablissements Michelin		688		73,914
Danone SA		385		24,135
Faurecia		1,851		80,425
Peugeot SA		16,429		305,754
Plastic Omnium SA		404		13,706
Renault SA		1,931		173,874
Teleperformance		189		20,232
Thales SA		435		40,810
				758,528
Germany
Deutsche Lufthansa AG, Registered Shares		2,659		35,521
Duerr AG		931		80,766
Evonik Industries AG		1,451		47,102
Hannover Rueck SE		1,066		117,419
Hochtief AG		788		112,330
Lanxess AG		2,167		157,695
Software AG		433		15,620
Talanx AG		175		6,024
Wacker Chemie AG		372		44,959
				617,436
Hong Kong
CLP Holdings Ltd.		5,000		48,803
Hopewell Holdings Ltd.		9,000		32,135
Li & Fung Ltd.		72,000		31,222
New World Development Co. Ltd.		77,000		88,842
Sun Hung Kai Properties Ltd.		1,000		13,761

	Shares		Value
Reference Entity — Long (continued)
Hong Kong (continued)
Texwinca Holdings Ltd.		50,000	$	32,037
				246,800
Ireland
CRH PLC		360		12,487
Italy
Atlantia SpA		384		8,751
Japan
Amada Holdings Co. Ltd.		600		7,052
Astellas Pharma, Inc.		700		9,395
Bridgestone Corp.		4,400		161,374
Citizen Holdings Co. Ltd.		4,300		26,702
Daicel Corp.		1,100		12,164
Dowa Holdings Co. Ltd.		3,000		25,462
Hitachi Ltd.		19,000		108,784
Inpex Corp.		100		981
ITOCHU Corp.		6,200		85,411
Jafco Co. Ltd.		100		3,373
Japan Airlines Co. Ltd.		100		3,184
Japan Steel Works Ltd.		700		13,144
JTEKT Corp.		300		4,927
Kao Corp.		4,000		197,939
Mazda Motor Corp.		900		13,244
MISUMI Group, Inc.		2,100		39,236
Mitsubishi Chemical Holdings Corp.		3,600		25,110
Mitsubishi Materials Corp.		1,100		37,537
Mitsui Chemicals, Inc.		1,000		4,703
NSK Ltd.		4,700		57,054
Penta-Ocean Construction Co. Ltd.		3,400		16,600
Pigeon Corp.		100		2,717
SMC Corp.		200		54,596
Sumitomo Corp.		10,400		130,372
Taiyo Yuden Co. Ltd.		1,700		20,734
Teijin Ltd.		2,600		54,878
TS Tech Co. Ltd.		200		5,104
				1,121,777
Netherlands
Akzo Nobel NV		3,208		217,712
ASM International NV		2,149		105,954
BE Semiconductor Industries NV		652		23,542
Koninklijke DSM NV		2,852		181,816
				529,024
Norway
Subsea 7 SA		506		6,885
Singapore
Venture Corp. Ltd.		12,900		93,320
Spain
ACS Actividades de Construccion y Servicios SA		4,761		75,728
Indra Sistemas SA		1,071		11,798
				87,526
Sweden
Atlas Copco AB, A Shares		722		23,156
Electrolux AB, Class B		388		10,317
Saab AB		2,297		93,805
				127,278
Switzerland
Coca-Cola HBC AG		4,246		97,055
Georg Fischer AG, Registered Shares		100		82,414
Glencore PLC		19,986		82,776
IWG PLC		31,684		99,815
Logitech International SA, Registered Shares		708		20,277

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 21

Schedule of Investments (continued) BlackRock Emerging Markets Long/Short Equity Fund

	Shares			Value
Reference Entity — Long (continued)
Switzerland (continued)
Lonza Group AG, Registered Shares		1,363		$	250,409
Schindler Holding AG, Participation Certificates		187			35,645
Straumann Holding AG, Registered Shares		30			12,107
TE Connectivity Ltd.		1,634			121,488
					801,986
United Kingdom
Anglo American PLC		941			16,221
British American Tobacco PLC		1,526			94,197
Inchcape PLC		7,667			69,392
Intertek Group PLC		908			38,868
Spirax-Sarco Engineering PLC		1,399			75,987
TechnipFMC PLC		148			4,851
UBM PLC		1,102			9,792
					309,308
United States
Accenture PLC, Class A		555			63,198
Agilent Technologies, Inc.		867			42,457
Amdocs Ltd.		110			6,458
Amphenol Corp., Class A		994			67,085
Analog Devices, Inc.		703			52,683
Applied Materials, Inc.		3,623			124,088
Archer-Daniels-Midland Co.		2,638			116,758
Baker Hughes, Inc.		417			26,304
Baxter International, Inc.		2,456			117,667
C.R. Bard, Inc.		309			73,335
Cabot Corp.		1,620			89,699
CBS Corp., Class B		370			23,861
Celanese Corp., Series A		263			22,197
Citrix Systems, Inc.		1,382			126,025
Corning, Inc.		7,062			187,072
Diamond Offshore Drilling, Inc.		454			7,437
Dril-Quip, Inc.		269			16,732
Eastman Chemical Co.		678			52,545
Energen Corp.		507			27,322
Estee Lauder Cos., Inc., Class A		792			64,318
Expeditors International of Washington, Inc.		1,724			89,786
Fluor Corp.		286			15,873
Hasbro, Inc.		1,520			125,415
Hawaiian Holdings, Inc.		82			4,178
HP, Inc.		3,217			48,416
Ingersoll-Rand PLC		833			66,099
Ingredion, Inc.		362			46,405
International Paper Co.		470			26,602
KLA-Tencor Corp.		1,243			105,792
Lear Corp.		92			13,072
Newmont Mining Corp.		865			31,382
Occidental Petroleum Corp.		1,285			87,084
PACCAR, Inc.		52			3,500
Parker Hannifin Corp.		377			55,468
Praxair, Inc.		625			74,025
Teradata Corp.		363			10,658
Texas Instruments, Inc.		1,063			80,299
VeriSign, Inc.		353			28,314
VMware, Inc., Class A		286			25,036
Xerox Corp.		32,664			226,362
					2,471,007
Total Reference Entity — Long					7,695,763
Reference Entity — Short
Australia
Iluka Resources Ltd.		(1,444	)		(8,287	)

	Shares			Value
Reference Entity — Short (continued)
Australia (continued)
Incitec Pivot Ltd.		(33,618	)	$	(98,253	)
					(106,540	)
Austria
Ams AG		(790	)		(27,215	)
Canada
Agrium, Inc.		(480	)		(49,437	)
Brookfield Asset Management, Inc., Class A		(3,891	)		(134,559	)
Centerra Gold, Inc.		(1,297	)		(6,409	)
Methanex Corp.		(173	)		(8,650	)
Potash Corp. of Saskatchewan, Inc.		(1,772	)		(32,968	)
					(232,023	)
Denmark
AP Moeller — Maersk A/S		(4	)		(6,404	)
NKT Holding A/S		(35	)		(2,706	)
					(9,110	)
France
Accor SA		(773	)		(31,327	)
Air Liquide SA		(1,163	)		(125,562	)
Airbus Group SE		(2,495	)		(169,123	)
Bollore SA		(11,822	)		(47,282	)
Bollore SA — New		(64	)		(263	)
Eutelsat Communications SA		(357	)		(6,089	)
Ingenico Group SA		(426	)		(35,923	)
JCDecaux SA		(3,451	)		(110,475	)
Suez Environnement Co.		(9,184	)		(139,115	)
					(665,159	)
Germany
Axel Springer SE		(1,114	)		(58,719	)
Bayerische Motoren Werke AG		(701	)		(52,662	)
Fraport AG Frankfurt Airport Services Worldwide		(957	)		(57,272	)
GEA Group AG		(1,605	)		(66,506	)
HeidelbergCement AG		(1,887	)		(182,292	)
Hella KGaA Hueck & Co.		(670	)		(27,385	)
Krones AG		(466	)		(47,635	)
Volkswagen AG		(524	)		(82,658	)
					(575,129	)
Hong Kong
Bank of East Asia Ltd.		(5,600	)		(23,853	)
Cheung Kong Property Holdings Ltd.		(7,000	)		(46,010	)
Hong Kong & China Gas Co. Ltd.		(130,200	)		(245,141	)
Hong Kong Exchanges and Clearing Ltd.		(1,700	)		(41,118	)
Jardine Strategic Holdings Ltd.		(100	)		(3,811	)
Melco International Development Ltd.		(9,000	)		(13,577	)
Shangri-La Asia Ltd.		(4,000	)		(4,449	)
Shun Tak Holdings Ltd.		(20,000	)		(6,912	)
Wharf Holdings Ltd.		(2,000	)		(14,997	)
Wheelock & Co. Ltd.		(7,000	)		(42,545	)
					(442,413	)
Ireland
Adient PLC		(2,046	)		(129,901	)
Israel
Frutarom Industries Ltd.		(455	)		(24,040	)
Italy
Prada SpA		(1,600	)		(6,629	)
Japan
Ajinomoto Co., Inc.		(1,600	)		(31,580	)
Alps Electric Co. Ltd.		(1,000	)		(26,636	)
Ariake Japan Co. Ltd.		(100	)		(5,301	)
Asahi Intecc Co. Ltd.		(800	)		(32,557	)

See Notes to Financial Statements.

22 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Emerging Markets Long/Short Equity Fund

	Shares			Value
Reference Entity — Short (continued)
Japan (continued)
Asics Corp.		(700	)	$	(13,636	)
Brother Industries Ltd.		(200	)		(3,692	)
Calsonic Kansei Corp.		(4,000	)		(63,590	)
Daifuku Co. Ltd.		(700	)		(15,475	)
Daikin Industries Ltd.		(700	)		(69,484	)
Eisai Co. Ltd.		(100	)		(5,512	)
Hino Motors Ltd.		(800	)		(8,440	)
Hitachi Kokusai Electric, Inc.		(1,600	)		(35,933	)
Isuzu Motors Ltd.		(2,200	)		(29,519	)
JGC Corp.		(4,400	)		(76,381	)
Kansai Paint Co. Ltd.		(6,200	)		(120,441	)
Kirin Holdings Co. Ltd.		(1,300	)		(21,301	)
Koito Manufacturing Co. Ltd.		(3,000	)		(159,137	)
Kyocera Corp.		(300	)		(15,618	)
Mitsubishi Motors Corp.		(11,100	)		(60,130	)
Nihon Kohden Corp.		(400	)		(9,178	)
Nippon Kayaku Co. Ltd.		(11,000	)		(143,765	)
Nippon Paint Co. Ltd.		(1,100	)		(32,087	)
Pilot Corp.		(100	)		(4,057	)
Rinnai Corp.		(600	)		(50,989	)
Shimano, Inc.		(200	)		(31,538	)
Shiseido Co. Ltd.		(1,300	)		(36,334	)
Stanley Electric Co. Ltd.		(1,200	)		(33,807	)
Sumitomo Electric Industries Ltd.		(2,900	)		(42,197	)
Tadano Ltd.		(600	)		(7,358	)
TDK Corp.		(400	)		(28,751	)
Terumo Corp.		(3,100	)		(114,681	)
Tokuyama Corp.		(2,000	)		(8,951	)
Topcon Corp.		(1,200	)		(18,394	)
Toray Industries, Inc.		(5,000	)		(43,295	)
Trend Micro, Inc.		(500	)		(19,403	)
Unicharm Corp.		(1,700	)		(38,288	)
Ushio, Inc.		(100	)		(1,269	)
Yamaha Motor Co. Ltd.		(700	)		(14,560	)
Yaskawa Electric Corp.		(700	)		(12,622	)
Yokohama Rubber Co. Ltd.		(300	)		(5,276	)
					(1,491,163	)
Netherlands
Koninklijke Boskalis Westminster NV		(933	)		(34,519	)
Royal Dutch Shell PLC, A Shares		(611	)		(16,571	)
Royal Dutch Shell PLC, B Shares		(227	)		(6,411	)
SBM Offshore NV		(36	)		(586	)
TomTom NV		(3,136	)		(28,748	)
					(86,835	)
Norway
Norwegian Air Shuttle ASA		(581	)		(18,967	)
Yara International ASA		(2,223	)		(93,734	)
					(112,701	)
Singapore
Broadcom Ltd.		(1,230	)		(245,385	)
Keppel Corp. Ltd.		(2,300	)		(10,093	)
UOL Group Ltd.		(1,000	)		(4,529	)
Wing Tai Holdings Ltd.		(5,000	)		(6,165	)
					(266,172	)
Spain
Atlantica Yield PLC		(235	)		(5,029	)
Ferrovial SA		(2,791	)		(50,663	)
					(55,692	)
Sweden
Alfa Laval AB		(3,910	)		(73,102	)
Autoliv, Inc.		(108	)		(12,492	)

	Shares			Value
Reference Entity — Short (continued)
Sweden (continued)
Getinge AB, B Shares		(309	)	$	(4,992	)
Hexagon AB, B Shares		(1,513	)		(59,849	)
					(150,435	)
Switzerland
Cie Financiere Richemont SA		(1,204	)		(93,767	)
Dufry AG		(442	)		(63,098	)
OC Oerlikon Corp. AG		(1,088	)		(12,343	)
Swatch Group AG		(1,527	)		(106,692	)
U-Blox Holding AG		(94	)		(16,970	)
					(292,870	)
United Kingdom
Capita PLC		(3,491	)		(22,025	)
Halma PLC		(160	)		(1,864	)
HSBC Holdings PLC		(15,184	)		(129,533	)
John Wood Group PLC		(8,617	)		(91,159	)
Marks & Spencer Group PLC		(402	)		(1,704	)
Micro Focus International PLC		(2,981	)		(80,635	)
Next PLC		(1,408	)		(67,937	)
Rio Tinto PLC		(97	)		(4,297	)
Rotork PLC		(6,693	)		(21,562	)
RPC Group PLC		(2,285	)		(30,857	)
WS Atkins PLC		(474	)		(8,742	)
					(460,315	)
United States
Advanced Micro Devices, Inc.		(3,459	)		(35,870	)
AGCO Corp.		(97	)		(6,092	)
ANSYS, Inc.		(221	)		(20,610	)
Avnet, Inc.		(4,406	)		(204,615	)
Axalta Coating Systems Ltd.		(1,876	)		(54,404	)
Bio-Rad Laboratories, Inc.		(521	)		(99,032	)
Cavium, Inc.		(2,476	)		(163,936	)
CF Industries Holdings, Inc.		(1,234	)		(43,548	)
Chemours Co.		(2,040	)		(53,897	)
Cheniere Energy, Inc.		(746	)		(35,547	)
Cooper Cos., Inc.		(115	)		(21,230	)
Coty, Inc., Class A		(2,525	)		(48,480	)
Cypress Semiconductor Corp.		(1,328	)		(15,670	)
Dentsply Sirona, Inc.		(1,531	)		(86,808	)
Diebold, Inc.		(4,865	)		(132,328	)
Dow Chemical Co.		(1,320	)		(78,712	)
EI du Pont de Nemours & Co.		(55	)		(4,152	)
Flowserve Corp.		(2,339	)		(114,985	)
Freeport-McMoRan, Inc.		(117	)		(1,948	)
General Electric Co.		(6,568	)		(195,070	)
Hecla Mining Co.		(1,109	)		(7,142	)
Hess Corp.		(584	)		(31,641	)
Illumina, Inc.		(635	)		(101,663	)
Integrated Device Technology, Inc.		(1,616	)		(40,707	)
John Bean Technologies Corp.		(649	)		(56,041	)
Keysight Technologies, Inc.		(669	)		(24,800	)
Lumentum Holdings, Inc.		(391	)		(14,838	)
M/A-COM Technology Solutions Holdings, Inc.		(1,021	)		(48,549	)
MKS Instruments, Inc.		(212	)		(13,971	)
Newell Rubbermaid, Inc.		(3,075	)		(145,540	)
PerkinElmer, Inc.		(341	)		(18,138	)
Procter & Gamble Co.		(1,933	)		(169,331	)
Quintiles Transnational Holdings, Inc.		(1,407	)		(110,435	)
Salesforce.com, Inc.		(71	)		(5,616	)
Symantec Corp.		(3,380	)		(93,119	)
Terex Corp.		(525	)		(16,695	)
Textron, Inc.		(298	)		(14,116	)
Total System Services, Inc.		(125	)		(6,335	)
Universal Display Corp.		(673	)		(44,418	)

��

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 23

Schedule of Investments (continued) BlackRock Emerging Markets Long/Short Equity Fund

	Shares			Value
Reference Entity — Short (continued)
United States (continued)
Verint Systems, Inc.		(310	)	$	(11,578	)
WABCO Holdings, Inc.		(634	)		(69,125	)
Western Digital Corp.		(269	)		(21,447	)
Zebra Technologies Corp., Class A		(664	)		(55,557	)
Zimmer Biomet Holdings, Inc.		(76	)		(8,993	)
					(2,546,729	)
Total Reference Entity — Short					(7,681,071	)
Net Value of Reference Entity — Morgan Stanley & Co., Inc.					14,692
The following table represents the individual long and short positions and related values of equity securities underlying the total return swap with UBS AG as of January 31, 2017, expiration date 5/19/17:
Reference Entity — Long
Australia
Amcor Ltd.		256			2,779
Boral Ltd.		21,785			96,274
Coca-Cola Amatil Ltd.		6,874			50,836
Mineral Resources Ltd.		1,433			13,380
Whitehaven Coal Ltd.		4,854			10,484
					173,753
Austria
OMV AG		2,016			70,556
Wienerberger AG		424			8,185
					78,741
Belgium
NV Bekaert SA		361			15,667
Bermuda
Nabors Industries Ltd.		1,599			25,984
Canada
Bank of Nova Scotia		2,609			155,909
Finning International, Inc.		910			18,420
Husky Energy, Inc.		143			1,845
West Fraser Timber Co. Ltd.		679			23,189
Yamana Gold, Inc.		8,601			28,422
					227,785
Denmark
GN Store Nord A/S		1,469			32,811
Finland
Nokian Renkaat OYJ		2,071			77,690
UPM-Kymmene OYJ		7,059			160,098
					237,788
France
Arkema SA		1,092			107,848
Cie Generale des Etablissements Michelin		1,703			182,958
Faurecia		1,413			61,394
LVMH Moet Hennessy Louis Vuitton SE		100			20,152
Plastic Omnium SA		1,140			38,676
Renault SA		736			66,272
Sodexo SA		1,077			119,097
Thales SA		1,461			137,063
Valeo SA		3,462			211,596
					945,056
Germany
Covestro AG		2,449			184,296
Deutsche Lufthansa AG, Registered Shares		703			9,391
Duerr AG		375			32,532

	Shares		Value
Reference Entity — Long (continued)
Germany (continued)
Evonik Industries AG		4,537	$	147,279
Hannover Rueck SE		425		46,814
Hochtief AG		977		139,272
Lanxess AG		851		61,928
Software AG		70		2,525
Talanx AG		125		4,303
Wacker Chemie AG		227		27,435
				655,775
Hong Kong
CLP Holdings Ltd.		12,500		122,007
Hong Kong Exchanges & Clearing Ltd.		4		97
Hopewell Holdings Ltd.		8,500		30,350
Johnson Electric Holdings Ltd.		500		1,331
New World Development Co. Ltd.		13,000		14,999
Sun Hung Kai Properties Ltd.		5,000		68,805
Texwinca Holdings Ltd.		18,000		11,533
				249,122
Ireland
CRH PLC		317		10,995
Italy
Atlantia SpA		2,193		49,978
Japan
Amada Holdings Co. Ltd.		1,000		11,754
Asahi Glass Co. Ltd.		1,000		7,430
Astellas Pharma, Inc.		8,000		107,374
Bridgestone Corp.		1,500		55,014
Citizen Holdings Co. Ltd.		2,000		12,420
Daicel Corp.		1,900		21,010
Daido Steel Co. Ltd.		1,000		4,541
DIC Corp.		2,000		61,934
FANUC Corp.		600		117,796
Hitachi Ltd.		9,000		51,529
Inpex Corp.		400		3,925
ITOCHU Corp.		1,000		13,776
Japan Airlines Co. Ltd.		400		12,737
Japan Steel Works Ltd.		1,200		22,532
JTEKT Corp.		1,000		16,424
Kao Corp.		500		24,742
Komatsu Ltd.		2,700		63,932
Lintec Corp.		400		8,952
MISUMI Group, Inc.		400		7,473
Mitsubishi Chemical Holdings Corp.		23,400		163,214
Mitsubishi Materials Corp.		700		23,888
Mitsui Chemicals, Inc.		4,000		18,810
Mitsui Engineering & Shipbuilding Co. Ltd.		1,000		1,618
NSK Ltd.		100		1,214
Panasonic Corp.		400		4,162
Penta-Ocean Construction Co. Ltd.		5,200		25,389
Sumitomo Chemical Co. Ltd.		7,000		37,296
Sumitomo Corp.		2,000		25,072
Teijin Ltd.		2,400		50,656
Tokai Rika Co. Ltd.		300		5,971
TonenGeneral Sekiyu KK		18,000		211,682
TS Tech Co. Ltd.		300		7,656
Zeon Corp.		1,000		11,475
				1,213,398
Netherlands
Akzo Nobel NV		771		52,324
ASM International NV		668		32,935
Koninklijke DSM NV		1,445		92,119
				177,378

See Notes to Financial Statements.

24 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Emerging Markets Long/Short Equity Fund

	Shares		Value
Reference Entity — Long (continued)
Norway
Seadrill Ltd.		919	$	1,800
Subsea 7 SA		5,627		76,570
				78,370
Portugal
Jeronimo Martins SGPS SA		610		10,325
Singapore
Hutchison Port Holdings Trust		25,700		10,931
Venture Corp. Ltd.		9,300		67,277
				78,208
Spain
ACS Actividades de Construccion y Servicios SA		7,160		114,891
Sweden
Atlas Copco AB, A Shares		4,524		145,093
Atlas Copco AB, B Shares		95		2,755
Electrolux AB, Class B		8,786		233,629
Saab AB		745		30,424
Securitas AB, Class B		856		13,631
				425,532
Switzerland
Coca-Cola HBC AG		2,868		65,557
Georg Fischer AG, Registered Shares		134		110,434
Glencore PLC		9,283		38,447
IWG PLC		8,800		27,723
Logitech International SA, Registered Shares		1,370		39,237
Lonza Group AG, Registered Shares		280		51,441
Schindler Holding AG, Participation Certificates		283		53,945
Straumann Holding AG, Registered Shares		539		217,522
TE Connectivity Ltd.		1,067		79,332
				683,638
United Kingdom
Anglo American PLC		519		8,947
British American Tobacco PLC		1,051		64,876
Croda International PLC		14		591
Inchcape PLC		6,848		61,980
Intertek Group PLC		4,833		206,884
Rolls-Royce Holdings PLC		8,120		68,392
Spirax-Sarco Engineering PLC		3,460		187,930
UBM PLC		7,195		63,933
				663,533
United States
Agilent Technologies, Inc.		2,003		98,087
Amphenol Corp., Class A		533		35,972
Analog Devices, Inc.		1,236		92,626
Applied Materials, Inc.		4,354		149,125
Archer-Daniels-Midland Co.		3,671		162,478
Baker Hughes, Inc.		930		58,664
Baxter International, Inc.		2,457		117,715
Boeing Co.		123		20,101
Bristol-Myers Squibb Co.		157		7,718
C.R. Bard, Inc.		547		129,820
Cabot Corp.		1,873		103,708
CBS Corp., Class B		2,152		138,782
Celanese Corp., Series A		456		38,486
Citrix Systems, Inc.		653		59,547
Diamond Offshore Drilling, Inc.		2,458		40,262
Dril-Quip, Inc.		348		21,646
Eastman Chemical Co.		563		43,633
Energen Corp.		36		1,940
Expeditors International of Washington, Inc.		279		14,530
F5 Networks, Inc.		51		6,836
Fluor Corp.		388		21,534

	Shares			Value
Reference Entity — Long (continued)
United States (continued)
Hasbro, Inc.		1,873		$	154,541
Hawaiian Holdings, Inc.		140			7,133
Hormel Foods Corp.		838			30,419
HP, Inc.		8,222			123,741
Ingersoll-Rand PLC		1,635			129,737
Ingredion, Inc.		419			53,712
International Paper Co.		77			4,358
Kellogg Co.		806			58,604
Lear Corp.		931			132,286
McCormick & Co., Inc.		325			31,054
Newmont Mining Corp.		194			7,038
Occidental Petroleum Corp.		1,098			74,411
Penske Automotive Group, Inc.		158			8,589
Praxair, Inc.		1,053			124,717
Teradata Corp.		578			16,970
Texas Instruments, Inc.		2,225			168,077
VeriSign, Inc.		904			72,510
VMware, Inc., Class A		211			18,471
Xerox Corp.		8,034			55,676
Xilinx, Inc.		3,742			217,784
					2,853,038
Total Reference Entity — Long					9,001,766
Reference Entity — Short
Australia
ALS Ltd.		(6,833	)		(30,715	)
Brambles Ltd.		(653	)		(5,161	)
Iluka Resources Ltd.		(1,143	)		(6,560	)
Incitec Pivot Ltd.		(23,450	)		(68,535	)
OceanaGold Corp.		(14,047	)		(48,793	)
					(159,764	)
Canada
Agrium, Inc.		(285	)		(29,353	)
BlackBerry Ltd.		(3,436	)		(24,240	)
Brookfield Asset Management, Inc., Class A		(1,418	)		(49,037	)
Centerra Gold, Inc.		(563	)		(2,782	)
Methanex Corp.		(643	)		(32,149	)
Parex Resources, Inc.		(8,414	)		(97,897	)
					(235,458	)
Denmark
AP Moeller — Maersk A/S		(13	)		(20,814	)
FLSmidth & Co. A/S		(83	)		(3,863	)
NKT Holding A/S		(33	)		(2,551	)
Novozymes A/S, B Shares		(1,938	)		(75,543	)
					(102,771	)
France
Accor SA		(256	)		(10,375	)
Air Liquide SA		(832	)		(89,826	)
Airbus Group SE		(1,835	)		(124,385	)
Bollore SA		(38,035	)		(152,129	)
Bureau Veritas SA		(14,461	)		(283,197	)
Eutelsat Communications SA		(1,230	)		(20,980	)
Ingenico Group SA		(650	)		(54,812	)
JCDecaux SA		(1,572	)		(50,324	)
Pernod Ricard SA		(324	)		(37,899	)
Suez Environnement Co.		(5,067	)		(76,753	)
					(900,680	)
Germany
Axel Springer SE		(1,695	)		(89,344	)

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 25

Schedule of Investments (continued) BlackRock Emerging Markets Long/Short Equity Fund

	Shares			Value
Reference Entity — Short (continued)
Germany (continued)
Bayerische Motoren Werke AG		(755	)	$	(56,719	)
Fraport AG Frankfurt Airport Services Worldwide		(3	)		(179	)
GEA Group AG		(4,958	)		(205,445	)
HeidelbergCement AG		(931	)		(89,938	)
Hella KGaA Hueck & Co.		(1,159	)		(47,372	)
K+S AG		(1,728	)		(43,897	)
Rational AG		(6	)		(2,724	)
Symrise AG		(4,071	)		(245,125	)
Volkswagen AG		(1,389	)		(217,648	)
					(998,391	)
Hong Kong
Bank of East Asia Ltd.		(400	)		(1,704	)
Cathay Pacific Airways Ltd.		(6,000	)		(8,126	)
Hong Kong & China Gas Co. Ltd.		(100	)		(188	)
Hong Kong Exchanges and Clearing Ltd.		(4	)		(97	)
Jardine Strategic Holdings Ltd.		(800	)		(30,489	)
Shun Tak Holdings Ltd.		(4,000	)		(1,382	)
					(41,986	)
Ireland
Adient PLC		(179	)		(11,365	)
Italy
Finmeccanica SpA		(10,859	)		(139,901	)
Japan
Ajinomoto Co., Inc.		(600	)		(11,843	)
Alps Electric Co. Ltd.		(1,500	)		(39,954	)
Asahi Intecc Co. Ltd.		(200	)		(8,139	)
Asics Corp.		(700	)		(13,636	)
Brother Industries Ltd.		(900	)		(16,612	)
Calsonic Kansei Corp.		(2,000	)		(31,795	)
Casio Computer Co. Ltd.		(800	)		(11,054	)
Daifuku Co. Ltd.		(1,400	)		(30,949	)
Daikin Industries Ltd.		(400	)		(39,705	)
Eisai Co. Ltd.		(500	)		(27,560	)
Hitachi Kokusai Electric, Inc.		(800	)		(17,967	)
Isuzu Motors Ltd.		(5,100	)		(68,431	)
JGC Corp.		(3,600	)		(62,494	)
Kansai Paint Co. Ltd.		(100	)		(1,943	)
Kawasaki Kisen Kaisha Ltd.		(3,000	)		(7,295	)
Kirin Holdings Co. Ltd.		(6,200	)		(101,592	)
Koito Manufacturing Co. Ltd.		(1,500	)		(79,568	)
Konica Minolta, Inc.		(700	)		(7,251	)
Kyocera Corp.		(400	)		(20,824	)
Nippon Kayaku Co. Ltd.		(6,000	)		(78,417	)
Nippon Paint Co. Ltd.		(1,000	)		(29,170	)
Nippon Steel & Sumitomo Metal Corp.		(800	)		(19,326	)
Nissan Chemical Industries Ltd.		(200	)		(7,141	)
Omron Corp.		(700	)		(28,720	)
Pilot Corp.		(100	)		(4,058	)
Rinnai Corp.		(200	)		(16,996	)
Shimano, Inc.		(200	)		(31,538	)
Shiseido Co. Ltd.		(1,100	)		(30,744	)
Stanley Electric Co. Ltd.		(500	)		(14,086	)
Sumitomo Electric Industries Ltd.		(1,700	)		(24,736	)
TDK Corp.		(600	)		(43,126	)
Terumo Corp.		(2,700	)		(99,883	)
Tokyo Ohka Kogyo Co. Ltd.		(100	)		(3,573	)
Topcon Corp.		(100	)		(1,533	)
Unicharm Corp.		(2,000	)		(45,044	)
Yakult Honsha Co. Ltd.		(200	)		(10,278	)
Yokohama Rubber Co. Ltd.		(1,000	)		(17,587	)
					(1,104,568	)

	Shares			Value
Reference Entity — Short (continued)
Netherlands
Koninklijke Boskalis Westminster NV		(5,324	)	$	(196,977	)
Royal Dutch Shell PLC, A Shares		(5,577	)		(151,257	)
Royal Dutch Shell PLC, B Shares		(2,930	)		(82,756	)
SBM Offshore NV		(7,869	)		(128,008	)
					(558,998	)
Norway
DNO ASA		(11,708	)		(12,254	)
Norwegian Air Shuttle ASA		(643	)		(20,991	)
Yara International ASA		(664	)		(27,998	)
					(61,243	)
Singapore
UOL Group Ltd.		(1,300	)		(5,888	)
Wing Tai Holdings Ltd.		(2,500	)		(3,083	)
					(8,971	)
Spain
Atlantica Yield PLC		(93	)		(1,990	)
Ferrovial SA		(7,759	)		(140,844	)
Tecnicas Reunidas SA		(450	)		(17,868	)
Viscofan SA		(150	)		(7,628	)
					(168,330	)
Sweden
Alfa Laval AB		(10,134	)		(189,467	)
Autoliv, Inc.		(2,385	)		(275,849	)
Hexagon AB, B Shares		(449	)		(17,761	)
					(483,077	)
Switzerland
Chocoladefabriken Lindt & Spruengli AG		(22	)		(240,725	)
Cie Financiere Richemont SA		(1,696	)		(132,084	)
Dufry AG		(1,349	)		(192,579	)
OC Oerlikon Corp. AG		(793	)		(8,996	)
Sonova Holding AG		(133	)		(17,610	)
Swatch Group AG		(603	)		(54,651	)
U-Blox Holding AG		(8	)		(1,444	)
					(648,089	)
United Kingdom
Capita PLC		(3,537	)		(22,315	)
HSBC Holdings PLC		(17,676	)		(150,792	)
John Wood Group PLC		(3,124	)		(33,049	)
Kazakhmys PLC		(1,222	)		(7,251	)
Micro Focus International PLC		(3,537	)		(95,675	)
Next PLC		(1,793	)		(86,514	)
Rio Tinto PLC		(1,047	)		(46,385	)
Rolls-Royce Holdings PLC		(56,693	)		(71	)
RPC Group PLC		(848	)		(11,452	)
WS Atkins PLC		(2,333	)		(43,025	)
					(496,529	)
United States
Advanced Micro Devices, Inc.		(1,638	)		(16,986	)
ANSYS, Inc.		(300	)		(27,978	)
Ashland Global Holdings, Inc.		(65	)		(7,737	)
Avnet, Inc.		(248	)		(11,517	)
Axalta Coating Systems Ltd.		(8,008	)		(232,232	)
Ball Corp.		(3,842	)		(292,991	)
Bio-Rad Laboratories, Inc.		(632	)		(120,131	)
Cavium, Inc.		(1,684	)		(111,498	)
CF Industries Holdings, Inc.		(1,932	)		(68,180	)
Chemours Co.		(1,335	)		(35,271	)
Cheniere Energy, Inc.		(260	)		(12,389	)
Cigna Corp.		(238	)		(34,800	)
Cirrus Logic, Inc.		(410	)		(24,731	)

See Notes to Financial Statements.

26 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Emerging Markets Long/Short Equity Fund

	Shares			Value
Reference Entity — Short (continued)
United States (continued)
Coty, Inc., Class A		(2,876	)	$	(55,219	)
Cypress Semiconductor Corp.		(1,011	)		(11,930	)
Dentsply Sirona, Inc.		(3,369	)		(191,022	)
Diebold, Inc.		(961	)		(26,139	)
EI du Pont de Nemours & Co.		(172	)		(12,986	)
Exxon Mobil Corp.		(252	)		(21,140	)
Facebook, Inc.		(63	)		(8,210	)
Flowserve Corp.		(1,375	)		(67,595	)
FMC Corp.		(440	)		(26,470	)
General Electric Co.		(2,637	)		(78,319	)
Goldman Sachs Group, Inc.		(336	)		(77,052	)
Halliburton Co.		(185	)		(10,466	)
Hecla Mining Co.		(2,320	)		(14,941	)
Illumina, Inc.		(822	)		(131,602	)
Integrated Device Technology, Inc.		(1,612	)		(40,606	)
John Bean Technologies Corp.		(125	)		(10,794	)
Keysight Technologies, Inc.		(1,024	)		(37,960	)
Lumentum Holdings, Inc.		(698	)		(26,489	)
M/A-COM Technology Solutions Holdings, Inc.		(20	)		(951	)
Mattel, Inc.		(221	)		(5,792	)
Microsemi Corp.		(1,716	)		(91,205	)
Mondelez International, Inc.		(1,354	)		(59,955	)
Newell Rubbermaid, Inc.		(1,814	)		(85,857	)
PerkinElmer, Inc.		(1,252	)		(66,594	)
PTC, Inc.		(30	)		(1,577	)
Symantec Corp.		(4,618	)		(127,226	)
Terex Corp.		(700	)		(22,260	)
Textron, Inc.		(814	)		(38,559	)
Total System Services, Inc.		(4,338	)		(219,850	)
Trimble Navigation Ltd.		(1,329	)		(39,365	)
Verint Systems, Inc.		(94	)		(3,511	)
WABCO Holdings, Inc.		(707	)		(77,084	)
Western Digital Corp.		(592	)		(47,200	)
Zebra Technologies Corp., Class A		(195	)		(16,316	)
Zimmer Biomet Holdings, Inc.		(1,527	)		(180,690	)
					(2,929,373	)
Total Reference Entity — Short					(9,049,494	)
Net Value of Reference Entity — UBS AG					(47,728	)
The following table represents the individual long and short positions and related values of equity securities underlying the total return swap with UBS AG as of January 31, 2017, expiration date 5/19/17:
Reference Entity — Long
Brazil
Banco Bradesco SA, Preference Shares		26,900			279,150
Braskem SA — ADR		1,188			24,580
Cia de Saneamento Basico do Estado de Sao Paulo — ADR		16,859			167,916
Cia Energetica de Sao Paulo, Preference ‘B’ Shares		182			1,005
Companhia de Saneamento Basico do Estado de Sao Paulo		5,200			51,734
Engie Brasil Energia SA		38,400			436,267
Hypermarcas SA		100,900			894,975
Itau Unibanco Holding SA, Preference Shares		85,700			1,012,811
Itau Unibanco Holding SA, Preference Shares — ADR		109,330			1,291,187
JBS SA		64,800			244,714
Localiza Rent a Car SA		53,200			622,138
M Dias Branco SA		4,700			184,832
Magazine Luiza SA		4,400			178,717
Marfrig Global Foods SA		35,800			73,393
Qualicorp SA		27,600			180,520

	Shares		Value
Reference Entity — Long (continued)
Brazil (continued)
Smiles SA		1,400	$	23,103
Tim Participacoes SA		17,100		48,569
Tim Participacoes SA — ADR		3,419		48,310
Ultrapar Participacoes SA		2,500		52,490
				5,816,411
Chile
Empresa Nacional de Electricidad SA		962,959		618,628
Empresa Nacional de Electricidad SA — ADR		10,480		203,102
Enersis SA		3,559,779		637,174
				1,458,904
China
Anhui Expressway Co. Ltd., Class H		134,000		99,485
Bank of China Ltd., Class H		500,000		226,458
China Biologic Products, Inc.		768		87,506
China Cinda Asset Management Co. Ltd., Class H		206,000		71,366
China Communications Services Corp. Ltd., Class H		934,000		634,906
China Lesso Group Holdings Ltd.		156,000		106,369
China Merchants Bank Co. Ltd., Class H		94,000		235,410
China Pacific Insurance Group Co. Ltd., Class H		55,600		197,492
China Petroleum & Chemical Corp. — ADR		6,386		511,135
China Petroleum & Chemical Corp., Class H		716,000		565,587
China Railway Construction Corp. Ltd., Class H		166,500		231,019
China Railway Group Ltd., Class H		272,000		238,085
China Shipping Development Co. Ltd.		166,000		91,750
CNOOC Ltd.		12,000		14,985
Datang International Power Generation Co. Ltd., Class H		276,000		71,566
Dongfang Electric Corp. Ltd.		14,600		14,722
Great Wall Motor Co. Ltd., Class H		215,500		215,927
Guangzhou Automobile Group Co. Ltd., Class H		10,000		13,638
Guangzhou Baiyunshan Pharmaceutical Holdings Co. Ltd., Class H		146,000		357,022
Hengan International Group Co. Ltd.		28,000		229,243
Industrial & Commercial Bank of China Ltd., Class H		2,049,000		1,252,727
Jiangxi Copper Co. Ltd., Class H		5,000		8,635
Lenovo Group Ltd.		320,000		209,606
Longfor Properties Co. Ltd.		317,000		456,378
Lonking Holdings Ltd.		562,000		147,242
Maanshan Iron & Steel		94,000		34,447
Metallurgical Corp. of China Ltd.		1,905,000		690,718
People’s Insurance Co. Group of China Ltd., Class H		233,000		90,759
Ping An Insurance Group Co. of China Ltd., Class H		48,500		248,794
Shanghai Pharmaceuticals Holding Co. Ltd., Class H		445,200		1,133,818
Sino-Ocean Land Holdings Ltd.		199,000		85,704
Sinopec Shanghai Petrochemical Co. Ltd. — ADR		203		12,635
Sinopec Shanghai Petrochemical Co. Ltd., Class H		1,062,000		657,603
Sinopharm Group Co. Ltd., Class H		232,000		1,060,220
Sinotrans Ltd., Class H		73,000		30,438
Sohu.com, Inc.		9,088		360,521
Tencent Holdings Ltd.		13,400		350,348
Tianjin Capital Environmental Protection Group Co. Ltd.		36,000		19,351
Tianneng Power International Ltd.		286,000		251,847
Weichai Power Co. Ltd., Class H		378,400		670,528
Zhejiang Expressway Co. Ltd., Class H		78,000		78,346
ZTE Corp., Class H		272,600		423,834
				12,488,170
Egypt
Global Telecom Holding — GDR		69,653		126,072
Hong Kong
China Mobile Ltd. — ADR		472		26,904
China Power International Development Ltd.		178,000		64,147
China Resources Cement Holdings Ltd.		694,000		321,468

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 27

Schedule of Investments (continued) BlackRock Emerging Markets Long/Short Equity Fund

	Shares		Value
Reference Entity — Long (continued)
Hong Kong (continued)
China Resources Land Ltd.		78,000	$	192,937
Geely Automobile Holdings Ltd.		555,000		655,967
Haier Electronics Group Co. Ltd.		415,000		729,987
KWG Property Holding Ltd.		106,000		60,913
Nine Dragons Paper Holdings Ltd.		150,000		172,640
Shenzhen Investment Ltd.		60,000		24,397
Shimao Property Holdings Ltd.		84,500		113,202
Yuexiu Property Co. Ltd.		1,082,000		158,232
				2,520,794
Hungary
MOL Hungarian Oil & Gas PLC		9,180		646,922
Indonesia
Adaro Energy Tbk PT		260,700		33,135
Bank Central Asia Tbk PT		245,000		280,808
Bank Rakyat Indonesia Persero Tbk PT		135,000		118,543
Gudang Garam Tbk PT		18,200		84,156
Matahari Department Store Tbk PT		153,800		170,269
Telekomunikasi Indonesia Persero Tbk PT		1,677,100		486,165
Telekomunikasi Indonesia Persero Tbk PT — ADR		14,361		422,501
				1,595,577
Malaysia
Astro Malaysia Holdings Bhd		260,600		160,025
Berjaya Sports Toto Bhd		116,600		77,128
Genting Malaysia Bhd		291,100		331,079
Kuala Lumpur Kepong Bhd		10,100		54,958
MISC Bhd		669,700		1,106,775
Sime Darby Bhd		270,600		544,071
Tenaga Nasional Bhd		121,900		368,456
Top Glove Corp. Bhd		108,300		127,139
				2,769,631
Mexico — 1.5%
America Movil SAB de C.V., Series L — ADR		40,070		505,283
Netherlands
Yandex NV, Class A		8,778		203,123
Philippines
Ayala Corp.		5,890		94,748
Globe Telecom, Inc.		16,520		570,971
Metro Pacific Investments Corp.		4,453,100		610,636
				1,276,355
Poland
Grupa Lotos SA		21,173		199,535
KGHM Polska Miedz SA		39,782		1,233,876
Polski Koncern Naftowy SA		17,433		353,781
Polskie Gornictwo Naftowe i Gazownictwo SA		25,509		35,030
				1,822,222
Russia
Aeroflot — Russian Airlines OJSC		43,300		125,115
Alrosa PJSC		237,800		418,928
Lukoil PJSC		771		43,410
Lukoil PJSC — ADR		22,907		1,290,918
Magnitogorsk Iron & Steel Works OJSC		67,400		44,002
Rostelecom PJSC		8,240		11,484
Severstal PAO — GDR		18,562		294,852
Severstal PJSC		3,790		60,384
Sistema PJSC FC — GDR		5,984		57,267
Tatneft PAO — ADR		5,363		218,634
Tatneft PJSC		12,320		83,673
				2,648,667

	Shares		Value
Reference Entity — Long (continued)
South Africa
Anglo American Platinum Ltd.		2,309	$	60,450
AVI Ltd.		17,957		122,094
Barloworld Ltd.		11,626		95,590
Capitec Bank Holdings Ltd.		1,879		98,195
Clicks Group Ltd.		16,432		148,772
Gold Fields Ltd. — ADR		30,241		106,146
Growthpoint Properties Ltd.		151,504		296,416
Mondi Ltd.		9,089		199,702
Netcare Ltd.		18,407		44,272
Pick n Pay Stores Ltd.		37,237		188,907
Pioneer Foods Group Ltd.		7,752		95,435
Redefine Properties Ltd.		96,634		80,053
Sappi Ltd.		69,617		447,624
Sibanye Gold Ltd.		66,688		150,778
Spar Group Ltd.		9,652		136,453
Standard Bank Group Ltd.		20,391		218,055
Telkom SA SOC Ltd.		16,497		90,408
Tiger Brands Ltd.		2,616		78,959
Tsogo Sun Holdings Ltd.		42,885		84,156
Vodacom Group Ltd.		37,945		425,236
				3,167,701
South Korea
Hyundai Development Co-Engineering & Construction		34,374		1,293,394
Hyundai Wia Corp.		3,858		214,731
Kia Motors Corp.		25,823		809,362
KT Corp. — ADR		101,294		1,506,242
LG Electronics, Inc.		3,746		179,021
LG Household & Health Care Ltd.		521		393,968
LG International Corp.		11,138		309,931
LG Uplus Corp.		17,567		172,550
Lotte Chemical Corp.		1,320		427,757
NAVER Corp.		1,808		1,181,010
Poongsan Corp.		30,239		1,133,055
POSCO		312		72,922
POSCO — ADR		8,205		474,905
Posco ICT Co. Ltd.		1		5
S&T Motiv Co. Ltd.		2,578		101,003
Samsung Electronics Co. Ltd.		366		622,484
Shinhan Financial Group Co. Ltd. — ADR		1,971		77,933
SK Hynix, Inc.		26,729		1,234,449
SK Networks Co. Ltd.		21,796		124,146
				10,328,868
Taiwan
AU Optronics Corp.		422,000		174,740
China Life Insurance Co. Ltd.		26,000		25,446
Elite Advanced Laser Corp.		23,640		94,079
Formosa Chemicals & Fibre Corp.		60,000		185,996
Formosa Petrochemical Corp.		177,000		604,627
Foxconn Technology Co. Ltd.		470,182		1,327,019
Fubon Financial Holding Co. Ltd.		477,000		775,244
Hon Hai Precision Industry Co. Ltd.		112,320		301,217
Hon Hai Precision Industry Co. Ltd. — GDR		76,772		403,821
Lite-On Technology Corp.		227,128		343,065
MediaTek, Inc.		40,000		273,844
Novatek Microelectronics Corp.		55,000		194,805
Pegatron Corp.		70,000		168,566
Sitronix Technology Corp.		336,000		1,013,023
Taiwan Semiconductor Manufacturing Co. Ltd. — ADR		12,290		379,884
Uni-President Enterprises Corp.		149,000		255,602
Yuanta Financial Holding Co. Ltd.		166		66
				6,521,044

See Notes to Financial Statements.

28 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Emerging Markets Long/Short Equity Fund

	Shares			Value
Reference Entity — Long (continued)
Thailand
Bangkok Chain Hospital PCL		712,200		$	299,363
CP ALL PCL		302,800			520,290
Glow Energy PCL, Foreign Registered Shares		266,700			590,815
Indorama Ventures PCL		156,800			155,865
Kiatnakin Bank PCL		235,400			381,079
PTT Exploration & Production PCL, Foreign Registered Shares		341,300			949,940
PTT Global Chemical PCL, Foreign Registered Shares		115,800			222,819
Thai Oil PCL — NVDR		72,300			147,331
Thanachart Capital PCL		251,900			339,825
					3,607,327
Turkey
Arcelik AS		365,512			2,217,002
Eregli Demir ve Celik Fabrikalari TAS		362,300			558,270
Haci Omer Sabanci Holding AS		39,602			104,859
KOC Holding AS		105,005			422,992
TAV Havalimanlari Holding AS		58,702			241,599
Turkiye Is Bankasi, Class C		457,894			723,780
Turkiye Sise ve Cam Fabrikalari AS		17,298			18,540
Yapi ve Kredi Bankasi		482,948			490,648
					4,777,690
United Arab Emirates
Aldar Properties PJSC		273,141			190,226
Emaar Properties PJSC		98,381			198,815
					389,041
United Kingdom
Anglo American PLC		17,315			298,542
United States
Genpact Ltd.		43,676			1,077,924
Total Reference Entity — Long					64,046,268
Reference Entity — Short
Brazil
BRF SA — ADR		(3,178	)		(44,905	)
Cielo SA		(19,400	)		(163,088	)
Embraer SA — ADR		(3,173	)		(72,535	)
Fibria Celulose SA — ADR		(62,961	)		(580,500	)
Gerdau SA — ADR		(67,667	)		(259,165	)
Itausa — Investimentos Itau SA		(26,200	)		(77,159	)
Klabin SA		(47,800	)		(246,349	)
Rumo Logistica Operadora Multimodal SA		(64,600	)		(153,756	)
WEG SA		(87,800	)		(443,305	)
					(2,040,762	)
Chile
Cia Cervecerias Unidas SA — ADR		(21,452	)		(484,601	)
China
58.com, Inc. — ADR		(55,750	)		(1,626,785	)
CGN Power Co. Ltd.		(96,000	)		(27,070	)
China Medical System Holdings Ltd.		(3,000	)		(4,889	)
China National Building Material Co. Ltd., Class H		(764,000	)		(446,807	)
China Oilfield Services Ltd.		(4,000	)		(4,267	)
China Shanshui Cement Group Ltd.		(2,538,622	)		(163,594	)
Ctrip.com International Ltd. — ADR		(44,930	)		(1,941,425	)
Fosun International Ltd.		(496,972	)		(754,271	)
Hollysys Automation Technologies Ltd.		(1,934	)		(32,685	)
Huaneng Renewables Corp. Ltd.		(34,000	)		(10,552	)
Semiconductor Manufacturing International Corp.		(100	)		(137	)
Sichuan Expressway Co. Ltd.		(88,000	)		(33,520	)
SOHO China Ltd.		(53,500	)		(27,066	)

	Shares			Value
Reference Entity — Short (continued)
China (continued)
Sunac China Holdings Ltd.		(57,000	)	$	(50,635	)
TAL Education Group — ADR		(23,622	)		(1,913,146	)
Zhuzhou CSR Times Electric Co. Ltd.		(12,000	)		(68,370	)
					(7,105,219	)
Czech Republic
CEZ		(751	)		(12,863	)
Moneta Money Bank		(53,909	)		(178,236	)
					(191,099	)
Hong Kong
Alibaba Pictures Group Ltd.		(2,210,000	)		(371,287	)
Beijing Enterprises Water Group Ltd.		(108,000	)		(74,907	)
Brilliance China Automotive Holdings Ltd.		(2,000	)		(2,817	)
China Everbright International Ltd.		(12,000	)		(14,554	)
China Gas Holdings Ltd.		(18,000	)		(26,058	)
China Mengniu Dairy Co. Ltd.		(45,000	)		(83,999	)
China Merchants Holdings International Co. Ltd.		(16,552	)		(44,249	)
China Traditional Chinese Medicine Co. Ltd.		(48,000	)		(22,619	)
COSCO Pacific Ltd.		(83,813	)		(83,287	)
Hopewell Highway Infrastructure Ltd.		(299,000	)		(157,503	)
Shenzhen International Holdings Ltd.		(161,500	)		(232,390	)
Tongda Group Holdings Ltd.		(420,000	)		(117,363	)
					(1,231,033	)
India
Reliance Industries Ltd. — GDR		(42	)		(1,302	)
Mexico
Grupo Aeroportuario del Sureste SAB de C.V. — ADR		(4,140	)		(599,762	)
Grupo Financiero Inbursa SAB de C.V.		(7,200	)		(10,672	)
					(610,434	)
Monaco
GasLog Ltd.		(52,244	)		(872,475	)
Peru
Hochschild Mining PLC		(23,949	)		(74,639	)
Poland
Orange Polska SA		(9,537	)		(12,867	)
Romania
New Europe Property Investments PLC		(1,110	)		(12,933	)
Russia
Gazprom PAO — ADR		(394,590	)		(1,957,829	)
MMC Norilsk Nickel PJSC — ADR		(44,736	)		(725,548	)
					(2,683,377	)
Singapore
IGG, Inc.		(127,000	)		(94,636	)
South Africa
Nampak Ltd.		(48,259	)		(67,311	)
Sasol Ltd. — ADR		(2,611	)		(77,965	)
Truworths International Ltd.		(21,589	)		(129,774	)
Woolworths Holdings Ltd.		(40,459	)		(222,283	)
					(497,333	)
South Korea
Amorepacific Corp.		(115	)		(17,773	)
Cheil Industries Inc.		(11,845	)		(1,285,214	)
Coway Co. Ltd.		(5,816	)		(437,353	)
GS Holdings		(9,275	)		(408,403	)
Hyundai Motor Co.		(4,972	)		(598,570	)
KCC Corp.		(66	)		(19,732	)
KEPCO Plant Service & Engineering Co. Ltd.		(1,646	)		(77,466	)
Korea Aerospace Industries Ltd.		(11,700	)		(624,582	)
Kumho Petrochemical Co. Ltd.		(5,442	)		(385,713	)

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 29

Schedule of Investments (continued) BlackRock Emerging Markets Long/Short Equity Fund

	Shares			Value
Reference Entity — Short (continued)
South Korea (continued)
NCSoft Corp.		(7,452	)	$	(1,951,023	)
Samsung Biologics Co. Ltd.		(612	)		(84,788	)
Samsung Electro-Mechanics Co. Ltd.		(11,749	)		(573,790	)
Samsung Life Insurance Co. Ltd.		(467	)		(44,622	)
Samsung SDI Co. Ltd.		(16,504	)		(1,640,115	)
Samsung Techwin Co. Ltd.		(695	)		(24,968	)
SK Holdings Co. Ltd.		(186	)		(34,656	)
					(8,208,768	)
Taiwan
Chunghwa Telecom Co. Ltd. — ADR		(5,996	)		(189,234	)
Delta Electronics, Inc.		(312,489	)		(1,745,373	)
Far Eastern New Century Corp.		(447,640	)		(373,079	)
Shin Kong Financial Holding Co. Ltd.		(1,512,000	)		(388,365	)
United Microelectronics Corp.		(1,239,000	)		(449,918	)
United Microelectronics Corp. — ADR		(3,521	)		(6,373	)
					(3,152,342	)

	Shares			Value
Reference Entity — Short (continued)
Thailand
Advanced Info Service PCL		(573,900	)	$	(2,591,596	)
Bangkok Dusit Medical Services PCL		(613,600	)		(386,877	)
IRPC PCL		(588,000	)		(86,839	)
Minor International PCL		(604,200	)		(596,306	)
Siam Commercial Bank PCL		(11,700	)		(50,176	)
True Corp. PCL		(696,700	)		(129,605	)
					(3,841,399	)
Turkey
Tofas Turk Otomobil Fabrikasi		(3,130	)		(21,614	)
Total Reference Entity — Short					(31,136,833	)
Net Value of Reference Entity — UBS AG					32,909,435

Derivative Financial Instruments Categorized by Risk Exposure

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

		Commodity Contracts		Credit Contracts		Equity Contracts		Foreign Currency Exchange Contracts		Interest Rate Contracts		Other Contacts		Total
Assets — Derivative Financial Instruments
Swap — OTC	Unrealized appreciation on OTC swaps		—		—	$	16,729,581		—		—		—	$	16,729,581
Liabilities — Derivative Financial Instruments
Swap — OTC	Unrealized depreciation on OTC swaps		—		—	$	5,650,084		—		—		—	$	5,650,084

For the six months ended January 31, 2017, the effect of derivative financial instruments in the Statements of Operations was as follows:

	Commodity Contracts		Credit Contracts		Equity Contracts		Foreign Currency Exchange Contracts		Interest Rate Contracts		Other Contacts		Total
Net Realized Gain (Loss) From:
Futures		—		—	$	920,868		—		—		—	$	920,868
Swaps		—		—		4,167		—		—		—		4,167
Total		—		—	$	925,035		—		—		—	$	925,035
Net Change in Unrealized Appreciation (Depreciation) on:
Swaps		—		—	$	354,321		—		—		—	$	354,321

Average Quarterly Balances of Outstanding Derivative Financial Instruments

Futures contracts:
Average notional value of contracts — short	$	31,529,050	1
Total return swaps:
Average notional value	$	143,443,446
1    Actual amounts for the period are shown due to limited outstanding derivative financial instruments as of each quarter.

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

See Notes to Financial Statements.

30 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (concluded) BlackRock Emerging Markets Long/Short Equity 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:
Swaps — OTC1	$	16,729,581	$	5,650,084
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)		—		—
Total derivative assets and liabilities subject to an MNA	$	16,729,581	$	5,650,084
1    Includes unrealized appreciation (depreciation) on OTC swaps in the Statements of Assets and Liabilities and reported in the schedule of investments.

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

Counterparty	Derivative Assets Subject to a MNA by  Counterparty		Derivatives Available for Offset1			Non-cash Collateral Received		Cash Collateral Received			Net Amount of Derivative Assets2
Goldman Sachs & Co.	$	3,343,543		—			—		—		$	3,343,543
Morgan Stanley & Co, Inc. .		7,339,481		—			—	$	(5,227,939	)		2,111,542
UBS AG		6,046,557	$	(208,038	)		—		(3,613,864	)		2,224,655
Total	$	16,729,581	$	(208,038	)		—	$	(8,841,803	)	$	7,679,740
Counterparty	Derivative Liabilities Subject to a MNA by  Counterparty		Derivatives Available for Offset1			Non-cash Collateral Pledged		Cash Collateral Pledged			Net Amount of Derivative Liabilities3
Goldman Sachs International	$	5,442,046		—			—	$	(4,010,000	)	$	1,432,046
UBS AG		208,038	$	(208,038	)		—		—			—
Total	$	5,650,084	$	(208,038	)		—	$	(4,010,000	)	$	1,432,046
1    The amount of derivatives available for offset is limited to the amount of derivative assets and/or liabilities that are subject to an MNA.
2    Net amount represents the net amount receivable from the counterparty in the event of default.
3    Net amount represents the net amount due to the counterparty in the event of default.

Fair Value Hierarchy as of Period End

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

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

	Level 1		Level 2			Level 3		Total
Assets:
Investments:
Short-Term Securities	$	148,882,956		—			—	$	148,882,956
Derivative Financial Instruments 1
Assets:
Equity contracts		—	$	16,729,581			—	$	16,729,581
Liabilities:
Equity contracts		—		(5,650,084	)		—		(5,650,084	)
Total		—	$	11,079,497			—	$	11,079,497
1    Derivative financial instruments are swaps. Swaps are valued at the unrealized appreciation (depreciation) on the instrument.

During the six months ended January 31, 2017, there were no transfers between levels.

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 31

Schedule of Investments January 31, 2017 (Unaudited) BlackRock Global Long/Short Equity Fund (Percentages shown are based on Net Assets)

Preferred Securities	Shares		Value
Preferred Stocks
United States — 1.0%
AliphCom (a)(b)(c)
Series 6 (acquired 12/15/15, cost $0)		8,264		—
Series 8 (acquired 3/10/15, cost $1,750,010)		823,530		—
Illumio, Inc., Series C, 0.00% (acquired 3/10/15, cost $1,500,001) (a)(b)		466,730	$	1,493,544
Palantir Technologies, Inc., Series I, 0.00% (acquired 6/05/14, cost $1,999,998) (a)(b)		326,264		2,688,415
Uber Technologies, Inc., Series E, 0.00% (acquired 12/04/14, cost $1,499,957) (a)(b)		45,020		2,305,925
Total Long-Term Investments (Cost — $6,749,966) — 1.0%				6,487,884

Short-Term Securities	Shares		Value
BlackRock Liquidity Funds, T-Fund, Institutional Class, 0.40% (d)(e)		610,032,932	$	610,032,932
Total Short-Term Securities (Cost — $610,032,932) — 97.8%				610,032,932
Total Investments (Cost — $616,782,898) — 98.8%				616,520,816
Other assets less liabilities — 1.2%				7,787,752
Net Assets — 100.0%			$	624,308,568

Notes to Schedule of Investments

(a) Non-income producing security.

(b) Restricted security as to resale, excluding 144A securities. As of report date, the Fund held restricted securities with a current value of $6,487,884, and an original cost of $6,749,966, which was 1.04% of its net assets.

(c) Issuer filed for bankruptcy and/or is in default.

(d) During the six months ended January 31, 2017, 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 July 31, 2016		Net Activity			Shares Held at January 31, 2017		Value at January 31, 2017		Income		Net Realized Gain1		Change in Unrealized Appreciation (Depreciation)
BlackRock Liquidity Funds, TempFund, Institutional Class		1,044,984,235		(1,044,984,235	)		—		—	$	326,809		—		—
BlackRock Liquidity Funds, T-Fund, Institutional Class		—		610,032,932			610,032,932	$	610,032,932		831,740	$	3,485		—
Total								$	610,032,932	$	1,158,549	$	3,485		—
1   Includes net capital gain distributions.

(e) Represents the current yield as of report date.

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts
Contracts Long (Short)			Issue	Expiration		Notional Value		Unrealized Appreciation (Depreciation)
	(233	)	AEX Index		February 2017	$	23,889,697	$	255,980
	368		CAC 40 Index		February 2017	$	18,859,724		(402,015	)
	(24	)	Hang Seng Index		February 2017	$	3,608,553		(53,177	)
	60		IBEX 35 Index		February 2017	$	6,050,488		(7,116	)
	(190	)	SGX MSCI Singapore Index		February 2017	$	4,546,600		10,385
	(933	)	OMX Stockholm 30 Index		February 2017	$	16,402,245		(8,288	)
	(16	)	Dax Index		March 2017	$	4,993,766		68,509
	439		FTSE100 Index		March 2017	$	38,909,598		709,066
	165		FTSE/MIB Index		March 2017	$	16,540,878		(464,547	)
	6		S&P 500 E-Mini Index		March 2017	$	682,350		—
	44		S&P/TSX 60 Index		March 2017	$	6,136,500		(10,593	)
	55		SPI 200 Index		March 2017	$	5,792,756		(58,070	)
	144		TOPIX Index		March 2017	$	19,347,091		(224,416	)
	Total							$	(184,282	)

See Notes to Financial Statements.

32 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Global Long/Short Equity Fund

OTC Total Return Swaps
Reference Entity	Fixed Amount1			Counterparty	Effective Date		Expiration Date		Contract Amount			Value			Premiums Paid (Received)		Unrealized Appreciation (Depreciation)
Swiss Market IX Future March 2017		CHF	2,195,488	Morgan Stanley & Co. International		1/23/17		3/17/17		CHF	27	$	23,346			—	$	23,346
Swiss Market IX Future March 2017		CHF	330,199	Morgan Stanley & Co. International		1/25/17		3/17/17		CHF	4		(1,535	)		—		(1,535	)
Swiss Market IX Future March 2017		CHF	2,942,292	Morgan Stanley & Co. International		1/20/17		3/17/17		CHF	36		15,995			—		15,995
Swiss Market IX Future March 2017		CHF	8,292,667	Morgan Stanley & Co. International		1/19/17		3/17/17		CHF	100		6,506			—		6,506
Swiss Market IX Future March 2017		CHF	1,143,643	Morgan Stanley & Co. International		1/24/17		3/17/17		CHF	14		6,808			—		6,808
Total												$	51,120			—	$	51,120
1    Fund pays the total return of the reference entity and receives the fixed amount. Net payment made at termination.

OTC Total Return Swaps1
Reference Entity	Counterparty		Expiration Date		Net Notional Amount			Unrealized Appreciation			Net Value of Reference Entities
Equity Securities Long/Short		Bank of America N.A.		3/28/17 - 7/11/17	$	14,584,841		$	1,621,422	2	$	15,672,218
		Bank of America N.A.		5/01/17		(1,846,653	)		2,331,754	3		328,928
		Deutsche Bank AG		3/01/17 - 3/23/17		12,470,041			1,365,262	4		13,985,353
		Goldman Sachs & Co.		3/02/17 - 8/29/18		8,473,500			6,599,604	5		16,060,180
		Goldman Sachs & Co.		6/14/17 - 8/29/18		14,592			243,058	6		236,377
		UBS AG		4/12/17 - 4/13/17		(2,490,743	)		21,174,020	7		16,294,835
Total								$	33,335,120		$	62,577,891

¹  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 of 20—745 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:

EUR 1 Week; EUR Overnight.

GBP 1 Week; GBP Overnight

JPY Spot Next; JPY 1 Week

USD 1 Week

Garbon Intercapital Federal Funds Rate Open

Hong Kong Dollar HIBOR Fixings 1 Week; 2 Week

Tokyo Interbank Offered Rate 1 Week

²  Amount includes $534,045 of net dividends and financing fees.

³  Amount includes $156,173 of net dividends and financing fees.

⁴  Amount includes $(150,050) of net dividends and financing fees.

⁵  Amount includes $(987,076) of net dividends and financing fees.

⁶  Amount includes $21,273 of net dividends and financing fees.

⁷  Amount includes $2,388,442 of net dividends and financing fees.

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 33

Schedule of Investments (continued) BlackRock Global Long/Short Equity Fund

The following table represents the individual long and short positions and related values of equity securities underlying the total return swap with Bank of America N.A. as of January 31, 2017, expiration dates 3/28/17 — 7/11/17:
	Shares		Value
Reference Entity — Long
Australia
Aristocrat Leisure Ltd.		12,385	$	143,626
Mineral Resources Ltd.		8,953		83,596
Regis Resources Ltd.		116,393		282,086
WorleyParsons Ltd.		2,673		20,099
				529,407
Austria
Wienerberger AG		1,268		24,477
Belgium
NV Bekaert SA		5,479		237,778
Umicore SA		603		33,777
				271,555
Bermuda
Nabors Industries Ltd.		19,007		308,864
Canada
B2Gold Corp.		12,164		36,924
Canadian Natural Resources Ltd.		14,143		427,578
Capital Power Corp.		3,725		70,650
Crescent Point Energy Corp.		1,284		14,969
Dollarama, Inc.		194		14,692
Finning International, Inc.		5,845		118,315
Inter Pipeline Ltd.		3,606		78,203
Maple Leaf Foods, Inc.		10,783		247,191
Quebecor, Inc., Class B		3,098		93,303
Saputo, Inc.		588		21,649
				1,123,474
China
FIH Mobile Ltd.		303,000		97,357
Denmark
GN Store Nord A/S		6,752		150,811
Novo Nordisk A/S, Class B		10,492		379,178
Tryg A/S		22,960		439,298
				969,287
Finland
Valmet Corp.		5,528		87,401
France
Arkema SA		931		91,947
Carrefour SA		1,916		46,872
Faurecia		6,789		294,979
Nexity SA		1,134		55,698
Peugeot SA		3,583		66,682
Plastic Omnium SA		2,838		96,283
Remy Cointreau SA		364		33,093
Sodexo SA		2,067		228,574
Technicolor SA, Registered Shares		4,410		18,908
Valeo SA		1,685		102,987
				1,036,023
Germany
Covestro AG		10,049		756,224
Hochtief AG		566		80,684
Kloeckner & Co. SE		14,161		184,917
Lanxess AG		2,532		184,257
				1,206,082
Hong Kong
Kerry Properties Ltd.		38,500		108,949
Texwinca Holdings Ltd.		58,000		37,163
				146,112

	Shares		Value
Reference Entity — Long (continued)
Ireland
CRH PLC		3,858	$	133,817
Glanbia PLC		10,247		173,115
Smurfit Kappa Group PLC		21,970		578,685
				885,617
Israel
Check Point Software Technologies Ltd.		1,855		183,218
Italy
Brembo SpA		267		17,107
Mediobanca SpA		8,066		69,449
Unipol Gruppo Finanziario SpA		87,946		325,239
				411,795
Japan
Bank of Kyoto Ltd.		36,000		281,428
Chiba Bank Ltd.		40,000		261,653
Citizen Holdings Co. Ltd.		3,200		19,872
Glory Ltd.		600		18,745
Hokuhoku Financial Group, Inc.		26,100		447,143
Ito En Ltd.		2,300		76,433
Itochu Techno-Solutions Corp.		14,200		381,965
Japan Petroleum Exploration Co.		10,100		226,879
Komeri Co. Ltd.		2,400		56,513
Mitsubishi Chemical Holdings Corp.		239,300		1,669,106
Nichi-iko Pharmaceutical Co. Ltd.		2,000		29,200
Nishimatsu Construction Co. Ltd.		2,000		10,001
Nomura Real Estate Holdings, Inc.		4,700		80,841
Ono Pharmaceutical Co. Ltd.		900		18,465
Open House Co. Ltd.		3,700		86,604
ORIX Corp.		5,000		75,436
Park24 Co. Ltd.		900		24,841
Penta-Ocean Construction Co. Ltd.		26,400		128,899
Sankyo Co. Ltd.		11,100		370,615
Showa Shell Sekiyu KK		1,700		16,664
Sumitomo Mitsui Trust Holdings, Inc.		17,400		648,557
Sumitomo Real Estate Sales Co. Ltd.		2,200		50,059
Sumitomo Realty & Development Co. Ltd.		3,000		81,155
TAG Immobilien AG		5,086		68,762
TonenGeneral Sekiyu KK		106,000		1,246,571
Toppan Forms Co. Ltd.		8,900		92,314
Toppan Printing Co. Ltd.		34,000		333,742
				6,802,463
Netherlands
BE Semiconductor Industries NV		17,814		643,226
PostNL NV		41,570		182,450
				825,676
Norway
Nordic American Tankers Ltd.		1,973		17,047
Salmar ASA		636		18,001
				35,048
Portugal
CTT — Correios de Portugal SA		111,115		619,860
Jeronimo Martins SGPS SA		82,173		1,390,827
NOS SGPS SA		38,459		216,544
				2,227,231
Singapore
Venture Corp. Ltd.		34,700		251,022
Sweden
JM AB		1,704		51,384
Saab AB		2,855		116,592
				167,976

See Notes to Financial Statements.

34 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Global Long/Short Equity Fund

	Shares		Value
Reference Entity — Long (continued)
Switzerland
Georg Fischer AG, Registered Shares		215	$	177,189
IWG PLC		158,376		498,937
Straumann Holding AG, Registered Shares		1,343		541,990
				1,218,116
United Kingdom
Acacia Mining PLC		6,014		32,613
Auto Trader Group PLC		8,447		42,662
Bunzl PLC		10,915		287,726
Centrica PLC		5,611		15,885
Croda International PLC		2,338		98,727
Indivior PLC		259,157		967,798
Intertek Group PLC		3,300		141,262
Moneysupermarket.com Group PLC		173,328		719,824
Serco Group PLC		296,486		538,484
TechnipFMC PLC		1,212		39,722
Thomas Cook Group PLC		20,860		22,925
WH Smith PLC		3,678		75,616
WM Morrison Supermarkets PLC		10,026		29,890
				3,013,134
United States
Agilent Technologies, Inc.		3,026		148,183
Amdocs Ltd.		9,088		533,556
Applied Materials, Inc.		2,846		97,476
Big Lots, Inc.		37,536		1,876,800
Booz Allen Hamilton Holding Corp.		13,838		468,001
Bruker Corp.		1,957		46,440
C.R. Bard, Inc.		8,300		1,969,839
Cabot Corp.		20,535		1,137,023
Carter’s, Inc.		670		56,113
CBS Corp., Class B		35,890		2,314,546
CenterPoint Energy, Inc.		80,758		2,116,667
Cheesecake Factory, Inc.		1,766		106,419
Church & Dwight Co., Inc.		4,775		215,926
Cinemark Holdings, Inc.		9,805		416,712
CONSOL Energy, Inc.		20,565		348,371
Darden Restaurants, Inc.		7,623		558,613
DCT Industrial Trust, Inc.		7,154		319,712
Diamond Offshore Drilling, Inc.		30,141		493,710
Domino’s Pizza, Inc.		7,857		1,371,361
Dr. Pepper Snapple Group, Inc.		1,556		141,907
Dril-Quip, Inc.		8,807		547,795
Duke Realty Corp.		3,266		79,462
Eastman Chemical Co.		622		48,205
Eaton Vance Corp.		436		18,281
Energen Corp.		4,166		224,506
Equity Lifestyle Properties, Inc.		9,819		726,017
First American Financial Corp.		10,042		377,378
Gartner, Inc.		4,775		474,444
HP, Inc.		27,550		414,628
Hyatt Hotels Corp., Class A		5,253		287,392
IDEXX Laboratories, Inc.		2,685		328,456
Ingredion, Inc.		7,703		987,448
Interpublic Group of Cos., Inc.		109,102		2,567,170
Kohl’s Corp.		60,885		2,425,050
Landstar System, Inc.		1,910		161,586
Legg Mason, Inc.		32,218		1,020,988
ManpowerGroup, Inc.		70		6,682
Masimo Corp.		4,991		367,238
MasTec, Inc.		4,594		171,127
NCR Corp.		17,344		746,139
Newmont Mining Corp.		536		19,446
Norfolk Southern Corp.		2,092		245,726
Nutanix, Inc., Class A		1,694		51,277
Oceaneering International, Inc.		24,904		693,576

	Shares			Value
Reference Entity — Long (continued)
United States (continued)
OGE Energy Corp.		468		$	15,697
Oshkosh Corp.		366			25,485
Papa John’s International, Inc.		9,229			786,495
Pilgrim’s Pride Corp.		21,156			404,926
Pitney Bowes, Inc.		5,051			80,412
RPC, Inc.		4,229			91,008
Target Corp.		26,166			1,687,184
Tenneco, Inc.		887			59,828
Teradata Corp.		2,279			66,911
Texas Instruments, Inc.		5,098			385,103
VeriSign, Inc.		22,043			1,768,069
Weingarten Realty Investors		23,586			840,369
WellCare Health Plans, Inc.		8,744			1,272,602
Whiting Petroleum Corp.		4,323			47,942
Williams-Sonoma, Inc.		7,560			364,468
Xerox Corp.		76,601			530,845
Zynga, Inc., Class A		62,966			158,674
					36,313,410
Total Reference Entity — Long					58,134,745
Reference Entity — Short
Australia
Alumina Ltd.		(41,141	)		(60,619	)
Domino’s Pizza Enterprises Ltd.		(543	)		(24,497	)
Incitec Pivot Ltd.		(12,395	)		(36,226	)
Independence Group NL		(6,108	)		(17,556	)
Qube Holdings Ltd.		(379,922	)		(663,105	)
Vocus Communications, Ltd.		(21,628	)		(66,326	)
					(868,329	)
Finland
Metsa Board OYJ		(3,383	)		(23,108	)
France
Airbus Group SE		(7,303	)		(495,034	)
Italy
Yoox SpA		(1,850	)		(46,407	)
Japan
Asics Corp.		(7,300	)		(142,202	)
Daikin Industries Ltd.		(1,300	)		(129,041	)
JGC Corp.		(81,800	)		(1,419,997	)
Kansai Paint Co. Ltd.		(1,100	)		(21,369	)
Koito Manufacturing Co. Ltd.		(2,100	)		(111,396	)
Kyocera Corp.		(14,300	)		(744,469	)
Nippon Kayaku Co. Ltd.		(10,000	)		(130,695	)
Nippon Paint Co. Ltd.		(1,600	)		(46,671	)
PanaHome Corp.		(7,000	)		(59,339	)
Rinnai Corp.		(200	)		(16,997	)
SBI Holdings, Inc.		(6,600	)		(91,105	)
Shimano, Inc.		(800	)		(126,150	)
Sugi Holdings Co. Ltd.		(600	)		(27,923	)
TDK Corp.		(700	)		(50,314	)
Terumo Corp.		(1,400	)		(51,791	)
TOTO Ltd.		(2,300	)		(92,635	)
					(3,262,094	)
Netherlands
Altice NV, Class B		(11,328	)		(250,010	)
GrandVision NV		(2,502	)		(59,663	)
					(309,673	)
Norway
Schibsted ASA		(5,229	)		(138,270	)
Schibsted ASA, B Shares		(6,667	)		(165,999	)
					(304,269	)

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 35

Schedule of Investments (continued) BlackRock Global Long/Short Equity Fund

	Shares			Value
Reference Entity — Short (continued)
Spain
Telefonica SA		(1,435	)	$	(13,884	)
Sweden
Alfa Laval AB		(4,050	)		(75,719	)
United Kingdom
Antofagasta PLC		(75,482	)		(797,519	)
J Sainsbury PLC		(233,234	)		(758,842	)
					(1,556,361	)
United States
Acuity Brands, Inc.		(113	)		(23,417	)
Advance Auto Parts, Inc.		(3,426	)		(562,686	)
Berkshire Hathaway, Inc., Class B		(13,121	)		(2,153,681	)
Callon Petroleum Co.		(11,966	)		(182,841	)
Cavium, Inc.		(2,218	)		(146,854	)
CF Industries Holdings, Inc.		(28,207	)		(995,425	)
Chemours Co.		(4,546	)		(120,105	)
Chevron Corp.		(3,187	)		(354,873	)
Chipotle Mexican Grill, Inc.		(1,594	)		(671,775	)
Colony Starwood Homes		(1,031	)		(32,425	)
DexCom, Inc.		(2,276	)		(180,145	)
Diamondback Energy, Inc.		(196	)		(20,613	)
Diebold, Inc.		(8,328	)		(226,522	)
EPAM Systems, Inc.		(3,918	)		(252,163	)
Exxon Mobil Corp.		(2,564	)		(215,094	)
First Solar, Inc.		(2,311	)		(72,080	)
Global Payments, Inc.		(4,962	)		(383,463	)
Hilton Worldwide Holdings, Inc.		(7,588	)		(436,917	)
Illumina, Inc.		(4,912	)		(786,411	)
Interactive Brokers Group, Inc., Class A		(22,562	)		(842,465	)
Liberty Ventures		(48,200	)		(2,103,930	)
LKQ Corp.		(21,384	)		(682,363	)
MGIC Investment Corp.		(157,731	)		(1,679,835	)
Monster Beverage Corp.		(66,329	)		(2,825,615	)
Netflix, Inc.		(148	)		(20,825	)
Nevro Corp.		(74,592	)		(6,490,996	)
New York Community Bancorp, Inc.		(57,855	)		(878,817	)
NuVasive, Inc.		(12,296	)		(870,188	)
Pandora Media, Inc.		(20,463	)		(266,019	)
Physicians Realty Trust		(112,729	)		(2,091,123	)
Post Holdings, Inc.		(200	)		(16,736	)
Procter & Gamble Co.		(21,171	)		(1,854,580	)
Radian Group, Inc.		(243,880	)		(4,487,392	)
Scotts Miracle-Gro Co., Class A		(1,244	)		(114,411	)
Snyder’s-Lance, Inc.		(14,189	)		(544,574	)
Tyler Technologies, Inc.		(186	)		(27,160	)
UniFirst Corp.		(5,517	)		(705,624	)
United States Steel Corp.		(13,936	)		(455,847	)
Walgreens Boots Alliance, Inc.		(5,051	)		(413,879	)
Wells Fargo & Co.		(1,672	)		(94,184	)
Western Digital Corp.		(1,126	)		(89,776	)
Workday, Inc., Class A		(882	)		(73,285	)
Zillow Group, Inc.		(1,711	)		(60,535	)
					(35,507,649	)
Total Reference Entity — Short					(42,462,527	)
Net Value of Reference Entity —Bank of America N.A.					15,672,218
The following table represents the individual long and short positions and related values of equity securities underlying the total return swap with Bank of America N.A. as of January 31, 2017, expiration date 5/01/17:
Reference Entity — Long
Argentina
Adecoagro SA		1,578			18,258

	Shares		Value
Reference Entity — Long (continued)
Belgium
Euronav SA		2,487	$	19,523
Bermuda
Belmond Ltd., Class A		7,129		98,737
Nabors Industries Ltd.		15,507		251,989
Seadrill Ltd.		35,011		65,470
Triton International Ltd.		4,297		104,589
				520,785
Canada
Domtar Corp.		7,576		330,995
First Majestic Silver Corp.		3,950		37,920
Precision Drilling Corp.		16,426		92,643
Shopify, Inc., Class A		2,460		125,017
				586,575
China
Hollysys Automation Technologies Ltd.		10,222		172,752
Yirendai Ltd. — ADR		1,588		33,554
				206,306
Germany
Deutsche Bank AG		7,142		142,197
Ireland
Allegion PLC		6,676		438,413
Israel
Caesarstone Ltd.		752		22,823
CyberArk Software Ltd.		838		44,464
Orbotech Ltd.		21,650		755,368
Taro Pharmaceutical Industries Ltd.		648		67,710
Tower Semiconductor Ltd.		31,799		674,457
Wix.com Ltd.		7,631		401,009
				1,965,831
Ivory Coast
Fabrinet		8,861		373,314
Netherlands
Aegon NV		64,234		352,003
QIAGEN NV		3,288		95,286
				447,289
Norway
Nordic American Tankers Ltd.		6,787		58,640
Panama
Copa Holdings SA, Class A		1,610		156,959
Switzerland
UBS Group AG		15,022		242,005
United Kingdom
Atlassian Corp. PLC, Class A		1,425		39,373
Coca-Cola European Partners PLC		28,198		973,677
Delphi Automotive PLC		6,216		435,493
Ferroglobe PLC		13,781		144,838
Pentair PLC		6,548		383,909
Travelport Worldwide Ltd.		6,731		96,657
				2,073,947
United States
2U, Inc.		2,281		77,645
A. Schulman, Inc.		2,195		75,728
Accelerate Diagnostics, Inc.		2,588		54,219
Accenture PLC, Class A		458		52,152
ACCO Brands Corp.		13,327		169,919
Activision Blizzard, Inc.		34,136		1,372,609
Acxiom Corp.		7,907		206,373
Advanced Energy Industries, Inc.		28,567		1,680,882
Affiliated Managers Group, Inc.		1,415		215,589

See Notes to Financial Statements.

36 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Global Long/Short Equity Fund

	Shares		Value
Reference Entity — Long (continued)
United States (continued)
Alarm.com Holdings, Inc.		1,067	$	28,905
Albemarle Corp.		4,747		439,762
Alliant Energy Corp.		17,456		657,218
Allison Transmission Holdings, Inc.		24,927		871,946
Amdocs Ltd.		42,651		2,504,040
American Campus Communities, Inc.		1,850		89,947
American Eagle Outfitters, Inc.		15,267		230,684
American Tower Corp.		9,296		962,136
American Water Works Co., Inc.		2,531		185,877
AMN Healthcare Services, Inc.		2,127		76,253
Amphastar Pharmaceuticals, Inc.		8,014		126,221
Amphenol Corp., Class A		19,784		1,335,222
AmTrust Financial Services, Inc.		3,399		89,700
Analog Devices, Inc.		7,632		571,942
Analogic Corp.		328		25,469
Andersons, Inc.		3,367		127,104
Anixter International, Inc.		6,466		552,843
AO Smith Corp.		11,443		557,846
Aon PLC		12,095		1,363,106
Applied Industrial Technologies, Inc.		4,605		278,372
Applied Materials, Inc.		34,816		1,192,448
Aptargroup, Inc.		14,546		1,061,422
Aramark		12,441		421,003
Archer-Daniels-Midland Co.		21,477		950,572
Archrock, Inc.		1,049		15,315
Armstrong World Industries, Inc.		11,629		464,579
ARRIS International PLC		1,028		29,380
Ascena Retail Group, Inc.		9,273		44,603
Aspen Technology, Inc.		745		39,567
Astec Industries, Inc.		3,606		252,348
Atlas Air Worldwide Holdings, Inc.		252		13,293
Atmos Energy Corp.		28,891		2,200,916
AutoZone, Inc.		826		598,833
Bank of the Ozarks, Inc.		1,521		83,457
Bankrate, Inc.		10,721		116,859
BankUnited, Inc.		15,050		574,910
Barnes & Noble, Inc.		9,437		96,257
Barracuda Networks, Inc.		8,697		204,293
Beacon Roofing Supply, Inc.		4,545		198,935
Belden, Inc.		6,962		532,384
Bio-Techne Corp.		5,571		566,849
Bloomin’ Brands, Inc.		6,140		105,055
Booz Allen Hamilton Holding Corp.		15,632		528,674
BorgWarner, Inc.		1,655		67,574
Briggs & Stratton Corp.		9,923		214,932
Bright Horizons Family Solutions, Inc.		9,885		700,451
Bristol-Myers Squibb Co.		4,007		196,984
Bruker Corp.		19,932		472,986
Builders FirstSource, Inc.		11,747		126,398
Bunge Ltd.		5,019		347,365
BWX Technologies, Inc.		5,732		237,821
Cabot Corp.		3,120		172,754
Cadence Design Systems, Inc.		11,674		303,874
CalAtlantic Group, Inc.		539		18,795
Callaway Golf Co.		61,095		692,206
Callon Petroleum Co.		4,440		67,843
Camping World Holdings, Inc., Class A		2,993		94,220
Cantel Medical Corp.		4,969		384,650
Capella Education Co.		1,782		152,361
Carlisle Cos., Inc.		8,029		876,044
Carrizo Oil & Gas, Inc.		849		30,021
Carter’s, Inc.		530		44,388
CBRE Group, Inc., Class A		5,112		155,200
CBS Corp., Class B		10,741		692,687
Central Garden and Pet Co., Class A		3,041		93,602
Charles River Laboratories International, Inc.		690		55,752

	Shares		Value
Reference Entity — Long (continued)
United States (continued)
Cheesecake Factory, Inc.		1,130	$	68,094
Chico’s FAS, Inc.		2,995		40,403
Choice Hotels International, Inc.		6,273		348,152
Church & Dwight Co., Inc.		61,585		2,784,874
Cimarex Energy Co.		415		56,112
Cincinnati Financial Corp.		16,109		1,136,973
Cinemark Holdings, Inc.		7,556		321,130
Cirrus Logic, Inc.		834		50,307
Cisco Systems, Inc.		29,993		921,385
Citigroup, Inc.		1,867		104,235
Citizens Financial Group, Inc.		22,995		831,729
Citrix Systems, Inc.		417		38,026
Cliffs Natural Resources, Inc.		10,148		88,998
ClubCorp Holdings, Inc.		7,383		121,820
CME Group, Inc.		7,318		886,063
CMS Energy Corp.		67,627		2,880,910
CNA Financial Corp.		6,239		259,854
CNO Financial Group, Inc.		4,097		77,474
Coca-Cola Co.		40,748		1,693,894
Coeur Mining, Inc.		7,809		90,975
Cognex Corp.		816		55,129
Coherent, Inc.		669		105,521
Colfax Corp.		3,000		117,000
Columbia Sportswear Co.		7,108		386,462
CommScope Holding Co., Inc.		26,507		1,002,495
CONMED Corp.		1,426		63,585
Consolidated Communications Holdings, Inc.		2,274		59,829
Continental Building Products, Inc.		1,804		41,943
Continental Resources, Inc.		1,269		61,623
Cooper-Standard Holding, Inc.		913		96,121
Corning, Inc.		49,258		1,304,844
Crane Co.		21,343		1,537,550
CSG Systems International, Inc.		8,189		396,348
Curtiss-Wright Corp.		2,485		243,679
Cynosure, Inc., Class A		2,076		110,858
Dana, Inc.		18,529		373,174
Danaher Corp.		7,011		588,363
Darling Ingredients, Inc.		1,405		16,860
Delek U.S. Holdings, Inc.		10,563		236,611
Dentsply Sirona, Inc.		11,891		674,220
Dermira, Inc.		7,405		218,003
DigitalGlobe, Inc.		2,287		64,150
Discovery Communications, Inc., Class A		658		18,654
Dolby Laboratories, Inc., Class A		1,342		64,295
Dr. Pepper Snapple Group, Inc.		6,165		562,248
Dun & Bradstreet Corp.		4,035		494,772
Dunkin’ Brands Group, Inc.		12,390		642,669
E*Trade Financial Corp.		6,999		262,113
E.I. du Pont de Nemours & Co.		7,960		600,980
Eagle Bancorp, Inc.		8,740		535,325
East West Bancorp, Inc.		2,163		111,265
Eaton Corp. PLC		13,839		979,524
Edison International		10,853		790,967
Electronic Arts, Inc.		9,980		832,631
Ellie Mae, Inc.		728		60,235
EMCOR Group, Inc.		5,103		355,628
Energen Corp.		3,325		179,184
EnerSys		15,018		1,170,653
EnPro Industries, Inc.		342		23,225
Ensign Group, Inc.		15,014		305,385
Envision Healthcare Corp.		234		15,912
EQT Corp.		6,888		417,619
Equifax, Inc.		12,045		1,412,638
Estee Lauder Cos., Inc., Class A		20,552		1,669,028
Ethan Allen Interiors, Inc.		7,224		210,218
Etsy, Inc.		4,633		58,422

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 37

Schedule of Investments (continued) BlackRock Global Long/Short Equity Fund

	Shares		Value
Reference Entity — Long (continued)
United States (continued)
Euronet Worldwide, Inc.		7,659	$	547,772
Eversource Energy		924		51,116
Expeditors International of Washington, Inc.		17,820		928,066
Express, Inc.		22,235		236,358
Extended Stay America, Inc.		3,575		57,951
Fastenal Co.		16,273		808,443
FCB Financial Holdings, Inc., Class A		14,415		676,784
Ferro Corp.		14,794		209,187
Fidelity National Information Services, Inc.		22,460		1,783,773
First American Financial Corp.		26,915		1,011,466
First Horizon National Corp.		25,796		515,920
First Industrial Realty Trust, Inc.		24,492		633,118
Fitbit, Inc., Series A		5,172		31,084
FleetCor Technologies, Inc.		6,175		910,751
FLIR Systems, Inc.		2,849		100,655
Flowserve Corp.		2,152		105,792
Fluor Corp.		6,824		378,732
Foot Locker, Inc.		968		66,347
Fortinet, Inc.		1,290		42,905
Fortive Corp.		312		17,257
Fortune Brands Home & Security, Inc.		1,561		86,058
Forum Energy Technologies, Inc.		5,350		116,095
Forward Air Corp.		4,764		229,577
Garmin Ltd.		13,199		637,380
Gigamon, Inc.		2,380		78,897
Gogo, Inc.		14,903		136,362
Gramercy Property Trust		3,833		100,961
Great Plains Energy, Inc.		1,725		47,524
Great Western Bancorp, Inc.		9,166		391,847
Greif, Inc., Class A		310		17,850
Groupon, Inc.		17,515		60,427
Halcon Resources Corp.		5,048		42,605
Hanesbrands, Inc.		16,547		392,329
Harris Corp.		2,561		263,040
Hasbro, Inc.		16,561		1,366,448
Healthcare Realty Trust, Inc.		588		17,763
HealthSouth Corp.		4,983		193,440
Helix Energy Solutions Group, Inc.		8,165		69,239
Helmerich & Payne, Inc.		7,549		537,187
Henry Schein, Inc.		7,785		1,244,510
Hersha Hospitality Trust		6,785		135,632
Hexcel Corp.		4,735		243,142
Hibbett Sports, Inc.		8,728		288,024
Hilltop Holdings, Inc.		15,332		419,790
Hilton Grand Vacations, Inc.		1,868		54,788
HollyFrontier Corp.		1,281		37,111
Hologic, Inc.		15,826		641,428
Home Depot, Inc.		8,608		1,184,289
Hormel Foods Corp.		29,183		1,059,343
Hospitality Properties Trust		20,127		626,554
Host Hotels & Resorts, Inc.		1,108		20,022
Howard Hughes Corp.		584		62,260
Hub Group, Inc., Class A		4,098		181,746
HubSpot, Inc.		6,656		341,453
Hyatt Hotels Corp., Class A		10,227		559,519
IDEXX Laboratories, Inc.		5,511		674,161
II-VI, Inc.		7,468		272,582
Imperva, Inc.		3,708		154,809
Ingersoll-Rand PLC		8,613		683,442
Ingredion, Inc.		10,728		1,375,222
Innophos Holdings, Inc.		167		8,123
Innospec, Inc.		2,901		206,986
Inogen, Inc.		1,496		96,298
Inphi Corp.		413		18,924
Insight Enterprises, Inc.		1,834		68,096
Integra LifeSciences Holdings Corp.		549		22,910

	Shares		Value
Reference Entity — Long (continued)
United States (continued)
Intercontinental Exchange, Inc.		22,316	$	1,302,362
International Flavors & Fragrances, Inc.		2,835		332,290
Interpublic Group of Cos., Inc.		56,992		1,341,022
Intuit, Inc.		2,467		292,537
Invesco Mortgage Capital, Inc.		1,484		21,622
Itron, Inc.		3,656		225,575
ITT, Inc.		1,568		64,084
Jacobs Engineering Group, Inc.		9,842		576,249
JC Penney Co., Inc.		2,895		19,252
Jones Lang LaSalle, Inc.		2,949		303,835
Kellogg Co.		38,794		2,820,712
KeyCorp		14,757		265,183
Kimco Realty Corp.		6,175		153,696
Kite Realty Group Trust		30,206		725,548
KLA-Tencor Corp.		502		42,725
Knoll, Inc.		18,415		480,816
Kohl’s Corp.		8,438		336,086
Kraton Corp.		1,410		37,873
L3 Technologies, Inc.		4,211		668,244
Laredo Petroleum, Inc.		3,827		51,856
LCI Industries		2,114		232,012
LegacyTexas Financial Group, Inc.		3,091		127,720
Liberty Expedia Holdings, Inc., Class A		343		15,095
Liberty Property Trust		23,209		890,994
LifePoint Health, Inc.		412		24,452
Littelfuse, Inc.		253		39,901
Louisiana-Pacific Corp.		7,802		149,252
Lowe’s Cos., Inc.		10,893		796,060
LPL Financial Holdings, Inc.		2,869		112,752
Luxoft Holding, Inc.		151		8,886
Lydall, Inc.		1,326		80,886
Macerich Co.		1,050		72,125
Madison Square Garden Co., Class A		3,991		701,099
Magellan Health, Inc.		1,359		101,857
Manitowoc Foodservice, Inc.		1,826		35,023
ManpowerGroup, Inc.		8,499		811,315
Mantech International Corp., Class A		3,463		134,849
Marriott International, Inc., Class A		435		36,801
Marsh & McLennan Cos., Inc.		11,209		762,436
MasTec, Inc.		16,720		622,820
MAXIMUS, Inc.		6,895		380,190
McCormick & Co., Inc.		1,761		168,264
McDermott International, Inc.		26,001		210,608
Media General, Inc. CVR		3,231		436
Medidata Solutions, Inc.		1,812		89,766
Medpace Holdings, Inc.		1,083		37,786
Meritage Homes Corp.		444		16,317
Meritor, Inc.		7,066		101,962
MetLife, Inc.		434		23,614
MINDBODY, Inc., Class A		659		16,047
Mobile Mini, Inc.		16,741		544,920
Molson Coors Brewing Co., Class B		9,981		963,366
Monolithic Power Systems, Inc.		1,143		99,715
Morningstar, Inc.		2,321		176,744
Mosaic Co.		4,685		146,968
MRC Global, Inc.		3,855		79,220
MSCI, Inc.		5,874		486,074
Mueller Water Products, Inc., Series A		33,888		456,132
Nasdaq, Inc.		1,286		90,714
National Retail Properties, Inc.		5,226		227,854
Natus Medical, Inc.		7,296		284,909
Navistar International Corp.		996		27,161
NCR Corp.		5,817		250,247
New Senior Investment Group, Inc.		19,367		193,864
Newmont Mining Corp.		648		23,509
NextEra Energy, Inc.		3,880		480,034

See Notes to Financial Statements.

38 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Global Long/Short Equity Fund

	Shares		Value
Reference Entity — Long (continued)
United States (continued)
Nielsen Holdings PLC		33,928	$	1,387,994
NiSource, Inc.		58,490		1,308,421
Nordstrom, Inc.		1,101		48,686
Norfolk Southern Corp.		3,054		358,723
Northwest Bancshares, Inc.		2,690		45,918
NorthWestern Corp.		31,341		1,789,885
NOW, Inc.		7,452		158,430
NRG Yield, Inc., Class C		6,224		105,497
Nuance Communications, Inc.		32,093		508,995
Nucor Corp.		736		42,754
NVIDIA Corp.		3,474		379,291
NxStage Medical, Inc.		1,826		49,119
O’Reilly Automotive, Inc.		4,836		1,268,338
Occidental Petroleum Corp.		563		38,155
Oclaro, Inc.		6,875		67,444
Oil States International, Inc.		1,323		52,259
Old Dominion Freight Line, Inc.		1,889		166,761
Omnicell, Inc.		2,255		80,955
On Assignment, Inc.		535		24,225
OSI Systems, Inc.		5,554		414,717
Owens Corning		5,377		297,079
Panera Bread Co., Class A		1,185		247,736
Papa John’s International, Inc.		338		28,804
Parsley Energy, Inc., Class A		1,907		67,165
Paylocity Holding Corp.		13,834		426,917
Penn National Gaming, Inc.		5,570		76,755
Penske Automotive Group, Inc.		3,728		202,654
PepsiCo, Inc.		489		50,748
Performance Food Group Co.		6,496		143,886
PerkinElmer, Inc.		631		33,563
Philip Morris International, Inc.		2,394		230,135
Pilgrim’s Pride Corp.		5,106		97,729
Pinnacle Foods, Inc.		5,362		285,205
Pioneer Natural Resources Co.		543		97,865
Pitney Bowes, Inc.		24,738		393,829
Planet Fitness, Inc., Class A		4,631		97,436
Power Integrations, Inc.		4,329		307,359
PRA Health Sciences, Inc.		509		29,822
Praxair, Inc.		19,598		2,321,187
Priceline Group, Inc.		204		321,327
Proofpoint, Inc.		1,033		82,805
Public Service Enterprise Group, Inc.		2,788		123,369
Pure Storage, Inc., Class A		17,888		203,387
Q2 Holdings, Inc.		5,076		161,163
QTS Realty Trust, Inc., Class A		6,020		303,348
Quad/Graphics, Inc.		3,856		100,989
QUALCOMM, Inc.		9,843		525,911
Ramco-Gershenson Properties Trust		6,310		102,601
Range Resources Corp.		2,319		74,996
Rayonier, Inc.		2,984		83,224
Red Rock Resorts, Inc., Class A		7,317		171,803
Redwood Trust, Inc.		8,392		130,076
Regal Entertainment Group, Class A		11,654		264,080
Regal-Beloit Corp.		743		53,942
Regency Centers Corp.		4,302		299,978
Reliance Steel & Aluminum Co.		5,663		451,058
Rockwell Collins, Inc.		4,475		406,151
Rogers Corp.		1,991		159,180
Rollins, Inc.		1,159		40,866
Roper Technologies, Inc.		5,135		985,150
Ross Stores, Inc.		3,763		248,772
RPC, Inc.		4,185		90,061
Sabre Corp.		1,864		45,668
Saia, Inc.		4,677		224,730
SBA Communications Corp.		812		85,471
Scorpio Tankers, Inc.		11,996		45,945

	Shares		Value
Reference Entity — Long (continued)
United States (continued)
Sears Holdings Corp.		14,028	$	97,915
Select Comfort Corp.		5,849		118,033
Sempra Energy		318		32,560
Shutterstock, Inc.		1,420		76,396
Sirius XM Holdings, Inc.		59,390		280,321
Six Flags Entertainment Corp.		2,416		143,945
Sotheby’s		2,297		91,214
Spirit Aerosystems Holdings, Inc., Class A		1,110		66,656
Spirit Airlines, Inc.		2,487		134,397
Sprint Corp.		25,142		232,061
STAG Industrial, Inc.		37,786		874,368
STORE Capital Corp.		2,135		50,514
Summit Hotel Properties, Inc.		20,969		331,939
Swift Transportation Co.		5,857		133,715
Synchronoss Technologies, Inc.		8,963		345,255
Synopsys, Inc.		17,613		1,107,682
T-Mobile U.S., Inc.		3,735		232,578
Take-Two Interactive Software, Inc.		7,034		377,374
Tallgrass Energy GP LP		8,349		225,173
Targa Resources Corp.		1,034		59,579
Target Corp.		19,946		1,286,118
Taylor Morrison Home Corp., Class A		17,646		342,332
TEGNA, Inc.		1,508		34,548
Teladoc, Inc.		1,097		21,940
Teledyne Technologies, Inc.		4,785		587,933
Teleflex, Inc.		378		63,402
Tenneco, Inc.		6,149		414,750
Terex Corp.		5,466		173,819
Tesoro Corp.		3,226		260,822
Texas Instruments, Inc.		6,386		482,398
Texas Roadhouse, Inc.		7,476		348,681
TherapeuticsMD, Inc.		22,494		130,690
Thermo Fisher Scientific, Inc.		4,228		644,305
TiVo Corp.		6,029		113,948
TJX Cos., Inc.		15,230		1,141,032
Tractor Supply Co.		4,143		305,215
TransUnion		9,310		293,544
Triumph Group, Inc.		6,773		181,178
Tronox Ltd., Class A		7,626		95,478
TTM Technologies, Inc.		4,118		61,070
Tupperware Brands Corp.		3,493		210,837
Two Harbors Investment Corp.		44,059		386,397
Tyson Foods, Inc., Class A		11,673		732,948
U.S. Foods Holding Corp.		3,826		104,067
U.S. Silica Holdings, Inc.		1,079		63,812
Ubiquiti Networks, Inc.		4,962		309,629
Unit Corp.		2,064		53,664
United Community Banks, Inc.		18,942		532,838
Universal Corp.		3,476		236,368
Universal Health Services, Inc., Class B		587		66,114
Unum Group		5,285		240,098
Valero Energy Corp.		3,297		216,811
Varex Imaging Corp.		136		3,910
Ventas, Inc.		15,357		947,066
VEREIT, Inc.		54,711		466,685
VF Corp.		20,500		1,055,340
ViaSat, Inc.		9,248		600,288
Viavi Solutions, Inc.		29,358		262,754
Vishay Intertechnology, Inc.		13,895		230,657
Vonage Holdings Corp.		30,728		217,862
Voya Financial, Inc.		8,710		350,316
Vulcan Materials Co.		1,612		206,868
VWR Corp.		1,384		35,859
Waddell & Reed Financial, Inc., Class A		7,466		134,761
Waste Management, Inc.		14,404		1,001,078
Watsco, Inc.		2,623		400,637

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 39

Schedule of Investments (continued) BlackRock Global Long/Short Equity Fund

	Shares			Value
Reference Entity — Long (continued)
United States (continued)
Weingarten Realty Investors		55,857		$	1,990,185
WellCare Health Plans, Inc.		841			122,399
Welltower, Inc.		7,376			489,029
Weyerhaeuser Co.		3,836			120,182
Williams Cos., Inc.		8,870			255,811
Windstream Holdings, Inc.		31,524			254,714
Winnebago Industries, Inc.		7,367			231,324
Wintrust Financial Corp.		1,436			102,818
World Fuel Services Corp.		515			22,907
WR Grace & Co.		1,371			95,065
Wyndham Worldwide Corp.		4,211			332,922
Xcel Energy, Inc.		14,309			591,248
Xylem, Inc.		43,250			2,132,657
Zayo Group Holdings, Inc.		4,052			129,502
Zimmer Biomet Holdings, Inc.		1,438			170,159
Zoetis, Inc.		270			14,834
Zynga, Inc., Class A		115,726			291,630
					157,702,348
Total Reference Entity — Long					164,952,390
Reference Entity — Short
Australia
InterOil Corp.		(2,137	)		(102,213	)
Bermuda
Axis Capital Holdings Ltd.		(9,549	)		(611,231	)
Helen of Troy Ltd.		(3,672	)		(342,598	)
Kosmos Energy Ltd.		(3,166	)		(20,706	)
Marvell Technology Group Ltd.		(1,385	)		(20,595	)
RenaissanceRe Holdings Ltd.		(2,522	)		(343,799	)
					(1,338,929	)
Canada
Lululemon Athletica, Inc.		(2,745	)		(185,315	)
China
Sohu.com, Inc.		(1,481	)		(58,751	)
India
MakeMyTrip, Ltd.		(1,437	)		(47,996	)
Ireland
Endo International PLC		(3,185	)		(38,984	)
Jazz Pharmaceuticals PLC		(4,364	)		(532,059	)
Medtronic PLC		(7,238	)		(550,233	)
Perrigo Co. PLC		(465	)		(35,410	)
					(1,156,686	)
Israel
Mellanox Technologies, Ltd.		(1,140	)		(53,979	)
Italy
Rizzoli Corriere Della Sera Mediagroup SpA		(934	)		(806	)
Mexico
Southern Copper Corp.		(7,510	)		(288,084	)
Netherlands
ASML Holding NV		(1,531	)		(185,863	)
Cimpress NV		(2,200	)		(185,658	)
Koninklijke Philips NV		(27,968	)		(821,700	)
					(1,193,221	)
Norway
Ship Finance International Ltd.		(29,920	)		(448,800	)
Russia
Yandex NV		(9,972	)		(230,752	)

	Shares			Value
Reference Entity — Short (continued)
Singapore
Broadcom Ltd.		(4,565	)	$	(910,717	)
Spain
Atlantica Yield PLC		(966	)		(20,672	)
Switzerland
Transocean Ltd.		(24,093	)		(336,579	)
Weatherford International PLC		(24,324	)		(126,728	)
					(463,307	)
United Kingdom
Ensco PLC, Class A		(51,467	)		(562,020	)
Fiat Chrysler Automobiles NV		(8,759	)		(96,262	)
Liberty Global PLC		(10,906	)		(397,851	)
LivaNova PLC		(2,516	)		(121,032	)
Noble Corp. PLC		(12,875	)		(86,906	)
STERIS PLC		(3,928	)		(278,220	)
					(1,542,291	)
United States
3D Systems Corp.		(1,127	)		(18,584	)
AAR Corp.		(434	)		(13,884	)
Abbott Laboratories		(5,552	)		(231,907	)
Actuant Corp.		(2,491	)		(65,140	)
Acuity Brands, Inc.		(2,721	)		(563,873	)
Adtran, Inc.		(2,483	)		(54,378	)
Advanced Drainage Systems, Inc.		(7,964	)		(191,932	)
Advisory Board Co.		(11,569	)		(526,390	)
AES Corp.		(11,352	)		(129,867	)
AGNC Investment Corp. REIT		(12,398	)		(231,471	)
Agree Realty Corp.		(16,729	)		(784,590	)
Air Methods Corp.		(1,691	)		(60,369	)
AK Steel Holding Corp.		(6,073	)		(49,070	)
Akorn, Inc.		(10,436	)		(199,328	)
Alexander & Baldwin, Inc.		(7,740	)		(344,585	)
Alexandria Real Estate Equities, Inc.		(1,607	)		(178,088	)
Allegheny Technologies, Inc.		(6,363	)		(138,268	)
Allegiant Travel Co.		(2,242	)		(385,624	)
Allergan PLC		(1,246	)		(272,737	)
ALLETE, Inc.		(1,476	)		(96,457	)
Alliance Data Systems Corp.		(4,824	)		(1,101,705	)
Alphabet, Inc., Class A Class A		(919	)		(753,755	)
Altria Group, Inc.		(31,886	)		(2,269,645	)
Ambarella, Inc.		(1,552	)		(76,995	)
Amedisys, Inc.		(5,366	)		(245,870	)
AMERCO, Inc.		(553	)		(208,299	)
Ameren Corp.		(7,631	)		(401,772	)
American Electric Power Co., Inc.		(408	)		(26,136	)
American Express Co.		(4,006	)		(305,978	)
American Financial Group, Inc.		(1,096	)		(94,442	)
American Homes 4 Rent		(3,085	)		(68,734	)
American States Water Co.		(18,852	)		(825,341	)
American Woodmark Corp.		(417	)		(29,690	)
AmerisourceBergen Corp.		(1,905	)		(166,268	)
AMETEK, Inc.		(3,698	)		(188,968	)
Annaly Capital Management, Inc.		(2,841	)		(29,035	)
ANSYS, Inc.		(4,822	)		(449,700	)
Antero Resources Corp.		(1,086	)		(26,509	)
Apogee Enterprises, Inc.		(7,156	)		(408,464	)
Apple Hospitality REIT, Inc.		(1,526	)		(30,551	)
Apple, Inc.		(4,785	)		(580,660	)
Arch Capital Group Ltd.		(3,296	)		(291,202	)
Arch Coal, Inc.		(275	)		(19,797	)
Arconic, Inc.		(7,842	)		(178,719	)
Argan, Inc.		(3,320	)		(244,850	)
Arista Networks, Inc.		(2,571	)		(241,674	)
Arthur J Gallagher & Co.		(3,096	)		(166,658	)

See Notes to Financial Statements.

40 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Global Long/Short Equity Fund

	Shares			Value
Reference Entity — Short (continued)
United States (continued)
Artisan Partners Asset Management, Inc.		(8,202	)	$	(237,448	)
Ashland Global Holdings, Inc.		(1,931	)		(229,847	)
Assurant, Inc.		(9,339	)		(907,097	)
AT&T, Inc.		(43,100	)		(1,817,096	)
athenahealth, Inc.		(1,838	)		(231,570	)
Atwood Oceanics, Inc.		(2,424	)		(29,476	)
Automatic Data Processing, Inc.		(5,710	)		(576,653	)
Avalonbay Communities, Inc.		(3,939	)		(682,668	)
Avangrid, Inc.		(18,740	)		(727,112	)
Avis Budget Group, Inc.		(3,965	)		(147,577	)
Avista Corp.		(3,650	)		(141,036	)
Avnet, Inc.		(22,624	)		(1,050,659	)
AZZ, Inc.		(2,273	)		(135,357	)
B&G Foods, Inc.		(5,088	)		(225,653	)
Badger Meter, Inc.		(12,015	)		(463,178	)
Balchem Corp.		(10,939	)		(932,440	)
Ball Corp.		(7,098	)		(541,293	)
BancorpSouth, Inc.		(20,996	)		(623,581	)
Bed Bath & Beyond, Inc.		(37,794	)		(1,524,988	)
Beneficial Bancorp, Inc.		(6,760	)		(120,666	)
Berry Plastics Group, Inc.		(3,073	)		(156,815	)
Blackbaud, Inc.		(9,418	)		(617,915	)
Blackhawk Network Holdings, Inc.		(1,288	)		(45,982	)
Blue Buffalo Pet Products, Inc.		(3,631	)		(88,052	)
BNC Bancorp		(4,318	)		(152,209	)
Bob Evans Farms, Inc.		(863	)		(48,699	)
Boeing Co.		(1,954	)		(319,323	)
Boston Beer Co., Inc.		(1,110	)		(170,607	)
Boston Properties, Inc.		(127	)		(16,624	)
Brandywine Realty Trust		(1,383	)		(22,266	)
Brinker International, Inc.		(1,286	)		(57,227	)
Brookdale Senior Living, Inc.		(13,825	)		(206,960	)
Brown & Brown, Inc.		(6,741	)		(283,998	)
Burlington Stores, Inc.		(1,157	)		(96,841	)
Cable One, Inc.		(863	)		(545,744	)
Cabot Microelectronics Corp.		(778	)		(52,523	)
Caesars Entertainment Corp.		(3,618	)		(32,381	)
Cal-Maine Foods, Inc.		(1,179	)		(49,164	)
Caleres, Inc.		(492	)		(15,129	)
California Water Service Group		(4,299	)		(148,315	)
Calpine Corp.		(12,690	)		(149,742	)
Camden Property Trust		(181	)		(15,126	)
Capstead Mortgage Corp.		(16,089	)		(171,670	)
Carnival Corp.		(13,425	)		(743,477	)
Carpenter Technology Corp.		(1,394	)		(55,788	)
Casey’s General Stores, Inc.		(3,090	)		(355,041	)
Cavium, Inc.		(3,548	)		(234,913	)
CBL & Associates Properties, Inc.		(3,848	)		(41,751	)
CBOE Holdings, Inc.		(5,679	)		(452,162	)
Centene Corp.		(849	)		(53,716	)
Centennial Resource Development, Inc.		(1,319	)		(24,098	)
Cerner Corp.		(5,473	)		(293,955	)
CF Industries Holdings, Inc.		(11,592	)		(409,082	)
CH Robinson Worldwide, Inc.		(19,040	)		(1,448,182	)
Chemed Corp.		(244	)		(40,526	)
Chemical Financial Corp.		(5,241	)		(259,063	)
Chemours Co.		(5,769	)		(152,417	)
Chesapeake Lodging Trust		(9,251	)		(236,826	)
Chevron Corp.		(7,411	)		(825,215	)
Chipotle Mexican Grill, Inc.		(347	)		(146,240	)
Ciena Corp.		(3,751	)		(91,299	)
Cintas Corp.		(7,366	)		(855,266	)
CIRCOR International, Inc.		(1,186	)		(73,864	)
Clean Harbors, Inc.		(6,218	)		(345,099	)
Clearwater Paper Corp.		(2,895	)		(182,095	)
Coca-Cola Bottling Co. Consolidated		(81	)		(13,676	)

	Shares			Value
Reference Entity — Short (continued)
United States (continued)
Colony Northstar, Inc. Class A		(21,660	)	$	(301,507	)
Colony Starwood Homes		(29,446	)		(926,077	)
Commerce Bancshares, Inc.		(5,166	)		(292,034	)
Commercial Metals Co.		(7,247	)		(148,056	)
Communications Sales & Leasing, Inc.		(2,661	)		(69,931	)
Community Bank System, Inc.		(10,049	)		(586,460	)
comScore, Inc.		(14,177	)		(475,638	)
ConAgra Foods, Inc.		(12,906	)		(504,496	)
Constellation Brands, Inc.		(8,782	)		(1,315,192	)
Core-Mark Holding Co., Inc.		(5,859	)		(204,655	)
CoreSite Realty Corp.		(1,617	)		(139,272	)
Corporate Office Properties Trust		(20,404	)		(649,255	)
CoStar Group, Inc.		(252	)		(50,929	)
Costco Wholesale Corp.		(2,740	)		(449,223	)
Cotiviti Holdings, Inc.		(1,344	)		(45,508	)
Coty, Inc., Class A		(4,651	)		(89,299	)
Cousins Properties, Inc.		(8,885	)		(75,522	)
Covanta Holding Corp.		(2,088	)		(33,617	)
CSRA, Inc.		(3,038	)		(94,239	)
CSX Corp.		(10,486	)		(486,446	)
Cubic Corp.		(5,990	)		(284,824	)
CVB Financial Corp.		(14,040	)		(316,462	)
Cypress Semiconductor Corp.		(16,451	)		(194,122	)
Dean Foods Co.		(13,340	)		(264,932	)
Deckers Outdoor Corp.		(4,899	)		(282,182	)
Deere & Co.		(4,133	)		(442,438	)
DexCom, Inc.		(4,466	)		(353,484	)
Digital Realty Trust, Inc.		(626	)		(67,376	)
Dollar General Corp.		(7,135	)		(526,706	)
Dorman Products, Inc.		(4,916	)		(339,302	)
Douglas Emmett, Inc.		(594	)		(22,477	)
Dril-Quip, Inc.		(7,710	)		(479,562	)
DTE Energy Co.		(4,950	)		(488,268	)
DuPont Fabros Technology, Inc.		(10,067	)		(477,981	)
Dynegy, Inc.		(2,701	)		(25,795	)
Eagle Materials, Inc.		(1,500	)		(156,870	)
EastGroup Properties, Inc.		(1,241	)		(87,826	)
EchoStar Corp.		(7,445	)		(379,174	)
El Paso Electric Co.		(10,122	)		(464,600	)
Electronics For Imaging, Inc.		(1,343	)		(60,354	)
Emerson Electric Co.		(12,341	)		(723,923	)
Enbridge Energy Management LLC		(41	)		(772	)
Endurance International Group Holdings, Inc.		(4,188	)		(32,248	)
Envestnet, Inc.		(1,045	)		(39,501	)
Equity LifeStyle Properties, Inc.		(439	)		(32,460	)
EW Scripps Co.		(12,281	)		(239,234	)
Exxon Mobil Corp.		(361	)		(30,284	)
F5 Networks, Inc.		(2,139	)		(286,690	)
FactSet Research Systems, Inc.		(3,724	)		(644,438	)
FedEx Corp.		(3,854	)		(728,830	)
Fiesta Restaurant Group, Inc.		(6,459	)		(169,872	)
Finisar Corp.		(826	)		(24,425	)
First Republic Bank		(263	)		(24,809	)
First Solar, Inc.		(9,664	)		(301,420	)
Five Below, Inc.		(12,146	)		(484,018	)
Flex Ltd.		(3,344	)		(52,400	)
Flowers Foods, Inc.		(30,832	)		(620,032	)
Forest City Realty Trust, Inc.		(7,421	)		(168,011	)
Franklin Electric Co., Inc.		(2,045	)		(82,516	)
Freeport-McMoRan, Inc.		(13,514	)		(225,008	)
Fresh Del Monte Produce, Inc.		(14,738	)		(843,751	)
FTI Consulting, Inc.		(11,309	)		(476,561	)
Fulton Financial Corp.		(9,660	)		(175,812	)
G-III Apparel Group Ltd.		(4,938	)		(129,672	)
GameStop Corp., Class A		(2,371	)		(58,066	)
Gaming and Leisure Properties, Inc.		(12,704	)		(401,828	)

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 41

Schedule of Investments (continued) BlackRock Global Long/Short Equity Fund

	Shares			Value
Reference Entity — Short (continued)
United States (continued)
General Dynamics Corp.		(6,857	)	$	(1,241,666	)
General Electric Co.		(74,559	)		(2,214,402	)
General Mills, Inc.		(36,112	)		(2,256,278	)
Genesco, Inc.		(3,613	)		(217,503	)
Gentex Corp.		(53,783	)		(1,123,527	)
Global Payments, Inc.		(8,077	)		(624,191	)
Globus Medical, Inc.		(2,865	)		(75,521	)
Graco, Inc.		(7,764	)		(695,577	)
Green Dot Corp., Class A		(3,728	)		(99,910	)
Greenbrier Cos., Inc.		(4,106	)		(179,637	)
GrubHub, Inc.		(1,604	)		(66,646	)
Guidewire Software, Inc.		(541	)		(28,311	)
Gulfport Energy Corp.		(785	)		(16,406	)
H&R Block, Inc.		(23,534	)		(505,040	)
Hancock Holding Co.		(7,552	)		(346,259	)
Hanover Insurance Group, Inc.		(835	)		(70,090	)
Hawaiian Electric Industries, Inc.		(22,487	)		(752,865	)
HB Fuller Co.		(7,733	)		(381,778	)
HCA Holdings, Inc.		(8,870	)		(712,084	)
Healthcare Services Group, Inc.		(3,323	)		(132,089	)
HEICO Corp.		(1,950	)		(150,052	)
Herman Miller, Inc.		(14,632	)		(456,518	)
Hertz Global Holdings, Inc.		(9,039	)		(189,548	)
Hewlett Packard Enterprise Co.		(6,533	)		(148,168	)
Hillenbrand, Inc.		(23,631	)		(863,713	)
Hope Bancorp, Inc.		(2,411	)		(50,414	)
Horizon Pharma PLC		(1,060	)		(17,352	)
HP, Inc.		(3,200	)		(48,160	)
HSN, Inc.		(500	)		(17,625	)
Hubbell, Inc.		(625	)		(76,300	)
ICU Medical, Inc.		(1,008	)		(138,197	)
IDACORP, Inc.		(6,254	)		(500,445	)
Illumina, Inc.		(3,528	)		(564,833	)
Impax Laboratories, Inc.		(11,968	)		(157,379	)
Infinera Corp.		(17,381	)		(156,603	)
Ingevity Corp.		(834	)		(46,362	)
Insulet Corp.		(551	)		(22,922	)
Intel Corp.		(16,629	)		(612,280	)
Interactive Brokers Group, Inc., Class A		(4,087	)		(152,609	)
International Bancshares Corp.		(6,110	)		(226,681	)
International Business Machines Corp.		(2,585	)		(451,134	)
Intuitive Surgical, Inc.		(300	)		(207,807	)
InvenSense, Inc.		(15,715	)		(198,952	)
IPG Photonics Corp.		(966	)		(111,080	)
Iron Mountain, Inc.		(1,966	)		(70,383	)
J&J Snack Foods Corp.		(5,733	)		(731,359	)
Jabil Circuit, Inc.		(17,751	)		(425,669	)
JetBlue Airways Corp.		(2,512	)		(49,260	)
Johnson & Johnson		(233	)		(26,387	)
Juniper Networks, Inc.		(3,653	)		(97,827	)
Kaman Corp.		(23,669	)		(1,195,995	)
Kate Spade & Co.		(9,963	)		(184,415	)
KBR, Inc.		(10,101	)		(171,818	)
KCG Holdings, Inc., Class A		(7,000	)		(97,790	)
Kemper Corp.		(938	)		(40,522	)
Kennametal, Inc.		(6,108	)		(218,300	)
Kimberly-Clark Corp.		(1,151	)		(139,421	)
Kinder Morgan, Inc.		(17,607	)		(393,340	)
Kroger Co.		(29,725	)		(1,009,461	)
L Brands, Inc.		(4,372	)		(263,238	)
Lam Research Corp.		(2,623	)		(301,278	)
Lamar Advertising Co.		(17,901	)		(1,351,884	)
Lamb Weston Holdings, Inc.		(18,368	)		(686,228	)
Lennar Corp.		(26,320	)		(1,175,188	)
Liberty Broadband Corp.		(792	)		(66,275	)
Liberty SiriusXM Group		(16,567	)		(600,388	)

	Shares			Value
Reference Entity — Short (continued)
United States (continued)
Liberty Ventures		(4,961	)	$	(216,548	)
Life Storage, Inc.		(269	)		(21,910	)
Lincoln Electric Holdings, Inc.		(6,462	)		(538,737	)
Lindsay Corp.		(3,003	)		(226,246	)
Lithia Motors, Inc., Class A		(3,174	)		(327,303	)
LTC Properties, Inc.		(2,326	)		(108,554	)
LyondellBasell Industries NV, Class A		(4,547	)		(424,099	)
M&T Bank Corp.		(6,368	)		(1,035,246	)
Mallinckrodt PLC		(592	)		(28,848	)
Markel Corp.		(26	)		(24,050	)
Masimo Corp.		(907	)		(66,737	)
Masonite International Corp.		(2,550	)		(169,830	)
Matson, Inc.		(3,096	)		(110,403	)
Matthews International Corp., Class A		(953	)		(64,280	)
Maxim Integrated Products, Inc.		(11,045	)		(491,282	)
MaxLinear, Inc., Class A		(801	)		(20,490	)
MB Financial, Inc.		(2,817	)		(125,441	)
MBIA, Inc.		(4,556	)		(46,471	)
Mednax, Inc.		(5,211	)		(356,172	)
Mercury General Corp.		(8,211	)		(519,346	)
Mercury Systems, Inc.		(547	)		(18,445	)
Meredith Corp.		(360	)		(22,068	)
Mettler-Toledo International, Inc.		(207	)		(88,312	)
MGE Energy, Inc.		(26,529	)		(1,688,571	)
MGIC Investment Corp.		(14,706	)		(156,619	)
Michaels Cos., Inc.		(1,638	)		(32,219	)
Micron Technology, Inc.		(5,313	)		(128,096	)
Microsoft Corp.		(21,584	)		(1,395,406	)
Middleby Corp.		(6,160	)		(826,549	)
Monogram Residential Trust, Inc.		(43,328	)		(440,646	)
Monro Muffler Brake, Inc.		(420	)		(25,158	)
Monster Beverage Corp.		(4,774	)		(203,372	)
Moog, Inc., Class A		(5,726	)		(377,172	)
MSC Industrial Direct Co., Inc.		(6,568	)		(670,921	)
Multi-Color Corp.		(7,817	)		(603,472	)
Murphy USA, Inc.		(2,335	)		(148,739	)
National Fuel Gas Co.		(4,982	)		(279,739	)
National Health Investors, Inc.		(2,617	)		(193,632	)
National Instruments Corp.		(18,883	)		(593,304	)
Navient Corp.		(10,888	)		(163,756	)
Neogen Corp.		(5,069	)		(334,757	)
NetApp, Inc.		(5,324	)		(204,016	)
Netscout Systems, Inc.		(4,424	)		(147,319	)
Nevro Corp.		(434	)		(37,767	)
New Jersey Resources Corp.		(36,865	)		(1,389,811	)
New Residential Investment Corp.		(3,280	)		(49,692	)
New York REIT, Inc.		(18,316	)		(182,244	)
New York Times Co.		(42,303	)		(571,091	)
NIC, Inc.		(7,035	)		(169,543	)
NIKE, Inc., Class B		(42,484	)		(2,247,404	)
Northwest Natural Gas Co.		(36,232	)		(2,134,065	)
Norwegian Cruise Line Holdings Ltd.		(16,325	)		(767,275	)
Nutrisystem, Inc.		(9,670	)		(319,594	)
NuVasive, Inc.		(4,211	)		(298,012	)
Oasis Petroleum, Inc.		(3,231	)		(45,686	)
Old Republic International Corp.		(18,387	)		(382,450	)
Ollie’s Bargain Outlet Holdings, Inc.		(8,332	)		(254,543	)
ON Semiconductor Corp.		(25,664	)		(341,844	)
OneMain Holdings, Inc.		(10,159	)		(227,358	)
Oracle Corp.		(55,711	)		(2,234,568	)
Orbital ATK, Inc.		(4,156	)		(361,364	)
Ormat Technologies, Inc.		(13,517	)		(725,863	)
Outfront Media, Inc.		(755	)		(20,710	)
Pacira Pharmaceuticals, Inc.		(512	)		(19,686	)
Palo Alto Networks, Inc.		(4,297	)		(634,065	)
Pandora Media, Inc.		(11,456	)		(148,928	)

See Notes to Financial Statements.

42 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Global Long/Short Equity Fund

	Shares			Value
Reference Entity — Short (continued)
United States (continued)
Parexel International Corp.		(1,647	)	$	(116,756	)
Paychex, Inc.		(23,752	)		(1,432,008	)
PDC Energy, Inc.		(3,545	)		(262,117	)
Pegasystems, Inc.		(3,399	)		(131,881	)
Penumbra, Inc.		(1,829	)		(130,865	)
Physicians Realty Trust		(3,399	)		(63,051	)
Piedmont Office Realty Trust, Inc.		(33,502	)		(727,663	)
Pinnacle West Capital Corp.		(592	)		(45,957	)
Plantronics, Inc.		(3,742	)		(211,722	)
Plexus Corp.		(4,228	)		(229,580	)
PNM Resources, Inc.		(3,083	)		(106,055	)
Polaris Industries, Inc.		(1,768	)		(148,636	)
Popeyes Louisiana Kitchen, Inc.		(9,396	)		(593,733	)
Portland General Electric Co.		(3,060	)		(133,447	)
Post Holdings, Inc.		(1,341	)		(112,215	)
Potlatch Corp.		(2,551	)		(105,101	)
PRA Group, Inc.		(6,540	)		(260,292	)
Premier, Inc., Class A		(1,620	)		(51,613	)
PriceSmart, Inc.		(3,120	)		(264,264	)
Procter & Gamble Co.		(26,028	)		(2,280,053	)
Prosperity Bancshares, Inc.		(3,883	)		(282,022	)
PVH Corp.		(2,346	)		(220,078	)
Qorvo, Inc.		(2,729	)		(175,229	)
Quality Care Properties, Inc.		(4,371	)		(80,689	)
Quanta Services, Inc.		(36,498	)		(1,309,913	)
Radian Group, Inc.		(1,812	)		(33,341	)
Raytheon Co.		(2,499	)		(360,256	)
RBC Bearings, Inc.		(6,699	)		(620,528	)
Realogy Holdings Corp.		(8,335	)		(215,960	)
RealPage, Inc.		(3,531	)		(108,049	)
Red Hat, Inc.		(13,563	)		(1,029,160	)
Republic Services, Inc.		(1,016	)		(58,298	)
ResMed, Inc.		(4,991	)		(337,092	)
Restoration Hardware		(8,723	)		(235,695	)
RLI Corp.		(4,109	)		(244,157	)
Robert Half International, Inc.		(1,998	)		(94,026	)
Rowan Cos. PLC		(9,206	)		(164,972	)
Royal Caribbean Cruises Ltd.		(5,053	)		(473,112	)
RPM International, Inc.		(21,591	)		(1,128,346	)
Sabra Health Care REIT, Inc.		(11,038	)		(280,365	)
Sanmina Corp.		(1,745	)		(67,968	)
Science Applications International Corp.		(7,874	)		(641,101	)
Scotts Miracle-Gro Co., Class A		(3,020	)		(277,749	)
SEACOR Holdings, Inc.		(8,306	)		(611,072	)
Seagate Technology PLC		(3,336	)		(150,620	)
SEI Investments Co.		(5,447	)		(264,234	)
Select Medical Holdings Corp.		(26,448	)		(329,278	)
Seritage Growth Properties		(1,083	)		(44,186	)
Service Corp. International		(13,272	)		(386,613	)
ServiceMaster Global Holdings, Inc.		(3,530	)		(130,539	)
ServiceNow, Inc.		(7,584	)		(687,262	)
Shenandoah Telecommunications Co.		(4,241	)		(115,567	)
Sherwin-Williams Co.		(3,112	)		(945,457	)
Signature Bank		(537	)		(84,588	)
Simon Property Group, Inc.		(78	)		(14,334	)
SiteOne Landscape Supply, Inc.		(6,046	)		(232,287	)
Skechers U.S.A., Inc., Class A		(529	)		(13,288	)
SL Green Realty Corp.		(1,363	)		(148,526	)
SLM Corp.		(6,282	)		(74,630	)
Snyder’s-Lance, Inc.		(23,003	)		(882,855	)
Sonic Automotive, Inc., Class A		(7,109	)		(166,351	)
Sonic Corp.		(1,846	)		(45,965	)
Sonoco Products Co.		(563	)		(30,937	)
Southern Co.		(17,747	)		(877,234	)
Spirit Realty Capital, Inc.		(15,363	)		(161,619	)
Sprouts Farmers Market, Inc.		(1,093	)		(20,406	)

	Shares			Value
Reference Entity — Short (continued)
United States (continued)
SPS Commerce, Inc.		(2,148	)	$	(148,212	)
SPX FLOW, Inc.		(679	)		(23,690	)
Standex International Corp.		(1,849	)		(161,233	)
Starwood Property Trust, Inc.		(38,380	)		(854,339	)
State Street Corp.		(1,807	)		(137,693	)
Steelcase, Inc., Class A		(30,178	)		(506,990	)
Stepan Co.		(1,121	)		(87,561	)
Stericycle, Inc.		(2,908	)		(224,323	)
Stifel Financial Corp.		(5,712	)		(287,485	)
Stratasys, Ltd.		(2,985	)		(58,864	)
Summit Materials, Inc., Class A		(5,144	)		(129,114	)
Sykes Enterprises, Inc.		(10,427	)		(291,226	)
Symantec Corp.		(4,265	)		(117,501	)
Synaptics, Inc.		(2,783	)		(156,906	)
Synovus Financial Corp.		(1,301	)		(54,226	)
Taubman Centers, Inc.		(2,517	)		(178,304	)
Tenet Healthcare Corp.		(3,079	)		(54,160	)
Tennant Co.		(12,370	)		(856,623	)
Tessera Holding Corp.		(2,588	)		(116,978	)
Textron, Inc.		(5,631	)		(266,740	)
Thor Industries, Inc.		(1,739	)		(179,986	)
Time, Inc.		(5,713	)		(109,975	)
Timken Co.		(2,161	)		(95,948	)
Toll Brothers, Inc.		(20,800	)		(652,288	)
Torchmark Corp.		(14,149	)		(1,040,517	)
Trade Desk, Inc., Class A		(3,363	)		(99,747	)
TreeHouse Foods, Inc.		(10,770	)		(817,228	)
TRI Pointe Group, Inc.		(6,962	)		(85,424	)
TripAdvisor, Inc.		(502	)		(26,556	)
Trustmark Corp.		(9,549	)		(321,037	)
Twenty-First Century Fox, Inc.		(18,239	)		(572,340	)
UDR, Inc.		(3,777	)		(132,006	)
Ulta Salon Cosmetics & Fragrance, Inc.		(2,130	)		(579,956	)
UniFirst Corp.		(7,044	)		(900,928	)
United Natural Foods, Inc.		(11,418	)		(521,803	)
United Rentals, Inc.		(2,476	)		(313,239	)
Universal Electronics, Inc.		(2,603	)		(154,878	)
Urban Edge Properties		(13,130	)		(367,246	)
US Bancorp		(2,502	)		(131,730	)
US Ecology, Inc.		(3,240	)		(166,050	)
USANA Health Sciences, Inc.		(7,935	)		(494,351	)
USG Corp.		(1,122	)		(34,322	)
Vector Group Ltd.		(13,954	)		(307,825	)
Vectren Corp.		(13,979	)		(767,307	)
Veeva Systems, Inc., Class A		(3,065	)		(129,741	)
VeriFone Systems, Inc.		(32,731	)		(594,722	)
Verint Systems, Inc.		(20,339	)		(759,662	)
Verisk Analytics, Inc., Class A		(5,422	)		(448,074	)
Verizon Communications, Inc.		(22,975	)		(1,126,005	)
Versum Materials, Inc.		(1,844	)		(51,540	)
Viacom, Inc., Class B		(5,167	)		(217,737	)
Visteon Corp.		(5,841	)		(523,178	)
Vornado Realty Trust		(148	)		(15,734	)
Wabash National Corp.		(5,524	)		(97,499	)
Walt Disney Co.		(5,147	)		(569,516	)
Wayfair, Inc., Class A		(3,802	)		(158,011	)
WD-40 Co.		(2,517	)		(264,663	)
Wells Fargo & Co.		(3,381	)		(190,452	)
Wendy’s Co.		(8,638	)		(116,872	)
Western Digital Corp.		(2,616	)		(208,574	)
Western Union Co.		(5,844	)		(114,426	)
Westlake Chemical Corp.		(7,171	)		(443,957	)
Whirlpool Corp.		(2,990	)		(522,921	)
Williams-Sonoma, Inc.		(2,476	)		(119,368	)
Wolverine World Wide, Inc.		(5,490	)		(128,960	)
Workday, Inc., Class A		(12,464	)		(1,035,634	)

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 43

Schedule of Investments (continued) BlackRock Global Long/Short Equity Fund

	Shares			Value
Reference Entity — Short (continued)
United States (continued)
Worthington Industries, Inc.		(6,410	)	$	(306,334	)
WP Carey, Inc.		(3,630	)		(224,842	)
WPX Energy, Inc.		(3,036	)		(42,291	)
WR Berkley Corp.		(22,163	)		(1,489,575	)
WW Grainger, Inc.		(1,340	)		(338,444	)
Wynn Resorts Ltd.		(383	)		(38,848	)
Xenia Hotels & Resorts, Inc.		(36,182	)		(663,940	)
Yelp, Inc.		(469	)		(19,595	)
Zendesk, Inc.		(3,905	)		(93,447	)
Zillow Group, Inc.		(2,552	)		(90,290	)
					(156,580,943	)
Total Reference Entity — Short					(164,623,462	)
Net Value of Reference Entity — Bank of America N.A.					328,928
The following table represents the individual long and short positions and related values of equity securities underlying the total return swap with Deutsche Bank AG as of January 31, 2017, expiration dates 3/01/17 — 3/23/17:
Reference Entity — Long
France
Peugeot SA		146,641			2,729,077
Germany
Solarworld AG		10			44
Hong Kong
Champion REIT		94,000			50,770
HKT Trust & HKT Ltd.		56,000			78,227
					128,997
Italy
Autogrill SpA		205,618			1,808,273
Japan
Glory Ltd.		10,200			318,668
Penta-Ocean Construction Co. Ltd.		17,400			84,956
					403,624
Singapore
Venture Corp. Ltd.		190,300			1,376,644
Spain
Mediaset Espana Comunicacion SA		484,842			5,934,238
Sweden
Intrum Justitia AB		39,745			1,338,053
United Kingdom
Qinetiq Group PLC		465,113			1,546,978
Total Reference Entity — Long					15,265,928
Reference Entity — Short
Australia
Qube Holdings Ltd.		(202,922	)		(354,174	)
Hong Kong
Esprit Holdings Ltd.		(1,186,906	)		(926,401	)
Total Reference Entity — Short					(1,280,575	)
Net Value of Reference Entity — Deutsche Bank AG					13,985,353

The following table represents the individual long and short positions and related values of equity securities underlying the total return swap with Goldman Sachs & Co. as of January 31, 2017, expiration dates 3/02/17 — 8/29/18:
	Shares		Value
Reference Entity — Long
Australia
Aristocrat Leisure Ltd.		8,391	$	97,309
Caltex Australia Ltd.		62,663		1,359,952
CSR Ltd.		165,588		554,508
Mineral Resources Ltd.		9,718		90,739
Platinum Asset Management Ltd.		2,141		8,112
Regis Resources Ltd.		4,201		10,181
WorleyParsons Ltd.		5,729		43,077
				2,163,878
Austria
Raiffeisen Bank International AG		884		19,688
Vienna Insurance Group AG		7,697		187,586
				207,274
Belgium
NV Bekaert SA		4,633		201,064
Umicore SA		570		31,928
				232,992
Bermuda
Nabors Industries Ltd.		3,239		52,634
Canada
Canadian Natural Resources Ltd.		60,455		1,827,704
Capital Power Corp.		11,030		209,199
Celestica, Inc.		2,789		38,730
Crescent Point Energy Corp.		12,920		150,622
HudBay Minerals, Inc.		9,642		75,506
Inter Pipeline Ltd.		28,512		618,335
Maple Leaf Foods, Inc.		48,566		1,113,332
Quebecor, Inc., Class B		3,865		116,403
Saputo, Inc.		139,216		5,125,716
Vermilion Energy, Inc.		3,466		142,982
				9,418,529
China
FIH Mobile Ltd.		200,000		64,262
Denmark
Carlsberg A/S, Class B		684		61,880
GN Store Nord A/S		15,243		340,463
Novo Nordisk A/S, Class B		23,285		841,514
				1,243,857
Finland
Valmet Corp.		12,346		195,198
France
Arkema SA		273		26,962
Cie Generale des Etablissements Michelin		8,095		869,665
Danone SA		11,120		697,099
Eurazeo		301		18,539
Faurecia		5,086		220,984
Ipsen SA		2,676		207,355
Nexity SA		1,623		79,716
Peugeot SA		1,832		34,095
Plastic Omnium SA		4,840		164,204
Sodexo SA		670		74,090
Technicolor SA, Registered Shares		16,018		68,679
				2,461,388
Germany
Covestro AG		8,162		614,221
Deutsche Euroshop AG		3,491		145,116
Duerr AG		801		69,488

See Notes to Financial Statements.

44 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Global Long/Short Equity Fund

	Shares		Value
Reference Entity — Long (continued)
Germany (continued)
Hochtief AG		341	$	48,610
Kloeckner & Co. SE		25,448		332,305
Lanxess AG		4,027		293,050
Rheinmetall AG		34,324		2,634,069
				4,136,859
Hong Kong
Hang Lung Properties Ltd.		79,000		194,425
HKT Trust & HKT Ltd.		250,000		349,229
Kerry Properties Ltd.		102,000		288,643
Texwinca Holdings Ltd.		84,000		53,822
WH Group Ltd.		37,500		28,483
				914,602
Ireland
CRH PLC		146,598		5,084,849
DCC PLC		7,379		595,214
Glanbia PLC		1,474		24,902
Greencore Group PLC		92,534		275,462
ICON PLC		1,796		150,972
Kerry Group PLC, Class A		297		20,872
Smurfit Kappa Group PLC		75,871		1,998,426
				8,150,697
Israel
Check Point Software Technologies Ltd.		3,949		390,043
Italy
Mediobanca SpA		53,141		457,546
Unipol Gruppo Finanziario SpA		39,996		147,912
				605,458
Japan
Alfresa Holdings Corp.		3,000		49,381
Bank of Kyoto Ltd.		47,000		367,420
Chiba Bank Ltd.		176,000		1,151,274
COLOPL, Inc.		3,000		25,947
Daiichi Sankyo Co. Ltd.		16,800		375,868
Glory Ltd.		3,100		96,850
Gunma Bank Ltd.		98,900		539,479
Hokuhoku Financial Group, Inc.		59,300		1,015,924
Hokuriku Electric Power Co.		1,500		15,113
Ito En Ltd.		700		23,262
Itochu Techno-Solutions Corp.		10,300		277,059
Japan Petroleum Exploration Co.		20,800		467,237
Japan Steel Works Ltd.		1,300		24,410
JX Holdings, Inc.		33,800		159,400
Kandenko Co. Ltd.		19,000		176,518
Matsumotokiyoshi Holdings Co. Ltd.		2,100		104,404
Mitsubishi Chemical Holdings Corp.		175,400		1,223,406
Nagase & Co. Ltd.		54,400		745,520
Nomura Real Estate Holdings, Inc.		18,100		311,325
NTT Docomo, Inc.		84,100		2,010,836
Ono Pharmaceutical Co. Ltd.		2,100		43,084
Open House Co. Ltd.		16,000		374,504
Park24 Co. Ltd.		2,500		69,002
Penta-Ocean Construction Co. Ltd.		124,600		608,362
Resona Holdings, Inc.		340,900		1,845,657
Sankyo Co. Ltd.		25,800		861,429
Sumitomo Forestry Co. Ltd.		14,100		193,959
Sumitomo Mitsui Trust Holdings, Inc.		21,600		805,105
Sumitomo Real Estate Sales Co. Ltd.		5,700		129,699
TAG Immobilien AG		28,796		389,319
Taiyo Yuden Co. Ltd.		3,000		36,589
TonenGeneral Sekiyu KK		173,000		2,034,498
Toppan Forms Co. Ltd.		40,800		423,194
Toppan Printing Co. Ltd.		61,000		598,772
				17,573,806

	Shares		Value
Reference Entity — Long (continued)
Mexico
Fresnillo PLC		11,273	$	206,932
Netherlands
BE Semiconductor Industries NV		34,086		1,230,774
Koninklijke Vopak NV		1,407		60,438
				1,291,212
Norway
Salmar ASA		2,694		76,249
Subsea 7 SA		45,521		619,431
				695,680
Portugal
CTT — Correios de Portugal SA		71,381		398,202
Jeronimo Martins SGPS SA		41,861		708,522
NOS SGPS SA		88,191		496,560
				1,603,284
Singapore
Venture Corp. Ltd.		103,900		751,620
Spain
ACS Actividades de Construccion y Servicios SA		1,382		21,607
Sweden
JM AB		21,073		635,456
Modern Times Group MTG AB, B Shares		782		24,103
Saab AB		11,657		476,048
				1,135,607
Switzerland
Coca-Cola HBC AG		68,892		1,574,739
Georg Fischer AG, Registered Shares		471		388,168
IWG PLC		60,084		189,285
Logitech International SA, Registered Shares		3,104		88,898
Lonza Group AG, Registered Shares		617		113,355
Straumann Holding AG, Registered Shares		7,971		3,216,825
				5,571,270
United Kingdom
Auto Trader Group PLC		27,023		136,483
Barratt Developments PLC		312,460		1,884,306
Bunzl PLC		3,032		79,925
Dialog Semiconductor PLC		3,776		175,705
DS Smith PLC		49,414		276,219
Electrocomponents PLC		26,807		163,945
Inchcape PLC		10,630		96,210
Indivior PLC		109,747		409,840
Intertek Group PLC		4,281		183,255
Liberty Global PLC LiLAC, Class A		2		46
Michael Page International PLC		86,038		468,641
Moneysupermarket.com Group PLC		69,190		287,343
Petrofac Ltd.		8,203		94,984
Qinetiq Group PLC		415		1,380
Rentokil Initial PLC		8,245		23,757
Royal Mail PLC		5,354		27,805
Serco Group PLC		152,372		276,742
Spirax-Sarco Engineering PLC		16,445		893,211
TechnipFMC PLC		5,340		175,011
Thomas Cook Group PLC		115,973		127,453
UBM PLC		199,115		1,769,289
WH Smith PLC		2,117		43,523
WM Morrison Supermarkets PLC		531,242		1,583,784
				9,178,857
United States
Agilent Technologies, Inc.		1,460		71,496
Amdocs Ltd.		48,193		2,829,411
American Eagle Outfitters, Inc.		127,752		1,930,333

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 45

Schedule of Investments (continued) BlackRock Global Long/Short Equity Fund

	Shares		Value
Reference Entity — Long (continued)
United States (continued)
AmerisourceBergen Corp.		5,647	$	492,870
Applied Materials, Inc.		49,204		1,685,237
Archer-Daniels-Midland Co.		170,857		7,562,131
Arconic, Inc.		3		68
Baker Hughes, Inc.		55,794		3,519,486
Baxter International, Inc.		137,297		6,577,899
Best Buy Co., Inc.		42,347		1,885,288
Big Lots, Inc.		128,784		6,439,200
Blue Buffalo Pet Products, Inc.		20,769		503,648
Booz Allen Hamilton Holding Corp.		5,743		194,228
Bruker Corp.		1,211		28,737
Burlington Stores, Inc.		9,142		765,185
C.R. Bard, Inc.		14,991		3,557,814
Cabot Corp.		20,060		1,110,722
CenterPoint Energy, Inc.		236,587		6,200,945
Cinemark Holdings, Inc.		6,616		281,180
CommScope Holding Co., Inc.		1,027		38,841
CONSOL Energy, Inc.		40,656		688,713
Crimson Wine Group Ltd.		1		9
Darden Restaurants, Inc.		22,345		1,637,442
DCT Industrial Trust, Inc.		37,759		1,687,450
Diamond Offshore Drilling, Inc.		40,444		662,473
Dick’s Sporting Goods, Inc.		71,293		3,678,719
Domino’s Pizza, Inc.		46,489		8,114,190
Dr. Pepper Snapple Group, Inc.		2,974		271,229
Dril-Quip, Inc.		37,052		2,304,634
DST Systems, Inc.		210		24,182
Duke Realty Corp.		81,100		1,973,163
Energen Corp.		8,440		454,832
Equity Lifestyle Properties, Inc.		21,135		1,562,722
First American Financial Corp.		76,811		2,886,557
Fitbit, Inc., Series A		26,885		161,579
Flex Ltd.		112,634		1,764,975
Gartner, Inc.		3,169		314,872
Groupon, Inc.		275,646		950,979
Hasbro, Inc.		82,629		6,817,719
Helmerich & Payne, Inc.		4,320		307,411
Hilton Grand Vacations, Inc.		7		205
Hormel Foods Corp.		85,740		3,112,362
HP, Inc.		115,164		1,733,218
IDEXX Laboratories, Inc.		35,413		4,332,072
Ingredion, Inc.		12,548		1,608,528
Interpublic Group of Cos., Inc.		187,969		4,422,911
Intuit, Inc.		26,427		3,133,714
Kellogg Co.		3,183		231,436
KLA-Tencor Corp.		18,674		1,589,344
Kohl’s Corp.		101,371		4,037,607
Landstar System, Inc.		39,417		3,334,678
Laredo Petroleum, Inc.		50,820		688,611
Lear Corp.		21,092		2,996,962
Legg Mason, Inc.		250,108		7,925,923
Macy’s, Inc.		22,748		671,976
ManpowerGroup, Inc.		33,021		3,152,185
Masimo Corp.		39,298		2,891,547
MasTec, Inc.		12,463		464,247
McCormick & Co., Inc.		104,969		10,029,788
NCR Corp.		25,916		1,114,906
NetApp, Inc.		9,444		361,894
Newmont Mining Corp.		2,723		98,790
Nordstrom, Inc.		10,450		462,099
Norfolk Southern Corp.		4,298		504,843
Nutanix, Inc., Class A		4,426		133,975
Oceaneering International, Inc.		6,053		168,576
OGE Energy Corp.		580		19,453
Oshkosh Corp.		1,369		95,323
Owens Corning		918		50,720

	Shares			Value
Reference Entity — Long (continued)
United States (continued)
Papa John’s International, Inc.		14,619		$	1,245,831
Park Hotels & Resorts, Inc.		6			163
Pilgrim’s Pride Corp.		60,195			1,152,132
Range Resources Corp.		9,922			320,877
Regal Entertainment Group, Class A		7,607			172,375
Ross Stores, Inc.		84,504			5,586,559
RPC, Inc.		12,802			275,499
Sinclair Broadcast Group, Inc., Class A		986			33,278
Target Corp.		113,156			7,296,299
Tenneco, Inc.		1,672			112,776
Teradata Corp.		21,549			632,679
Texas Instruments, Inc.		15,988			1,207,734
VeriSign, Inc.		42,728			3,427,213
Weingarten Realty Investors		287,432			10,241,202
WellCare Health Plans, Inc.		23,442			3,411,749
Whiting Petroleum Corp.		67,170			744,915
Williams-Sonoma, Inc.		5,822			280,679
Xerox Corp.		804,628			5,576,072
Xilinx, Inc.		137,819			8,021,066
Zynga, Inc., Class A		118,499			298,617
					191,344,177
Total Reference Entity — Long					259,611,723
Reference Entity — Short
Australia
Alumina Ltd.		(15,203	)		(22,401	)
Domino’s Pizza Enterprises Ltd.		(4,151	)		(187,267	)
Qube Holdings Ltd.		(97,557	)		(170,273	)
					(379,941	)
Bermuda
Signet Jewelers Ltd.		(1,004	)		(77,981	)
Canada
Alimentation Couche-Tard, Inc.		(2,858	)		(130,925	)
Emera, Inc.		(16,640	)		(581,073	)
					(711,998	)
Denmark
DSV A/S		(24,499	)		(1,191,375	)
Finland
Metsa Board OYJ		(50,286	)		(343,492	)
Nokia OYJ		(1,662,757	)		(7,466,052	)
					(7,809,544	)
France
Air Liquide SA		(736	)		(79,461	)
Airbus Group SE		(388	)		(26,301	)
Bollore SA		(34,905	)		(139,602	)
					(245,364	)
Germany
HeidelbergCement AG		(64	)		(6,183	)
Hong Kong
Cathay Pacific Airways Ltd.		(72,000	)		(97,516	)
Ireland
Adient PLC		(1,158	)		(73,521	)
Israel
Mobileye NV		(26,229	)		(1,126,798	)
Italy
Yoox SpA		(2,624	)		(65,822	)

See Notes to Financial Statements.

46 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Global Long/Short Equity Fund

	Shares			Value
Reference Entity — Short (continued)
Japan
Aeon Co. Ltd.		(7,900	)	$	(114,177	)
Alps Electric Co. Ltd.		(4,500	)		(119,861	)
Asics Corp.		(4,100	)		(79,867	)
Bic Camera, Inc.		(147,100	)		(1,373,959	)
Calsonic Kansei Corp.		(73,000	)		(1,160,523	)
Daikin Industries Ltd.		(1,500	)		(148,894	)
Dentsu, Inc.		(37,300	)		(1,723,972	)
FamilyMart UNY Holdings Co. Ltd.		(15,100	)		(956,725	)
JGC Corp.		(60,600	)		(1,051,978	)
Koito Manufacturing Co. Ltd.		(13,000	)		(689,593	)
Kyocera Corp.		(7,000	)		(364,425	)
Nippon Kayaku Co. Ltd.		(27,000	)		(352,877	)
Nippon Paint Co. Ltd.		(38,400	)		(1,120,111	)
Oriental Land Co. Ltd.		(12,800	)		(701,431	)
PanaHome Corp.		(3,000	)		(25,431	)
Recruit Holdings Co. Ltd.		(34,500	)		(1,510,259	)
Rinnai Corp.		(1,700	)		(144,470	)
SBI Holdings, Inc.		(2,300	)		(31,749	)
Shimano, Inc.		(2,200	)		(346,913	)
Shiseido Co. Ltd.		(3,400	)		(95,027	)
Sugi Holdings Co. Ltd.		(3,300	)		(153,577	)
TDK Corp.		(800	)		(57,501	)
Terumo Corp.		(7,100	)		(262,656	)
TOTO Ltd.		(29,700	)		(1,196,203	)
					(13,782,179	)
Jordan
Hikma Pharmaceuticals PLC		(54,634	)		(1,258,393	)
Netherlands
GrandVision NV		(2,457	)		(58,590	)
TomTom NV		(51,520	)		(472,286	)
					(530,876	)
Norway
Schibsted ASA		(34,334	)		(907,888	)
Schibsted ASA, B Shares		(18,593	)		(462,940	)
					(1,370,828	)
Sweden
Alfa Laval AB		(42,385	)		(792,438	)
Hennes & Mauritz AB, B Shares		(4,337	)		(124,090	)
SSAB AB, A Shares		(33,550	)		(137,905	)
					(1,054,433	)
Switzerland
Cie Financiere Richemont SA		(10,179	)		(792,737	)
Swatch Group AG		(1,259	)		(446,196	)
Weatherford International PLC		(82,636	)		(430,534	)
					(1,669,467	)
United Kingdom
Antofagasta PLC		(20,628	)		(217,949	)
Capital & Counties Properties PLC		(511,286	)		(1,754,082	)
J Sainsbury PLC		(372,169	)		(1,210,876	)
Next PLC		(1,687	)		(81,399	)
Rio Tinto PLC		(30,001	)		(1,329,133	)
Willis Towers Watson PLC		(404	)		(50,553	)
					(4,643,992	)
United States
Acuity Brands, Inc.		(2,365	)		(490,099	)
Advance Auto Parts, Inc.		(18,746	)		(3,078,843	)
AK Steel Holding Corp.		(15,042	)		(121,539	)
Alcoa Corp.		(3,209	)		(116,968	)
Allegiant Travel Co.		(8,488	)		(1,459,936	)
Allergan PLC		(23,872	)		(5,225,342	)
Alliance Data Systems Corp.		(28,723	)		(6,559,759	)

	Shares			Value
Reference Entity — Short (continued)
United States (continued)
Amazon.com, Inc.		(3,764	)	$	(3,099,579	)
American Homes 4 Rent		(223,648	)		(4,982,877	)
Arch Capital Group Ltd.		(16,419	)		(1,450,619	)
Assurant, Inc.		(2,601	)		(252,635	)
AT&T, Inc.		(229,070	)		(9,657,591	)
Avalonbay Communities, Inc.		(14,794	)		(2,563,948	)
Axalta Coating Systems Ltd.		(31,422	)		(911,238	)
Ball Corp.		(127,879	)		(9,752,053	)
Berkshire Hathaway, Inc., Class B		(40,777	)		(6,693,137	)
Boston Beer Co., Inc.		(19,191	)		(2,949,657	)
Callon Petroleum Co.		(16,567	)		(253,144	)
CarMax, Inc.		(2,885	)		(192,458	)
Cavium, Inc.		(5,633	)		(372,961	)
CF Industries Holdings, Inc.		(121,566	)		(4,290,064	)
Cheniere Energy, Inc.		(9,116	)		(434,377	)
Chemours Co.		(16,357	)		(432,152	)
Chevron Corp.		(39,027	)		(4,345,656	)
Chipotle Mexican Grill, Inc.		(6,779	)		(2,856,942	)
Credit Acceptance Corp.		(1,239	)		(254,342	)
DexCom, Inc.		(10,978	)		(868,909	)
Diebold, Inc.		(36,960	)		(1,005,312	)
DISH Network Corp.		(108,992	)		(6,449,057	)
Dollar Tree, Inc.		(37,425	)		(2,888,836	)
EPAM Systems, Inc.		(19,255	)		(1,239,252	)
Equinix, Inc.		(2,622	)		(1,009,418	)
Exxon Mobil Corp.		(105,866	)		(8,881,099	)
First Solar, Inc.		(1,847	)		(57,608	)
Freeport-McMoRan, Inc.		(17,825	)		(296,786	)
General Electric Co.		(56,376	)		(1,674,367	)
Global Payments, Inc.		(8,697	)		(672,104	)
Gramercy Property Trust REIT		(167,400	)		(4,409,316	)
Hilton Worldwide Holdings, Inc.		(62,892	)		(3,621,321	)
Illumina, Inc.		(8,498	)		(1,360,530	)
Interactive Brokers Group, Inc., Class A		(72,801	)		(2,718,389	)
Kraft Heinz Co.		(28,606	)		(2,554,230	)
Liberty Broadband Corp.		(33,577	)		(2,865,461	)
Liberty Ventures		(80,559	)		(3,516,400	)
LKQ Corp.		(109,721	)		(3,501,197	)
M&T Bank Corp.		(58,454	)		(9,502,867	)
Medicines Co.		(112,570	)		(4,058,149	)
Middleby Corp.		(718	)		(96,341	)
Monster Beverage Corp.		(26,570	)		(1,131,882	)
Netflix, Inc.		(33,124	)		(4,660,878	)
New York Community Bancorp, Inc.		(126,696	)		(1,924,512	)
Newell Rubbermaid, Inc.		(186,014	)		(8,804,043	)
Norwegian Cruise Line Holdings Ltd.		(136,330	)		(6,407,510	)
Oasis Petroleum, Inc.		(21,092	)		(298,241	)
PacWest Bancorp		(7,676	)		(425,250	)
Palo Alto Networks, Inc.		(3,587	)		(529,298	)
Pandora Media, Inc.		(237,339	)		(3,085,407	)
Physicians Realty Trust		(234,552	)		(4,350,940	)
Platform Specialty Products Corp.		(1,924	)		(23,357	)
Priceline Group, Inc.		(100	)		(157,513	)
Procter & Gamble Co.		(87,608	)		(7,674,461	)
Scotts Miracle-Gro Co., Class A		(2,624	)		(241,329	)
ServiceNow, Inc.		(15,958	)		(1,446,114	)
Snyder’s-Lance, Inc.		(57,189	)		(2,194,914	)
Spirit Realty Capital, Inc.		(293,256	)		(3,085,053	)
SS&C Technologies Holdings, Inc.		(12,447	)		(399,922	)
Sun Communities, Inc.		(21,041	)		(1,657,189	)
TreeHouse Foods, Inc.		(96,197	)		(7,299,428	)
Under Armour, Inc., Class A		(1,080	)		(23,209	)
Under Armour, Inc., Class C		(9,520	)		(182,974	)
UniFirst Corp.		(2,903	)		(371,294	)
United States Steel Corp.		(3,914	)		(128,027	)
Vereit, Inc.		(494,408	)		(4,217,300	)

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 47

Schedule of Investments (continued) BlackRock Global Long/Short Equity Fund

	Shares			Value
Reference Entity — Short (continued)
United States (continued)
Walgreens Boots Alliance, Inc.		(1,010	)	$	(82,759	)
Wayfair, Inc., Class A		(37,747	)		(1,568,765	)
Wells Fargo & Co.		(19,078	)		(1,074,664	)
Western Digital Corp.		(5,621	)		(448,162	)
Workday, Inc., Class A		(20,533	)		(1,706,087	)
XPO Logistics, Inc.		(4,452	)		(199,183	)
Zayo Group Holdings, Inc.		(95,011	)		(3,036,552	)
Zendesk, Inc.		(1,137	)		(27,208	)
Zillow Group, Inc.		(71,991	)		(2,547,042	)
					(207,455,332	)
Total Reference Entity — Short					(243,551,543	)
Net Value of Reference Entity — Goldman Sachs & Co.					16,060,180
The following table represents the individual long and short positions and related values of equity securities underlying the total return swap with Goldman Sachs & Co. as of January 31, 2017, expiration dates 6/14/17 — 8/29/18:
Reference Entity — Long
Canada
Domtar Corp.		521			22,762
Precision Drilling Corp.		4,443			25,059
Shopify, Inc., Class A		324			16,466
					64,287
China
Yirendai, Ltd. — ADR		934			19,735
Israel
Caesarstone Ltd.		474			14,386
Orbotech, Ltd.		570			19,887
Taro Pharmaceutical Industries Ltd.		501			52,350
					86,623
Luxembourg
Globant SA		701			23,238
Panama
Copa Holdings SA, Class A		236			23,008
United Kingdom
Cardtronics PLC, Class A		757			41,317
Liberty Global PLC LiLAC, Class A		1			23
					41,340
United States
A. Schulman, Inc.		541			18,664
Activision Blizzard, Inc.		420			16,888
Advanced Energy Industries, Inc.		752			44,248
American Eagle Outfitters, Inc.		1,284			19,401
American Tower Corp.		419			43,366
AMN Healthcare Services, Inc.		200			7,170
Analog Devices, Inc.		249			18,660
Andersons, Inc.		1,803			68,063
Anixter International, Inc.		74			6,327
Applied Industrial Technologies, Inc.		233			14,085
Archrock, Inc.		951			13,885
Belden, Inc.		188			14,376
Bio-Techne Corp.		155			15,771
BorgWarner, Inc.		464			18,945
Bright Horizons Family Solutions, Inc.		261			18,494
BWX Technologies, Inc.		361			14,978
Callon Petroleum Co.		1,025			15,662
Carlisle Cos., Inc.		409			44,626
Cincinnati Financial Corp.		181			12,775
Coherent, Inc.		124			19,559

	Shares		Value
Reference Entity — Long (continued)
United States (continued)
Columbia Sportswear Co.		313	$	17,018
CVS Health Corp.		8,828		695,735
Dana, Inc.		2,165		43,603
Dermira, Inc.		603		17,752
Discovery Communications, Inc., Class A		634		17,974
Dun & Bradstreet Corp.		125		15,327
Dunkin’ Brands Group, Inc.		339		17,584
Education Realty Trust, Inc.		428		17,210
Energen Corp.		261		14,065
Ensign Group, Inc.		1,000		20,340
EPR Properties		374		27,665
EQT Corp.		672		40,743
Estee Lauder Cos., Inc., Class A		165		13,400
Fidelity National Information Services, Inc.		297		23,588
First Industrial Realty Trust, Inc.		766		19,801
Fitbit, Inc., Series A		2,147		12,903
Generac Holdings, Inc.		429		17,272
Gramercy Property Trust		706		18,596
Halcon Resources Corp.		4,036		34,064
HealthSouth Corp.		434		16,848
Hexcel Corp.		908		46,626
Hilltop Holdings, Inc.		979		26,805
Hologic, Inc.		1,966		79,682
Hope Bancorp, Inc.		3,164		66,159
Howard Hughes Corp.		207		22,068
IDEXX Laboratories, Inc.		44		5,383
Insight Enterprises, Inc.		1,741		64,643
Intercontinental Exchange, Inc.		837		48,847
Interpublic Group of Cos., Inc.		1,950		45,883
Itron, Inc.		226		13,944
ITT, Inc.		453		18,514
Jacobs Engineering Group, Inc.		599		35,071
John Bean Technologies Corp.		246		21,242
Kraton Corp.		3,296		88,531
LCI Industries		147		16,133
LifePoint Health, Inc.		285		16,915
Lowe’s Cos., Inc.		233		17,028
MACOM Technology Solutions Holdings, Inc.		645		30,670
MarketAxess Holdings, Inc.		91		17,040
Masco Corp.		527		17,365
McDermott International, Inc.		2,748		22,259
Meritage Homes Corp.		986		36,235
Mobile Mini, Inc.		964		31,378
Monolithic Power Systems, Inc.		21		1,832
Mosaic Co.		439		13,771
Natus Medical, Inc.		370		14,449
Navistar International Corp.		582		15,871
NiSource, Inc.		2,503		55,992
Nordstrom, Inc.		322		14,239
Old Dominion Freight Line, Inc.		55		4,855
Patrick Industries, Inc.		265		21,664
Performance Food Group Co.		847		18,761
PerkinElmer, Inc.		477		25,372
Power Integrations, Inc.		1,435		101,885
PRA Health Sciences, Inc.		242		14,179
Proto Labs, Inc.		612		32,130
Red Rock Resorts, Inc., Class A		1,249		29,327
Regal-Beloit Corp.		208		15,101
Rockwell Collins, Inc.		196		17,789
Saia, Inc.		424		20,373
Shutterstock, Inc.		308		16,570
Sirius XM Holdings, Inc.		13,861		65,424
Sotheby’s		441		17,512
Spirit Airlines, Inc.		282		15,239
STAG Industrial, Inc.		2,615		60,511
Summit Hotel Properties, Inc.		3,614		57,210

See Notes to Financial Statements.

48 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Global Long/Short Equity Fund

	Shares			Value
Reference Entity — Long (continued)
United States (continued)
Synchronoss Technologies, Inc.		1,523		$	58,666
T-Mobile U.S., Inc.		265			16,502
TEGNA, Inc.		753			17,251
Tenneco, Inc.		313			21,112
Terex Corp.		686			21,815
TiVo Corp.		1,188			22,453
TJX Cos., Inc.		561			42,030
Triumph Group, Inc.		1,884			50,397
Tronox Ltd., Class A		1,240			15,525
Viavi Solutions, Inc.		4,348			38,915
Visa, Inc., Class A		9,255			765,481
Vishay Intertechnology, Inc.		1,156			19,190
Watsco, Inc.		5,677			867,105
Weingarten Realty Investors		1,552			55,298
WellCare Health Plans, Inc.		95			13,826
Welltower, Inc.		232			15,382
Weyerhaeuser Co.		583			18,265
Williams Cos., Inc.		6,181			178,260
World Fuel Services Corp.		397			17,659
Xylem, Inc.		288			14,201
Zynga, Inc., Class A		17,636			44,443
					5,299,684
Total Reference Entity — Long					5,557,915
Reference Entity — Short
Bermuda
Signet Jewelers Ltd.		(1,812	)		(140,738	)
Canada
Lululemon Athletica, Inc.		(4,893	)		(330,327	)
Israel
Mellanox Technologies Ltd.		(2,886	)		(136,652	)
Netherlands
Cimpress NV		(184	)		(15,528	)
Wright Medical Group NV		(861	)		(21,680	)
					(37,208	)
Norway
Ship Finance International Ltd.		(5,449	)		(81,735	)
Spain
Atlantica Yield PLC		(7,291	)		(156,027	)
Switzerland
Logitech International SA		(509	)		(14,593	)
United Kingdom
CNH Industrial NV		(4,536	)		(40,643	)
Noble Corp. PLC		(4,934	)		(33,304	)
					(73,947	)
United States
Allergan PLC		(261	)		(57,130	)
athenahealth, Inc.		(1,260	)		(158,747	)
Boston Beer Co., Inc.		(2,156	)		(331,377	)
CarMax, Inc.		(10,413	)		(694,651	)
Chipotle Mexican Grill, Inc.		(505	)		(212,827	)
Colony Northstar, Inc. Class A		(7,844	)		(109,189	)
GameStop Corp., Class A		(3,165	)		(77,511	)
Government Properties Income Trust		(4,224	)		(81,354	)
H&R Block, Inc.		(1,357	)		(29,121	)
Hope Bancorp, Inc.		(3,164	)		(66,159	)
Infinera Corp.		(754	)		(6,794	)
Johnson & Johnson		(1,105	)		(125,141	)
Knowles Corp.		(12,221	)		(220,223	)

	Shares			Value
Reference Entity — Short (continued)
United States (continued)
Liberty SiriusXM Group		(1,577	)	$	(57,151	)
Lions Gate Entertainment Corp.		(713	)		(19,101	)
MasterCard, Inc., Class A		(7,505	)		(798,007	)
Paycom Software, Inc.		(1,017	)		(47,026	)
Penumbra, Inc.		(190	)		(13,595	)
Royal Caribbean Cruises Ltd.		(1,399	)		(130,988	)
TerraForm Power, Inc.		(13,028	)		(154,642	)
Tiffany & Co.		(9,355	)		(736,426	)
Wayfair, Inc., Class A		(354	)		(14,712	)
Wynn Resorts Ltd.		(2,055	)		(208,439	)
					(4,350,311	)
Total Reference Entity — Short					(5,321,538	)
Net Value of Reference Entity — Goldman Sachs & Co.					236,377
The following table represents the individual long and short positions and related values of equity securities underlying the total return swap with UBS AG as of January 31, 2017, expiration dates 4/12/17 — 4/13/17:
Reference Entity — Long
Australia
Aristocrat Leisure Ltd.		141,829			1,644,761
Caltex Australia Ltd.		289,188			6,276,140
CSR Ltd.		888,885			2,976,626
JB Hi-Fi Ltd.		95,619			2,005,659
Mineral Resources Ltd.		29,955			279,697
Northern Star Resources Ltd.		152,943			444,937
Platinum Asset Management Ltd.		169,091			640,652
Qantas Airways Ltd.		296,330			765,964
Regis Resources Ltd.		365,195			885,072
WorleyParsons Ltd.		333,463			2,507,361
					18,426,869
Austria
Andritz AG		26,931			1,455,616
Raiffeisen Bank International AG		15,654			348,648
Vienna Insurance Group AG		133,271			3,247,986
Wienerberger AG		3,967			76,576
					5,128,826
Belgium
NV Bekaert SA		17,964			779,605
Umicore SA		8,253			462,287
					1,241,892
Canada
B2Gold Corp.		137,797			418,289
Bank of Nova Scotia		3,003			179,453
Canadian Imperial Bank of Commerce		127,740			10,877,902
Canadian Natural Resources Ltd.		114,721			3,468,299
Capital Power Corp.		21,548			408,687
Crescent Point Energy Corp.		92,136			1,074,123
Dollarama, Inc.		51,929			3,932,836
Domtar Corp.		89,292			3,904,488
Enerplus Corp.		303,172			2,702,628
Finning International, Inc.		10,021			202,846
IGM Financial, Inc.		856			26,307
Inter Pipeline Ltd.		146,146			3,169,445
Kinross Gold Corp.		176,147			686,313
Maple Leaf Foods, Inc.		168,406			3,860,558
Pan American Silver Corp.		22,783			444,017
Quebecor, Inc., Class B		15,040			452,963
Saputo, Inc.		78,678			2,896,801
Vermilion Energy, Inc.		15,199			626,999
Yamana Gold, Inc.		50,348			166,376
					39,499,330

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 49

Schedule of Investments (continued) BlackRock Global Long/Short Equity Fund

	Shares		Value
Reference Entity — Long (continued)
China
FIH Mobile Ltd.		1,264,000	$	406,134
Denmark
GN Store Nord A/S		69,407		1,550,255
H Lundbeck A/S		1,377		59,141
Novo Nordisk A/S, Class B		5,002		180,771
Tryg A/S		47,461		908,080
				2,698,247
Finland
Valmet Corp.		47,491		750,862
France
Arkema SA		1,581		156,142
Cie Generale des Etablissements Michelin		11,078		1,190,136
Danone SA		3,020		189,320
Eurazeo		1,258		77,481
Faurecia		9,115		396,042
Ipsen SA		21,811		1,690,067
Nexans SA		25,868		1,501,086
Nexity SA		763		37,476
Peugeot SA		367,586		6,840,997
Plastic Omnium SA		3,766		127,767
Sartorius Stedim Biotech		281		17,004
Sodexo SA		14,441		1,596,919
Technicolor SA, Registered Shares		22,227		95,300
Thales SA		44,485		4,173,344
Valeo SA		15,541		949,860
Vivendi SA		13,958		255,935
				19,294,876
Germany
Covestro AG		13,627		1,025,483
Deutsche Euroshop AG		6,741		280,214
Duerr AG		1,439		124,836
Hochtief AG		76,744		10,939,923
Kloeckner & Co. SE		547,020		7,143,089
Lanxess AG		32,933		2,396,576
				21,910,121
Hong Kong
Champion REIT		1,077,000		581,692
Chow Tai Fook Jewellery Group Ltd.		386,400		328,519
CLP Holdings Ltd.		615,500		6,007,637
Hang Lung Properties Ltd.		1,081,000		2,660,421
HKT Trust & HKT Ltd.		404,000		564,354
Hutchison Telecommunications Hong Kong Holdings Ltd.		588,000		190,592
Kerry Properties Ltd.		927,500		2,624,676
Li & Fung Ltd.		1,038,000		450,112
New World Development Co. Ltd.		449,000		518,054
SJM Holdings Ltd.		121,000		96,142
Sun Hung Kai Properties Ltd.		319,000		4,389,776
Texwinca Holdings Ltd.		768,000		492,086
WH Group Ltd.		383,000		290,905
Yue Yuen Industrial Holdings Ltd.		54,000		197,657
				19,392,623
Ireland
CRH PLC		110,923		3,847,438
DCC PLC		10,106		815,183
Glanbia PLC		216,260		3,653,534
Greencore Group PLC		182,671		543,788
Kerry Group PLC, Class A		9,310		654,264
Smurfit Kappa Group PLC		112,139		2,953,718
				12,467,925

	Shares		Value
Reference Entity — Long (continued)
Italy
A2A SpA		701,417	$	936,856
Autogrill SpA		195,648		1,720,594
Mediobanca SpA		192,420		1,656,742
Unipol Gruppo Finanziario SpA		39,511		146,118
				4,460,310
Japan
Alfresa Holdings Corp.		30,100		495,457
Aoyama Trading Co. Ltd.		7,100		250,245
Bank of Kyoto Ltd.		173,000		1,352,419
Chiba Bank Ltd.		490,000		3,205,251
Citizen Holdings Co. Ltd.		3,900		24,219
COLOPL, Inc.		99,700		862,321
Daiichi Sankyo Co. Ltd.		88,300		1,975,542
Daito Trust Construction Co. Ltd.		1,900		265,618
Glory Ltd.		66,300		2,071,342
Gree, Inc.		84,000		453,095
Gunma Bank Ltd.		96,500		526,387
Hokuhoku Financial Group, Inc.		248,200		4,252,145
Hokuriku Electric Power Co.		34,200		344,574
IT Holdings Corp.		8,200		185,798
Ito En Ltd.		7,500		249,237
Itochu Techno-Solutions Corp.		33,400		898,425
Japan Petroleum Exploration Co.		35,100		788,462
Japan Steel Works Ltd.		3,300		61,963
Kandenko Co. Ltd.		7,000		65,033
Komeri Co. Ltd.		2,300		54,159
Maeda Road Construction Co. Ltd.		90,000		1,555,720
Matsumotokiyoshi Holdings Co. Ltd.		26,400		1,312,508
Mitsubishi Chemical Holdings Corp.		1,226,600		8,555,475
Nagase & Co. Ltd.		93,600		1,282,734
Nichi-iko Pharmaceutical Co. Ltd.		9,700		141,618
Nishimatsu Construction Co. Ltd.		146,000		730,075
Nomura Real Estate Holdings, Inc.		61,900		1,064,698
NTT Docomo, Inc.		216,700		5,181,310
Ono Pharmaceutical Co. Ltd.		11,900		244,144
Open House Co. Ltd.		18,800		440,042
Park24 Co. Ltd.		6,400		176,645
Penta-Ocean Construction Co. Ltd.		259,800		1,268,478
Resona Holdings, Inc.		1,022,700		5,536,970
Sankyo Co. Ltd.		135,100		4,510,814
Sapporo Holdings Ltd.		34,300		892,091
Seven & i Holdings Co. Ltd.		1,900		75,864
Shikoku Electric Power Co. Ltd.		81,500		784,240
SKY Perfect JSAT Holdings, Inc.		43,000		193,509
Sumitomo Forestry Co. Ltd.		91,400		1,257,297
Sumitomo Mitsui Trust Holdings, Inc.		36,200		1,349,297
Sumitomo Real Estate Sales Co. Ltd.		31,000		705,382
Sumitomo Realty & Development Co. Ltd.		3,000		81,155
TAG Immobilien AG		59,685		806,935
Taiyo Yuden Co Ltd.		20,900		254,903
Teijin Ltd.		64,100		1,352,945
Tokai Rika Co. Ltd.		49,700		989,149
Tokyo Gas Co. Ltd.		230,000		1,020,708
TonenGeneral Sekiyu KK		649,000		7,632,306
Toppan Forms Co. Ltd.		86,200		894,101
Toppan Printing Co. Ltd.		397,000		3,896,929
Zeon Corp.		86,000		986,875
				73,556,609
Mexico
Fresnillo PLC		9,112		167,264
Netherlands
ASM International NV		4,741		233,749
BE Semiconductor Industries NV		93,488		3,375,656

See Notes to Financial Statements.

50 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Global Long/Short Equity Fund

	Shares		Value
Reference Entity — Long (continued)
Netherlands (continued)
PostNL NV		108,544	$	476,397
				4,085,802
New Zealand
Contact Energy Ltd.		210,685		738,294
Norway
Salmar ASA		31,301		885,919
Subsea 7 SA		134,052		1,824,125
				2,710,044
Portugal
CTT — Correios de Portugal SA		578,294		3,226,040
Jeronimo Martins SGPS SA		137,584		2,328,691
NOS SGPS SA		107,914		607,610
				6,162,341
Singapore
Venture Corp. Ltd.		392,800		2,841,543
Spain
ACS Actividades de Construccion y Servicios SA		73,204		1,144,525
Mediaset Espana Comunicacion SA		436,995		5,348,614
Melia Hotels International SA		18,542		238,448
				6,731,587
Sweden
Axfood AB		30,235		497,145
Electrolux AB, Class B		55,190		1,467,562
Fabege AB		130,472		2,221,689
Intrum Justitia AB		33,842		1,139,323
JM AB		70,422		2,123,575
Modern Times Group MTG AB, B Shares		17,018		524,530
Saab AB		72,416		2,957,321
				10,931,145
Switzerland
Coca-Cola HBC AG		89,852		2,053,845
Georg Fischer AG, Registered Shares		1,774		1,462,016
IWG PLC		1,962,880		6,183,727
Logitech International SA, Registered Shares		135,653		3,885,086
Lonza Group AG, Registered Shares		58,409		10,730,850
Straumann Holding AG, Registered Shares		5,607		2,262,795
				26,578,319
United Kingdom
Acacia Mining PLC		9,032		48,979
Auto Trader Group PLC		131,844		665,894
Barratt Developments PLC		413,620		2,494,356
Bunzl PLC		956		25,201
Compass Group PLC		34,922		621,508
Croda International PLC		1,245		52,573
Dialog Semiconductor PLC		13,406		623,808
DS Smith PLC		151,864		848,905
Electrocomponents PLC		8,033		49,128
IG Group Holdings PLC		47,602		320,004
Inchcape PLC		549,351		4,972,053
Indivior PLC		526,413		1,965,841
Intertek Group PLC		15,060		644,668
Jupiter Fund Management PLC		191,250		969,672
Michael Page International PLC		40,428		220,208
Moneysupermarket.com Group PLC		828,868		3,442,254
Pearson PLC		81,945		638,845
Petrofac Ltd.		72,581		840,429
Qinetiq Group PLC		2,028,146		6,745,666
Rentokil Initial PLC		7,432		21,415
Royal Mail PLC		382,933		1,988,707
Saga PLC		12,212		28,375

	Shares			Value
Reference Entity — Long (continued)
United Kingdom (continued)
Serco Group PLC		953,639		$	1,732,021
Spirax-Sarco Engineering PLC		176,835			9,604,804
TechnipFMC PLC		59,700			1,956,585
Thomas Cook Group PLC		872,559			958,930
UBM PLC		432,367			3,841,910
WM Morrison Supermarkets PLC		1,204,116			3,589,814
Wolseley PLC		355			21,985
					49,934,538
Total Reference Entity — Long					330,115,501
Reference Entity — Short
Australia
ALS Ltd.		(135,121	)		(607,389	)
Alumina Ltd.		(348,602	)		(513,650	)
APA Group		(8,644	)		(55,219	)
Commonwealth Bank of Australia		(3,799	)		(235,386	)
Domino’s Pizza Enterprises Ltd.		(33,681	)		(1,519,475	)
Iluka Resources Ltd.		(3,441	)		(19,748	)
Incitec Pivot Ltd.		(494,157	)		(1,444,232	)
Independence Group NL		(14,076	)		(40,457	)
Macquarie Atlas Roads Group		(5,106	)		(19,443	)
Transurban Group		(862,051	)		(6,670,633	)
Vocus Communications Ltd.		(506,013	)		(1,551,789	)
					(12,677,421	)
Canada
Alimentation Couche-Tard, Inc.		(4,388	)		(201,013	)
Amaya, Inc.		(16,295	)		(223,528	)
Bombardier, Inc.		(205,561	)		(393,350	)
Corus Entertainment, Inc., B Shares		(74,756	)		(742,246	)
Cott Corp.		(378,565	)		(4,017,662	)
DH Corp.		(110,442	)		(1,952,946	)
Element Financial Corp.		(718,317	)		(6,983,063	)
Empire Co. Ltd.		(34,065	)		(425,403	)
Fairfax Financial Holdings Ltd.		(8,653	)		(4,043,054	)
Hydro One Ltd.		(490,147	)		(9,059,009	)
New Flyer Industries, Inc.		(27,760	)		(889,600	)
Pretium Resources, Inc.		(106,568	)		(1,148,191	)
Stantec, Inc.		(38,764	)		(1,039,069	)
Torex Gold Resources, Inc.		(15,165	)		(321,655	)
					(31,439,789	)
Denmark
AP Moeller — Maersk A/S		(157	)		(251,367	)
DSV A/S		(24,681	)		(1,200,226	)
William Demant Holding A/S		(13,680	)		(256,145	)
					(1,707,738	)
France
Aeroports de Paris		(77,796	)		(8,632,819	)
Air Liquide SA		(87,839	)		(9,483,422	)
Airbus Group SE		(130,301	)		(8,832,450	)
Bollore SA		(727,531	)		(2,909,744	)
					(29,858,435	)
Germany
Bayerische Motoren Werke AG		(36,901	)		(2,772,175	)
GEA Group AG		(227,364	)		(9,421,277	)
HeidelbergCement AG		(84,247	)		(8,138,606	)
Volkswagen AG		(34,390	)		(5,370,205	)
					(25,702,263	)
Hong Kong
Esprit Holdings Ltd.		(230,500	)		(179,909	)

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 51

Schedule of Investments (continued) BlackRock Global Long/Short Equity Fund

	Shares			Value
Reference Entity — Short (continued)
Italy
Finmeccanica SpA		(18,246	)	$	(235,070	)
Yoox SpA		(169,263	)		(4,245,905	)
					(4,480,975	)
Japan
Acom Co. Ltd.		(727,000	)		(3,126,935	)
Aeon Co. Ltd.		(130,800	)		(1,890,432	)
Ain Holdings, Inc.		(400	)		(29,321	)
Alps Electric Co. Ltd.		(74,500	)		(1,984,365	)
Asics Corp.		(4,600	)		(89,607	)
Bic Camera, Inc.		(2,100	)		(19,615	)
Calsonic Kansei Corp.		(64,000	)		(1,017,445	)
Chugai Pharmaceutical Co. Ltd.		(46,900	)		(1,378,326	)
Daikin Industries Ltd.		(18,000	)		(1,786,724	)
Dentsu, Inc.		(128,800	)		(5,953,017	)
DMG Mori Seiki Co. Ltd.		(428,200	)		(5,851,305	)
FamilyMart UNY Holdings Co. Ltd.		(139,500	)		(8,838,615	)
Fast Retailing Co. Ltd.		(30,200	)		(9,498,356	)
HIS Co. Ltd.		(700	)		(18,680	)
Isuzu Motors Ltd.		(206,600	)		(2,772,139	)
JGC Corp.		(309,300	)		(5,369,256	)
Kansai Paint Co. Ltd.		(143,200	)		(2,781,790	)
Kawasaki Kisen Kaisha Ltd.		(1,140,000	)		(2,771,980	)
Koito Manufacturing Co. Ltd.		(72,500	)		(3,845,809	)
Kyocera Corp.		(35,800	)		(1,863,775	)
Kyudenko Corp.		(600	)		(16,282	)
McDonald’s Holdings Co. Japan Ltd.		(55,600	)		(1,461,766	)
Mitsubishi Motors Corp.		(73,900	)		(400,327	)
Mitsubishi UFJ Financial Group, Inc.		(141,700	)		(907,379	)
Mitsubishi UFJ Lease & Finance Co. Ltd.		(3,700	)		(19,723	)
Nihon Kohden Corp.		(6,300	)		(144,560	)
Nippon Kayaku Co. Ltd.		(231,000	)		(3,019,056	)
Nippon Paint Co. Ltd.		(70,300	)		(2,050,620	)
Nippon Steel & Sumitomo Metal Corp.		(30,300	)		(731,974	)
Oriental Land Co. Ltd.		(95,000	)		(5,205,934	)
Recruit Holdings Co. Ltd.		(187,500	)		(8,207,929	)
Resorttrust, Inc.		(17,800	)		(327,944	)
Rinnai Corp.		(500	)		(42,491	)
SBI Holdings, Inc.		(23,200	)		(320,247	)
Sharp Corp.		(33,000	)		(89,242	)
Shimano, Inc.		(4,000	)		(630,751	)
Sugi Holdings Co. Ltd.		(46,700	)		(2,173,346	)
Sumitomo Electric Industries Ltd.		(9,300	)		(135,323	)
TDK Corp.		(10,900	)		(783,452	)
Terumo Corp.		(112,700	)		(4,169,208	)
Topcon Corp.		(105,900	)		(1,623,269	)
TOTO Ltd.		(136,700	)		(5,505,755	)
Unicharm Corp.		(86,700	)		(1,952,663	)
					(100,806,733	)
Jordan
Hikma Pharmaceuticals PLC		(119,691	)		(2,756,860	)
Luxembourg
ArcelorMittal		(27,610	)		(215,290	)
Tenaris SA		(277,210	)		(4,855,875	)
					(5,071,165	)
Macau
Wynn Macau Ltd.		(528,000	)		(960,234	)
Netherlands
Altice NV, Class A		(153,439	)		(3,368,578	)
Altice NV, Class B		(60,801	)		(1,341,882	)
GrandVision NV		(23,956	)		(571,259	)
Koninklijke Boskalis Westminster NV		(596	)		(22,051	)

	Shares			Value
Reference Entity — Short (continued)
Netherlands (continued)
Royal Dutch Shell PLC, A Shares		(181,019	)	$	(4,909,534	)
Royal Dutch Shell PLC, B Shares		(167,178	)		(4,721,843	)
					(14,935,147	)
Norway
Norwegian Air Shuttle ASA		(20,148	)		(657,725	)
Schibsted ASA		(56,382	)		(1,490,899	)
Schibsted ASA, B Shares		(50,970	)		(1,269,082	)
					(3,417,706	)
Singapore
Sembcorp Industries Ltd.		(2,688,300	)		(6,003,740	)
Singapore Telecommunications Ltd.		(735,100	)		(2,021,078	)
					(8,024,818	)
South Africa
Mediclinic International PLC		(161,591	)		(1,598,759	)
Spain
Ferrovial SA		(230,934	)		(4,191,988	)
Sweden
Alfa Laval AB		(7,732	)		(144,559	)
Fastighets AB Balder		(1,115	)		(22,821	)
Hennes & Mauritz AB, B Shares		(337,586	)		(9,659,000	)
					(9,826,380	)
Switzerland
Chocoladefabriken Lindt & Spruengli AG		(1,123	)		(6,233,071	)
Chocoladefabriken Lindt & Spruengli AG		(49	)		(3,178,073	)
Cie Financiere Richemont SA		(112,551	)		(8,765,438	)
Dufry AG		(28,850	)		(4,118,523	)
Geberit AG		(361	)		(154,288	)
Swatch Group AG		(42,113	)		(2,942,436	)
					(25,391,829	)
United Kingdom
Antofagasta PLC		(826,450	)		(8,732,007	)
AstraZeneca PLC		(9,685	)		(513,973	)
BBA Aviation PLC		(1,177,904	)		(4,154,372	)
Berkeley Group Holdings PLC		(10,973	)		(387,561	)
Capita PLC		(168,104	)		(1,060,592	)
Capital & Counties Properties PLC		(65,868	)		(225,975	)
Cobham PLC		(4,772,648	)		(8,166,876	)
CYBG PLC		(86,853	)		(311,043	)
Greene King PLC		(7,977	)		(68,543	)
HSBC Holdings PLC		(704,518	)		(6,010,184	)
Next PLC		(9,873	)		(476,381	)
Rio Tinto PLC		(10,249	)		(454,061	)
Rolls-Royce Holdings PLC		(1,489,022	)		(1,873	)
Travis Perkins PLC		(12,490	)		(229,076	)
					(30,792,517	)
Total Reference Entity — Short					(313,820,666	)
Net Value of Reference Entity — UBS AG					16,294,835

See Notes to Financial Statements.

52 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Global Long/Short Equity Fund

Transactions in Options Written for the Six Months Ended January 31, 2017

	Calls
	Contracts			Premiums Received
Outstanding options, beginning of period		—			—
Options written		58,400		$	933,232
Options closed		(58,400	)		(933,232	)
Outstanding options, end of period		—			—

Derivative Financial Instruments Categorized by Risk Exposure

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

Assets — Derivative Financial Instruments		Commodity Contracts		Credit Contracts		Equity Contracts		Foreign Currency Exchange Contracts		Interest Rate Contracts		Other Contacts		Total
Futures contracts	Net unrealized appreciation1		—		—	$	1,043,940		—		—		—	$	1,043,940
Swap — OTC	Unrealized appreciation on OTC swaps		—		—		33,387,775		—		—		—		33,387,775
Total			—		—	$	34,431,715		—		—		—	$	34,431,715
Liabilities — Derivative Financial Instruments
Futures contracts	Net unrealized depreciation1		—		—	$	1,228,222		—		—		—	$	1,228,222
Swap — OTC	Unrealized depreciation on OTC swaps		—		—		1,535		—		—		—		1,535
Total			—		—	$	1,229,757		—		—		—	$	1,229,757
1    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 Statements of Assets and Liabilities.

For the six months ended January 31, 2017, the effect of derivative financial instruments in the Statements of Operation was as follows:

Net Realized Gain (Loss) From:	Commodity Contracts		Credit Contracts		Equity Contracts			Foreign Currency Exchange Contracts		Interest Rate Contracts		Other Contacts		Total
Futures contracts		—		—	$	4,655,996			—		—		—	$	4,655,996
Options purchased1		—		—		(1,683,278	)		—		—		—		(1,683,278	)
Options written		—		—		735,840			—		—		—		735,840
Swaps		—		—		2,697,245			—		—		—		2,697,245
Total		—		—	$	6,405,803			—		—		—	$	6,405,803
1    Options purchased are included in the net realized gain (loss) from investments.
Net Change in Unrealized Appreciation (Depreciation) on:
Futures contracts		—		—	$	(1,020,586	)		—		—		—	$	(1,020,586	)
Swaps		—		—		22,952,852			—		—		—		22,952,852
Total		—		—	$	21,932,266			—		—		—	$	21,932,266

Average Quarterly Balances of Outstanding Derivative Financial Instruments

Futures contracts:
Average notional value of contracts — long	$	129,115,633
Average notional value of contracts — short	$	65,916,233
Options:
Average value of options contracts purchased	$	764,748
Average value of options contracts written	$	916,880	1
Total return swaps:
Average notional value	$	57,757,969
1    Actual amounts for the period are shown due to limited outstanding derivative financial instruments as of each quarter.

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 53

Schedule of Investments (continued) BlackRock Global Long/Short Equity Fund

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

Derivative Financial Instruments — Offsetting as of Period End

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

	Assets			Liabilities
Derivative Financial Instruments:
Futures contracts	$	158,804		$	662,005
Swaps — OTC1		33,387,775			1,535
Total derivative assets and liabilities in the Statements of Assets and Liabilities	$	33,546,579		$	663,540
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)		(158,804	)		(662,005	)
Total derivative assets and liabilities subject to an MNA	$	33,387,775		$	1,535
1    Includes unrealized appreciation (depreciation) on OTC swaps in the Statements of Assets and Liabilities and reported in the Schedule of Investments.

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

Counterparty	Derivative Assets Subject to a MNA by Counterparty		Derivatives Available for Offset1			Non-cash Collateral Received		Cash Collateral Received2			Net Amount of Derivative Assets3
Bank of America N.A	$	3,953,176		—			—	$	(3,430,000	)	$	523,176
Deutsche Bank AG		1,365,262		—			—		(1,365,262	)		—
Goldman Sachs & Co		6,842,662		—			—		(6,100,000	)		742,662
Morgan Stanley & Co. International		52,655	$	(1,535	)		—		—			51,120
UBS AG		21,174,020		—			—		(21,151,403	)		22,617
Total	$	33,387,775	$	(1,535	)		—	$	(32,046,665	)	$	1,339,575
Counterparty	Derivative Liabilities Subject to a MNA by Counterparty		Derivatives Available for Offset1			Non-cash Collateral Pledged		Cash Collateral Pledged			Net Amount of Derivative Liabilities
Morgan Stanley & Co. International	$	1,535	$	(1,535	)		—		—			—
1    The amount of derivatives available for offset is limited to the amount of assets and/or liabilities that are subject to an MNA.
2    Excess of collateral received from the individual counterparty is not shown for financial reporting purposes.
3    Net amount represents the net amount receivable from the counterparty in the event of default.

Fair Value Hierarchy as of Period End

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

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

	Level 1			Level 2			Level 3		Total
Assets:
Investments:
Long-Term Investments:1
Preferred Securities		—			—		$	6,487,884	$	6,487,884
Short-Term Securities	$	610,032,932			—			—		610,032,932
Total	$	610,032,932			—		$	6,487,884	$	616,520,816
Derivative Financial Instruments 2
Assets:
Equity contracts	$	1,043,940		$	33,387,775			—	$	34,431,715
Liabilities:
Equity contracts		(1,228,222	)		(1,535	)		—		(1,229,757	)
Total	$	(184,282	)	$	33,386,240			—	$	33,201,958
1    See above Schedule of Investments for values in each country.
2  �� Derivative financial instruments are futures contracts and swaps. Futures contracts and swaps are valued at the unrealized appreciation (depreciation) on the instrument.

During the six months ended January 31, 2017, there were no transfers between levels.

See Notes to Financial Statements.

54 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (concluded) BlackRock Global Long/Short Equity 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 period 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:

	Preferred Securities
Assets:
Opening balance, as of July 31, 2016	$	6,612,226
Transfers into Level 3		—
Transfers out of Level 31		—
Accrued discounts/premiums		—
Net realized gain (loss)		(124,342	)
Net change in unrealized appreciation (depreciation)1,2		—
Purchases		—
Sales		—
Closing Balance, as of January 31, 2017	$	6,487,884
Net change in unrealized appreciation (depreciation) on investments still held at January 31, 20172	$	(124,342	)
1    Included in the related net change in unrealized appreciation (depreciation) in the Statements of Operations.
2    Any difference between net change in unrealized appreciation (depreciation) and net change in unrealized appreciation (depreciation) on investments still held at January 31, 2017 is generally due to investments no longer held or categorized as Level 3 at period end.

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.

	Value		Valuation Approach	Unobservable Inputs	Range of Unobservable Inputs Utilized		Weighted Average of Unobservable Inputs
Assets:
Preferred Stocks	$	6,487,884	Market	Discount Rate1 Revenue Growth Rate2 Revenue Growth Rate2 Revenue Multiple2 Exit Scenario Probability2 Time to Exit1		25.00% 72.00% 187% – 230.00% 11.25x – 37.50x 15.00% – 55.00% 1-2 years		— — 203.90% 15.03x 35.00% —
1   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.
2    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.

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 55

Statements of Assets and Liabilities

January 31, 2017 (Unaudited)	BlackRock Emerging Markets Long/Short Equity Fund			BlackRock Global Long/Short Equity Fund
Assets
Investments at value — affiliated1	$	148,882,956		$	610,032,932
Investments at value — unaffiliated2		—			6,487,884
Foreign currency at value3		—			4,977,273
Cash pledged:
OTC derivatives		4,010,000			—
Futures contracts		—			8,302,000
Receivables:
Capital shares sold		593,830			2,057,320
Dividends — affiliated		50,289			199,618
Swaps		—			2,646
Variation margin on futures contracts		—			158,804
Unrealized appreciation on OTC swaps		16,729,581			33,387,775
Deferred offering costs		—			34,417
Prepaid expenses		28,053			74,226
Total assets		170,294,709			665,714,895
Liabilities
Bank overdraft		257,586			1,748,232
Cash received as collateral for OTC derivatives		8,841,803			34,481,403
Payables:
Capital shares redeemed		456,716			2,573,361
Investment advisory fees		190,861			777,532
Administration fees		5,641			23,055
Officer’s and Trustees’ fees		5,532			17,357
Service and distribution fees		5,479			48,043
Variation margin on futures contracts		—			662,005
Other accrued expenses		304,216			1,073,804
Unrealized depreciation on OTC swaps		5,650,084			1,535
Total liabilities		15,717,918			41,406,327
Net Assets	$	154,576,791		$	624,308,568
Net Assets Consist of
Paid-in capital	$	167,880,210		$	739,593,705
Accumulated net investment loss		(3,258,008	)		(18,223,122	)
Accumulated net realized loss		(21,124,908	)		(130,066,064	)
Net unrealized appreciation (depreciation)		11,079,497			33,004,049
Net Assets	$	154,576,791		$	624,308,568

See Notes to Financial Statements.
56	BLACKROCK FUNDS	JANUARY 31, 2017

Statements of Assets and Liabilities (concluded)

January 31, 2017 (Unaudited)	BlackRock Emerging Markets Long/Short Equity Fund		BlackRock Global Long/Short Equity Fund
Net Asset Value
Institutional:
Net assets	$	143,564,421	$	517,511,581
Shares outstanding4		14,676,851		47,630,658
Net asset value	$	9.78	$	10.87
Investor A:
Net assets	$	6,222,493	$	69,063,329
Shares outstanding4		643,061		6,402,927
Net asset value	$	9.68	$	10.79
Investor C:
Net assets	$	4,789,877	$	37,714,899
Shares outstanding4		513,577		3,589,021
Net asset value	$	9.33	$	10.51
Class K:
Net assets		—	$	18,759
Shares outstanding4		—		1,724
Net asset value		—	$	10.88
1    Investments at cost — affiliated	$	148,882,956	$	610,032,932
2    Investments at cost — unaffiliated		—	$	6,749,966
3    Foreign currency at cost		—	$	4,908,189
4    Unlimited number of shares authorized, $0.001 par value.

See Notes to Financial Statements.
	BLACKROCK FUNDS	JANUARY 31, 2017	57

Statements of Operations

Six Months Ended January 31, 2017 (Unaudited)	BlackRock Emerging Markets Long/Short Equity Fund			BlackRock Global Long/Short Equity Fund
Investment Income
Dividends — affiliated	$	243,923		$	1,158,549
Expenses
Investment advisory		1,335,033			6,255,792
Transfer agent — class specific		67,849			600,597
Professional		58,480			67,840
Service and distribution — class specific		38,847			359,125
Administration		37,826			173,121
Accounting services		36,364			205,820
Registration		25,981			96,739
Administration — class specific		17,800			83,489
Printing		17,150			32,683
Officer and Trustees		8,148			22,125
Custodian		7,996			39,070
Offering		—			42,614
Recoupment of past waived fees — class specific		19,543			2,985
Miscellaneous		41,685			49,355
Total expenses		1,712,702			8,031,355
Less:
Fees waived by the Manager		(53,891	)		(253,202	)
Administrator fees waived — class specific		(8,407	)		(59,466	)
Transfer agent fees waived and/or reimbursed — class specific		(54,032	)		(85,017	)
Total expenses after fees waived and/or reimbursed		1,596,372			7,633,670
Net investment loss		(1,352,449	)		(6,475,121	)
Realized and Unrealized Gain (Loss)
Net realized gain (loss) from:
Investments — unaffiliated		—			(1,687,170	)
Capital gain distributions from investment companies — affiliated		803			3,485
Futures contracts		920,868			4,655,996
Foreign currency transactions		—			40,969
Options written		—			735,840
Swaps		4,167			2,697,245
		925,838			6,446,365
Net change in unrealized appreciation (depreciation) on:
Investments — unaffiliated		—			(120,134	)
Futures contracts		—			(1,020,586	)
Foreign currency translations		—			66,598
Swaps		354,321			22,952,852
		354,321			21,878,730
Net realized and unrealized gain		1,280,159			28,325,095
Net Increase (Decrease) in Net Assets Resulting from Operations	$	(72,290	)	$	21,849,974

See Notes to Financial Statements.
58	BLACKROCK FUNDS	JANUARY 31, 2017

Statements of Changes in Net Assets

	BlackRock Emerging Markets Long/Short Equity Fund						BlackRock Global Long/Short Equity Fund
Increase (Decrease) in Net Assets:	Six Months Ended January 31, 2017 (Unaudited)			Year Ended July 31, 2016			Six Months Ended January 31, 2017 (Unaudited)			Year Ended July 31, 2016
Operations
Net investment loss	$	(1,352,449	)	$	(4,117,675	)	$	(6,475,121	)	$	(23,401,275	)
Net realized gain (loss)		925,838			(5,503,444	)		6,446,365			(90,655,239	)
Net change in unrealized appreciation (depreciation)		354,321			7,828,927			21,878,730			(51,517,722	)
Net increase (decrease) in net assets resulting from operations		(72,290	)		(1,792,192	)		21,849,974			(165,574,236	)
Distributions to Shareholders1
From net realized gain:
Institutional		—			(3,004,653	)		—			(27,244,588	)
Investor A		—			(187,418	)		—			(3,362,215	)
Investor C		—			(89,473	)		—			(1,181,063	)
Decrease in net assets resulting from distributions to shareholders		—			(3,281,544	)		—			(31,787,866	)
Capital Share Transactions
Net decrease in net assets derived from capital share transactions		(41,573,212	)		(227,124,855	)		(459,332,914	)		(564,023,952	)
Capital contributions — affiliated		22,962	2		—			—			—
		(41,550,250	)		(227,124,855	)		(459,332,914	)		(564,023,952	)
Net Assets
Total decrease in net assets		(41,622,540	)		(232,198,591	)		(437,482,940	)		(761,386,054	)
Beginning of period		196,199,331			428,397,922			1,061,791,508			1,823,177,562
End of period	$	154,576,791		$	196,199,331		$	624,308,568		$	1,061,791,508
Accumulated net investment loss, end of period	$	(3,258,008	)	$	(1,905,559	)	$	(18,223,122	)	$	(11,748,001	)

¹  Distributions for annual periods determined in accordance with federal income tax regulations.

² See Note 6 of the Notes to Financial Statements.

See Notes to Financial Statements.
	BLACKROCK FUNDS	JANUARY 31, 2017	59

Financial Highlights BlackRock Emerging Markets Long/Short Equity Fund

	Institutional
	Six Months Ended January 31, 2017 (Unaudited)			Year Ended July 31,												Period October 6, 20111 to July 31, 2012
				2016			2015			2014			2013
Per Share Operating Performance
Net asset value, beginning of period	$	9.76		$	9.84		$	10.34		$	10.73		$	10.73		$	10.00
Net investment loss2		(0.07	)		(0.14	)		(0.17	)		(0.18	)		(0.17	)		(0.14	)
Net realized and unrealized gain (loss)		0.09			0.17			(0.33	)		(0.15	)		0.21			0.89
Net increase (decrease) from investment operations		0.02			0.03			(0.50	)		(0.33	)		0.04			0.75
Distributions:3
From net investment income		—			—			—			—			—			(0.02	)
From net realized gain		—			(0.11	)		—			(0.06	)		(0.04	)		—
Total distributions		—			(0.11	)		—			(0.06	)		(0.04	)		(0.02	)
Net asset value, end of period	$	9.78		$	9.76		$	9.84		$	10.34		$	10.73		$	10.73
Total Return4
Based on net asset value		0.21%	5		0.34%			(4.84)%			(3.09)%			0.33%			7.47%	5
Ratios to Average Net Assets
Total expenses		1.88%	6,7		1.85%	8		1.86%	9		1.85%	8		1.84%	8		2.13%	6,8,10
Total expenses excluding recoupment of past fees waived		1.85%	6,7		1.84%	8		1.85%	9		1.84%	8		1.81%	8		2.13%	6,8
Total expenses after fees waived and/or reimbursed		1.75%	6,7		1.75%	8		1.75%	9		1.75%	8		1.71%	8		1.75%	6,8
Net investment loss		(1.48)%	6,7		(1.49)%	8		(1.68)%	9		(1.72)%	8		(1.61)%	8		(1.61)%	6,8
Supplemental Data
Net assets, end of period (000)	$	143,564		$	177,981		$	400,181		$	509,665		$	433,886		$	126,707

¹  Commencement of operations.

²  Based on average shares outstanding.

³  Distributions for annual periods determined in accordance with federal income tax regulations.

⁴  Where applicable, assumes the reinvestment of distributions.

⁵  Aggregate total return.

⁶  Annualized.

⁷  Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.17%.

⁸  Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.18%.

⁹  Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.16%.

¹⁰  Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expense ratio would have been 2.15%.

See Notes to Financial Statements.
60	BLACKROCK FUNDS	JANUARY 31, 2017

Financial Highlights (continued) BlackRock Emerging Markets Long/Short Equity Fund

	Investor A
	Six Months Ended January 31, 2017 (Unaudited)			Year Ended July 31,												Period October 6, 20111 to July 31, 2012
				2016			2015			2014			2013
Per Share Operating Performance
Net asset value, beginning of period	$	9.67		$	9.78		$	10.29		$	10.69		$	10.71		$	10.00
Net investment loss2		(0.08	)		(0.17	)		(0.19	)		(0.20	)		(0.20	)		(0.16	)
Net realized and unrealized gain (loss)		0.09			0.17			(0.32	)		(0.15	)		0.21			0.88
Net increase (decrease) from investment operations		0.01			—			(0.51	)		(0.35	)		0.01			0.72
Distributions:3
From net investment income		—			—			—			—			—			(0.01	)
From net realized gain		—			(0.11	)		—			(0.05	)		(0.03	)		—
Total distributions		—			(0.11	)		—			(0.05	)		(0.03	)		(0.01	)
Net asset value, end of period	$	9.68		$	9.67		$	9.78		$	10.29		$	10.69		$	10.71
Total Return4
Based on net asset value		0.10%	5		0.03%			(4.96)%			(3.27)%			0.12%			7.24%	5
Ratios to Average Net Assets
Total expenses		2.16%	6,7		2.10%	8		2.03%	9		2.01%	8		2.03%	8		2.19%	6,8,10
Total expenses excluding recoupment of past fees waived		2.15%	6,7		2.08%	8		2.02%	9		2.00%	8		2.01%	8		2.19%	6,8
Total expenses after fees waived and/or reimbursed		2.00%	6,7		2.00%	8		1.95%	9		1.94%	8		1.95%	8		2.00%	6,8
Net investment loss		(1.72)%	6,7		(1.74)%	8		(1.89)%	9		(1.91)%	8		(1.85)%	8		(1.85)%	6,8
Supplemental Data
Net assets, end of period (000)	$	6,222		$	12,239		$	19,036		$	64,400		$	166,701		$	57,655

¹  Commencement of operations.

²  Based on average shares outstanding.

³  Distributions for annual periods determined in accordance with federal income tax regulations.

⁴  Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

⁵  Aggregate total return.

⁶  Annualized.

⁷  Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.17%.

⁸  Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.18%.

⁹  Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.16%.

¹⁰  Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expense ratio would have been 2.20%.

See Notes to Financial Statements.
	BLACKROCK FUNDS	JANUARY 31, 2017	61

Financial Highlights (concluded) BlackRock Emerging Markets Long/Short Equity Fund

	Investor C
	Six Months Ended January 31, 2017 (Unaudited)			Year Ended July 31,												Period October 6, 20111 to July 31, 2012
				2016			2015			2014			2013
Per Share Operating Performance
Net asset value, beginning of period	$	9.36		$	9.53		$	10.11		$	10.56		$	10.65		$	10.00
Net investment loss2		(0.12	)		(0.23	)		(0.27	)		(0.27	)		(0.28	)		(0.22	)
Net realized and unrealized gain (loss)		0.09			0.17			(0.31	)		(0.15	)		0.21			0.87
Net increase (decrease) from investment operations		(0.03	)		(0.06	)		(0.58	)		(0.42	)		(0.07	)		0.65
Distributions from net realized gain3		—			(0.11	)		—			(0.03	)		(0.02	)		(0.00	)4
Net asset value, end of period	$	9.33		$	9.36		$	9.53		$	10.11		$	10.56		$	10.65
Total Return5
Based on net asset value		(0.32)%	6		(0.60)%			(5.74)%			(3.99)%			(0.70)%			6.53%	6
Ratios to Average Net Assets
Total expenses		2.90%	7,8		2.85%	9		2.81%	10		2.79%	9		2.81%	9		3.00%	7,9,11
Total expenses excluding recoupment of past fees waived		2.90%	7,8		2.85%	9		2.80%	10		2.78%	9		2.77%	9		3.00%	7,9
Total expenses after fees waived and/or reimbursed		2.75%	7,8		2.74%	9		2.74%	10		2.72%	9		2.72%	9		2.75%	7,9
Net investment loss		(2.47)%	7,8		(2.48)%	9		(2.67)%	10		(2.68)%	9		(2.62)%	9		(2.61)%	7,9
Supplemental Data
Net assets, end of period (000)	$	4,790		$	5,979		$	9,181		$	16,131		$	20,636		$	10,196

¹ Commencement of operations.

² Based on average shares outstanding.

³ Distributions for annual periods determined in accordance with federal income tax regulations.

⁴ Amount is greater than $(0.005) per share.

⁵ Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

⁶ Aggregate total return.

⁷ Annualized.

⁸ Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.17%.

⁹ Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.18%.

¹⁰ Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.16%.

¹¹ Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expense ratio would have been 3.00%.

See Notes to Financial Statements.
62	BLACKROCK FUNDS	JANUARY 31, 2017

Financial Highlights BlackRock Global Long/Short Equity Fund

	Institutional
	Six Months Ended January 31, 2017 (Unaudited)			Year Ended July 31,									Period December 20, 20121 to July  31, 2013
				2016			2015			2014
Per Share Operating Performance
Net asset value, beginning of period	$	10.56		$	11.92		$	11.61		$	11.29		$	10.00
Net investment loss2		(0.08	)		(0.15	)		(0.18	)		(0.19	)		(0.11	)
Net realized and unrealized gain (loss)		0.39			(1.00	)		0.50			0.66			1.40
Net increase (decrease) from investment operations		0.31			(1.15	)		0.32			0.47			1.29
Distributions from net realized gain3		—			(0.21	)		(0.01	)		(0.15	)		—
Net asset value, end of period	$	10.87		$	10.56		$	11.92		$	11.61		$	11.29
Total Return4
Based on net asset value		2.94%	5		(9.77)%			2.78%			4.13%			12.90%	5
Ratios to Average Net Assets
Total expenses		1.84%	6,7		1.68%	8		1.67%	9		1.71%	8		2.67%	6,8,10
Total expenses excluding recoupment of past fees waived		1.84%	6,7		1.68%	8		1.67%	9		1.69%	8		2.67%	6,8
Total expenses after fees waived and/or reimbursed		1.75%	6,7		1.62%	8		1.60%	9		1.64%	8		1.75%	6,8
Net investment loss		(1.47)%	6,7		(1.35)%	8		(1.53)%	9		(1.61)%	8		(1.67)%	6,8
Supplemental Data
Net assets, end of period (000)	$	517,512		$	824,306		$	1,496,484		$	1,005,213		$	65,630
Portfolio turnover rate		—			34%	11		17%	11		—			—

¹ Commencement of operations.

² Based on average shares outstanding.

³ Distributions for annual periods determined in accordance with federal income tax regulations.

⁴ Where applicable, assumes the reinvestment of distributions.

⁵ Aggregate total return.

⁶ Annualized.

⁷ Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.17%.

⁸ Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.18%.

⁹ Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.16%.

¹⁰ Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expense ratio would have been 2.94%.

¹¹ Excludes investments underlying the total return swaps.

See Notes to Financial Statements.
	BLACKROCK FUNDS	JANUARY 31, 2017	63

Financial Highlights (continued) BlackRock Global Long/Short Equity Fund

	Investor A
	Six Months Ended January 31, 2017 (Unaudited)			Year Ended July 31,									Period December 20, 20121 to July  31, 2013
				2016			2015			2014
Per Share Operating Performance
Net asset value, beginning of period	$	10.49		$	11.84		$	11.57		$	11.28		$	10.00
Net investment loss2		(0.09	)		(0.18	)		(0.21	)		(0.21	)		(0.14	)
Net realized and unrealized gain (loss)		0.39			(0.99	)		0.49			0.64			1.42
Net increase (decrease) from investment operations		0.30			(1.17	)		0.28			0.43			1.28
Distributions from net realized gain3		—			(0.18	)		(0.01	)		(0.14	)		—
Net asset value, end of period	$	10.79		$	10.49		$	11.84		$	11.57		$	11.28
Total Return4
Based on net asset value		2.86%	5		(10.02)%			2.44%			3.82%			12.80%	5
Ratios to Average Net Assets
Total expenses		2.15%	6,7		1.95%	8		1.93%	9		1.97%	8		2.30%	6,8,10
Total expenses excluding recoupment of past fees waived		2.15%	6,7		1.94%	8		1.92%	9		1.95%	8		2.30%	6,8
Total expenses after fees waived and/or reimbursed		2.00%	6,7		1.88%	8		1.86%	9		1.89%	8		2.00%	6,8
Net investment loss		(1.72)%	6,7		(1.61)%	8		(1.80)%	9		(1.86)%	8		(1.95)%	6,8
Supplemental Data
Net assets, end of period (000)	$	69,063		$	122,464		$	225,910		$	294,439		$	15,076
Portfolio turnover rate		—			34%	11		17%	11		—			—

¹ Commencement of operations.

² Based on average shares outstanding.

³ Distributions for annual periods determined in accordance with federal income tax regulations.

⁴ Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

⁵ Aggregate total return.

⁶ Annualized.

⁷ Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.17%.

⁸ Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.18%.

⁹ Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.16%.

¹⁰ Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expense ratio would have been 2.57%.

¹¹ Excludes investments underlying the total return swaps.

See Notes to Financial Statements.
64	BLACKROCK FUNDS	JANUARY 31, 2017

Financial Highlights (continued) BlackRock Global Long/Short Equity Fund

	Investor C
	Six Months Ended January 31, 2017 (Unaudited)			Year Ended July 31,									Period December 20, 20121 to July  31, 2013
				2016			2015			2014
Per Share Operating Performance
Net asset value, beginning of period	$	10.26		$	11.63		$	11.45		$	11.23		$	10.00
Net investment loss2		(0.13	)		(0.26	)		(0.30	)		(0.30	)		(0.19	)
Net realized and unrealized gain (loss)		0.38			(0.97	)		0.49			0.65			1.42
Net increase (decrease) from investment operations		0.25			(1.23	)		0.19			0.35			1.23
Distributions from net realized gain3		—			(0.14	)		(0.01	)		(0.13	)		—
Net asset value, end of period	$	10.51		$	10.26		$	11.63		$	11.45		$	11.23
Total Return4
Based on net asset value		2.44%	5		(10.66)%			1.69%			3.07%			12.30%	5
Ratios to Average Net Assets
Total expenses		2.85%	6,7		2.71%	8		2.70%	9		2.72%	8		3.09%	6,8,10
Total expenses excluding recoupment of past fees waived		2.85%	6,7		2.71%	8		2.69%	9		2.70%	8		3.09%	6,8
Total expenses after fees waived and/or reimbursed		2.75%	6,7		2.64%	8		2.63%	9		2.64%	8		2.75%	6,8
Net investment loss		(2.47)%	6,7		(2.37)%	8		(2.57)%	9		(2.61)%	8		(2.70)%	6,8
Supplemental Data
Net assets, end of period (000)	$	37,715		$	62,567		$	100,783		$	100,980		$	2,592
Portfolio turnover rate		—			34%	11		17%	11		—			—

¹ Commencement of operations.

² Based on average shares outstanding.

³ Distributions for annual periods determined in accordance with federal income tax regulations.

⁴ Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

⁵ Aggregate total return.

⁶ Annualized.

⁷ Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.17%.

⁸ Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.18%.

⁹ Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.16%.

¹⁰ Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expense ratio would have been 3.36%.

¹¹ Excludes investments underlying the total return swaps.

See Notes to Financial Statements.
	BLACKROCK FUNDS	JANUARY 31, 2017	65

Financial Highlights (concluded) BlackRock Global Long/Short Equity Fund

	Class K
	Six Months Ended January 31, 2017 (Unaudited)			Period March 28, 20161 to July 31, 2016
Per Share Operating Performance
Net asset value, beginning of period	$	10.56		$	11.02
Net investment loss2		(0.07	)		(0.04	)
Net realized and unrealized gain (loss)		0.39			(0.42	)
Net increase (decrease) from investment operations		0.32			(0.46	)
Net asset value, end of period	$	10.88		$	10.56
Total Return3
Based on net asset value		3.03%	4		(4.17)%	4
Ratios to Average Net Assets
Total expenses		1.68%	5,6		1.63%	5,7
Total expenses excluding recoupment of past fees waived		1.68%	5,6		1.63%	5,7
Total expenses after fees waived and/or reimbursed		1.62%	5,6		1.56%	5,7
Net investment loss		(1.34)%	5,6		(1.15)%	5,7
Supplemental Data
Net assets, end of period (000)	$	19		$	52,455
Portfolio turnover rate		—			34%	8,9

¹ Commencement of operations.

² Based on average shares outstanding.

³ Where applicable, assumes the reinvestment of distributions.

⁴ Aggregate total return.

⁵ Annualized.

⁶ Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.17%.

⁷ Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.18%.

⁸ Excludes investments underlying the total return swaps.

⁹ Portfolio turnover is representative of the Fund for the entire year.

See Notes to Financial Statements.
66	BLACKROCK FUNDS	JANUARY 31, 2017

Notes to Financial Statements (Unaudited)

1. Organization:

BlackRock Funds^SM (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust is organized as a Massachusetts business trust. The following are referred to herein collectively as the “Funds”, or individually, a “Fund”:

Fund Name	Herein Referred To As	Diversification Classification
BlackRock Emerging Markets Long/Short Equity Fund	Emerging Markets Long/Short Equity		Diversified
BlackRock Global Long/Short Equity Fund	Global Long/Short Equity		Diversified

Each Fund offers multiple classes of shares. All classes of shares have identical voting, dividend, liquidation and other rights and are subject to the same terms and conditions, except that certain classes bear expenses related to the shareholder servicing and distribution of such shares. Institutional and Class K Shares are sold only to certain eligible investors. Investor A and Investor C Shares are generally available through financial intermediaries. Each class has exclusive voting rights with respect to matters relating to its shareholder servicing and distribution expenditures.

Share Class	Initial Sales Charge		CDSC			Conversion Privilege
Institutional and Class K Shares		No		No			None
Investor A Shares		Yes		No	1		None
Investor C Shares		No		Yes			None

¹  Investor A Shares may be subject to a contingent deferred sales charge (“CDSC”) for certain redemptions where no initial sales charge was paid at the time of purchase.

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

2. Significant Accounting Policies:

The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. Below is a summary of significant accounting policies:

Foreign Currency: Each Fund’s books and records are maintained in U.S. dollars. Purchases and sales of investments are recorded at the rates of exchange prevailing on the respective dates of such transactions. Generally, when the U.S. dollar rises in value against a foreign currency, the investments denominated in that currency will lose value; the opposite effect occurs if the U.S. dollar falls in relative value.

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

Defensive Positions: Investment policies may vary for temporary defensive purposes during periods in which the investment adviser believes that conditions in the securities markets or other economic, financial or political conditions warrant. Under such conditions, a Fund may invest up to 100% of its total assets in U.S. Government securities, certificates of deposit, repurchase agreements that involve purchases of debt securities, bankers’ acceptances and other bank obligations, commercial paper, money market funds and/or other debt securities, or may hold its assets in cash. The investment adviser applies this defensive posture as applicable and is consistent with each Fund’s investment policies.

Segregation and Collateralization: In cases where a Fund enters into certain investments (e.g., futures contracts, options written and swaps) that would be treated as “senior securities” for 1940 Act purposes, a Fund may segregate or designate on its books and records cash or liquid assets having a market value at least equal to the amount of its future obligations under such investments. Doing so allows the investment to be excluded from treatment as a “senior security.” Furthermore, if required by an exchange or counterparty agreement, the Funds may be required to deliver/deposit cash and/or securities to/with an exchange, or broker-dealer or custodian as collateral for certain investments or obligations.

Investment Transactions and Investment Income: 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 Funds are 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. Income, expenses and realized and unrealized gains and losses are allocated daily to each class based on its relative net assets.

BLACKROCK FUNDS JANUARY 31, 2017 67

Notes to Financial Statements (continued)

Distributions: Distributions paid by the Funds 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 federal income tax regulations, which may differ from U.S. GAAP.

Offering Costs: Offering costs are amortized over a 12-month period beginning with the commencement of operations.

Recent Accounting Standard: In November 2016, the Financial Accounting Standards Board issued Accounting Standards Update “Restricted Cash” which will require entities to include the total of cash, cash equivalents, restricted cash, and restricted cash equivalents in the beginning and ending cash balances in the Statements of Cash Flows. The guidance will be applied retrospectively and is effective for fiscal years beginning after December 15, 2017, and interim periods within those years. Management is evaluating the impact, if any, of this guidance on the Funds’ presentation in the Statements of Cash Flows.

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

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

Through May 31, 2016, the Funds had an arrangement with their custodian whereby credits were earned on uninvested cash balances, which could be used to reduce custody fees and/or overdraft charges. Credits previously earned may have been utilized until December 31, 2016. Under current arrangements effective June 1, 2016, the Funds no longer earn credits on uninvested cash, and may incur charges on uninvested cash balances and overdrafts, subject to certain conditions.

3. Investment Valuation and Fair Value Measurements:

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

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

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

Generally, trading in foreign instruments is substantially completed each day at various times prior to the close of trading on the NYSE. Occasionally, events affecting the values of such instruments may occur between the foreign market close and the close of trading on the NYSE that may not be reflected in the computation of the Funds’ net assets. Each business day, the Funds use a pricing service to assist with the valuation of certain foreign exchange-traded equity securities and foreign exchange-traded and over-the-counter (“OTC”) options (the “Systematic Fair Value Price”). Using current market factors, the Systematic Fair Value Price is designed to value such foreign securities and foreign options at fair value as of the close of trading on the NYSE, which follows the close of the local markets.

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

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

• 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 NYSE. 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 Funds’ pricing service or through brokers, which are derived using daily swap curves and models that incorporate a number of market data factors, such as discounted cash flows, trades and values of the underlying reference instruments.

68 BLACKROCK FUNDS JANUARY 31, 2017

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 typically used in determining fair value. When determining the price for Fair Valued Investments, the Global Valuation Committee, or its delegate, seeks to determine the price that each Fund might reasonably expect to receive or pay from the current sale or purchase of that asset or liability in an 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 each Fund’s pricing vendors, regular reviews of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices and large movements in market values and reviews of any market related activity. The pricing of all Fair Valued Investments is subsequently reported to the Board or a committee thereof on a quarterly basis. As a result of the inherent uncertainty in valuation of these investments, the fair values may differ from the values that would have been used had an active market existed.

For investments in equity or debt issued by privately-held companies or funds (“Private Company” or collectively, the “Private Companies”) and other Fair Valued Investments, the fair valuation approaches that are used by third party pricing services utilize one or a combination of, but not limited to, the following inputs.

Standard Inputs Generally Considered By Third Party Pricing Services

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

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

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

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

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

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

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

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its

BLACKROCK FUNDS JANUARY 31, 2017 69

Notes to Financial Statements (continued)

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/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 each Fund’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investments and derivative financial instruments and is not necessarily an indication of the risks associated with investing in those securities.

4. Securities and Other Investments:

Preferred Stock: 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.

5. Derivative Financial Instruments:

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

Futures Contracts: Certain Funds invest in long and/or short positions in futures and options on futures contracts to gain exposure to, or manage exposure to, changes in interest rates (interest rate risk), changes in the value of equity securities (equity risk) or foreign currencies (foreign currency exchange rate risk).

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

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

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

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

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

70 BLACKROCK FUNDS JANUARY 31, 2017

Notes to Financial Statements (continued)

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

Swaps: The Funds enter into swap contracts to manage exposure to issuers, markets and securities. Such contracts are agreements between the Funds and a counterparty to make periodic net payments on a specified notional amount or a net payment upon termination. Swap agreements are privately negotiated in the OTC market and may be entered into as a bilateral contract (“OTC swaps”) or centrally cleared (“centrally cleared swaps”).

For OTC swaps, any upfront premiums paid and any upfront fees received are shown as swap premiums paid and swap premiums received, respectively, in the Statements of Assets and Liabilities and amortized over the term of the contract. The daily fluctuation in market value is recorded as unrealized appreciation (depreciation) on OTC Swaps in the Statements of Assets and Liabilities. Payments received or paid are recorded in the Statements of Operations as realized gains or losses, respectively. When an OTC swap is terminated, a realized gain or loss is recorded in the Statements of Operations equal to the difference between the proceeds from (or cost of) the closing transaction and the Funds’ basis in the contract, if any. Generally, the basis of the contract is the premium received or paid.

• Total return swaps — Certain Funds enter into total return swaps 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 Funds receive payment from or make a payment to the counterparty.

• Total return swaps / Custom basket swaps — Certain Funds enter into total return swaps to obtain exposure to a portfolio of long and short securities without owning such securities.

Under the terms of a contract, the swap is designed to function as a portfolio of direct investments in long and short equity positions. This means that each Fund has the ability to trade in and out of these long and short positions within the swap and will receive the economic benefits and risks equivalent to direct investment in these positions, subject to certain adjustments due to events related to the counterparty. Benefits and risks include capital appreciation (depreciation), corporate actions and dividends received and paid, all of which are reflected in the swap’s market value. The market value also includes interest charges and credits (“financing fees”) related to the notional values of the long and short positions and cash balances within the swap. These interest charges and credits are based on a specified benchmark rate plus or minus a specified spread determined based upon the country and/or currency of the positions in the portfolio.

Positions within the swap and financing fees are reset periodically. During a reset, any unrealized appreciation (depreciation) on positions and accrued financing fees become available for cash settlement between the Funds and the counterparty. The amounts that are available for cash settlement are recorded as realized gains or losses in the Statements of Operations. Cash settlement in and out of the swap may occur at a reset date or any other date, at the discretion of the Funds and the counterparty, over the life of the agreement. Certain swaps have no stated expiration and can be terminated by either party at any time.

Swap transactions involve, to varying degrees, elements of interest rate, credit and market risk in excess of the amounts recognized in the Statements of Assets and Liabilities. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreements may default on its obligation to perform or disagree as to the meaning of the contractual terms in the agreements, and that there may be unfavorable changes in interest rates and/or market values associated with these transactions.

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

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.

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Notes to Financial Statements (continued)

Cash collateral that has been pledged to cover obligations of the Funds and cash collateral received from the counterparty, if any, is reported separately on the Statements of Assets and Liabilities as cash pledged as collateral and cash received as collateral, respectively. Non-cash collateral pledged by the Funds, if any, is noted in the Schedules of Investments. Generally, the amount of collateral due from or to a counterparty is subject to a certain minimum transfer amount threshold before a transfer is required, which is determined at the close of business of the Funds. Any additional required collateral is delivered to/pledged by the Funds on the next business day. Typically, the counterparty is not permitted to sell, re-pledge or use cash and non-cash collateral it receives. A Fund generally agrees not to use non-cash collateral that it receives but may, absent default or certain other circumstances defined in the underlying ISDA Master Agreement, be permitted to use cash collateral received. In such cases, interest may be paid pursuant to the collateral arrangement with the counterparty. To the extent amounts due to the Funds from their counterparties are not fully collateralized, they bear the risk of loss from counterparty non-performance. Likewise, to the extent the Funds have delivered collateral to a counterparty and stand ready to perform under the terms of their agreement with such counterparty, they bear the risk of loss from a counterparty in the amount of the value of the collateral in the event the counterparty fails to return such collateral. Based on the terms of agreements, collateral may not be required for all derivative contracts.

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

6. Investment Advisory Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock, Inc. (“BlackRock”) for 1940 Act purposes.

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

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

Average Daily Net Assets	Investment Advisory Fee
First $1 Billion		1.50%
$1 Billion — $3 Billion		1.41%
$3 Billion — $5 Billion		1.35%
$5 Billion — $10 Billion		1.31%
Greater than $10 Billion		1.28%

With respect to Global Long/Short Equity, the Manager entered into a separate sub-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.

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

	Service Fees		Distribution Fees
Investor A		0.25%		—
Investor C		0.25%		0.75%

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

For the six months ended January 31, 2017, the following table shows the class specific service and distribution fees borne directly by each share class of each Fund:

Service and Distribution Fees	Investor A		Investor C		Total
Emerging Markets Long/Short Equity	$	11,681	$	27,166	$	38,847
Global Long/Short Equity	$	110,468	$	248,657	$	359,125

72 BLACKROCK FUNDS JANUARY 31, 2017

Notes to Financial Statements (continued)

Administration: The Trust, on behalf of the Funds, entered into an Administration Agreement with the Manager, an indirect, wholly-owned subsidiary of BlackRock, to provide administrative services. For these services, the Manager receives an administration fee computed daily and payable monthly, based on a percentage of the average daily net assets of each Fund. The administration fee, which is shown as administration in the Statements of Operations, is paid at the annual rates below.

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

In addition, the Manager charges each of the share classes an administration fee, which is shown as administration — class specific in the Statements of Operations, at an annual rate of 0.02% of the average daily net assets of each respective class.

For the six months ended January 31, 2017, the following table shows the class specific administration fees borne directly by each share class of each Fund:

Administration Fees	Institutional		Investor A		Investor C		Class K		Total
Emerging Markets Long/Short Equity	$	16,327	$	930	$	543		—	$	17,800
Global Long/Short Equity	$	67,057	$	8,816	$	4,951	$	2,665	$	83,489

Transfer Agent: Pursuant to written agreements, certain financial intermediaries, some of which may be affiliates, provide the Funds with sub-accounting, recordkeeping, sub-transfer agency and other administrative services with respect to sub-accounts they service. For these services, these entities receive an asset-based fee or an annual fee per shareholder account, which will vary depending on share class and/or net assets. For the six months ended

January 31, 2017, the Funds paid the following amounts to affiliates of BlackRock in return for these services, which are included in transfer agent — class specific in the Statements of Operations:

	Institutional		Investor A		Total
Emerging Markets Long/Short Equity	$	2		—	$	2
Global Long/Short Equity	$	4,331	$	907	$	5,238

The Manager maintains a call center that is responsible for providing certain shareholder services to the Funds. Shareholder services include responding to inquiries and processing subscriptions and redemptions based upon instructions from shareholders. For the six months ended January 31, 2017, each Fund reimbursed the Manager the following amounts for costs incurred in running the call center, which are included in transfer agent — class specific in the Statements of Operations:

	Institutional		Investor A		Investor C		Class K		Total
Emerging Markets Long/Short Equity	$	233	$	184	$	58		—	$	475
Global Long/Short Equity	$	1,953	$	809	$	617	$	202	$	3,581

For the six months ended January 31, 2017, the following table shows the class specific transfer agent fees borne directly by each class of each Fund:

	Institutional		Investor A		Investor C		Class K		Total
Emerging Markets Long/Short Equity	$	59,080	$	5,654	$	3,115		—	$	67,849
Global Long/Short Equity	$	474,133	$	89,276	$	36,757	$	431	$	600,597

Other Fees: For the six months ended January 31, 2017, affiliates earned underwriting discounts, direct commissions and dealer concessions on sales of each Fund’s Investor A Shares as follows:

	Emerging Markets Long/Short Equity		Global Long/Short Equity
Investor A	$	164	$	315

For the six months ended January 31, 2017, affiliates received CDSCs as follows:

	Emerging Markets Long/Short Equity		Global Long/Short Equity
Investor A		—	$	18,091
Investor C	$	45	$	5,630

BLACKROCK FUNDS JANUARY 31, 2017 73

Notes to Financial Statements (continued)

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

Share Class	Emerging Markets Long/Short Equity		Global Long/Short Equity
Institutional		1.75%		1.75%
Investor A		2.00%		2.00%
Investor C		2.75%		2.75%
Class K		—		1.70%

The Manager has agreed not to reduce or discontinue these contractual expense limitations prior to December 1, 2017 for each Fund unless approved by the Board, including a majority of the Independent Trustees who are not “interested persons” of the Funds, as defined in the 1940 Act (“Independent Trustees”) or by a vote of a majority of the outstanding voting securities of the Fund.

For the six months ended January 31, 2017, class specific expense waivers and/or reimbursements are as follows:

Administration Fees Waived — Class Specific
	Institutional		Investor A		Investor C		Class K		Total
Emerging Markets Long/Short Equity	$	7,271	$	631	$	505		—	$	8,407
Global Long/Short Equity	$	46,842	$	8,580	$	4,015	$	29	$	59,466

Transfer Agent Fees Waived and/or Reimbursed — Class Specific
	Institutional		Investor A		Investor C		Class K		Total
Emerging Markets Long/Short Equity	$	48,291	$	3,814	$	1,927		—	$	54,032
Global Long/Short Equity	$	49,269	$	29,863	$	5,792	$	93	$	85,017

These amounts waived and/or reimbursed are included in fees waived and/or reimbursed by the Manager, and shown as administration fees waived — class specific and transfer agent fees waived and/or reimbursed — class specific, respectively, in the Statements of Operations.

With respect to the Funds, the Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees each Fund pays to the Manager indirectly through its investment in affiliated money market funds (the “affiliated money market fund waiver”). These amounts are included in fees waived by the Manager in the Statements of Operations. The amount of waivers of fees and expenses made pursuant to the expense limitation caps, as applicable, will be reduced by the amount of the affiliated money market fund waiver. For the six months ended January 31, 2017, the amounts waived were as follows:

Emerging Markets Long/Short Equity	$	53,891
Global Long/Short Equity	$	253,202

Effective September 1, 2016, the Manager voluntarily agreed to waive its investment advisory fee with respect to any portion of each Fund’s assets invested in affiliated equity and fixed-income mutual funds and exchange-traded funds that have a contractual management fee. Prior to September 1, 2016, the Manager did not waive such fees. Effective November 28, 2016, the waiver become contractual through November 30, 2017. The contractual agreement may be terminated upon 90 days’ notice by a majority of the non-interested trustees of the Trust or by a vote of a majority of the outstanding voting securities of the Funds.

With respect to the contractual expense caps, if during a 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 expense cap for that share class, the Manager is entitled to be reimbursed by such share class up to the lesser of the following expenses:

(a) The amount of fees waived and/or expenses reimbursed during those prior two fiscal years under the agreement.

(b) The amount by which the expense cap for that share class exceeds the operating expenses of the share class for the current fiscal year, provided that:

• Each Fund, of which the share class is a part, has more than $50 million in assets for the fiscal year; and

• The Manager or an affiliate continues to serve as a Fund’s investment adviser or administrator.

In the event the expense cap for a share class is changed subsequent to a fiscal year in which the Manager becomes entitled to reimbursement for fees waived and/or reimbursed, the amount available to reimburse the Manager shall be calculated by reference to the expense cap for that share class in effect at the time the Manager became entitled to receive such reimbursement, rather than the subsequently changed expense cap for that share class.

74 BLACKROCK FUNDS JANUARY 31, 2017

Notes to Financial Statements (continued)

For the six months ended January 31, 2017, the Manager recouped the following fund level and class specific waivers and/or reimbursements previously recorded by the Funds:

	Emerging Markets Long/Short Equity		Global Long/Short Equity
Fund Level		—		—
Institutional	$	19,343	$	2,478
Investor A	$	141		—
Investor C	$	59	$	507

On January 31, 2017, the Funds’ fund level and class specific waivers and/or reimbursements subject to possible future recoupment under the expense limitation agreement are as follows:

	Emerging Markets Long/Short Equity						Global Long/Short Equity
Expiring July 31,	2017		2018		2019		2017		2018		2019
Fund Level		—		—		—		—		—		—
Institutional	$	166,594	$	87,987	$	55,562		—		—	$	96,111
Investor A	$	2,067	$	4,571	$	4,445		—	$	4,223	$	38,443
Investor C		—	$	3,152	$	2,432		—		—	$	9,807
Class K		—		—		—		—		—	$	122
Total	$	168,661	$	95,710	$	62,439		—	$	4,223	$	144,483

Interfund Lending: In accordance with an exemptive order (the “Order”) from the U.S. Securities and Exchange Commission, each Fund may participate in a joint lending and borrowing facility for temporary purposes (the “Interfund Lending Program”), subject to compliance with the terms and conditions of the Order, and to the extent permitted by each Fund’s investment policies and restrictions. Each Fund is currently permitted to borrow and lend under the Interfund Lending Program.

A 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 Fund may not borrow through the Interfund Lending Program or from any other source more than 33 ¹/₃% of its total assets or any lower threshold provided for by the Funds’ investment restrictions. If a 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 six months ended January 31, 2017, the Funds did not participate in the Interfund Lending Program.

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

Other Transactions: During the six months ended January 31, 2017, Emerging Markets Long/Short Equity Fund received a reimbursement of $22,962 from an affiliate, which is included in capital share transactions in the Statements of Changes in Net Assets, relating to an operating error.

7. Purchase and Sales:

For the six months ended January 31, 2017, purchases and sales of investments excluding short-term securities, were as follows:

	Global Long/Short Equity
Purchases		—
Sales	$	6,018

8. Income Tax Information:

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

Each Fund files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on Emerging Market Long/Short Equity’s U.S. federal tax returns generally remains open for each of the four years ended July 31, 2016. The statute of limitations on Global Long/Short Equity’s U.S. federal tax returns remains open for each of the three years ended July 31, 2016 and the period ended July 31, 2013. The statutes of limitations on each Fund’s state and local tax returns may remain open for an additional year depending upon the jurisdiction.

Management has analyzed tax laws and regulations and their application to the Funds as of January 31, 2017, inclusive of the open tax return years, and does not believe that there are any uncertain tax positions that require recognition of a tax liability in the Funds��� financial statements.

BLACKROCK FUNDS JANUARY 31, 2017 75

Notes to Financial Statements (continued)

As of July 31, 2016, Emerging Markets Long/Short Equity Fund and Global Long/Short Equity Fund had capital loss carryforwards, with no expiration dates, available to offset future realized capital gains of $10,094,032 and $73,499,970, respectively.

As of January 31, 2017, gross unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:

	Global Long/ Short Equity
Tax cost	$	616,782,898
Gross unrealized appreciation	$	1,494,384
Gross unrealized depreciation		(1,756,466	)
Net unrealized appreciation (depreciation)	$	(262,082	)

9. Bank Borrowings:

The Trust, on behalf of the Funds, along with certain other funds managed by the Manager and its affiliates (“Participating Funds”), is a party to a 364-day, $2.1 billion credit agreement with a group of lenders. Under this agreement, the Funds may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Funds, can borrow up to an aggregate commitment amount of $1.6 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 0.12% 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 2017 unless extended or renewed. Participating Funds paid administration, legal and arrangement fees, which, if applicable, are included in miscellaneous expenses in the Statements of Operations. These fees were allocated among such funds based upon portions of the aggregate commitment available to them and relative net assets of Participating Funds. During the six months ended January 31, 2017, the Funds did not borrow under the credit agreement.

10. Principal Risks:

In the normal course of business, the Funds invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the issuer to meet all its obligations, including the ability to pay principal and interest when due (issuer credit risk). The value of securities held by the Funds may decline in response to certain events, including those directly involving the issuers of securities owned by the Funds. Investments in the securities of issuers domiciled in countries with emerging capital markets involve certain additional risks that do not generally apply to investments in securities of issuers in more developed capital markets, such as (i) low or nonexistent trading volume, resulting in a lack of liquidity and increased volatility in prices for such securities; (ii) uncertain national policies and social, political and economic instability, increasing the potential for expropriation of assets, confiscatory taxation, high rates of inflation or unfavorable diplomatic developments; and (iii) possible fluctuations in exchange rates, differing legal systems and the existence or possible imposition of exchange controls, custodial restrictions or other foreign or U.S. governmental laws or restrictions applicable to such investments. Changes arising from the general economy, the overall market and local, regional or global political and/or social instability, as well as currency, interest rate and price fluctuations, may also affect the securities’ value.

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

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

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

76 BLACKROCK FUNDS JANUARY 31, 2017

Notes to Financial Statements (continued)

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.

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

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

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

Concentration Risk: Certain Funds invest a substantial amount of their assets in issuers located in a single country or a limited number of countries. When the Funds concentrate their 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 Schedules of Investments.

Certain Funds invest a significant portion of their assets in securities of issuers located in Europe or with significant exposure to European issuers or countries. The European financial markets have recently experienced volatility and adverse trends due to concerns about economic downturns in, or rising government debt levels of, several European countries. These events may spread to other countries in Europe and may affect the value and liquidity of certain of the Funds’ investments.

The United Kingdom voted on June 23, 2016 to withdraw from the European Union, which may introduce significant new uncertainties and instability in the financial markets across Europe.

Certain Funds invest a significant portion of their assets in securities of issuers located in Asia or with significant exposure to Asian issuers or countries. The Asian financial markets have recently experienced volatility and adverse trends due to concerns in several Asian countries regarding monetary policy, government intervention in the markets, rising government debt levels or economic downturns. These events may spread to other countries in Asia and may affect the value and liquidity of certain of the Funds’ investments.

11. Capital Share Transactions:

Transactions in capital shares for each class were as follows:

	Six Months Ended January 31, 2017						Year Ended July 31, 2016
Emerging Markets Long/Short Equity	Shares			Amount			Shares			Amount
Institutional
Shares sold		2,874,695		$	28,058,823			5,109,943		$	49,489,464
Shares issued in reinvestment of distributions		—			—			270,813			2,570,013
Shares redeemed		(6,426,340	)		(62,473,961	)		(27,809,335	)		(269,618,413	)
Net decrease		(3,551,645	)	$	(34,415,138	)		(22,428,579	)	$	(217,558,936	)
Investor A
Shares sold		18,843		$	181,460			250,108		$	2,396,073
Shares issued in reinvestment of distributions		—			—			19,138			180,087
Shares redeemed		(641,380	)		(6,151,475	)		(950,988	)		(9,115,067	)
Net decrease		(622,537	)	$	(5,970,015	)		(681,742	)	$	(6,538,907	)

BLACKROCK FUNDS JANUARY 31, 2017 77

Notes to Financial Statements (concluded)

	Six Months Ended January 31, 2017						Year Ended July 31, 2016
Emerging Markets Long/Short Equity (concluded)	Shares			Amount			Shares			Amount
Investor C
Shares sold		2,514		$	23,135			43,762		$	406,389
Shares issued in reinvestment of distributions		—			—			9,534			87,244
Shares redeemed		(127,907	)		(1,188,232	)		(377,482	)		(3,520,645	)
Net decrease		(125,393	)	$	(1,165,097	)		(324,186	)	$	(3,027,012	)
Total Net Decrease		(4,299,575	)	$	(41,550,250	)		(23,434,507	)	$	(227,124,855	)
Global Long/Short Equity
Institutional
Shares sold		7,880,033		$	83,683,601			55,910,136		$	632,370,583
Shares issued in reinvestment of distributions		—			—			1,799,694			20,750,471
Shares redeemed		(38,341,680	)		(408,513,198	)		(105,181,745	)		(1,165,600,523	)
Net decrease		(30,461,647	)	$	(324,829,597	)		(47,471,915	)	$	(512,479,469	)
Investor A
Shares sold		600,033		$	6,364,185			7,359,585		$	83,095,922
Shares issued in reinvestment of distributions		—			—			289,164			3,319,604
Shares redeemed		(5,868,584	)		(61,986,892	)		(15,050,945	)		(165,087,237	)
Net decrease		(5,268,551	)	$	(55,622,707	)		(7,402,196	)	$	(78,671,711	)
Investor C
Shares sold		145,333		$	1,492,661			1,890,714		$	20,601,379
Shares issued in reinvestment of distributions		—			—			101,849			1,148,859
Shares redeemed		(2,654,082	)		(27,403,138	)		(4,561,193	)		(49,208,113	)
Net decrease		(2,508,749	)	$	(25,910,477	)		(2,568,630	)	$	(27,457,875	)
Class K1
Shares sold		1,032,910		$	10,867,859			6,977,422		$	75,936,456
Shares issued in reinvestment of distributions		—			—			—			—
Shares redeemed		(5,997,998	)		(63,837,992	)		(2,010,610	)		(21,351,353	)
Net increase (decrease)		(4,965,088	)	$	(52,970,133	)		4,966,812		$	54,585,103
Total Net Decrease		(43,204,035	)	$	(459,332,914	)		(52,475,929	)	$	(564,023,952	)

¹  Class K Shares commenced operations on March 28, 2016.

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.

78 BLACKROCK FUNDS JANUARY 31, 2017

Officers and Trustees

Rodney D. Johnson, Chair of the Board and Trustee

Susan J. Carter, Trustee

Collette Chilton, Trustee

Neil A. Cotty, Trustee

Cynthia A. Montgomery, Trustee

Joseph P. Platt, Trustee

Robert C. Robb, Jr., Trustee

Mark Stalnecker, Trustee

Kenneth L. Urish, Trustee

Claire A. Walton, Trustee

Frederick W. Winter, Trustee

Barbara G. Novick, Trustee

John M. Perlowski, Trustee, President and Chief Executive Officer

Thomas Callahan, Vice President

Jennifer McGovern, Vice President

Neal J. Andrews, Chief Financial Officer

Jay M. Fife, Treasurer

Charles Park, Chief Compliance Officer

Fernanda Piedra, Anti-Money Laundering Compliance Officer

Benjamin Archibald, Secretary

Effective December 31, 2016, David O. Beim and Dr. Matina S. Horner resigned as Trustees of the Trust.

Investment Adviser and Administrator BlackRock Advisors, LLC Wilmington, DE 19809	Accounting Agent and Custodian State Street Bank and Trust Company Boston, MA 02110	Distributor BlackRock Investments, LLC New York, NY 10022	Legal Counsel Sidley Austin LLP New York, NY 10019
Sub-Adviser BlackRock International Limited1 Edinburgh, EH3 8BL United Kingdom	Transfer Agent BNY Mellon Investment Servicing (US) Inc. Wilmington, DE 19809	Independent Registered Public Accounting Firm PricewaterhouseCoopers LLP Philadelphia, PA 19103	Address of the Trust 100 Bellevue Parkway Wilmington, DE 19809

¹  For Global Long/Short Equity

BLACKROCK FUNDS JANUARY 31, 2017 79

Additional Information

General Information

Householding

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

Availability of Quarterly Schedule of Investments

The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ 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, DC. Information on the operation of the Public Reference Room or how to access documents on the SEC’s website without charge may be obtained by calling (800) SEC-0330. The Funds’ Forms N-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) 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 Funds voted proxies relating to securities held in the Funds’ portfolios during the most recent 12-month period ended June 30 is available upon request and without charge (1) at http://www.blackrock.com or by calling (800) 441-7762 and (2) on the SEC’s website at http://www.sec.gov.

BlackRock’s Mutual Fund Family

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

80 BLACKROCK FUNDS JANUARY 31, 2017

Additional Information (concluded)

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 at http://www.blackrock.com/funds.

Automatic Investment Plans

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

Systematic Withdrawal Plans

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

Retirement Plans

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

BlackRock Privacy Principles

BlackRock is committed to maintaining the privacy of its current and former fund investors and individual clients (collectively, “Clients”) and to safeguarding their non-public personal information. The following information is provided to help you understand what personal information BlackRock collects, how we protect that information and why in certain cases we share such information with select parties.

If you are located in a jurisdiction where specific laws, rules or regulations require BlackRock to provide you with additional or different privacy-related rights beyond what is set forth below, then BlackRock will comply with those specific laws, rules or regulations.

BlackRock obtains or verifies personal non-public information from and about you from different sources, including the following: (i) information we receive from you or, if applicable, your financial intermediary, on applications, forms or other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our websites.

BlackRock does not sell or disclose to non-affiliated third parties any non-public personal information about its Clients, except as permitted by law or as is necessary to respond to regulatory requests or to service Client accounts. These non-affiliated third parties are required to protect the confidentiality and security of this information and to use it only for its intended purpose.

We may share information with our affiliates to service your account or to provide you with information about other BlackRock products or services that may be of interest to you. In addition, BlackRock restricts access to non-public personal information about its Clients to those BlackRock employees with a legitimate business need for the information. BlackRock maintains physical, electronic and procedural safeguards that are designed to protect the non-public personal information of its Clients, including procedures relating to the proper storage and disposal of such information.

BLACKROCK FUNDS JANUARY 31, 2017 81

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

EMLSGLS-1/17-SAR

JANUARY 31, 2017

  SEMI-ANNUAL REPORT (UNAUDITED)  

BlackRock Funds^SM

^Ø   BlackRock Midcap Index Fund

^Ø   BlackRock MSCI Asia ex Japan Index Fund

^Ø   BlackRock MSCI World Index Fund

^Ø   BlackRock Small/Mid Cap Index Fund

^Ø   BlackRock Total Stock Market Index Fund

Not FDIC Insured • May Lose Value • No Bank Guarantee

The Markets in Review

Dear Shareholder,

The 12 months ended January 31, 2017 was an exceptionally strong period for risk assets (such as stocks and high yield bonds), while higher-quality assets generated muted returns after struggling in the latter part of 2016. As the period began, worries about slowing growth in China and the instability of oil prices had global equity prices sliding. However, the broad market momentum shifted in the second half of 2016 as reflationary expectations in the United States helped drive a pick-up in global growth.

Markets were remarkably resilient during the period. Big surprises such as the United Kingdom’s vote to leave the European Union and the outcome of the U.S. presidential election brought spikes in equity market volatility, but they were ultimately short-lived. Instead, investors used the sell-offs to seize upon buying opportunities, allowing markets to quickly rebound. We believe this reinforces the case for taking the long view rather than reacting to short-term market noise.

The global reflationary theme — rising nominal growth, wages and inflation — was the dominant driver of asset returns during the period, outweighing significant political upheavals and uncertainty. This trend accelerated after the U.S. election and continued into the beginning of 2017, stoked by expectations for an extra boost to U.S. growth via fiscal policy.

Although economic momentum is gaining traction, the capacity for rapid global growth is restrained by structural factors including an aging population, low productivity growth and excess savings. A tempered economic growth trend and high valuations across most assets have set the stage for muted investment returns going forward.

Equity markets still have room to move, although the disparity between winners and losers is widening, making stock selection increasingly important. Fixed income investors are also facing challenges as bond markets recalibrate to accommodate rising rates and higher inflation expectations. And in a world where political risk and policy uncertainty abound, there is no lack of potential catalysts for higher 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 visit blackrock.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 January 31, 2017
	6-month			12-month
U.S. large cap equities (S&P 500® Index)		5.96	%		20.04	%
U.S. small cap equities (Russell 2000® Index)		12.43			33.53
International equities (MSCI Europe, Australasia, Far East Index)		3.49			12.03
Emerging market equities (MSCI Emerging Markets Index)		4.92			25.41
3-month Treasury bills (BofA Merrill Lynch 3-Month U.S. Treasury Bill Index)		0.20			0.37
U.S. Treasury securities (BofA Merrill Lynch 10-Year U.S. Treasury Index)		(7.87	)		(3.26	)
U.S. investment grade bonds (Bloomberg Barclays U.S. Aggregate Bond Index)		(2.95	)		1.45
Tax-exempt municipal bonds (S&P Municipal Bond Index)		(2.94	)		0.24
U.S. high yield bonds (Bloomberg Barclays U.S. Corporate High Yield 2% Issuer Capped Index)		6.09			20.77
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.

2 THIS PAGE NOT PART OF YOUR FUND REPORT

Table of Contents

	Page
The Markets in Review		2
Semi-Annual Report:
Fund Summaries		4
Portfolio Information		14
About Fund Performance		16
Disclosure of Expenses		16
Derivative Financial Instruments		16
Financial Statements:
Schedule of Investments		17
Statements of Assets and Liabilities		95
Statements of Operations		97
Statement of Changes in Net Assets		98
Financial Highlights		101
Notes to Financial Statements		109
Officers and Trustees		122
Additional Information		122

BLACKROCK FUNDS JANUARY 31, 2017 3

Fund Summary as of January 31, 2017 BlackRock Midcap Index Fund

Investment Objective

BlackRock Midcap Index Fund’s (the “Fund”) investment objective is to seek to track the investment results of an index composed of mid-capitalization U.S. equities.

On February 24, 2017, the Board of Trustees of BlackRock Funds approved a name change from “BlackRock Midcap Index Fund” to “iShares Mid-Cap Index Fund.” The change is expected to be effective during the second quarter of 2017.

Portfolio Management Commentary

How did the Fund perform?

• For the six months ended January 31, 2017, the Fund’s Institutional Shares returned 5.67%, Investor A Shares returned 5.60% and Class K Shares returned 5.69%. The benchmark Russell MidCap^® Index returned 5.65% for the same period.

• Returns for the Fund’s respective share classes differ from the benchmark index based on individual share-class expenses.

Describe the market environment.

• Most of the major U.S. equity indexes saw gains at the beginning of the period, largely driven by a dovish Federal Reserve (“Fed”) that kept rates unchanged and stronger-than-expected earnings releases versus analyst expectations.

• Investors’ focus on the September Fed meeting dominated market performance in the last month of the third quarter. While the Fed kept rates unchanged, several Fed officials expressed support of a rate hike later in the year.

• The U.S. presidential election and the Fed were front and center in 2016, especially in the fourth quarter. The fourth quarter started with a slight increase in volatility as investors prepared for a possible Fed rate

increase, and weighed probable outcomes of the presidential election. While many people were shocked by the Trump win, markets did not experience the same type of volatility seen after the Brexit vote, with major U.S. indexes posting solid gains in November.

• The performance of U.S. equities post-election suggests market participants are optimistic about President Trump’s pro-growth policies including lower taxes, deregulation and infrastructure spending.

Describe recent portfolio activity.

• During the period, as changes were made to the composition of the Russell Midcap^® 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.

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

4 BLACKROCK FUNDS JANUARY 31, 2017

BlackRock Midcap Index Fund

Total Return Based on a $10,000 Investment

¹  Assuming transaction costs and other operating expenses, including investment advisory fees, if any.

²  The Fund generally invests at least 90% of its assets, plus the amount of any borrowing for investment purposes, in securities of the Russell Midcap^® Index and in depositary receipts representing securities of the Russell Midcap^® Index.

³  A float-adjusted capitalization-weighted index that measures the performance of the mid-cap segment of the U.S. equities universe. It is a subset of the Russell 1000^® Index including approximately 800 of the smallest issuers based on a combination of their market cap and current index membership.

⁴  Commencement of operations.

Performance Summary for the Period Ended January 31, 2017

				Average Annual Total  Returns5
	6-Month Total Returns			1 Year			Since Inception6
Institutional		5.67	%		24.59	%		5.61	%
Investor A		5.60			24.38			5.34
Class K		5.69			24.61			5.69
Russell Midcap® Index		5.65			24.72			5.48

⁵  See “About Fund Performance” on page 16 for a detailed description of share classes, including any related fees.

⁶  The Fund commenced operations on May 13, 2015.

Past performance is not indicative of future results.

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

Expense Example

	Actual						Hypothetical8
	Beginning Account Value August 1, 2016		Ending Account Value January 31, 2017		Expenses Paid During the Period7		Beginning Account Value August 1, 2016		Ending Account Value January 31, 2017		Expenses Paid During the Period7		Annualized Expense Ratio
Institutional	$	1,000.00	$	1,056.70	$	0.57	$	1,000.00	$	1,024.65	$	0.56		0.11	%
Investor A	$	1,000.00	$	1,056.00	$	1.66	$	1,000.00	$	1,023.59	$	1.63		0.32	%
Class K	$	1,000.00	$	1,056.90	$	0.36	$	1,000.00	$	1,024.85	$	0.36		0.07	%

⁷  For each class of the Fund, expenses are equal to the annualized net expense ratio for the class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period shown).

⁸  Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365.

See “Disclosure of Expenses” on page 16 for further information on how expenses were calculated.

BLACKROCK FUNDS JANUARY 31, 2017 5

Fund Summary as of January 31, 2017 BlackRock MSCI Asia ex Japan Index Fund

Investment Objective

BlackRock MSCI Asia ex Japan Index Fund’s (the “Fund”) investment objective is to seek to track the investment results of an index composed of Asian equities, excluding Japan.

On February 24, 2017, the Board of Trustees of BlackRock Funds approved a name change from “BlackRock MSCI Asia ex Japan Index Fund” to “iShares MSCI Asia ex Japan Index Fund.” The change is expected to be effective during the second quarter of 2017.

Portfolio Management Commentary

How did the Fund perform?

• For the six months ended January 31, 2017, the Fund’s Institutional and Class K Shares each returned 4.80%. The benchmark MSCI AC Asia ex Japan Index returned 4.52% for the same period.

• Returns for the Fund’s respective share classes differ from the benchmark index based on individual share-class expenses.

Describe the market environment.

• Global equity markets broadly rallied during the third quarter as the Fed kept rates unchanged, Japan announced additional fiscal and monetary stimulus, and the Bank of England cut rates.

• Markets had a strong start to the third quarter as expectations of a near-term Fed rate hike diminished, Japan announced another round of fiscal stimulus, and the earnings season had a strong start.

• Despite multiple terrorist attacks in France and Germany and a failed coup in Turkey, markets continued to rally in August on the back of a strong earnings season and monetary stimulus from the Bank of England. Positive performance sustained in September as the Fed kept rates unchanged, the Bank of Japan announced additional monetary stimulus, and OPEC decided to limit output. This was all despite inaction from the European Central Bank (“ECB”), the crisis in Syria, and concerns around Wells Fargo and Deutsche Bank. However, weak macro data out of China, a terrorist attack in Thailand, flooding in Louisiana, and a more hawkish tone from Fed officials hindered some performance early in the period.

• China implemented significant fiscal and monetary stimulus policies in the face of economic slowdown. Markets reacted positively to the stimulus and Moody’s upgraded its economic forecast on the back of the news. Outside the stimulus, the economic slowdown continued to be a drag on demand for raw materials, which contributed to underperformance and volatility in commodity-exporting countries.

• Developed markets rallied in the last quarter of the year as global investors embraced the results of the U.S. election and strong macro data, although a stronger U.S. dollar subdued gains for U.S. investors. Global equity market performance was mixed in October as Asia and Europe outperformed the United States (in local currency terms) on

improving economic data and supportive commentary from the Bank of England and ECB.

• Asian stocks continued to perform well in November as global investors absorbed the unexpected results of the U.S. election and the Bank of Japan’s first intervention after introducing target yield curve control in September.

• December brought a global equity rally as strong global economic data and continued optimism around President-elect Trump’s reflationary policies outweighed the effects of the ECB’s decision to reduce the pace of its asset purchases and diplomatic tensions between the United States and other major powers.

• The 2016 emerging market (“EM”) rally lost steam in the fourth quarter, with particularly poor performance in the month of November as speculation around the outcome of the U.S. presidential election pressured the asset class and EM currencies broadly. The unexpected Trump victory raised concerns for EM investors given the potential for a faster pace of U.S. rate hikes in 2017, leading to a stronger U.S. dollar, and the possible renegotiation of trade agreements that could be detrimental to EM companies.

Describe recent portfolio activity.

• During the period, as changes were made to the composition of the MSCI AC Asia Ex Japan Index, the Fund purchased and sold securities to maintain its objective of replicating the risks and return of the benchmark index.

• As part of its investment strategy, the Fund utilized derivatives in the form of financial futures contracts. The Fund invests in derivative instruments in order to gain market exposure quickly in the event of subscriptions, to maintain liquidity in the event of redemptions and to keep trading costs low. The Fund may seek to enhance returns using derivatives. During the period, the Fund’s use of financial futures contracts contributed positively to Fund performance.

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.

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.

6 BLACKROCK FUNDS JANUARY 31, 2017

BlackRock MSCI Asia ex Japan Index Fund

Total Return Based on a $10,000 Investment

¹  Assuming transaction costs and other operating expenses, including investment advisory fees, if any.

²  The Fund generally invests at least 90% of its assets, plus the amount of any borrowing for investment purposes, in securities of the MSCI AC Asia ex Japan Index and in depositary receipts representing securities of the MSCI AC Asia ex Japan Index.

³  A free float-adjusted market capitalization index designed to measure equity market performance of the following 10 developed and emerging market countries or regions: China, Hong Kong, India, Indonesia, Malaysia, the Philippines, Singapore, South Korea, Taiwan and Thailand.

⁴  Commencement of operations.

Performance Summary for the Period Ended January 31, 2017

				Average Annual Total  Returns5
	6-Month Total Returns			1 Year			Since Inception6
Institutional		4.80	%		20.65	%		(2.20	)%
Class K		4.80			20.66			(2.18	)
MSCI AC Asia ex Japan Index (in USD)		4.52			21.24			(2.29	)

⁵  See “About Fund Performance” on page 16 for a detailed description of share classes, including any related fees.

⁶  The Fund commenced operations on June 9, 2015.

Past performance is not indicative of future results.

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

Expense Example

	Actual						Hypothetical8
	Beginning Account Value August 1, 2016		Ending Account Value January 31, 2017		Expenses Paid During the Period7		Beginning Account Value August 1, 2016		Ending Account Value January 31, 2017		Expenses Paid During the Period7		Annualized Expense Ratio
Institutional	$	1,000.00	$	1,048.00	$	2.32	$	1,000.00	$	1,022.94	$	2.29		0.45	%
Class K	$	1,000.00	$	1,048.00	$	2.32	$	1,000.00	$	1,022.94	$	2.29		0.45	%

⁷  For each class of the Fund, expenses are equal to the annualized net expense ratio for the class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period shown).

⁸  Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365.

See “Disclosure of Expenses” on page 16 for further information on how expenses were calculated.

BLACKROCK FUNDS JANUARY 31, 2017 7

Fund Summary as of January 31, 2017 BlackRock MSCI World Index Fund

Investment Objective

BlackRock MSCI World Index Fund’s (the “Fund”) investment objective is to seek to track the investment results of an index composed of developed market equities.

On February 24, 2017, the Board of Trustees of BlackRock Funds approved a name change from “BlackRock MSCI World Index Fund” to “iShares MSCI World Index Fund.” The change is expected to be effective during the second quarter of 2017.

Portfolio Management Commentary

How did the Fund perform?

• For the six months ended January 31, 2017, the Fund’s Institutional Shares returned 5.13%, and Class K Shares returned 5.24%. The benchmark MSCI World Index returned 4.95% for the same period.

• Returns for the Fund’s respective share classes differ from the benchmark index based on individual share-class expenses.

Describe the market environment.

• Markets had a strong start to the period as expectations of a near-term Fed rate hike diminished, Japan announced another round of fiscal stimulus, and the earnings season had a strong start.

• Despite multiple terrorist attacks in France and Germany and a failed coup in Turkey, markets continued to rally in August on the back of a strong earnings season and monetary stimulus from the Bank of England.

• Positive performance sustained in September as the Fed kept rates unchanged, the Bank of Japan announced additional monetary stimulus, and OPEC decided to limit output. This was all despite inaction from the European Central Bank (“ECB”), the crisis in Syria, and concerns around Wells Fargo and Deutsche Bank. However, weak macro data out of China, a terrorist attack in Thailand, flooding in Louisiana, and a more hawkish tone from Fed officials hindered some performance for the quarter.

• Developed markets rallied later in the period as global investors embraced the results of the U.S. election and strong macro data, although a stronger U.S. dollar subdued gains for U.S. investors.

• Global equity market performance was mixed in October as Asia and Europe outperformed the United States (in local currency terms) on improving economic data and supportive commentary from the Bank of England and ECB. Asian stocks continued to perform well in November as global investors absorbed the unexpected results of the U.S. election and the Bank of Japan’s first intervention after introducing target yield curve control in September. Europe lagged in anticipation of the Italian referendum, while energy stocks rallied as OPEC and Russia agreed on a production cut at the end of the month.

• Global equities rallied as strong global economic data and continued optimism around President Trump’s reflationary policies outweighed the effects of the ECB’s decision to reduce the pace of its asset purchases and diplomatic tensions between the United States and other major powers.

Describe recent portfolio activity.

• During the period, as changes were made to the composition of the MSCI World 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.

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.

8 BLACKROCK FUNDS JANUARY 31, 2017

BlackRock MSCI World Index Fund

Total Return Based on a $10,000 Investment

¹  Assuming transaction costs and other operating expenses, including investment advisory fees, if any.

²  The Fund generally invests at least 90% of its assets, plus the amount of any borrowing for investment purposes, in securities of the MSCI World Index and in depositary receipts representing securities of the MSCI World Index.

³  A free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. The MSCI World Index consists of the following 23 developed market country indexes: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom, and the United States.

⁴  Commencement of operations.

Performance Summary for the Period Ended January 31, 2017

				Average Annual Total  Returns5
	6-Month Total Returns			1 Year			Since Inception6
Institutional		5.13	%		16.85	%		2.77	%
Class K		5.24			17.12			2.93
MSCI World Index		4.95			17.11			2.34

⁵  See “About Fund Performance” on page 16 for a detailed description of share classes, including any related fees.

⁶  The Fund commenced operations on June 1, 2015.

Past performance is not indicative of future results.

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

Expense Example

	Actual						Hypothetical8
	Beginning Account Value August 1, 2016		Ending Account Value January 31, 2017		Expenses Paid During the Period7		Beginning Account Value August 1, 2016		Ending Account Value January 31, 2017		Expenses Paid During the Period7		Annualized Expense Ratio
Institutional	$	1,000.00	$	1,051.30	$	0.93	$	1,000.00	$	1,024.30	$	0.92		0.18	%
Class K	$	1,000.00	$	1,052.40	$	0.78	$	1,000.00	$	1,024.45	$	0.71		0.15	%

⁷  For each class of the Fund, expenses are equal to the annualized net expense ratio for the class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period shown).

⁸ Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365.

See “Disclosure of Expenses” on page 16 for further information on how expenses were calculated.

BLACKROCK FUNDS JANUARY 31, 2017 9

Fund Summary as of January 31, 2017 BlackRock Small/Mid Cap Index Fund

Investment Objective

BlackRock Small/Mid Cap Index Fund’s (the “Fund”) investment objective is to seek to track the performance of the small to mid-cap segment of the U.S. equity universe.

On February 24, 2017, the Board of Trustees of BlackRock Funds approved a name change from “BlackRock Small/Mid Cap Index Fund” to “iShares Small/Mid-Cap Index Fund.” The change is expected to be effective during the second quarter of 2017.

Portfolio Management Commentary

How did the Fund perform?

• For the six months ended January 31, 2017, the Fund’s Institutional Shares returned 8.99%, Investor A Shares returned 8.90%, and Class K Shares returned 9.00%. The benchmark Russell 2500^™ Index returned 8.97% for the same period.

• Returns for the Fund’s respective share classes differ from the benchmark index based on individual share-class expenses.

Describe the market environment.

• Most of the major U.S. equity indexes saw gains at the beginning of the period, largely driven by a dovish Fed that kept rates unchanged and stronger-than-expected earnings releases versus analyst expectations.

• Investors’ focus on the September Fed meeting dominated market performance in the last month of the third quarter. While the Fed kept rates unchanged, several Fed officials expressed support of a rate hike later in the year.

• The U.S. presidential election and the Fed were front and center in 2016, especially in the fourth quarter. The fourth quarter started with a slight increase in volatility as investors prepared for a possible Fed rate increase, and weighed probable outcomes of the presidential election. While many people were shocked by the Trump win, markets did not experience the same type of volatility seen after the Brexit vote, with major U.S. indexes posting solid gains in November.

• The performance of U.S. equities post-election suggests market participants are optimistic about President Trump’s pro-growth policies including lower taxes, deregulation and infrastructure spending.

Describe recent portfolio activity.

• During the period, as changes were made to the composition of the Russell 2500^™ 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.

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

10 BLACKROCK FUNDS JANUARY 31, 2017

BlackRock Small/Mid Cap Index Fund

Total Return Based on a $10,000 Investment

¹  Assuming transaction costs and other operating expenses, including investment advisory fees, if any.

²  The Fund generally invests at least 90% of its assets, plus the amount of any borrowing for investment purposes, in securities of the Russell 2500^™ Index.

³  An index that measures the performance of the small to mid-cap segment of the U.S. equity universe, commonly referred to as “smid” cap. The Russell 2500^™ Index is a subset of the Russell 3000® Index. It includes approximately 2500 of the smallest securities based on a combination of their market cap and current index membership.

⁴  Commencement of operations.

Performance Summary for the Period Ended January 31, 2017

				Average Annual Total  Returns5
	6 Month Total Returns			1 Year			Since Inception6
Institutional		8.99	%		29.78	%		8.51	%
Investor A		8.90			29.67			8.30
Class K		9.00			29.81			8.55
Russell 2500™ Index		8.97			29.55			8.29

⁵  See “About Fund Performance” on page 16 for a detailed description of share classes, including any related fees.

⁶  The Fund commenced operations on August 13, 2015.

Past performance is not indicative of future results.

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

Expense Example

	Actual						Hypothetical8
	Beginning Account Value August 1, 2016		Ending Account Value January 31, 2017		Expenses Paid During the Period7		Beginning Account Value August 1, 2016		Ending Account Value January 31, 2017		Expenses Paid During the Period7		Annualized Expense Ratio
Institutional	$	1,000.00	$	1,089.90	$	0.52	$	1,000.00	$	1,024.43	$	0.50		0.10	%
Investor A	$	1,000.00	$	1,089.00	$	1.72	$	1,000.00	$	1,023.29	$	1.66		0.33	%
Class K	$	1,000.00	$	1,090.00	$	0.36	$	1,000.00	$	1,024.58	$	0.35		0.07	%

⁷  For each class of the Fund, expenses are equal to the annualized net expense ratio for the class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period shown).

⁸  Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365.

See “Disclosure of Expenses” on page 16 for further information on how expenses were calculated.

BLACKROCK FUNDS JANUARY 31, 2017 11

Fund Summary as of January 31, 2017 BlackRock Total Stock Market Index Fund

Investment Objective

BlackRock Total Stock Market Index Fund’s (the “Fund”) investment objective is to seek to track the investment results of a broad-based index composed of U.S. equities.

On February 24, 2017, the Board of Trustees of BlackRock Funds approved a name change from “BlackRock Total Stock Market Index Fund” to “iShares Total U.S. Stock Market Index Fund.” The change is expected to be effective during the second quarter of 2017.

Portfolio Management Commentary

How did the Fund perform?

• For the six months ended January 31, 2017, the Fund’s Institutional Shares returned 6.55%, Investor A Shares returned 6.37%, and Class K Shares returned 6.57%. The benchmark Russell 3000^® Index returned 6.61% for the same period.

• Returns for the Fund’s respective share classes differ from the benchmark index based on individual share-class expenses.

Describe the market environment.

• Most of the major U.S. equity indexes saw gains at the beginning of the period, largely driven by a dovish Fed that kept rates unchanged and stronger-than-expected earnings releases versus analyst expectations.

• Investors’ focus on the September Fed meeting dominated market performance in the last month of the third quarter. While the Fed kept rates unchanged, several Fed officials expressed support of a rate hike later in the year.

• The U.S. presidential election and the Fed were front and center in 2016, especially in the fourth quarter. The fourth quarter started with a slight increase in volatility as investors prepared for a possible Fed rate increase, and weighed probable outcomes of the presidential election. While many people were shocked by the Trump win, markets did not experience the same type of volatility seen after the Brexit vote, with major U.S. indexes posting solid gains in November.

• The performance of U.S. equities post-election suggests market participants are optimistic about President Trump’s pro-growth policies including lower taxes, deregulation and infrastructure spending.

Describe recent portfolio activity.

• During the period, as changes were made to the composition of the Russell 3000^® Index, the Fund purchased and sold securities to maintain its objective of replicating the risks and return of the benchmark index.

• At period end, the Fund accumulated cash leading into the rebalancing of the benchmark index to limit transactional costs. The Fund’s cash position had no material impact on performance.

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.

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.

12 BLACKROCK FUNDS JANUARY 31, 2017

BlackRock Total Stock Market Index Fund

Total Return Based on a $10,000 Investment

¹  Assuming transaction costs and other operating expenses, including investment advisory fees, if any.

²  The Fund generally invests at least 90% of its assets, plus the amount of any borrowing for investment purposes, in securities of the Russell 3000^® Index.

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

⁴  Commencement of operations.

Performance Summary for the Period Ended January 31, 2017

				Average Annual Total Returns5
	6 Month Total Returns			1 Year			Since Inception6
Institutional		6.55	%		21.82	%		8.47	%
Investor A		6.37			21.52			8.21
Class K		6.57			21.86			8.50
Russell 3000® Index		6.61			21.73			8.37

⁵  See “About Fund Performance” on page 16 for a detailed description of share classes, including any related fees.

⁶  The Fund commenced operations on August 13, 2015.

Past performance is not indicative of future results.

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

Expense Example

	Actual						Hypothetical8
	Beginning Account Value August 1, 2016		Ending Account Value January 31, 2017		Expenses Paid During the Period7		Beginning Account Value August 1, 2016		Ending Account Value January 31, 2017		Expenses Paid During the Period7		Annualized Expense Ratio
Institutional	$	1,000.00	$	1,065.50	$	0.31	$	1,000.00	$	1,024.90	$	0.31		0.06	%
Investor A	$	1,000.00	$	1,063.70	$	1.46	$	1,000.00	$	1,023.79	$	1.43		0.28	%
Class K	$	1,000.00	$	1,065.70	$	0.16	$	1,000.00	$	1,025.05	$	0.15		0.03	%

⁷  For each class of the Fund, expenses are equal to the annualized net expense ratio for the class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period shown).

⁸  Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365.

See “Disclosure of Expenses” on page 16 for further information on how expenses were calculated.

BLACKROCK FUNDS JANUARY 31, 2017 13

Portfolio Information as of January 31, 2017

BlackRock Midcap Index Fund*

Sector Allocation	Percent of Net Assets
Consumer Discretionary		15	%
Information Technology		15
Industrials		13
Financials		13
Real Estate		9
Health Care		9
Energy		6
Utilities		6
Materials		6
Consumer Staples		5
Telecommunication Services		1
Short-Term Securities		4
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 rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

* Ten largest holdings have not been included as the Fund does not hold any position in excess of 1% of Net Assets.

BlackRock MSCI Asia ex Japan Index  Fund

Ten Largest Holdings	Percent of Net Assets
Samsung Electronics Co. Ltd.		5	%
Tencent Holdings Ltd.		4
Taiwan Semiconductor Manufacturing Co. Ltd.		4
Alibaba Group Holding Ltd. — ADR		3
AIA Group Ltd.		2
China Mobile Ltd.		2
China Construction Bank Corp., Class H		2
Baidu, Inc. — ADR		1
Industrial & Commercial Bank of China Ltd., Class H		1
Hon Hai Precision Industry Co. Ltd.		1

Geographic Allocation	Percent of Net Assets
China		26	%
South Korea		17
Hong Kong		17
Taiwan		14
India		10
Singapore		5
Indonesia		3
Malaysia		3
Thailand		3
Philippines		1
Other		—	1
Short-Term Securities		1
Other Assets Less Liabilities		—	2

¹  Other includes a 1% or less investment in each of the following countries: Republic of Korea, United States.

²  Represents less than 1% of Net Assets.

BlackRock MSCI World Index Fund

Ten Largest Holdings	Percent of Net Assets
Apple, Inc.		2	%
Microsoft Corp.		1
Exxon Mobil Corp.		1
Amazon.com, Inc.		1
Johnson & Johnson		1
JPMorgan Chase & Co.		1
Facebook, Inc.		1
Wells Fargo & Co.		1
General Electric Co.		1
AT&T, Inc.		1

Geographic Allocation	Percent of Net Assets1
United States		58	%
Japan		9
United Kingdom		6
Canada		4
France		3
Switzerland		3
Germany		3
Australia		3
Netherlands		2
Other		7	1
Short-Term Securities		3
Liabilities in Excess of Other Assets		(1	)

¹  Other includes a 1% or less investment in each of the following countries: Hong Kong, Spain, Sweden, Singapore, Ireland, Italy, Denmark, Belgium, Finland, Norway, Israel, Austria, New Zealand, Portugal, Argentina, Luxembourg, Bermuda, Mexico and United Arab Emirates.

14 BLACKROCK FUNDS JANUARY 31, 2017

Portfolio Information (concluded)

BlackRock Small/Mid Cap Index Fund*

Sector Allocation	Percent of Net Assets
Financials		17	%
Industrials		15
Information Technology		15
Consumer Discretionary		12
Health Care		11
Real Estate		10
Materials		6
Short-Term Securities		5
Energy		5
Utilities		4
Consumer Staples		3
Telecommunication Services		1
Liabilities in Excess of Other Assets		(4	)

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 such sector sub-classifications for reporting ease.

* Ten largest holdings have not been included as the Fund does not hold any position in excess of 1% of Net Assets.

BlackRock Total Stock Market Index Fund

Ten Largest Holdings	Percent of Net Assets
Apple, Inc.		3	%
Microsoft Corp.		2
Exxon Mobil Corp.		1
Amazon.com, Inc.		1
Johnson & Johnson		1
Berkshire Hathaway, Inc.		1
JPMorgan Chase & Co.		1
Facebook, Inc.		1
General Electric Co.		1
AT&T, Inc.		1

Sector Allocation	Percent of Net Assets
Information Technology		20	%
Financials		15
Health Care		13
Consumer Discretionary		12
Industrials		11
Consumer Staples		8
Energy		7
Real Estate		4
Materials		3
Utilities		3
Telecommunication Services		2
Short-Term Securities		9
Liabilities in Excess of Other Assets		(7	)

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 such sector sub-classifications for reporting ease.

BLACKROCK FUNDS JANUARY 31, 2017 15

About Fund Performance

• Institutional and Class K Shares are not subject to any sales charge. These shares bear no ongoing distribution or service fees and are available only to certain eligible investors. Prior to November 30, 2015, Class K Shares of BlackRock MSCI Asia ex Japan Index Fund and BlackRock MSCI World Index Fund performance results are those of Institutional Shares of BlackRock MSCI Asia ex Japan Index Fund and BlackRock MSCI World Index Fund, respectively, restated to reflect Class K Share fees.

• Investor A Shares (available only in BlackRock Midcap Index Fund, BlackRock Small/Mid Cap Index Fund and BlackRock Total Stock Market Index Fund) are not subject to any sales charge and bear no ongoing distribution fee. These shares are subject to an ongoing service fee of 0.25% per year. These shares are generally available through financial intermediaries. Prior to November 30, 2015, Investor A Shares of BlackRock Midcap Index Fund performance results are those of Institutional Shares restated to reflect Investor A Share fees.

Performance information reflects past performance and does not guarantee future results. Current performance may be lower or higher than the perform-

ance data quoted. Refer to www.blackrock.com to obtain performance data current to the most recent month end. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Figures shown in the performance tables on the previous pages assume reinvestment of all distributions, if any, at net asset value (“NAV”) on the ex-dividend date. Investment return and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Distributions paid to each class of shares will vary because of the different levels of service, distribution and transfer agency fees applicable to each class, which are deducted from the income available to be paid to shareholders.

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

Disclosure of Expenses

Shareholders of these Funds may incur the following charges: (a) transactional expenses; and (b) operating expenses, including investment advisory fees, service and distribution fees, including 12b-1 fees, and other fund expenses. The expense examples shown on the previous pages (which are based on a hypothetical investment of $1,000 invested on August 1, 2016 and held through January 31, 2017) are intended to assist shareholders both in calculating expenses based on an investment in each Fund and in comparing these expenses with similar costs of investing in other mutual funds.

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

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

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

Derivative Financial Instruments

The Funds may invest in various derivative financial instruments. These instruments are used to obtain exposure to a security, commodity, index, market, and/or other asset without owning or taking physical custody of securities, commodities and/or other referenced assets or to manage market, equity, credit, interest rate, foreign currency exchange rate, commodity and/or other risks. Derivative financial instruments may give rise to a form of economic leverage and involve risks, including the imperfect correlation between the value of a derivative financial instrument and the underlying asset, possible default of the counterparty to the

transaction or illiquidity of the instrument. The Funds’ successful use of a derivative financial instrument depends on the investment adviser’s ability to predict pertinent market movements accurately, which cannot be assured. The use of these instruments may result in losses greater than if they had not been used, may limit the amount of appreciation a Fund can realize on an investment and/or may result in lower distributions paid to shareholders. The Funds’ investments in these instruments, if any, are discussed in detail in the Notes to Financial Statements.

16 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments January 31, 2017 (Unaudited) BlackRock Midcap Index Fund (Percentages shown are based on Net Assets)

Common Stocks	Shares		Value
Aerospace & Defense — 1.5%
Arconic, Inc.		182,698	$	4,163,689
B/E Aerospace, Inc.		42,487		2,611,676
HEICO Corp.		7,843		603,519
HEICO Corp., Class A		16,353		1,084,204
Hexcel Corp.		38,471		1,975,486
Huntington Ingalls Industries, Inc.		19,396		3,762,048
L3 Technologies, Inc.		31,942		5,068,876
Orbital ATK, Inc.		24,295		2,112,450
Rockwell Collins, Inc.		54,232		4,922,096
Spirit Aerosystems Holdings, Inc., Class A		50,670		3,042,734
Textron, Inc.		112,244		5,316,998
TransDigm Group, Inc.		20,881		4,518,648
				39,182,424
Air Freight & Logistics — 0.3%
C.H. Robinson Worldwide, Inc.		59,255		4,506,936
Expeditors International of Washington, Inc.		75,503		3,932,196
				8,439,132
Airlines — 1.1%
Alaska Air Group, Inc.		49,796		4,671,861
American Airlines Group, Inc.		220,295		9,748,054
Copa Holdings SA, Class A		13,121		1,279,166
JetBlue Airways Corp. (a)		133,837		2,624,544
Spirit Airlines, Inc. (a)		29,611		1,600,178
United Continental Holdings, Inc. (a)		132,121		9,310,567
				29,234,370
Auto Components — 1.7%
Adient PLC (a)		38,276		2,430,143
Allison Transmission Holdings, Inc.		58,719		2,053,990
BorgWarner, Inc.		90,371		3,689,848
Delphi Automotive PLC		113,678		7,964,281
Gentex Corp.		117,511		2,454,805
Goodyear Tire & Rubber Co.		110,885		3,591,565
Johnson Controls International PLC		382,385		16,817,292
Lear Corp.		30,807		4,377,367
Visteon Corp. (a)		14,202		1,272,073
				44,651,364
Automobiles — 0.2%
Harley-Davidson, Inc.		75,445		4,303,383
Thor Industries, Inc.		20,056		2,075,796
				6,379,179
Banks — 4.1%
Associated Banc-Corp		61,934		1,566,930
Bank of Hawaii Corp.		17,594		1,511,501
BankUnited, Inc.		41,147		1,571,815
BOK Financial Corp.		10,867		893,702
CIT Group, Inc.		83,069		3,421,612
Citizens Financial Group, Inc.		220,817		7,986,951
Comerica, Inc.		72,872		4,921,046
Commerce Bancshares, Inc.		36,554		2,066,398
Cullen/Frost Bankers, Inc.		22,135		1,978,869
East West Bancorp, Inc.		59,479		3,059,600
Fifth Third Bancorp		318,582		8,314,990
First Hawaiian, Inc.		10,124		333,991
First Horizon National Corp.		95,875		1,917,500
First Republic Bank		60,813		5,736,490
Huntington Bancshares, Inc.		447,455		6,054,066

Common Stocks	Shares		Value
Banks (continued)
KeyCorp		449,605	$	8,079,402
M&T Bank Corp.		62,379		10,140,954
PacWest Bancorp		49,562		2,745,735
Popular, Inc.		42,722		1,898,138
Regions Financial Corp.		528,949		7,622,155
Signature Bank (a)		21,991		3,464,022
SunTrust Banks, Inc.		209,257		11,889,983
SVB Financial Group (a)		21,545		3,710,695
Synovus Financial Corp.		51,744		2,156,690
TCF Financial Corp.		65,902		1,143,400
Western Alliance Bancorp (a)		38,868		1,919,302
Zions Bancorporation		83,563		3,525,523
				109,631,460
Beverages — 0.7%
Brown-Forman Corp., Class A		23,545		1,101,435
Brown-Forman Corp., Class B		76,219		3,475,586
Dr. Pepper Snapple Group, Inc.		77,199		7,040,549
Molson Coors Brewing Co., Class B		71,673		6,917,878
				18,535,448
Biotechnology — 1.2%
ACADIA Pharmaceuticals, Inc. (a)		40,583		1,403,766
Agios Pharmaceuticals, Inc. (a)		12,481		537,058
Alkermes PLC (a)		62,575		3,385,933
Alnylam Pharmaceuticals, Inc. (a)		31,108		1,244,009
AquaBounty Technologies, Inc. (a)		358		4,940
BioMarin Pharmaceutical, Inc. (a)		71,011		6,222,694
Incyte Corp. (a)		67,751		8,212,099
Intercept Pharmaceuticals, Inc. (a)		6,831		749,702
Intrexon Corp. (a)		23,983		507,480
Ionis Pharmaceuticals, Inc. (a)		50,033		2,226,469
Juno Therapeutics, Inc. (a)		26,412		563,632
Neurocrine Biosciences, Inc. (a)		35,742		1,533,689
OPKO Health, Inc. (a)		135,003		1,173,176
Seattle Genetics, Inc. (a)		39,975		2,408,094
United Therapeutics Corp. (a)		18,314		2,996,720
				33,169,461
Building Products — 0.8%
Allegion PLC		39,891		2,619,642
AO Smith Corp.		60,676		2,957,955
Armstrong World Industries, Inc. (a)		19,141		764,683
Fortune Brands Home & Security, Inc.		63,785		3,516,467
Lennox International, Inc.		16,531		2,592,226
Masco Corp.		138,144		4,551,845
Owens Corning		47,649		2,632,607
USG Corp. (a)		37,139		1,136,082
				20,771,507
Capital Markets — 2.0%
Affiliated Managers Group, Inc. (a)		22,461		3,422,158
Ameriprise Financial, Inc.		65,458		7,348,970
Artisan Partners Asset Management, Inc., Class A		14,824		429,155
Donnelley Financial Solutions, Inc. (a)		10,375		249,830
E*Trade Financial Corp. (a)		116,428		4,360,229
Eaton Vance Corp.		45,819		1,921,191
Federated Investors, Inc., Class B		34,623		900,544
Invesco Ltd.		171,512		4,960,127
Lazard Ltd., Class A		53,214		2,260,531
Legg Mason, Inc.		42,149		1,335,702

Portfolio Abbreviations

ADR	American Depositary Receipts	MSCI	Morgan Stanley Capital International	PCL	Public Company Limited
CVA	Certificaten Van Aandelen (Dutch Certificate)	NVDR	Non-voting Depository Receipts	REIT	Real Estate Investment Trust
GDR	Global Depositary Receipt

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 17

Schedule of Investments (continued) BlackRock Midcap Index Fund

Common Stocks	Shares		Value
Capital Markets (continued)
LPL Financial Holdings, Inc.		35,051	$	1,377,504
Northern Trust Corp.		86,329		7,161,854
Raymond James Financial, Inc.		52,722		3,950,459
SEI Investments Co.		53,157		2,578,646
T. Rowe Price Group, Inc.		101,276		6,830,053
TD Ameritrade Holding Corp.		103,649		4,783,401
				53,870,354
Chemicals — 1.9%
Albemarle Corp.		46,647		4,321,378
Ashland Global Holdings, Inc.		25,802		3,071,212
Axalta Coating Systems Ltd. (a)		68,890		1,997,810
Cabot Corp.		25,446		1,408,945
Celanese Corp., Series A		61,425		5,184,270
CF Industries Holdings, Inc.		97,080		3,425,953
Eastman Chemical Co.		61,558		4,770,745
FMC Corp.		55,652		3,348,024
Huntsman Corp.		82,444		1,681,033
International Flavors & Fragrances, Inc.		33,196		3,890,903
Mosaic Co.		145,693		4,570,389
NewMarket Corp.		3,070		1,323,692
Platform Specialty Products Corp. (a)		82,049		996,075
RPM International, Inc.		54,180		2,831,447
Scotts Miracle-Gro Co., Class A		18,781		1,727,289
Valspar Corp.		32,671		3,615,699
Valvoline, Inc.		13,812		319,748
Westlake Chemical Corp.		16,060		994,275
WR Grace & Co.		29,246		2,027,918
				51,506,805
Commercial Services & Supplies — 1.0%
Cintas Corp.		36,959		4,291,310
Clean Harbors, Inc. (a)		21,876		1,214,118
Copart, Inc. (a)		40,631		2,305,403
Covanta Holding Corp.		49,793		801,667
Iron Mountain, Inc.		108,989		3,901,806
KAR Auction Services, Inc.		57,306		2,610,288
LSC Communications, Inc.		10,375		272,033
Pitney Bowes, Inc.		79,094		1,259,176
Republic Services, Inc.		98,183		5,633,741
Rollins, Inc.		39,940		1,408,284
RR Donnelley & Sons Co.		31,840		546,056
Stericycle, Inc. (a)		34,259		2,642,739
				26,886,621
Communications Equipment — 1.2%
Arista Networks, Inc. (a)		16,218		1,524,492
ARRIS International PLC (a)		78,519		2,244,073
Brocade Communications Systems, Inc.		166,337		2,074,223
CommScope Holding Co., Inc. (a)		53,272		2,014,747
EchoStar Corp., Class A (a)		18,462		940,270
F5 Networks, Inc. (a)		27,975		3,749,489
Harris Corp.		51,968		5,337,633
Juniper Networks, Inc.		155,393		4,161,425
Motorola Solutions, Inc.		72,789		5,874,800
Palo Alto Networks, Inc. (a)		36,206		5,342,557
				33,263,709
Construction & Engineering — 0.5%
AECOM (a)		63,328		2,338,703
Chicago Bridge & Iron Co. NV		43,373		1,440,417
Fluor Corp.		57,933		3,215,281
Jacobs Engineering Group, Inc. (a)		49,763		2,913,624
KBR, Inc.		60,389		1,027,217
Quanta Services, Inc. (a)		60,001		2,153,436
				13,088,678

Common Stocks	Shares		Value
Construction Materials — 0.6%
Eagle Materials, Inc.		19,468	$	2,035,963
Martin Marietta Materials, Inc.		26,466		6,076,594
Vulcan Materials Co.		55,154		7,077,913
				15,190,470
Consumer Finance — 0.8%
Ally Financial, Inc.		184,733		3,901,561
Credit Acceptance Corp. (a)(b)		3,330		683,582
Navient Corp.		125,321		1,884,828
OneMain Holdings, Inc. (a)		21,667		484,908
Santander Consumer USA Holdings, Inc. (a)		42,787		565,644
SLM Corp. (a)		178,554		2,121,222
Synchrony Financial		348,815		12,494,553
				22,136,298
Containers & Packaging — 1.7%
Aptargroup, Inc.		25,643		1,871,170
Avery Dennison Corp.		37,429		2,733,065
Ball Corp.		71,110		5,422,848
Bemis Co., Inc.		39,018		1,900,957
Berry Plastics Group, Inc. (a)		52,402		2,674,074
Crown Holdings, Inc. (a)		55,847		3,025,232
Graphic Packaging Holding Co.		131,968		1,650,920
International Paper Co.		170,903		9,673,110
Owens-Illinois, Inc. (a)		67,412		1,274,087
Packaging Corp. of America		38,926		3,588,199
Sealed Air Corp.		81,726		3,963,711
Silgan Holdings, Inc.		16,475		963,952
Sonoco Products Co.		41,152		2,261,302
WestRock Co.		104,197		5,559,952
				46,562,579
Distributors — 0.4%
Genuine Parts Co.		60,783		5,884,402
LKQ Corp. (a)		127,012		4,052,953
Pool Corp.		16,745		1,767,602
				11,704,957
Diversified Consumer Services — 0.3%
Graham Holdings Co., Class B		1,818		944,542
H&R Block, Inc.		86,289		1,851,762
Service Corp. International		77,788		2,265,964
ServiceMaster Global Holdings, Inc. (a)		56,350		2,083,823
				7,146,091
Diversified Financial Services — 1.1%
CBOE Holdings, Inc.		33,817		2,692,510
FactSet Research Systems, Inc.		16,651		2,881,456
Interactive Brokers Group, Inc., Class A		26,612		993,692
Leucadia National Corp.		136,959		3,266,472
MarketAxess Holdings, Inc.		15,278		2,860,805
Moody’s Corp.		70,553		7,314,229
Morningstar, Inc.		7,239		551,250
MSCI, Inc.		37,871		3,133,825
Nasdaq, Inc.		46,798		3,301,131
Voya Financial, Inc.		85,385		3,434,185
				30,429,555
Diversified Telecommunication Services — 0.8%
CenturyLink, Inc.		224,183		5,797,372
Frontier Communications Corp.		483,522		1,687,492
Level 3 Communications, Inc. (a)		121,874		7,246,628
SBA Communications Corp. (a)		51,786		5,450,994
Zayo Group Holdings, Inc. (a)		67,932		2,171,107
				22,353,593
Electric Utilities — 2.3%
Avangrid, Inc.		22,396		868,965

See Notes to Financial Statements.

18 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Midcap Index Fund

Common Stocks	Shares		Value
Electric Utilities (continued)
Edison International		131,991	$	9,619,504
Entergy Corp.		74,652		5,348,069
Eversource Energy		132,338		7,320,938
FirstEnergy Corp.		177,268		5,374,766
Great Plains Energy, Inc.		89,266		2,459,278
Hawaiian Electric Industries, Inc.		44,650		1,494,882
OGE Energy Corp.		82,830		2,778,118
Pinnacle West Capital Corp.		46,241		3,589,689
PPL Corp.		282,817		9,853,344
Westar Energy, Inc.		59,040		3,228,898
Xcel Energy, Inc.		212,034		8,761,245
				60,697,696
Electrical Equipment — 0.8%
Acuity Brands, Inc.		18,110		3,752,935
AMETEK, Inc.		95,900		4,900,490
Hubbell, Inc.		22,734		2,775,367
Regal-Beloit Corp.		18,561		1,347,528
Rockwell Automation, Inc.		54,139		8,012,031
				20,788,351
Electronic Equipment, Instruments & Components — 1.3%
Amphenol Corp., Class A		124,975		8,434,563
Arrow Electronics, Inc. (a)		38,170		2,806,258
Avnet, Inc.		53,276		2,474,138
CDW Corp.		67,710		3,487,742
Cognex Corp.		33,770		2,281,501
Dolby Laboratories, Inc., Class A		21,342		1,022,495
Fitbit, Inc., Series A (a)		50,416		303,000
FLIR Systems, Inc.		56,849		2,008,475
IPG Photonics Corp. (a)		14,674		1,687,363
Jabil Circuit, Inc.		77,715		1,863,606
Keysight Technologies, Inc. (a)		71,367		2,645,575
National Instruments Corp.		43,141		1,355,490
Trimble, Inc. (a)		105,474		3,124,140
Zebra Technologies Corp., Class A (a)		21,539		1,802,168
				35,296,514
Energy Equipment & Services — 1.3%
Baker Hughes, Inc.		182,469		11,510,144
Diamond Offshore Drilling, Inc. (a)		25,641		420,000
Dril-Quip, Inc. (a)		15,891		988,420
Ensco PLC, Class A		125,992		1,375,833
Frank’s International NV		20,758		245,775
Helmerich & Payne, Inc.		40,282		2,866,467
Nabors Industries Ltd.		114,307		1,857,489
National Oilwell Varco, Inc.		156,901		5,932,427
Noble Corp. PLC		103,607		699,347
Oceaneering International, Inc.		40,869		1,138,202
Patterson-UTI Energy, Inc.		59,725		1,674,689
Rowan Cos. PLC, Class A (a)		52,747		945,226
RPC, Inc.		23,631		508,539
Superior Energy Services, Inc. (a)		64,502		1,139,750
Transocean Ltd. (a)		144,801		2,022,870
Weatherford International PLC (a)		405,039		2,110,253
				35,435,431
Equity Real Estate Investment Trusts (REITs) — 0.1%
Colony NorthStar, Inc., Class A		227,235		3,163,111
Food & Staples Retailing — 0.4%
Casey’s General Stores, Inc.		16,153		1,855,980
Rite Aid Corp. (a)		429,427		2,413,380
Sprouts Farmers Market, Inc. (a)		56,014		1,045,781
U.S. Foods Holding Corp. (a)		18,145		493,544
Whole Foods Market, Inc.		132,555		4,005,812
				9,814,497

Common Stocks	Shares		Value
Food Products — 2.9%
Blue Buffalo Pet Products, Inc. (a)		23,965	$	581,151
Bunge Ltd.		57,948		4,010,581
Campbell Soup Co.		77,633		4,831,102
Conagra Brands, Inc.		182,152		7,120,322
Flowers Foods, Inc.		70,979		1,427,388
Hain Celestial Group, Inc. (a)		42,320		1,674,179
Hershey Co.		58,424		6,161,979
Hormel Foods Corp.		112,673		4,090,030
Ingredion, Inc.		29,910		3,834,163
J.M. Smucker Co.		48,285		6,559,517
Kellogg Co.		103,465		7,522,940
Lamb Weston Holdings, Inc.		60,682		2,267,080
McCormick & Co., Inc.		48,155		4,601,210
Mead Johnson Nutrition Co.		77,806		5,482,211
Pilgrim’s Pride Corp.		25,439		486,903
Pinnacle Foods, Inc.		48,121		2,559,556
Post Holdings, Inc. (a)		26,724		2,236,264
TreeHouse Foods, Inc. (a)		22,789		1,729,229
Tyson Foods, Inc., Class A		121,508		7,629,487
WhiteWave Foods Co. (a)		72,396		3,986,124
				78,791,416
Gas Utilities — 0.3%
Atmos Energy Corp.		42,319		3,223,861
National Fuel Gas Co.		30,903		1,735,204
UGI Corp.		71,819		3,330,247
				8,289,312
Health Care Equipment & Supplies — 2.9%
ABIOMED, Inc. (a)		16,506		1,755,743
Alere, Inc. (a)		36,002		1,332,074
Align Technology, Inc. (a)		30,332		2,781,141
C.R. Bard, Inc.		30,623		7,267,757
Cooper Cos., Inc.		19,817		3,658,416
Dentsply Sirona, Inc.		95,642		5,422,901
DexCom, Inc. (a)		34,182		2,705,505
Edwards Lifesciences Corp. (a)		87,976		8,466,810
Hill-Rom Holdings, Inc.		27,222		1,602,559
Hologic, Inc. (a)		116,139		4,707,114
IDEXX Laboratories, Inc. (a)		36,966		4,522,051
Intuitive Surgical, Inc. (a)		15,744		10,905,711
ResMed, Inc.		57,958		3,914,483
Teleflex, Inc.		18,184		3,050,002
Varex Imaging Corp. (a)		15,622		449,133
Varian Medical Systems, Inc. (a)		39,724		3,084,569
West Pharmaceutical Services, Inc.		29,636		2,508,095
Zimmer Biomet Holdings, Inc.		76,930		9,103,127
				77,237,191
Health Care Providers & Services — 2.0%
Acadia Healthcare Co., Inc. (a)		30,318		1,163,302
AmerisourceBergen Corp.		68,556		5,983,568
Brookdale Senior Living, Inc. (a)		76,841		1,150,310
Centene Corp. (a)		69,631		4,405,553
DaVita, Inc. (a)		69,762		4,447,327
Envision Healthcare Corp. (a)		48,328		3,286,304
Henry Schein, Inc. (a)		34,068		5,446,110
Laboratory Corp. of America Holdings (a)		42,599		5,717,212
LifePoint Health, Inc. (a)		15,596		925,622
MEDNAX, Inc. (a)		38,072		2,602,221
Patterson Cos., Inc.		34,877		1,451,232
Premier, Inc., Class A (a)		19,117		609,068
Quest Diagnostics, Inc.		58,978		5,421,258
Tenet Healthcare Corp. (a)		33,669		592,238
Universal Health Services, Inc., Class B		35,641		4,014,246
VCA, Inc. (a)		32,343		2,930,276
WellCare Health Plans, Inc. (a)		18,640		2,712,865
				52,858,712

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 19

Schedule of Investments (continued) BlackRock Midcap Index Fund

Common Stocks	Shares		Value
Health Care Technology — 0.4%
athenahealth, Inc. (a)		16,172	$	2,037,510
Cerner Corp. (a)		122,500		6,579,475
Inovalon Holdings, Inc., Class A (a)		24,032		277,570
Veeva Systems, Inc., Class A (a)		39,927		1,690,110
				10,584,665
Hotels, Restaurants & Leisure — 2.5%
Aramark		100,793		3,410,835
Brinker International, Inc.		20,928		931,296
Chipotle Mexican Grill, Inc. (a)		11,758		4,955,291
Choice Hotels International, Inc.		13,611		755,410
Darden Restaurants, Inc.		48,521		3,555,619
Domino’s Pizza, Inc.		20,796		3,629,734
Dunkin’ Brands Group, Inc.		38,051		1,973,705
Extended Stay America, Inc.		29,343		475,650
Hilton Grand Vacations, Inc. (a)		21,254		623,380
Hilton Worldwide Holdings, Inc.		72,657		4,183,590
Hyatt Hotels Corp., Class A (a)		13,679		748,378
International Game Technology PLC		39,771		1,050,352
Marriott International, Inc., Class A		134,045		11,340,207
MGM Resorts International (a)		197,397		5,685,034
Norwegian Cruise Line Holdings Ltd. (a)		66,238		3,113,186
Panera Bread Co., Class A (a)		9,280		1,940,077
Royal Caribbean Cruises Ltd.		70,190		6,571,890
Six Flags Entertainment Corp.		29,773		1,773,875
Vail Resorts, Inc.		16,011		2,746,527
Wendy’s Co.		88,086		1,191,804
Wyndham Worldwide Corp.		45,731		3,615,493
Wynn Resorts Ltd.		33,508		3,398,716
				67,670,049
Household Durables — 1.8%
CalAtlantic Group, Inc.		31,462		1,097,080
D.R. Horton, Inc.		140,573		4,204,538
Garmin Ltd.		46,334		2,237,469
Harman International Industries, Inc.		29,405		3,268,660
Leggett & Platt, Inc.		55,036		2,626,318
Lennar Corp., Class A		73,657		3,288,785
Lennar Corp., Class B		6,095		219,176
Mohawk Industries, Inc. (a)		25,683		5,543,419
Newell Brands, Inc.		196,036		9,278,384
NVR, Inc. (a)		1,454		2,701,532
PulteGroup, Inc.		143,486		3,086,384
Tempur Sealy International, Inc. (a)		22,151		952,493
Toll Brothers, Inc. (a)		64,275		2,015,664
Tupperware Brands Corp.		21,071		1,271,846
Whirlpool Corp.		30,950		5,412,845
				47,204,593
Household Products — 0.5%
Church & Dwight Co., Inc.		106,885		4,833,340
Clorox Co.		53,970		6,476,400
Energizer Holdings, Inc.		25,702		1,297,180
Spectrum Brands Holdings, Inc.		10,257		1,368,181
				13,975,101
Independent Power and Renewable Electricity Producers — 0.3%
AES Corp.		274,158		3,136,367
Calpine Corp. (a)		149,140		1,759,852
NRG Energy, Inc.		129,561		2,142,939
				7,039,158
Industrial Conglomerates — 0.5%
BWX Technologies, Inc.		38,762		1,608,235
Carlisle Cos., Inc.		26,279		2,867,302
Roper Technologies, Inc.		41,586		7,978,274
				12,453,811

Common Stocks	Shares		Value
Insurance — 4.3%
Alleghany Corp. (a)		5,676	$	3,471,271
Allied World Assurance Co. Holdings AG		36,518		1,940,201
American Financial Group, Inc.		29,502		2,542,187
American National Insurance Co.		3,272		381,482
AmTrust Financial Services, Inc.		37,389		986,696
Arch Capital Group Ltd. (a)		48,431		4,278,879
Arthur J Gallagher & Co.		73,295		3,945,470
Aspen Insurance Holdings Ltd.		26,029		1,468,036
Assurant, Inc.		24,200		2,350,546
Assured Guaranty Ltd.		56,911		2,214,407
Axis Capital Holdings Ltd.		39,592		2,534,284
Brown & Brown, Inc.		48,656		2,049,877
Cincinnati Financial Corp.		62,834		4,434,824
CNA Financial Corp.		13,113		546,156
Endurance Specialty Holdings Ltd.		26,266		2,434,596
Erie Indemnity Co., Class A		9,786		1,097,108
Everest Re Group Ltd.		15,450		3,397,919
First American Financial Corp.		44,359		1,667,011
FNF Group		109,753		3,880,866
Hanover Insurance Group, Inc.		17,942		1,506,051
Hartford Financial Services Group, Inc.		163,712		7,974,412
Lincoln National Corp.		99,639		6,726,629
Loews Corp.		116,814		5,441,196
Markel Corp. (a)		5,739		5,308,575
Mercury General Corp.		7,488		473,616
Old Republic International Corp.		100,601		2,092,501
Principal Financial Group, Inc.		111,648		6,373,984
ProAssurance Corp.		20,924		1,138,266
Progressive Corp.		243,759		9,126,337
Reinsurance Group of America, Inc.		25,450		3,193,212
RenaissanceRe Holdings Ltd.		15,515		2,115,005
Torchmark Corp.		49,819		3,663,689
Unum Group		99,460		4,518,468
Validus Holdings Ltd.		32,680		1,862,760
W.R. Berkley Corp.		41,111		2,763,070
White Mountains Insurance Group Ltd.		1,816		1,652,124
XL Group Ltd.		110,610		4,155,618
				115,707,329
Internet & Direct Marketing Retail — 0.6%
Expedia, Inc.		49,718		6,045,212
Groupon, Inc. (a)		147,930		510,359
Liberty Expedia Holdings, Inc., Class A (a)		22,615		995,286
Liberty Interactive Corp QVC Group, Series A (a)		184,585		3,540,340
Liberty Ventures (a)		33,222		1,450,140
TripAdvisor, Inc. (a)		47,339		2,504,233
				15,045,570
Internet Software & Services — 0.9%
Akamai Technologies, Inc. (a)		71,738		4,920,510
CommerceHub, Inc., Series A (a)		13,222		194,231
CommerceHub, Inc., Series C (a)		11,894		173,415
CoStar Group, Inc. (a)		13,281		2,684,090
GoDaddy, Inc., Class A (a)		18,775		670,831
IAC/InterActiveCorp (a)		29,195		2,008,908
Match Group, Inc. (a)(b)		11,955		207,658
Nutanix, Inc., Class A (a)(b)		5,953		180,197
Pandora Media, Inc. (a)		91,652		1,191,476
Twilio, Inc. (a)		7,777		224,211
Twitter, Inc. (a)		263,362		4,640,439
VeriSign, Inc. (a)		39,439		3,163,402
Yelp, Inc. (a)		28,689		1,198,626
Zillow Group, Inc., Class A (a)		20,938		753,349
Zillow Group, Inc., Class C (a)		43,001		1,521,375
				23,732,718

See Notes to Financial Statements.

20 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Midcap Index Fund

Common Stocks	Shares		Value
IT Services — 3.7%
Alliance Data Systems Corp.		24,044	$	5,491,169
Amdocs Ltd.		61,924		3,635,558
Black Knight Financial Services, Inc., Class A (a)		9,785		356,663
Booz Allen Hamilton Holding Corp.		47,225		1,597,149
Broadridge Financial Solutions, Inc.		49,165		3,270,947
Computer Sciences Corp.	��	57,763		3,592,859
Conduent, Inc. (a)		83,957		1,255,997
CoreLogic, Inc. (a)		36,927		1,302,415
CSRA, Inc.		67,886		2,105,824
DST Systems, Inc.		13,650		1,571,798
Euronet Worldwide, Inc. (a)		20,725		1,482,252
Fidelity National Information Services, Inc.		135,360		10,750,291
First Data Corp., Class A (a)		129,676		1,989,230
Fiserv, Inc. (a)		92,488		9,935,986
FleetCor Technologies, Inc. (a)		38,167		5,629,251
Gartner, Inc. (a)		33,334		3,312,066
Genpact Ltd. (a)		62,621		1,545,486
Global Payments, Inc.		64,017		4,947,234
Jack Henry & Associates, Inc.		32,723		2,937,871
Leidos Holdings, Inc.		55,376		2,675,768
Paychex, Inc.		134,287		8,096,163
Sabre Corp.		85,974		2,106,363
Square, Inc., Class A (a)		21,063		307,941
Teradata Corp. (a)		53,797		1,579,480
Total System Services, Inc.		69,193		3,506,701
Vantiv, Inc., Class A (a)		64,555		4,017,903
VeriFone Systems, Inc. (a)		46,570		846,177
Western Union Co.		205,321		4,020,185
WEX, Inc. (a)		16,047		1,834,654
Xerox Corp.		418,645		2,901,210
				98,602,591
Leisure Products — 0.5%
Brunswick Corp.		37,631		2,252,592
Hasbro, Inc.		46,767		3,858,745
Mattel, Inc.		141,911		3,719,487
Polaris Industries, Inc.		25,043		2,105,365
Vista Outdoor, Inc. (a)		24,358		701,754
				12,637,943
Life Sciences Tools & Services — 1.6%
Agilent Technologies, Inc.		135,100		6,615,847
Bio-Rad Laboratories, Inc., Class A (a)		8,623		1,639,060
Bio-Techne Corp.		15,247		1,551,382
Bruker Corp.		44,091		1,046,279
Charles River Laboratories International, Inc. (a)		19,641		1,586,993
Illumina, Inc. (a)		60,914		9,752,331
Mettler-Toledo International, Inc. (a)		10,935		4,665,199
Patheon NV (a)		13,350		383,012
PerkinElmer, Inc.		45,138		2,400,890
QIAGEN NV (a)		91,227		2,643,759
Quintiles IMS Holdings, Inc. (a)		58,346		4,579,578
VWR Corp. (a)		31,308		811,190
Waters Corp. (a)		31,971		4,528,692
				42,204,212
Machinery — 3.8%
AGCO Corp.		28,929		1,816,741
Colfax Corp. (a)		40,858		1,593,462
Crane Co.		20,225		1,457,009
Cummins, Inc.		65,832		9,677,962
Donaldson Co., Inc.		52,610		2,222,773
Dover Corp.		63,801		4,960,528
Flowserve Corp.		54,019		2,655,574
Graco, Inc.		23,093		2,068,902
IDEX Corp.		31,633		2,852,031
Ingersoll-Rand PLC		107,316		8,515,525

Common Stocks	Shares		Value
Machinery (continued)
ITT, Inc.		37,516	$	1,533,279
Lincoln Electric Holdings, Inc.		25,407		2,118,182
Manitowoc Foodservice, Inc. (a)		52,303		1,003,172
Middleby Corp. (a)		23,404		3,140,349
Nordson Corp.		23,727		2,693,726
Oshkosh Corp.		30,297		2,109,580
PACCAR, Inc.		142,623		9,599,954
Parker Hannifin Corp.		55,673		8,191,168
Pentair PLC		69,180		4,056,023
Snap-on, Inc.		24,099		4,374,691
Stanley Black & Decker, Inc.		62,318		7,727,432
Terex Corp.		43,905		1,396,179
Timken Co.		29,358		1,303,495
Toro Co.		44,460		2,620,028
Trinity Industries, Inc.		62,050		1,708,857
Valmont Industries, Inc.		9,256		1,332,864
WABCO Holdings, Inc. (a)		21,964		2,394,735
Wabtec Corp.		36,043		3,122,766
Xylem, Inc.		74,837		3,690,212
				101,937,199
Marine — 0.1%
Kirby Corp. (a)		21,946		1,414,420
Media — 2.0%
AMC Networks, Inc., Class A (a)		24,684		1,415,627
Cable One, Inc.		1,956		1,236,935
Cinemark Holdings, Inc.		44,112		1,874,760
Clear Channel Outdoor Holdings, Inc., Class A		14,126		69,924
Discovery Communications, Inc., Class A (a)		61,949		1,756,254
Discovery Communications, Inc., Class C (a)		92,932		2,575,146
Interpublic Group of Cos., Inc.		167,175		3,933,628
John Wiley & Sons, Inc., Class A		18,760		1,033,676
Liberty Broadband Corp., Class A (a)		10,345		865,670
Liberty Broadband Corp., Class C (a)		43,213		3,687,797
Liberty Media Corp. — Liberty SiriusXM, Class A (a)		38,186		1,383,861
Liberty Media Corp. — Liberty SiriusXM, Class C (a)		75,933		2,725,235
Lions Gate Entertainment Corp., Class A		20,241		582,334
Lions Gate Entertainment Corp., Class B (a)		43,013		1,152,318
Live Nation Entertainment, Inc. (a)		54,537		1,560,849
Madison Square Garden Co., Class A (a)		8,094		1,421,873
News Corp., Class A		156,546		1,923,950
News Corp., Class B		51,247		648,275
Omnicom Group, Inc.		98,475		8,434,384
Regal Entertainment Group, Class A		32,562		737,855
Scripps Networks Interactive, Inc., Class A		34,307		2,612,821
Sirius XM Holdings, Inc.		740,307		3,494,249
TEGNA, Inc.		90,477		2,072,828
Tribune Media Co., Class A		32,698		943,010
Viacom, Inc., Class A		4,340		196,385
Viacom, Inc., Class B		143,494		6,046,837
				54,386,481
Metals & Mining — 1.5%
Alcoa Corp.		60,811		2,216,561
Compass Minerals International, Inc.		14,166		1,184,278
Freeport-McMoRan, Inc. (a)		553,119		9,209,431
Newmont Mining Corp.		221,115		8,022,052
Nucor Corp.		132,503		7,697,099
Reliance Steel & Aluminum Co.		28,851		2,297,982
Royal Gold, Inc.		27,122		1,957,395
Southern Copper Corp.		34,843		1,336,578
Steel Dynamics, Inc.		97,668		3,302,155
Tahoe Resources, Inc.		126,717		1,158,193
United States Steel Corp.		63,991		2,093,146
				40,474,870

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 21

Schedule of Investments (continued) BlackRock Midcap Index Fund

Common Stocks	Shares		Value
Multi-Utilities — 2.8%
Alliant Energy Corp.		95,014	$	3,577,277
Ameren Corp.		101,159		5,326,021
CenterPoint Energy, Inc.		179,897		4,715,100
CMS Energy Corp.		116,126		4,946,968
Consolidated Edison, Inc.		127,222		9,458,956
DTE Energy Co.		74,742		7,372,551
MDU Resources Group, Inc.		80,651		2,367,107
NiSource, Inc.		132,303		2,959,618
Public Service Enterprise Group, Inc.		210,355		9,308,209
SCANA Corp.		54,349		3,733,776
Sempra Energy		104,163		10,665,250
Vectren Corp.		34,427		1,889,698
WEC Energy Group, Inc.		131,883		7,787,691
				74,108,222
Multiline Retail — 1.1%
Burlington Stores, Inc. (a)		29,238		2,447,221
Dillard’s, Inc., Class A		7,129		402,361
Dollar General Corp.		118,576		8,753,280
Dollar Tree, Inc. (a)		94,411		7,287,585
JC Penney Co., Inc. (a)		130,652		868,836
Kohl’s Corp.		76,908		3,063,246
Macy’s, Inc.		128,519		3,796,451
Nordstrom, Inc.		51,219		2,264,904
				28,883,884
Oil, Gas & Consumable Fuels — 4.8%
Antero Resources Corp. (a)		75,298		1,838,024
Cabot Oil & Gas Corp.		192,468		4,134,213
Cheniere Energy, Inc. (a)		83,272		3,967,911
Chesapeake Energy Corp. (a)		253,629		1,635,907
Cimarex Energy Co.		39,109		5,287,928
Concho Resources, Inc. (a)		58,856		8,206,881
CONSOL Energy, Inc.		94,662		1,603,574
Continental Resources, Inc. (a)		36,342		1,764,767
Devon Energy Corp.		217,956		9,925,716
Diamondback Energy, Inc. (a)		37,669		3,961,649
Energen Corp. (a)		40,531		2,184,216
EQT Corp.		71,938		4,361,601
Extraction Oil & Gas, Inc. (a)		18,124		324,782
Gulfport Energy Corp. (a)		66,349		1,386,694
Hess Corp.		117,612		6,372,218
HollyFrontier Corp.		67,430		1,953,447
Kosmos Energy Ltd. (a)		62,538		408,998
Laredo Petroleum, Inc. (a)		61,432		832,404
Marathon Oil Corp.		353,647		5,923,587
Marathon Petroleum Corp.		219,284		10,536,596
Murphy Oil Corp.		68,138		1,969,870
Murphy USA, Inc. (a)		15,689		999,389
Newfield Exploration Co. (a)		82,958		3,324,957
Noble Energy, Inc.		177,572		7,060,263
ONEOK, Inc.		87,502		4,822,235
Parsley Energy, Inc., Class A (a)		77,424		2,726,873
PBF Energy, Inc., Class A		45,236		1,049,023
QEP Resources, Inc. (a)		99,750		1,739,640
Range Resources Corp.		85,804		2,774,901
Rice Energy, Inc. (a)		45,491		902,087
SM Energy Co.		40,304		1,229,675
Southwestern Energy Co. (a)		204,380		1,841,464
Targa Resources Corp.		68,744		3,961,029
Tesoro Corp.		49,761		4,023,177
Whiting Petroleum Corp. (a)		85,390		946,975
Williams Cos., Inc.		312,053		8,999,608
World Fuel Services Corp.		28,897		1,285,339
WPX Energy, Inc. (a)		160,225		2,231,934
				128,499,552

Common Stocks	Shares		Value
Paper & Forest Products — 0.0%
Domtar Corp.		25,013	$	1,092,818
Personal Products — 0.3%
Coty, Inc., Class A		190,035		3,648,672
Edgewell Personal Care Co. (a)		24,531		1,934,024
Herbalife Ltd. (a)		30,744		1,727,813
Nu Skin Enterprises, Inc., Class A		23,201		1,203,668
				8,514,177
Pharmaceuticals — 0.7%
Akorn, Inc. (a)		33,794		645,465
Endo International PLC (a)		87,043		1,065,406
Mallinckrodt PLC (a)		45,567		2,220,480
Perrigo Co. PLC		57,326		4,365,375
Zoetis, Inc.		189,938		10,435,194
				18,731,920
Professional Services — 0.9%
Dun & Bradstreet Corp.		15,115		1,853,401
Equifax, Inc.		49,378		5,791,052
ManpowerGroup, Inc.		27,825		2,656,174
Nielsen Holdings PLC		150,093		6,140,305
Robert Half International, Inc.		53,005		2,494,415
TransUnion (a)		21,828		688,237
Verisk Analytics, Inc. (a)		63,948		5,284,663
				24,908,247
Real Estate Investment Trusts (REITs) — 9.5%
AGNC Investment Corp.		137,723		2,571,288
Alexandria Real Estate Equities, Inc.		32,293		3,578,710
American Campus Communities, Inc.		54,425		2,646,144
American Homes 4 Rent, Class A		69,397		1,546,165
Annaly Capital Management, Inc.		423,705		4,330,265
Apartment Investment & Management Co., Class A		64,890		2,859,702
Apple Hospitality REIT, Inc.		68,468		1,370,729
AvalonBay Communities, Inc.		57,176		9,909,173
Boston Properties, Inc.		63,787		8,349,718
Brandywine Realty Trust		72,263		1,163,434
Brixmor Property Group, Inc.		79,399		1,915,898
Camden Property Trust		35,867		2,997,405
Care Capital Properties, Inc.		35,677		881,579
Chimera Investment Corp.		81,824		1,442,557
Columbia Property Trust, Inc.		52,147		1,160,271
Communications Sales & Leasing, Inc.		50,972		1,339,544
CoreCivic, Inc.		46,897		1,361,889
Corporate Office Properties Trust		39,531		1,257,876
CubeSmart		73,837		1,855,524
CyrusOne, Inc.		29,418		1,416,771
DCT Industrial Trust, Inc.		37,605		1,680,568
DDR Corp.		127,217		1,931,154
Digital Realty Trust, Inc.		66,383		7,144,802
Douglas Emmett, Inc.		58,061		2,197,028
Duke Realty Corp.		144,534		3,516,512
Empire State Realty Trust, Inc., Class A		51,118		1,047,408
EPR Properties		26,289		1,944,597
Equinix, Inc.		28,865		11,112,448
Equity Commonwealth (a)		50,880		1,569,139
Equity Lifestyle Properties, Inc.		31,796		2,350,996
Equity One, Inc.		38,416		1,198,195
Essex Property Trust, Inc.		27,187		6,098,044
Extra Space Storage, Inc.		50,230		3,619,072
Federal Realty Investment Trust		29,457		4,136,647
Forest City Realty Trust, Inc., Class A		94,967		2,150,053
Gaming and Leisure Properties, Inc.		77,710		2,457,967
GGP, Inc.		233,786		5,807,244
HCP, Inc.		194,550		5,898,756
Healthcare Trust of America, Inc., Class A		56,035		1,628,937
Highwoods Properties, Inc.		39,828		2,047,558

See Notes to Financial Statements.

22 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Midcap Index Fund

Common Stocks	Shares		Value
Real Estate Investment Trusts (REITs) (continued)
Hospitality Properties Trust		62,358	$	1,941,205
Host Hotels & Resorts, Inc.		306,841		5,544,617
Kilroy Realty Corp.		39,960		2,991,006
Kimco Realty Corp.		167,983		4,181,097
Lamar Advertising Co., Class A		34,145		2,578,630
Liberty Property Trust		60,823		2,334,995
Life Storage, Inc.		19,003		1,547,794
Macerich Co.		59,738		4,103,403
MFA Financial, Inc.		155,123		1,223,921
Mid-America Apartment Communities, Inc.		47,033		4,465,783
National Retail Properties, Inc.		59,582		2,597,775
Omega Healthcare Investors, Inc.		76,726		2,460,603
Outfront Media, Inc.		57,282		1,571,245
Paramount Group, Inc.		75,476		1,259,694
Park Hotels & Resorts, Inc.		42,508		1,153,667
Piedmont Office Realty Trust, Inc., Class A		60,514		1,314,364
Prologis, Inc.		217,675		10,633,424
Quality Care Properties, Inc. (a)		37,982		701,148
Rayonier, Inc.		51,916		1,447,937
Realty Income Corp.		107,509		6,410,762
Regency Centers Corp.		42,935		2,993,858
Retail Properties of America, Inc., Class A		98,667		1,477,045
Senior Housing Properties Trust		93,782		1,786,547
SL Green Realty Corp.		40,625		4,426,906
Spirit Realty Capital, Inc.		199,085		2,094,374
Starwood Property Trust, Inc.		104,365		2,323,165
STORE Capital Corp.		62,834		1,486,652
Sun Communities, Inc.		27,779		2,187,874
Tanger Factory Outlet Centers, Inc.		38,930		1,331,017
Taubman Centers, Inc.		24,208		1,714,895
Two Harbors Investment Corp.		144,768		1,269,615
UDR, Inc.		110,184		3,850,931
Ventas, Inc.		140,898		8,689,180
VEREIT, Inc.		402,262		3,431,295
Vornado Realty Trust		71,503		7,601,484
Weingarten Realty Investors		48,241		1,718,827
Welltower, Inc.		148,892		9,871,540
Weyerhaeuser Co.		308,691		9,671,289
WP Carey, Inc.		43,042		2,666,022
				254,547,353
Real Estate Management & Development — 0.3%
CBRE Group, Inc., Class A (a)		125,001		3,795,030
Howard Hughes Corp. (a)		15,023		1,601,602
Jones Lang LaSalle, Inc.		18,732		1,929,958
Realogy Holdings Corp.		59,327		1,537,163
				8,863,753
Road & Rail — 0.7%
AMERCO, Inc.		2,578		971,055
Avis Budget Group, Inc. (a)		33,518		1,247,540
Genesee & Wyoming, Inc., Class A (a)		25,204		1,899,374
Hertz Global Holdings, Inc. (a)		29,668		622,138
JB Hunt Transport Services, Inc.		36,886		3,654,665
Kansas City Southern		44,841		3,852,290
Landstar System, Inc.		17,837		1,509,010
Old Dominion Freight Line, Inc. (a)		28,067		2,477,755
Ryder System, Inc.		22,270		1,728,152
				17,961,979
Semiconductors & Semiconductor Equipment — 3.8%
Analog Devices, Inc.		127,846		9,580,779
Cree, Inc. (a)		41,493		1,144,377
Cypress Semiconductor Corp.		129,259		1,525,256
First Solar, Inc. (a)		32,052		999,702
KLA-Tencor Corp.		64,976		5,530,107
Lam Research Corp.		66,497		7,637,845

Common Stocks	Shares		Value
Semiconductors & Semiconductor Equipment (continued)
Linear Technology Corp.		99,197	$	6,262,307
Marvell Technology Group Ltd.		167,575		2,491,840
Maxim Integrated Products, Inc.		117,653		5,233,206
Microchip Technology, Inc.		87,553		5,896,695
Micron Technology, Inc. (a)		431,717		10,408,697
NVIDIA Corp.		212,226		23,170,835
ON Semiconductor Corp. (a)		171,377		2,282,742
Qorvo, Inc. (a)		53,421		3,430,162
Skyworks Solutions, Inc.		79,076		7,254,432
SunPower Corp. (a)(b)		22,929		152,249
Teradyne, Inc.		84,450		2,396,691
Xilinx, Inc.		105,772		6,155,930
				101,553,852
Software — 3.3%
Allscripts Healthcare Solutions, Inc. (a)		74,989		878,121
ANSYS, Inc. (a)		36,651		3,418,072
Atlassian Corp. PLC, Class A (a)		10,565		291,911
Autodesk, Inc. (a)		88,228		7,176,465
CA, Inc.		121,479		3,798,648
Cadence Design Systems, Inc. (a)		125,002		3,253,802
CDK Global, Inc.		64,780		4,051,989
Citrix Systems, Inc. (a)		64,671		5,897,348
Electronic Arts, Inc. (a)		121,285		10,118,808
FireEye, Inc. (a)		64,452		873,325
Fortinet, Inc. (a)		60,234		2,003,383
Guidewire Software, Inc. (a)		30,072		1,573,668
Manhattan Associates, Inc. (a)		29,803		1,527,702
Nuance Communications, Inc. (a)		92,808		1,471,935
PTC, Inc. (a)		47,424		2,493,080
Red Hat, Inc. (a)		75,425		5,723,249
ServiceNow, Inc. (a)		65,671		5,951,106
Splunk, Inc. (a)		54,501		3,153,428
SS&C Technologies Holdings, Inc.		69,978		2,248,393
Symantec Corp.		255,661		7,043,461
Synopsys, Inc. (a)		63,028		3,963,831
Tableau Software, Inc., Class A (a)		22,376		1,070,468
Tyler Technologies, Inc. (a)		13,765		2,009,965
Ultimate Software Group, Inc. (a)		11,433		2,214,115
Workday, Inc., Class A (a)		48,523		4,031,776
Zynga, Inc., Class A (a)		295,693		745,146
				86,983,195
Specialty Retail — 3.4%
Advance Auto Parts, Inc.		29,497		4,844,587
AutoNation, Inc. (a)		27,096		1,439,340
AutoZone, Inc. (a)		12,266		8,892,605
Bed Bath & Beyond, Inc.		61,824		2,494,598
Best Buy Co., Inc.		115,458		5,140,190
Cabela’s, Inc. (a)		20,878		1,166,871
CarMax, Inc. (a)		80,498		5,370,022
CST Brands, Inc.		30,946		1,490,978
Dick’s Sporting Goods, Inc.		36,355		1,875,918
Foot Locker, Inc.		56,206		3,852,359
GameStop Corp., Class A		42,927		1,051,282
Gap, Inc.		92,461		2,129,377
L Brands, Inc.		100,831		6,071,035
Michaels Cos., Inc. (a)		39,664		780,191
O’Reilly Automotive, Inc. (a)		39,387		10,330,029
Penske Automotive Group, Inc.		16,429		893,080
Ross Stores, Inc.		164,003		10,842,238
Sally Beauty Holdings, Inc. (a)		60,718		1,445,088
Signet Jewelers Ltd.		28,977		2,250,644
Staples, Inc.		267,828		2,464,018
Tiffany & Co.		45,562		3,586,641
Tractor Supply Co.		55,517		4,089,937
Ulta Salon Cosmetics & Fragrance, Inc. (a)		24,385		6,639,548

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 23

Schedule of Investments (continued) BlackRock Midcap Index Fund

Common Stocks	Shares		Value
Specialty Retail (continued)
Urban Outfitters, Inc. (a)		37,833	$	1,004,088
Williams-Sonoma, Inc.		36,710		1,769,789
				91,914,453
Technology Hardware, Storage & Peripherals — 0.6%
NCR Corp. (a)		51,369		2,209,894
NetApp, Inc.		120,678		4,624,381
Western Digital Corp.		117,607		9,376,806
				16,211,081
Textiles, Apparel & Luxury Goods — 1.0%
Carter’s, Inc.		20,796		1,741,665
Coach, Inc.		115,988		4,332,152
Hanesbrands, Inc.		156,962		3,721,569
Kate Spade & Co. (a)		53,209		984,899
lululemon athletica, Inc. (a)		40,396		2,727,134
Michael Kors Holdings Ltd. (a)		67,353		2,883,382
PVH Corp.		33,781		3,168,996
Ralph Lauren Corp.		23,695		2,095,349
Skechers U.S.A., Inc., Class A (a)		54,169		1,360,725
Under Armour, Inc., Class A (a)(b)		76,339		1,640,525
Under Armour, Inc., Class C (a)		76,761		1,475,346
				26,131,742
Thrifts & Mortgage Finance — 0.2%
New York Community Bancorp, Inc.		198,699		3,018,238
People’s United Financial, Inc.		128,374		2,407,013
TFS Financial Corp.		23,182		405,453
				5,830,704
Trading Companies & Distributors — 1.0%
Air Lease Corp.		40,018		1,455,855
Fastenal Co.		119,783		5,950,819
HD Supply Holdings, Inc. (a)		83,715		3,541,145
Herc Holdings, Inc. (a)		9,584		476,037
MSC Industrial Direct Co., Inc., Class A		18,314		1,870,775
United Rentals, Inc. (a)		36,770		4,651,773

Common Stocks	Shares		Value
Trading Companies & Distributors (continued)
W.W. Grainger, Inc.		23,066	$	5,825,780
Watsco, Inc.		10,768		1,644,704
WESCO International, Inc. (a)		19,873		1,405,021
				26,821,909
Transportation Infrastructure — 0.1%
Macquarie Infrastructure Corp.		31,464		2,359,485
Water Utilities — 0.3%
American Water Works Co., Inc.		74,338		5,459,383
Aqua America, Inc.		73,590		2,237,872
				7,697,255
Wireless Telecommunication Services — 0.2%
Sprint Corp. (a)		315,144		2,908,779
Telephone & Data Systems, Inc.		40,016		1,226,491
United States Cellular Corp. (a)		5,797		258,488
				4,393,758
Total Long-Term Investments (Cost — $2,324,399,424) — 98.2%				2,627,586,335
Short-Term Securities
BlackRock Liquidity Funds, T-Fund, Institutional Class, 0.40% (c)(d)		106,972,620		106,972,620
SL Liquidity Series, LLC, Money Market Series, 0.94% (c)(d)(e)		1,310,830		1,311,092
Total Short-Term Securities (Cost — $108,283,541) — 4.0%				108,283,712
Total Investments (Cost — $2,432,682,965) — 102.2%				2,735,870,047
Liabilities in Excess of Other Assets — (2.2)%				(58,680,607	)
Net Assets — 100.0%			$	2,677,189,440

Notes to Schedule of Investments

(a) Non-income producing security.

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

(c) During the six months ended January 31, 2017, 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 July 31, 2016		Net Activity			Shares Held at January 31, 2017		Value at January 31, 2017		Income			Net Realized Gain1		Change in Unrealized Appreciation
BlackRock Liquidity Funds, T-Fund, Institutional Class		—		106,972,620			106,972,620	$	106,972,620	$	62,426		$	353		—
BlackRock Premier Government Institutional Fund		38,232,137		(38,232,137	)		—		—		11,444			—		—
SL Liquidity Series, LLC, Money Market Series		4,519,466		(3,208,636	)		1,310,830		1,311,092		136,976	2		920	$	171
Total								$	108,283,712	$	210,846		$	1,273	$	171
1   Includes net capital gain distributions.
2   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) Current yield as of period end.

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

See Notes to Financial Statements.

24 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Midcap Index 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 rating 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
Contracts Long		Issue	Expiration	Notional Value		Unrealized Appreciation (Depreciation)
	107	S&P 500 E-Mini Index	March 2017	$	12,168,575	$	(6,319	)
	189	S&P MidCap 400 E-Mini Index	March 2017	$	31,855,950		10,791
	Total					$	4,472

Derivative Financial Instruments Outstanding as of Period End

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

Assets — Derivative Financial Instruments		Commodity Contracts		Credit Contracts		Equity Contracts			Foreign Currency Exchange Contracts		Interest Rate Contracts		Other Contracts		Total
Futures contracts	Net unrealized appreciation		—		—	$	10,791			—		—		—	$	10,791
Liabilities — Derivative Financial Instruments
Futures contracts	Net unrealized depreciation		—		—	$	6,319			—		—		—	$	6,319
For the six months ended January 31, 2017, the effect of derivative financial instruments in the Statements of Operations was as follows:
Net Realized Gain (Loss) from:
Futures contracts			—		—	$	5,530,284			—		—		—	$	5,530,284
Net Change in Unrealized Appreciation (Depreciation) on:
Futures contracts			—		—	($	2,520,492	)		—		—		—	($	2,520,492	)

Average Quarterly Balances of Outstanding Derivative Financial Instruments

Futures contracts:
Average notional value of contracts — long	$	37,542,490

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

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 25

Schedule of Investments (concluded) BlackRock Midcap Index 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:1	$	2,627,586,335			—		—	$	2,627,586,335
Short-Term Securities		106,972,620			—		—		106,972,620
Subtotal	$	2,734,558,955			—		—	$	2,734,558,955
Investments valued at NAV2									1,311,092
Total								$	2,735,870,047
Derivative Financial Instruments3
Assets:
Equity contracts	$	10,791			—		—	$	10,791
Liabilities:
Equity contracts		(6,319	)		—		—		(6,319	)
Total	$	4,472			—		—	$	4,472
1    See above Schedule of Investments for values in each sector.
2    As of January 31, 2017, certain of the Fund’s investments were fair valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.
3   Derivative financial instruments are futures contracts, which are valued at the unrealized appreciation (depreciation) on the instrument.

During the six months ended January 31, 2017, there were no transfers between levels.

See Notes to Financial Statements.

26 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments January 31, 2017 (Unaudited) BlackRock MSCI Asia ex Japan Index Fund (Percentages shown are based on Net Assets)

Common Stocks	Shares		Value
China — 25.9%
58.com, Inc. — ADR (a)		1,541	$	44,967
AAC Technologies Holdings, Inc.		12,000		123,236
Agricultural Bank of China Ltd., Class H		386,000		161,240
Air China Ltd., Class H		22,000		15,742
Alibaba Group Holding Ltd. — ADR (a)		16,679		1,689,750
Aluminum Corp. of China Ltd., Class H (a)		58,000		29,958
Anhui Conch Cement Co. Ltd., Class H		17,500		56,314
ANTA Sports Products Ltd.		13,000		41,377
AviChina Industry & Technology Co. Ltd., Class H		23,000		16,884
Baidu, Inc. — ADR (a)		4,091		716,211
Bank of China Ltd., Class H		1,125,000		509,531
Bank of Communications Co. Ltd., Class H		148,000		108,860
Beijing Capital International Airport Co. Ltd., Class H		18,000		17,414
Byd Co. Ltd., Class H		8,000		44,255
CGN Power Co. Ltd., Class H (b)		119,000		33,556
China Cinda Asset Management Co. Ltd., Class H		131,000		45,383
China CITIC Bank Corp. Ltd., Class H		150,000		98,656
China Coal Energy Co. Ltd., Class H (a)		30,000		15,644
China Communications Construction Co. Ltd., Class H		54,000		64,994
China Communications Services Corp. Ltd., Class H		30,000		20,393
China Conch Venture Holdings Ltd.		17,000		32,639
China Construction Bank Corp., Class H		1,228,000		910,425
China Everbright Bank Co. Ltd., Class H		33,000		15,884
China Evergrande Group		64,000		44,580
China Galaxy Securities Co. Ltd., Class H		42,500		39,454
China Huarong Asset Management Co., Ltd., Class H (a)(b)		82,983		31,457
China Huishan Dairy Holdings Co. Ltd.		144,000		53,768
China Life Insurance Co. Ltd., Class H		109,000		300,250
China Longyuan Power Group Corp. Ltd., Class H		25,000		20,420
China Medical System Holdings Ltd.		32,000		52,145
China Mengniu Dairy Co. Ltd.		40,000		74,666
China Merchants Bank Co., Ltd., Class H		60,500		151,514
China Minsheng Banking Corp. Ltd., Class H		100,000		110,052
China National Building Material Co. Ltd., Class H		40,000		23,393
China Oilfield Services Ltd., Class H		34,000		36,269
China Pacific Insurance Group Co. Ltd., Class H		36,000		127,872
China Petroleum & Chemical Corp. Class H		380,000		300,172
China Railway Construction Corp. Ltd., Class H		23,500		32,606
China Railway Group Ltd., Class H		46,000		40,264
China Resources Gas Group Ltd.		10,000		31,604
China Shenhua Energy Co. Ltd., Class H		50,500		106,722
China Southern Airlines Co. Ltd., Class H		26,000		14,891
China Telecom Corp. Ltd., Class H		204,000		96,316
China Unicom Hong Kong Ltd.		100,000		118,032
China Vanke Co. Ltd., Class H		19,200		48,706
Chongqing Changan Automobile Co. Ltd., Class B		13,000		18,433
Chongqing Rural Commercial Bank, Co. Ltd., Class H		25,000		15,223
CITIC Securities Co. Ltd., Class H		29,000		59,013
CNOOC Ltd.		304,000		379,621
Country Garden Holdings Co. Ltd.		112,000		64,222
CSPC Pharmaceutical Group Ltd.		72,000		81,033
CSR Corp. Ltd., Class H		58,000		56,441
Ctrip.com International Ltd. — ADR (a)		5,963		257,661
Dongfeng Motor Group Co. Ltd., Class H		38,000		40,285
Far East Horizon Ltd.		28,000		25,526
Fosun International Ltd.		43,000		65,263
Fuyao Glass Industry Group Co., Ltd. (b)		6,800		20,099
GF Securities Co., Ltd., Class H		18,000		38,483
Great Wall Motor Co. Ltd., Class H		39,000		39,077
Guangzhou Automobile Group Co. Ltd., Class H		24,000		32,732
Guangzhou R&F Properties Co. Ltd., Class H		14,800		18,982
Haitian International Holdings Ltd.		8,000		16,274
Haitong Securities Co. Ltd., Class H		40,400		72,483
Hengan International Group Co. Ltd.		14,000		114,621
HengTen Networks Group Ltd. (a)		784,000		22,196
Huaneng Power International, Inc., Class H		78,000		50,599

Common Stocks	Shares		Value
China (continued)
Huaneng Renewables Corp. Ltd., Class H		48,000	$	14,896
Huatai Securities Co. Ltd., Class H (b)		18,200		35,100
Industrial & Commercial Bank of China Ltd., Class H		1,051,000		642,565
JD.com, Inc. — ADR (a)		10,634		302,006
Jiangsu Expressway Co. Ltd., Class H		22,000		27,553
Jiangxi Copper Co. Ltd., Class H		14,000		24,177
Kingsoft Corp. Ltd.		13,000		27,217
Lenovo Group Ltd.		118,000		77,292
Longfor Properties Co. Ltd.		23,000		33,113
NetEase, Inc. — ADR		1,255		318,645
New China Life Insurance Co. Ltd., Class H		11,700		56,452
New Oriental Education & Technology Group, Inc. — ADR (a)		2,325		110,554
People’s Insurance Co. Group of China Ltd., Class H		79,000		30,772
PetroChina Co. Ltd., Class H		318,000		252,629
PICC Property & Casualty Co. Ltd., Class H		62,000		93,722
Ping An Insurance Group Co. of China Ltd., Class H		74,500		382,168
Qunar Cayman Islands Ltd. — ADR (a)		1,310		39,863
Semiconductor Manufacturing International Corp. (a)		43,300		59,375
Shandong Weigao Group Medical Polymer Co. Ltd., Class H		28,000		18,317
Shanghai Electric Group Co. Ltd., Class H (a)		32,000		14,563
Shanghai Fosun Pharmaceutical Group Co. Ltd., Class H		8,000		26,541
Shanghai Lujiazui Finance & Trade Zone Development Co., Ltd., Class B		20,680		29,799
Shanghai Pharmaceuticals Holding Co. Ltd., Class H		10,500		26,741
Shenzhou International Group Holdings Ltd.		11,000		67,852
SINA Corp. (a)		980		68,326
Sino-Ocean Land Holdings Ltd.		32,500		13,997
Sinopec Engineering Group Co. Ltd., Class H		8,000		6,497
Sinopec Shanghai Petrochemical Co. Ltd., Class H		50,000		30,961
Sinopharm Group Co. Ltd., Class H		17,600		80,430
Sinotrans Ltd., Class H		30,000		12,509
SOHO China Ltd.		32,000		16,189
Sunac China Holdings Ltd.		22,000		19,543
Sunny Optical Technology Group Co., Ltd.		10,000		58,595
TAL Education Group — ADR (a)		920		74,511
Tencent Holdings Ltd.		84,500		2,209,283
Tingyi Cayman Islands Holding Corp.		34,000		38,649
TravelSky Technology Ltd., Class H		12,000		26,955
Tsingtao Brewery Co. Ltd., Class H		6,000		23,958
Vipshop Holdings Ltd. — ADR (a)		6,979		79,002
Want Want China Holdings Ltd.		90,000		64,211
Weibo Corp. — ADR (a)		662		31,922
Weichai Power Co. Ltd., Class H		12,000		21,264
Yanzhou Coal Mining Co. Ltd., Class H		22,000		17,234
YY, Inc. — ADR (a)		825		33,891
Zhejiang Expressway Co. Ltd., Class H		16,000		16,071
Zhuzhou CRRC Times Electric Co. Ltd.		6,500		37,034
Zijin Mining Group Co. Ltd., Class H		66,000		22,583
ZTE Corp., Class H		11,000		17,103
				13,889,363
Hong Kong — 16.6%
AIA Group Ltd.		180,600		1,118,158
Alibaba Health Information Technology Ltd. (a)		70,000		32,446
Alibaba Pictures Group Ltd. (a)		300,000		50,401
ASM Pacific Technology Ltd.		4,400		53,496
Bank of East Asia Ltd.		15,200		64,744
Beijing Enterprises Holdings Ltd.		6,000		29,909
Beijing Enterprises Water Group Ltd. (a)		44,000		30,518
Belle International Holdings Ltd.		142,000		86,555
BOC Hong Kong Holdings Ltd.		57,000		227,879
Brilliance China Automotive Holdings Ltd.		42,000		59,167
Cathay Pacific Airways Ltd.		17,000		23,025
Cheung Kong Infrastructure Holdings Ltd.		11,000		88,459

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 27

Schedule of Investments (continued) BlackRock MSCI Asia ex Japan Index Fund

Common Stocks	Shares		Value
Hong Kong (continued)
Cheung Kong Property Holdings Ltd.		38,000	$	249,769
China Everbright International Ltd.		38,000		46,087
China Everbright Ltd.		10,000		19,092
China Gas Holdings Ltd.		16,000		23,162
China Jinmao Holdings Group Ltd.		22,000		6,458
China Merchants Port Holdings Co., Ltd.		14,110		37,721
China Mobile Ltd.		91,500		1,029,615
China Overseas Land & Investment Ltd.		60,000		176,187
China Power International Development Ltd.		42,000		15,136
China Resources Beer Holdings Co. Ltd. (a)		32,000		64,996
China Resources Land Ltd.		44,000		108,836
China Resources Power Holdings Co. Ltd.		20,000		34,350
China State Construction International Holdings Ltd.		22,000		35,749
China Taiping Insurance Holdings Co. Ltd. (a)		22,200		48,634
CITIC Ltd.		59,000		87,467
CK Hutchison Holdings Ltd.		37,500		449,444
CLP Holdings Ltd.		26,000		253,775
COSCO Pacific Ltd.		18,000		17,887
ENN Energy Holdings Ltd.		10,000		49,299
First Pacific Co. Ltd.		34,000		25,779
Fullshare Holdings Ltd.		107,500		45,292
Galaxy Entertainment Grup Ltd.		36,000		170,996
GCL-Poly Energy Holdings Ltd. (a)		196,000		25,330
Geely Automobile Holdings Ltd.		80,000		94,554
GOME Electrical Appliances Holding Ltd.		176,000		21,904
Guangdong Investment Ltd.		34,000		42,191
Haier Electronics Group Co. Ltd.		16,000		28,144
Hang Lung Group Ltd.		12,000		46,021
Hang Lung Properties Ltd.		22,000		54,144
Hang Seng Bank Ltd.		12,000		244,595
Henderson Land Development Co. Ltd.		18,500		102,119
HK Electric Investments & HK Electric Investments Ltd. (b)(c)		61,500		51,335
HKT Trust & HKT Ltd. (c)		52,000		72,640
Hong Kong & China Gas Co. Ltd.		124,400		234,220
Hong Kong Exchanges & Clearing Ltd.		17,100		413,595
Hongkong Land Holdings Ltd.		20,900		141,153
Hysan Development Co. Ltd.		9,000		41,017
Jardine Matheson Holdings Ltd.		4,000		246,700
Kerry Properties Ltd.		6,500		18,394
Kunlun Energy Co. Ltd.		64,000		50,829
Li & Fung Ltd.		64,000		27,753
Link REIT		34,000		232,342
Melco Crown Entertainment Ltd. — ADR		4,032		67,899
MGM China Holdings Ltd.		13,200		25,640
MTR Corp. Ltd.		26,000		132,084
New World Development Co. Ltd.		89,000		102,688
Nine Dragons Paper Holdings Ltd.		21,000		24,170
NWS Holdings Ltd.		17,321		31,125
PCCW Ltd.		94,000		57,055
Power Assets Holdings Ltd.		19,000		182,055
Sands China Ltd.		37,600		165,439
Shanghai Industrial Holdings Ltd.		6,000		16,148
Shangri-La Asia Ltd.		18,000		20,021
Shimao Property Holdings Ltd.		15,000		20,095
Sino Biopharmaceutical Ltd.		71,000		55,726
Sino Land Co. Ltd.		40,000		66,094
SJM Holdings Ltd.		21,000		16,686
Sun Art Retail Group Ltd.		35,500		35,780
Sun Hung Kai Properties Ltd.		21,000		288,982
Swire Pacific Ltd., Class A		7,000		71,315
Swire Properties Ltd.		16,400		46,146
Techtronic Industries Co. Ltd.		21,500		74,360
WH Group Ltd. (b)		118,500		90,006
Wharf Holdings Ltd.		21,000		157,464
Wheelock & Co. Ltd.		9,000		54,701
Wynn Macau Ltd.		20,800		37,827

Common Stocks	Shares		Value
Hong Kong (continued)
Yue Yuen Industrial Holdings Ltd.		10,500	$	38,433
				8,927,407
India — 9.6%
Axis Bank Ltd. — GDR		4,900		169,614
Dr. Reddy’s Laboratories Ltd. — ADR		10,723		484,680
GAIL India Ltd. — GDR		13,423		555,041
ICICI Bank Ltd. — ADR		65,278		505,904
Infosys Ltd. — ADR		33,146		456,420
Larsen & Toubro Ltd. — GDR		24,923		536,882
Mahindra & Mahindra Ltd. — GDR		26,850		498,495
Reliance Industries Ltd. — GDR (b)		5,423		168,113
State Bank of India — GDR		13,423		522,608
Tata Motors Ltd. — ADR		7,423		289,200
Vedanta Ltd. — ADR		33,850		500,980
Wipro Ltd. — ADR		53,250		491,497
				5,179,434
Indonesia — 2.9%
Adaro Energy Tbk PT		207,900		26,424
AKR Corporindo Tbk PT		20,000		9,998
Astra International Tbk PT		284,300		169,487
Bank Central Asia Tbk PT		186,400		213,644
Bank Danamon Indonesia Tbk PT		47,200		14,710
Bank Mandiri Persero Tbk PT		154,600		126,274
Bank Negara Indonesia Persero Tbk PT		100,000		42,726
Bank Rakyat Indonesia Persero Tbk PT		175,200		153,842
Bumi Serpong Damai Tbk PT		110,900		15,212
Charoen Pokphand Indonesia Tbk PT		89,300		20,754
Gudang Garam Tbk PT		5,600		25,894
Hanjaya Mandala Sampoerna Tbk PT		122,600		35,318
Indocement Tunggal Prakarsa Tbk PT		18,900		21,275
Indofood CBP Sukses Makmur Tbk PT		65,200		41,025
Indofood Sukses Makmur Tbk PT		51,400		30,507
Jasa Marga Persero Tbk PT		31,699		10,026
Kalbe Farma Tbk PT		293,700		31,922
Lippo Karawaci Tbk PT		216,500		11,922
Matahari Department Store Tbk PT		36,900		40,851
Media Nusantara Citra Tbk PT		50,200		6,376
Pakuwon Jati Tbk PT		124,800		5,239
Perusahaan Gas Negara Persero Tbk PT		128,100		27,665
Semen Indonesia Persero Tbk PT		36,400		24,618
Summarecon Agung Tbk PT		127,500		12,519
Surya Citra Media Tbk PT		101,300		21,411
Telekomunikasi Indonesia Persero Tbk PT		755,300		218,950
Tower Bersama Infrastructure Tbk PT		27,800		10,306
Unilever Indonesia Tbk PT		32,700		100,834
United Tractors Tbk PT		28,900		47,297
Waskita Karya Persero Tbk PT		126,100		24,190
XL Axiata Tbk PT (a)		24,200		5,276
				1,546,492
Malaysia — 2.9%
AirAsia Bhd		14,700		8,463
Alliance Financial Group Bhd		7,000		5,942
AMMB Holdings Bhd		20,000		20,680
Astro Malaysia Holdings Bhd		33,600		20,633
Axiata Group Bhd		33,600		35,905
British American Tobacco Malaysia Bhd		3,200		33,477
CIMB Group Holdings Bhd		36,800		41,309
Dialog Group Bhd		43,300		14,955
DiGi.Com Bhd		53,400		59,795
Felda Global Ventures Holdings Bhd		17,800		7,428
Gamuda Bhd		27,500		29,875
Genting Bhd		23,500		43,528
Genting Malaysia Bhd		22,100		25,135
Genting Plantations Bhd		12,800		31,527

See Notes to Financial Statements.

28 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock MSCI Asia ex Japan Index Fund

Common Stocks	Shares		Value
Malaysia (continued)
HAP Seng Consolidated Bhd		9,800	$	19,244
Hartalega Holdings Bhd		13,900		14,812
Hong Leong Bank Bhd		6,300		18,752
IHH Healthcare Bhd		59,700		84,910
IJM Corp. Bhd		28,500		21,302
IOI Corp. Bhd		39,300		39,138
Kuala Lumpur Kepong Bhd		9,900		53,870
Lafarge Malayan Cement Bhd		2,900		4,520
Malayan Banking Bhd		59,100		109,680
Malaysia Airports Holdings Bhd		9,600		13,394
Maxis Bhd		26,300		36,524
MISC Bhd		12,900		21,319
Petronas Chemicals Group Bhd		37,800		60,845
Petronas Dagangan Bhd		10,200		54,188
Petronas Gas Bhd		10,100		47,671
PPB Group Bhd		12,400		45,518
Public Bank Bhd		41,700		189,225
Sapurakencana Petroleum Bhd (a)		42,900		16,667
Sime Darby Bhd		34,700		69,768
Telekom Malaysia Bhd		29,000		38,955
Tenaga Nasional Bhd		52,700		159,291
UMW Holdings Bhd		2,800		3,572
Westports Holdings Bhd		24,500		23,079
YTL Corp. Bhd		48,400		16,622
				1,541,518
Philippines — 1.4%
Aboitiz Equity Ventures, Inc.		17,120		25,587
Aboitiz Power Corp.		34,700		29,404
Alliance Global Group, Inc.		20,000		5,043
Ayala Corp.		4,690		75,444
Ayala Land, Inc.		113,300		80,985
Bank of the Philippine Islands		17,190		30,960
BDO Unibank, Inc.		26,530		60,117
DMCI Holdings, Inc.		25,500		6,625
Energy Development Corp.		42,800		4,696
Globe Telecom, Inc.		430		14,862
GT Capital Holdings, Inc.		1,090		28,582
International Container Terminal Services, Inc.		3,340		5,195
JG Summit Holdings, Inc.		29,710		44,362
Jollibee Foods Corp.		10,700		44,199
Megaworld Corp.		173,000		12,770
Metro Pacific Investments Corp.		151,800		20,816
Metropolitan Bank & Trust Co.		15,450		25,309
PLDT, Inc.		1,290		38,132
Robinsons Land Corp.		19,100		9,643
Security Bank Corp.		4,800		20,578
SM Investments Corp.		4,985		69,144
SM Prime Holdings, Inc.		116,400		69,508
Universal Robina Corp.		15,390		50,430
				772,391
Republic of Korea — 0.1%
Lotte Chilsung Beverage Co. Ltd.		22		27,460
Singapore — 4.6%
Ascendas Real Estate Investment Trust		43,991		76,811
CapitaLand Commercial Trust Ltd.		51,600		55,902
CapitaLand Ltd.		43,800		102,218
CapitaLand Mall Trust		50,300		69,118
City Developments Ltd.		6,000		39,384
ComfortDelGro Corp. Ltd.		31,400		53,731
DBS Group Holdings Ltd.		25,900		350,167
Genting Singapore PLC		82,900		57,179
Global Logistic Properties Ltd.		42,200		77,774
Golden Agri-Resources Ltd.		100,900		30,350
Hutchison Port Holdings Trust		74,700		31,772
Jardine Cycle & Carriage Ltd.		1,544		45,275

Common Stocks	Shares		Value
Singapore (continued)
Keppel Corp. Ltd.		20,800	$	91,272
Oversea-Chinese Banking Corp. Ltd.		45,500		303,467
SATS Ltd.		11,000		41,211
SembCorp Industries Ltd.		10,300		23,003
Singapore Airlines Ltd.		8,000		56,344
Singapore Exchange Ltd.		10,900		57,334
Singapore Technologies Engineering Ltd.		21,200		49,683
Singapore Telecommunications Ltd.		125,100		343,949
StarHub Ltd.		20,500		43,162
Suntec Real Estate Investment Trust		35,000		43,015
United Overseas Bank Ltd.		18,241		271,279
UOL Group Ltd.		5,900		26,722
Wilmar International Ltd.		33,800		93,018
Yangzijiang Shipbuilding Holdings Ltd.		24,500		14,011
				2,447,151
South Korea — 17.1%
Amorepacific Corp.		707		175,446
Amorepacific Group		553		64,525
BGF Retail Co., Ltd.		334		26,427
BNK Financial Group, Inc.		2,214		16,249
Celltrion, Inc. (a)		1,339		115,713
Cheil Worldwide, Inc.		1,559		24,878
CJ CheilJedang Corp.		160		48,868
CJ Corp.		156		24,495
CJ E&M Corp.		407		30,631
CJ Korea Express Co., Ltd. (a)		98		13,746
Coway Co., Ltd.		749		56,323
Daelim Industrial Co., Ltd.		302		21,873
Daewoo Engineering & Construction Co., Ltd. (a)		1,719		7,678
Daewoo Securities Co., Ltd.		4,547		34,499
DGB Financial Group, Inc.		2,050		17,411
Dongbu Insurance Co., Ltd.		742		37,806
Dongsuh Cos., Inc.		1,249		27,514
Doosan Heavy Industries & Construction Co., Ltd.		883		20,919
E-Mart, Inc.		346		60,571
GS Engineering & Construction Corp. (a)		640		15,253
GS Holdings Corp.		1,081		47,599
GSretail Co. Ltd.		452		20,277
Hana Financial Group, Inc.		4,045		119,937
Hankook Tire Co., Ltd.		1,008		49,190
Hanmi Pharm Co., Ltd.		90		22,353
Hanmi Science Co., Ltd.		179		8,914
Hanon Systems		2,643		20,696
Hanssem Co., Ltd.		147		26,405
Hanwha Chemical Corp.		1,535		34,482
Hanwha Corp.		544		16,508
Hanwha Life Insurance Co., Ltd.		3,268		18,127
Hotel Shilla Co., Ltd.		642		23,978
Hyosung Corp.		266		31,009
Hyundai Department Store Co., Ltd.		217		17,952
Hyundai Development Co-Engineering & Construction		721		27,129
Hyundai Engineering & Construction Co., Ltd.		771		27,599
Hyundai Glovis Co., Ltd.		251		33,611
Hyundai Heavy Industries Co., Ltd. (a)		571		65,118
Hyundai Marine & Fire Insurance Co., Ltd.		934		24,207
Hyundai Mobis Co. Ltd.		987		205,332
Hyundai Motor Co.		2,286		275,208
Hyundai Motor Co., Preference Shares		226		18,125
Hyundai Motor Co., Second Preference Shares		394		32,601
Hyundai Steel Co.		925		46,387
Hyundai Wia Corp.		219		12,189
Industrial Bank of Korea		3,523		38,483
Kakao Corp.		617		41,309
Kangwon Land, Inc.		1,547		43,531
KB Financial Group, Inc.		5,820		235,508
KCC Corp.		69		20,628

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 29

Schedule of Investments (continued) BlackRock MSCI Asia ex Japan Index Fund

Common Stocks	Shares		Value
South Korea (continued)
KEPCO Plant Service & Engineering Co., Ltd.		482	$	22,684
Kia Motors Corp.		4,194		131,451
Korea Aerospace Industries Ltd.		903		48,205
Korea Electric Power Corp.		3,471		127,119
Korea Gas Corp.		526		21,006
Korea Investment Holdings Co., Ltd.		513		20,575
Korea Zinc Co., Ltd.		112		47,365
Korean Air Lines Co., Ltd. (a)		788		17,911
KT Corp.		267		6,757
KT&G Corp.		1,830		158,522
Kumho Petrochemical Co., Ltd.		258		18,286
LG Chem Ltd.		741		167,093
LG Chem Ltd., Preference Shares		47		6,922
LG Corp.		1,573		80,257
LG Display Co., Ltd.		2,985		78,749
LG Electronics, Inc.		1,816		86,787
LG Household & Health Care Ltd.		193		136,931
LG Innotek Co., Ltd.		294		25,103
LG Uplus Corp.		3,934		38,641
Lotte Chemical Corp.		226		73,237
Lotte Confectionery Co., Ltd.		102		17,928
Lotte Shopping Co., Ltd.		118		22,961
NAVER Corp.		397		259,326
NCSoft Corp.		259		67,809
NH Investment & Securities Co., Ltd.		2,142		21,085
OCI Co., Ltd. (a)		289		21,375
Orion Corp.		72		40,229
Ottogi Corp.		22		12,305
POSCO		1,085		253,592
Posco Daewoo Corp.		310		6,802
S-1 Corp.		496		35,990
S-Oil Corp.		787		54,967
Samsung Biologics Co. Ltd. (a)		226		31,311
Samsung C&T Corp.		1,188		128,901
Samsung Card Co., Ltd.		532		17,982
Samsung Electro-Mechanics Co., Ltd.		789		38,533
Samsung Electronics Co. Ltd.		1,485		2,525,651
Samsung Electronics Co. Ltd., Preference Shares		255		344,632
Samsung Fire & Marine Insurance Co., Ltd.		543		125,805
Samsung Heavy Industries Co. Ltd. (a)		2,239		20,054
Samsung Life Insurance Co., Ltd.		1,191		113,799
Samsung SDI Co. Ltd.		804		79,899
Samsung SDS Co., Ltd.		473		51,277
Samsung Securities Co., Ltd.		889		24,822
Samsung Techwin Co., Ltd.		465		16,705
Shinhan Financial Group Co. Ltd.		5,769		228,004
Shinsegae Co., Ltd.		94		14,234
SK Holdings Co., Ltd.		639		119,061
SK Hynix, Inc.		8,621		398,151
SK Innovation Co., Ltd.		1,045		141,566
SK Networks Co., Ltd.		1,641		9,347
SK Telecom Co. Ltd.		394		75,532
Woori Bank		4,140		46,736
Yuhan Corp.		159		25,762
				9,150,951
Taiwan — 14.1%
Acer, Inc.		39,000		18,010
Advanced Semiconductor Engineering, Inc.		93,000		102,485
Advantech Co. Ltd.		5,000		42,415
Asia Cement Corp.		24,000		20,574
Asia Pacific Telecom Co., Ltd. (a)		41,000		13,294
Asustek Computer, Inc.		10,000		87,399
AU Optronics Corp.		121,000		50,103
Casetek Holdings Ltd.		4,000		12,302
Catcher Technology Co. Ltd.		11,000		89,713
Cathay Financial Holding Co. Ltd.		129,000		196,451

Common Stocks	Shares		Value
Taiwan (continued)
Chailease Holding Co. Ltd.		20,200	$	36,136
Chang Hwa Commercial Bank Ltd.		66,220		36,772
Cheng Shin Rubber Industry Co. Ltd.		28,000		55,742
Chicony Electronics Co. Ltd.		11,030		26,021
China Airlines Ltd.		51,000		15,320
China Development Financial Holding Corp.		123,000		31,439
China Life Insurance Co. Ltd.		58,160		56,920
China Steel Corp.		173,000		140,072
Chunghwa Telecom Co. Ltd.		62,000		202,225
Compal Electronics, Inc.		54,000		32,581
CTBC Financial Holding Co. Ltd.		265,966		151,498
Delta Electronics, Inc.		29,000		161,976
E.Sun Financial Holding Co. Ltd.		106,259		62,768
Eclat Textile Co. Ltd.		3,000		31,337
Eva Airways Corp.		33,550		16,203
Evergreen Marine Corp. Taiwan Ltd. (a)		42,150		17,433
Far Eastern New Century Corp.		32,320		26,937
Far EasTone Telecommunications Co. Ltd.		31,000		73,655
Feng TAY Enterprise Co. Ltd.		5,307		23,198
First Financial Holding Co. Ltd.		141,189		78,790
Formosa Chemicals & Fibre Corp.		44,000		136,397
Formosa Petrochemical Corp.		21,000		71,735
Formosa Plastics Corp.		55,000		158,918
Formosa Taffeta Co. Ltd.		4,000		3,852
Foxconn Technology Co. Ltd.		16,090		45,412
Fubon Financial Holding Co. Ltd.		106,000		172,276
Giant Manufacturing Co. Ltd.		4,000		26,289
Highwealth Construction Corp.		10,900		16,211
Hiwin Technologies Corp.		4,050		20,878
Hon Hai Precision Industry Co. Ltd.		225,800		605,545
Hotai Motor Co. Ltd.		4,000		45,967
HTC Corp. (a)		10,000		25,484
Hua Nan Financial Holdings Co. Ltd.		82,963		43,632
Innolux Corp.		100,000		42,362
Inventec Co. Ltd.		30,000		22,563
Largan Precision Co. Ltd.		1,450		207,403
Lite-On Technology Corp.		26,110		39,438
MediaTek, Inc.		23,000		157,460
Mega Financial Holding Co. Ltd.		147,000		109,587
Merida Industry Co. Ltd.		4,000		20,838
Micro-Star International Co., Ltd.		9,000		21,836
Nan Ya Plastics Corp.		66,000		155,468
Nanya Technology Corp.		10,000		15,406
Nien Made Enterprise Co., Ltd.		4,000		37,551
Novatek Microelectronics Corp.		8,000		28,335
OBI Pharma, Inc. (a)		2,000		18,527
Pegatron Corp.		25,000		60,202
Phison Electronics Corp.		5,000		39,580
Pou Chen Corp.		21,000		26,608
Powertech Technology, Inc.		10,000		27,409
President Chain Store Corp.		11,000		82,281
Quanta Computer, Inc.		38,000		77,476
Realtek Semiconductor Corp.		7,000		24,429
Ruentex Development Co. Ltd. (a)		13,536		16,494
Ruentex Industries Ltd.		10,000		18,555
Shin Kong Financial Holding Co. Ltd. (a)		99,755		25,623
Siliconware Precision Industries Co.		38,302		58,341
SinoPac Financial Holdings Co. Ltd.		110,727		32,668
Standard Foods Corp.		14,663		36,039
Synnex Technology International Corp.		24,350		25,412
TaiMed Biologics, Inc. (a)		3,000		15,391
Taishin Financial Holding Co. Ltd.		116,026		43,814
Taiwan Business Bank		71,419		18,659
Taiwan Cement Corp.		46,000		52,167
Taiwan Cooperative Financial Holding Co. Ltd.		92,322		42,188
Taiwan Fertilizer Co. Ltd.		13,000		16,911
Taiwan Mobile Co. Ltd.		29,000		96,864

See Notes to Financial Statements.

30 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock MSCI Asia ex Japan Index Fund

Common Stocks	Shares		Value
Taiwan (continued)
Taiwan Semiconductor Manufacturing Co. Ltd.		366,000	$	2,180,943
Teco Electric and Machinery Co. Ltd.		21,000		18,982
Transcend Information, Inc.		6,000		16,366
Uni-President Enterprises Corp.		82,840		142,108
United Microelectronics Corp.		136,000		49,386
Vanguard International Semiconductor Corp.		11,000		19,880
Wistron Corp.		35,553		30,358
WPG Holdings Ltd.		28,000		33,513
Yuanta Financial Holding Co. Ltd.		140,865		55,933
Yulon Motor Co. Ltd.		6,000		5,282
Zhen Ding Technology Holding Ltd.		11,000		23,103
				7,572,104
Thailand — 2.7%
Advanced Info Service PCL — NVDR		19,200		86,722
Airports of Thailand PCL — NVDR		7,900		93,036
Bangkok Bank PCL — NVDR		1,400		6,941
Bangkok Bank PCL, Foreign Registered Shares		4,400		22,686
Bangkok Dusit Medical Services PCL — NVDR		66,100		41,646
Bangkok Expressway & Metro PCL		48,100		9,649
Banpu PCL — NVDR		20,100		11,085
BEC World PCL — NVDR		21,400		10,758
Berli Jucker PCL — NVDR		16,000		22,739
BTS Group Holdings PCL — NVDR		34,900		8,279
Bumrungrad Hospital PCL — NVDR		5,500		27,947
Central Pattana PCL — NVDR		11,500		18,458
Charoen Pokphand Foods PCL — NVDR		24,400		19,755
CP ALL PCL — NVDR		79,900		137,226
Delta Electronics Thailand PCL — NVDR		6,000		14,603
Electricity Generating PCL		3,000		17,196
Glow Energy PCL — NVDR		3,300		7,309
Home Product Center PCL — NVDR		41,900		11,836
Indorama Ventures PCL — NVDR		21,000		20,875
IRPC PCL — NVDR		125,600		18,555
Kasikornbank PCL — NVDR		12,000		64,299
Kasikornbank PCL, Foreign Registered Shares		20,100		107,121
KCE Electronics PCL		3,900		12,082
Krung Thai Bank PCL — NVDR		42,800		23,104
Minor International PCL — NVDR		10,500		10,370

Common Stocks	Shares		Value
Thailand (continued)
PTT Exploration & Production PCL — NVDR		24,500	$	68,211
PTT Global Chemical PCL — NVDR		14,300		27,523
PTT PCL — NVDR		15,900		182,499
Robinson Department Store PCL		2,000		3,292
Siam Cement PCL — NVDR		3,000		43,124
Siam Cement PCL, Foreign Registered Shares		5,600		80,511
Siam Commercial Bank PCL — NVDR		26,600		114,124
Thai Oil PCL — NVDR		13,300		27,108
Thai Union Group PCL — NVDR		39,800		23,512
TMB Bank PCL — NVDR		256,800		17,074
True Corp. PCL — NVDR		81,773		15,217
				1,426,472
United States — 0.3%
Yum China Holdings, Inc. (a)		6,845		188,101
Total Common Stocks — 98.2%				52,668,844
Rights
Republic of Korea — 0.0%
Korean Air Lines Co., Ltd. (a)		187		893
Samsung Securities Co., Ltd. (a)		119		625
Total Rights — 0.0%				1,518
Total Long-Term Investments (Cost — $53,662,381) — 98.2%				52,670,362
Short-Term Securities
BlackRock Liquidity Funds, T-Fund, Institutional Class, 0.40% (d)(e)		702,741		702,741
Total Short-Term Securities (Cost — $702,741) — 1.3%				702,741
Total Investments (Cost — $54,365,122) — 99.5%				53,373,103
Other Assets Less Liabilities — 0.5%				257,693
Net Assets — 100.0%			$	53,630,796

Notes to Schedule of Investments

(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) A security contractually bound to one or more other securities to form a single saleable unit which cannot be sold separately.

(d) During the six months ended January 31, 2017, 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 July 31, 2016		Net Activity			Shares Held at January 31, 2017		Value at January 31, 2017		Income			Net Realized Gain1		Change in Unrealized Appreciation
BlackRock Liquidity Funds, T-Fund, Institutional Class		—		702,741			702,741	$	702,741	$	1,482		$	2		—
BlackRock Premier Government Institutional Fund		15,860		(15,860	)		—		—		15			—		—
SL Liquidity Series, LLC, Money Market Series		3,553		(3,553	)		—		—		101	2		—		—
Total								$	702,741	$	1,598		$	2		—
1    Includes net capital gain distributions.
2    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) Current yield as of period end.

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 31

Schedule of Investments (concluded) BlackRock MSCI Asia ex Japan Index Fund

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts
Contracts Long		Issue	Expiration	Notional Value		Unrealized Appreciation
	18	MSCI Emerging Markets Mini Index	March 2017	$	823,590	$	10,364

Derivative Financial Instruments Outstanding as of Period End

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

Assets — Derivative Financial Instruments		Commodity Contracts		Credit Contracts		Equity Contracts		Foreign Currency Exchange Contracts		Interest Rate Contracts		Other Contracts		Total
Futures contracts	Net unrealized appreciation		—		—	$	10,364		—		—		—	$	10,364
For the six months ended January 31, 2017, the effect of derivative financial instruments in the Statements of Operations was as follows:
Net Realized Gain (Loss) from:
Futures contracts			—		—	$	181,886		—		—		—	$	181,886
Net Change in Unrealized Appreciation (Depreciation) on:
Futures contracts			—		—	$	8,069		—		—		—	$	8,069

Average Quarterly Balances of Outstanding Derivative Financial Instruments

Futures contracts:
Average notional value of contracts — long	$	592,495

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:
Common Stocks:
China	$	3,767,309	$	10,122,054		—	$	13,889,363
Hong Kong		142,112		8,785,295		—		8,927,407
India		3,451,835		1,727,599		—		5,179,434
Indonesia		20,304		1,526,188		—		1,546,492
Malaysia		579,541		961,977		—		1,541,518
Philippines		14,862		757,529		—		772,391
Republic of Korea		—		27,460		—		27,460
Singapore		41,211		2,405,940		—		2,447,151
South Korea		128,407		9,022,544		—		9,150,951
Taiwan		16,366		7,555,738		—		7,572,104
Thailand		10,758		1,415,714		—		1,426,472
United States		188,101		—		—		188,101
Rights		—		1,518		—		1,518
Short-Term Securities		702,741		—		—		702,741
Total	$	9,063,547	$	44,309,556		—	$	53,373,103
Derivative Financial Instruments1
Assets:
Equity contracts	$	10,364		—		—	$	10,364
1    Derivative financial instruments are futures contracts, which are valued at the unrealized appreciation (depreciation) on the instrument.

During the six months ended January 31, 2017, there were no transfers between levels.

See Notes to Financial Statements.

32 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments January 31, 2017 (Unaudited) BlackRock MSCI World Index Fund (Percentages shown are based on Net Assets)

Common Stocks		Shares		Value
Argentina — 0.0%
MercadoLibre, Inc.			430	$	79,718
Australia — 2.7%
AGL Energy Ltd.			8,754		150,110
Alumina Ltd.			41,516		61,172
Amcor Ltd.			13,996		151,913
AMP Ltd.			38,003		144,243
APA Group (a)			16,874		107,793
Aristocrat Leisure Ltd.			6,025		69,871
ASX Ltd.			2,220		84,025
Aurizon Holdings Ltd.			28,230		107,249
AusNet Services			18,104		21,715
Australia & New Zealand Banking Group Ltd.			36,509		811,171
Bank of Queensland Ltd.			6,911		62,790
Bendigo & Adelaide Bank Ltd.			7,799		74,273
BHP Billiton Ltd.			41,158		835,023
Boral Ltd.			14,795		65,383
Brambles Ltd.			19,513		154,211
Caltex Australia Ltd.			4,121		89,437
Challenger Ltd.			4,979		41,661
CIMIC Group Ltd.			1,069		27,825
Coca-Cola Amatil Ltd.			8,032		59,399
Cochlear Ltd.			995		94,519
Commonwealth Bank of Australia			21,599		1,338,276
Computershare Ltd.			7,242		70,827
Crown Resorts Ltd.	��		7,473		64,646
CSL Ltd.			5,494		468,364
Dexus Property Group			11,769		80,173
Domino’s Pizza Enterprises Ltd.			517		23,324
DUET Group (a)			27,920		59,336
Flight Centre Travel Group Ltd.			482		10,959
Fortescue Metals Group Ltd.			21,688		109,748
Goodman Group			19,389		101,818
GPT Group			18,738		66,542
Harvey Norman Holdings Ltd.			5,760		21,847
Healthscope Ltd.			18,926		31,430
Incitec Pivot Ltd.			20,268		59,236
Insurance Australia Group Ltd.			32,134		140,632
Lend Lease Group (a)			5,084		54,364
Macquarie Group Ltd.			4,073		261,550
Medibank Pvt Ltd.			26,335		53,969
Mirvac Group			53,906		83,036
National Australia Bank Ltd.			33,795		777,154
Newcrest Mining Ltd.			8,944		146,674
Oil Search Ltd.			14,597		76,234
Orica Ltd.			3,615		51,460
Origin Energy Ltd.			22,413		120,184
Qantas Airways Ltd.			4,693		12,131
QBE Insurance Group Ltd.			16,931		160,628
Ramsay Health Care Ltd.			1,442		73,088
REA Group Ltd.			1,287		51,380
Rio Tinto Ltd.			5,501		279,063
Santos Ltd.			27,671		84,183
Scentre Group			61,972		206,795
Seek Ltd.			4,929		54,025
Sonic Healthcare Ltd.			4,595		72,469
South32 Ltd.			64,231		134,434
Stockland			31,102		102,634
Suncorp Group Ltd.			15,512		153,366
Sydney Airport (a)			13,012		57,743
Tabcorp Holdings Ltd.			6,721		24,157
Tatts Group Ltd.			20,780		68,412
Telstra Corp. Ltd.			49,855		189,152
TPG Telecom Ltd.			2,446		12,016
Transurban Group (a)			22,354		172,977
Treasury Wine Estates Ltd.			9,623		84,894
Vicinity Centres			41,144		89,276

Common Stocks	Shares		Value
Australia (continued)
Vocus Group Ltd.		3,819	$	11,712
Wesfarmers Ltd.		14,928		456,038
Westfield Corp.		25,016		166,766
Westpac Banking Corp.		42,979		1,034,654
Woodside Petroleum Ltd.		10,381		248,901
Woolworths Ltd.		16,219		302,685
				11,789,145
Austria — 0.1%
Andritz AG		961		51,942
Erste Group Bank AG (b)		2,816		85,835
OMV AG		2,521		88,230
Raiffeisen Bank International AG (b)		2,054		45,747
Voestalpine AG		1,750		74,206
				345,960
Belgium — 0.4%
Ageas		1,997		85,506
Anheuser-Busch InBev SA		9,631		1,005,650
Colruyt SA		810		39,642
Groupe Bruxelles Lambert SA		977		83,263
KBC Group NV		2,832		183,930
Proximus		1,452		41,701
Solvay SA		939		110,098
Telenet Group Holding NV (b)		1,112		59,670
UCB SA		1,818		125,569
Umicore SA		891		49,909
				1,784,938
Bermuda — 0.0%
Marvell Technology Group Ltd.		4,833		71,867
Canada — 3.7%
Agnico Eagle Mines Ltd.		3,088		147,298
Agrium, Inc.		1,617		166,540
Alimentation Couche Tard, Inc., Class B		5,319		243,662
AltaGas Ltd.		1,443		34,322
ARC Resources Ltd.		3,536		55,027
Atco Ltd. Class I		804		28,311
Bank of Montreal		8,473		640,920
Bank of Nova Scotia		15,021		897,624
Barrick Gold Corp.		13,880		255,787
BCE, Inc.		1,717		77,402
BlackBerry Ltd. (b)		7,929		55,937
Bombardier, Inc., Class B (b)		21,867		41,843
Brookfield Asset Management, Inc., Class A		10,408		359,931
CAE, Inc.		5,090		72,287
Cameco Corp.		6,528		83,127
Canadian Imperial Bank of Commerce		4,881		415,649
Canadian National Railway Co.		9,878		686,545
Canadian Natural Resources Ltd.		13,898		420,171
Canadian Pacific Railway Ltd.		1,852		280,109
Canadian Tire Corp. Ltd., Class A		946		100,609
Canadian Utilities Ltd., Class A		958		27,269
CCL Industries, Inc., Class B		278		57,213
Cenovus Energy, Inc.		9,399		128,281
CGI Group, Inc., Class A (b)		3,036		145,985
CI Financial Corp.		2,827		59,093
Constellation Software, Inc.		195		88,075
Crescent Point Energy Corp.		7,219		84,159
Dollarama, Inc.		1,421		107,619
Eldorado Gold Corp. (b)		8,726		30,847
Element Fleet Management Corp.		5,211		50,658
Emera, Inc.		1,068		37,295
Empire Co. Ltd., Class A		1,259		15,722
Enbridge, Inc.		11,497		489,478
Encana Corp.		13,206		168,570
Fairfax Financial Holdings Ltd.		276		128,959

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 33

Schedule of Investments (continued) BlackRock MSCI World Index Fund

Common Stocks	Shares		Value
Canada (continued)
Finning International, Inc.		1,457	$	29,493
First Capital Realty, Inc.		1,017		16,178
First Quantum Minerals Ltd.		8,989		113,360
Fortis, Inc.		5,378		172,923
Franco-Nevada Corp.		2,020		131,391
George Weston Ltd.		565		48,187
Gildan Activewear, Inc.		3,360		87,896
Goldcorp, Inc.		11,706		189,275
Great-West Lifeco, Inc.		4,569		125,211
H&R Real Estate Investment Trust		1,261		21,862
Husky Energy, Inc. (b)		4,896		63,173
Hydro One, Ltd. (c)		1,427		26,374
IGM Financial, Inc.		882		27,106
Imperial Oil Ltd.		4,200		138,080
Industrial Alliance Insurance & Financial Services, Inc.		1,683		70,812
Intact Financial Corp.		1,902		138,873
Inter Pipeline Ltd.		5,492		119,104
Jean Coutu Group PJC, Inc., Class A		1,007		15,826
Keyera Corp.		2,885		84,693
Kinross Gold Corp. (b)		11,493		44,780
Linamar Corp.		414		18,202
Loblaw Cos. Ltd.		2,805		147,423
Magna International, Inc.		4,753		205,607
Manulife Financial Corp.		24,342		466,730
Methanex Corp.		1,478		73,897
Metro, Inc.		2,406		73,091
National Bank of Canada		4,132		178,363
Onex Corp.		873		61,092
Open Text Corp.		3,208		109,805
Pembina Pipeline Corp.		5,792		179,691
Peyto Exploration & Development Corp.		2,379		51,776
Potash Corp. of Saskatchewan, Inc.		10,313		191,875
Power Corp. of Canada		4,214		98,869
Power Financial Corp.		2,724		70,777
PrairieSky Royalty Ltd.		3,587		84,076
Restaurant Brands International, Inc.		3,030		148,630
RioCan Real Estate Investment Trust		1,373		27,444
Rogers Communications, Inc., Class B		4,096		177,690
Royal Bank of Canada		18,731		1,346,761
Saputo, Inc.		3,711		136,633
Seven Generations Energy Ltd. (b)		2,327		46,513
Shaw Communications, Inc., Class B		5,704		123,044
Silver Wheaton Corp.		6,151		135,996
Smart Real Estate Investment Trust		626		15,404
SNC-Lavalin Group, Inc.		1,379		59,431
Sun Life Financial, Inc.		7,853		309,956
Suncor Energy, Inc.		21,365		662,664
Teck Resources Ltd., Class B		6,863		168,193
TELUS Corp.		2,185		72,942
Thomson Reuters Corp.		4,610		206,648
Toronto-Dominion Bank		23,570		1,221,021
Tourmaline Oil Corp. (b)		3,253		76,047
TransCanada Corp.		11,086		523,012
Turquoise Hill Resources Ltd. (b)		11,569		41,875
Valeant Pharmaceuticals International, Inc. (b)		3,056		42,179
Veresen, Inc.		5,822		59,193
Vermilion Energy, Inc.		1,807		74,544
Waste Connections, Inc.		396		31,759
Waste Connections, Inc.		2,085		167,425
West Fraser Timber Co. Ltd.		709		24,214
Yamana Gold, Inc.		9,349		30,894
				16,288,307
Denmark — 0.6%
A.P. Moeller — Maersk A/S, Class A		45		72,048
A.P. Moeller — Maersk A/S, Class B		85		142,471
Carlsberg A/S, Class B		1,431		129,459

Common Stocks	Shares		Value
Denmark (continued)
Chr Hansen Holding A/S		1,404	$	85,706
Coloplast A/S, Class B		1,705		122,257
Danske Bank A/S		9,358		312,131
DONG Energy A/S (b)(c)		1,033		39,171
DSV A/S		2,240		108,930
Genmab A/S (b)		528		102,253
ISS A/S		2,883		102,659
Novo Nordisk A/S, Class B		24,144		872,558
Novozymes A/S, Class B		3,192		124,424
Pandora A/S		1,252		164,073
TDC A/S (b)		9,490		50,004
Tryg A/S		1,039		19,879
Vestas Wind Systems A/S		2,606		182,756
William Demant Holding A/S (b)		1,130		21,158
				2,651,937
Finland — 0.3%
Elisa OYJ		2,308		77,774
Fortum OYJ		5,806		92,633
Kone OYJ, Class B		4,010		181,296
Metso OYJ		1,005		30,897
Neste Oil OYJ		1,226		42,656
Nokia OYJ		71,473		320,936
Nokian Renkaat OYJ		1,183		44,378
Orion OYJ, Class B		1,454		67,682
Sampo OYJ, Class A		5,734		265,533
Stora Enso OYJ, Class R		8,882		100,795
UPM-Kymmene OYJ		6,947		157,557
Wartsila OYJ		1,746		87,683
				1,469,820
France — 3.5%
Accor SA		2,478		100,423
Aeroports de Paris		190		21,084
Air Liquide SA		4,885		527,403
Airbus SE		7,093		480,799
Alstom SA (b)		2,603		73,859
ArcelorMittal (b)		22,213		173,207
Arkema SA		715		70,615
AtoS SE		1,039		110,544
AXA SA		25,175		618,732
BNP Paribas SA		13,268		848,778
Bollore SA		7,514		30,052
Bouygues SA		2,591		94,146
Bureau Veritas SA		2,974		58,242
Cap Gemini SA		2,046		166,582
Carrefour SA		7,762		189,884
Casino Guichard-Perrachon SA		496		26,745
Christian Dior SE		746		160,140
Cie Generale des Etablissements Michelin		2,208		237,211
CNP Assurances		1,387		26,066
Compagnie de Saint-Gobain		6,401		314,517
Credit Agricole SA		13,354		177,230
Danone SA		7,693		482,264
Dassault Aviation SA		33		38,035
Dassault Systemes SA		1,593		123,319
Edenred		1,805		39,354
Eiffage SA		1,030		74,047
Electricite de France SA		1,940		19,125
Engie SA		21,803		261,037
Essilor International SA		2,793		327,664
Eurazeo		537		33,074
Eutelsat Communications SA		1,683		28,706
Fonciere Des Regions		385		32,092
Gecina SA		544		70,150
Groupe Eurotunnel SE, Registered Shares		7,842		72,948
Hermes International		365		158,624

See Notes to Financial Statements.

34 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock MSCI World Index Fund

Common Stocks	Shares		Value
France (continued)
ICADE		255	$	18,078
Iliad SA		426		91,101
Imerys SA		272		21,843
Ingenico Group SA		950		80,110
JCDecaux SA		576		18,439
Kering		902		214,713
Klepierre		3,250		123,413
L’Oreal SA		3,289		597,996
Lagardere SCA		1,249		31,336
Legrand SA		3,202		185,976
LVMH Moet Hennessy Louis Vuitton SE		3,506		706,540
Natixis SA		14,230		84,321
Orange SA		24,278		376,902
Pernod Ricard SA		2,594		303,430
Peugeot SA (b)		4,915		91,471
Publicis Groupe SA		2,156		148,115
Remy Cointreau SA		190		17,274
Renault SA		2,424		218,266
Rexel SA		5,012		87,414
Safran SA		3,796		257,318
Sanofi		14,764		1,186,678
Schneider Electric SE		7,242		518,194
SCOR SE		2,534		85,760
SEB SA		259		32,571
SES SA		3,592		69,846
SFR Group SA (b)		1,035		30,073
Societe BIC SA		528		69,037
Societe Generale SA		10,036		490,635
Sodexo SA		1,221		135,021
Suez		4,073		61,696
Thales SA		1,573		147,570
TOTAL SA		28,244		1,429,010
Unibail-Rodamco SE		1,172		270,089
Valeo SA		2,837		173,396
Veolia Environnement SA		6,594		112,318
Vinci SA		6,607		463,128
Vivendi SA		12,539		229,916
Wendel SA		198		23,433
Zodiac Aerospace		3,050		92,702
				15,561,827
Germany — 3.3%
adidas AG		2,439		384,886
Allianz SE, Registered Shares		5,644		959,278
Axel Springer AG		398		20,979
BASF SE		11,798		1,138,905
Bayer AG, Registered Shares		10,666		1,184,770
Bayerische Motoren Werke AG		4,227		385,968
Bayerische Motoren Werke AG, Preference Shares		763		57,320
Beiersdorf AG		1,473		130,683
Brenntag AG		2,242		130,433
Commerzbank AG		16,186		140,780
Continental AG		1,340		262,323
Covestro AG (c)		640		48,162
Daimler AG, Registered Shares		11,937		897,744
Deutsche Bank AG, Registered Shares (b)		17,841		356,302
Deutsche Boerse AG (b)		2,326		214,628
Deutsche Lufthansa AG, Registered Shares		1,873		25,021
Deutsche Post AG, Registered Shares		12,571		421,946
Deutsche Telekom AG, Registered Shares		42,002		735,329
Deutsche Wohnen AG, Bearer Shares		4,506		146,974
E.ON SE		22,965		176,901
Evonik Industries AG		1,551		50,348
Fraport AG Frankfurt Airport Services Worldwide		362		21,664
Fresenius Medical Care AG & Co. KGaA		2,917		238,099
Fresenius SE & Co. KGaA		5,172		409,336
Fuchs Petrolub SE, Preference Shares		501		22,943

Common Stocks	Shares		Value
Germany (continued)
GEA Group AG		2,824	$	117,018
Hannover Rueck SE		1,031		113,564
HeidelbergCement AG		1,683		162,585
Henkel AG & Co. KGaA		1,133		119,557
Henkel AG & Co. KGaA Preference Shares		2,201		268,683
Hochtief AG		204		29,080
HUGO BOSS AG		657		42,211
Infineon Technologies AG		15,009		276,185
Innogy SE (b)(c)		1,392		47,612
K+S AG, Registered Shares		2,113		53,677
Lanxess AG		972		70,734
Linde AG		2,451		398,592
MAN SE		649		67,283
Merck KGaA		1,516		167,263
Metro AG		2,730		93,423
Muenchener Rueckversicherungs AG, Registered Shares		2,186		411,637
OSRAM Licht AG		1,512		87,773
Porsche Automobil Holding SE, Preference Shares		1,935		116,396
ProSiebenSat.1 Media AG, Registered Shares		3,110		132,304
RWE AG (b)		5,181		68,985
SAP SE		12,558		1,148,431
Schaeffler AG		2,023		32,805
Siemens AG, Registered Shares		9,717		1,256,975
Symrise AG		1,653		99,531
Telefonica Deutschland Holding AG		13,818		57,803
ThyssenKrupp AG		5,275		133,631
TUI AG		7,224		105,873
United Internet AG, Registered Shares		1,622		67,973
Volkswagen AG		323		51,743
Vonovia SE		5,314		174,102
Zalando SE (b)(c)		1,629		64,425
				14,599,576
Hong Kong — 1.2%
AIA Group Ltd.		149,400		924,988
ASM Pacific Technology Ltd.		2,400		29,180
Bank of East Asia Ltd.		13,000		55,373
BOC Hong Kong Holdings Ltd.		44,000		175,907
Cathay Pacific Airways Ltd.		12,000		16,253
Cheung Kong Infrastructure Holdings Ltd.		11,000		88,459
Cheung Kong Property Holdings Ltd.		33,500		220,191
CK Hutchison Holdings Ltd.		33,000		395,511
CLP Holdings Ltd.		19,500		190,331
First Pacific Co. Ltd.		22,000		16,681
Galaxy Entertainment Group Ltd.		32,000		151,996
Hang Lung Group, Ltd.		10,000		38,351
Hang Lung Properties Ltd.		26,000		63,988
Hang Seng Bank Ltd.		8,800		179,370
Henderson Land Development Co. Ltd.		13,310		73,470
HK Electric Investments & HK Electric Investments Ltd. (a)(c)		23,500		19,616
HKT Trust & HKT Ltd. (a)		27,000		37,717
Hong Kong & China Gas Co. Ltd.		89,940		169,339
Hong Kong Exchanges & Clearing Ltd.		13,914		336,536
Hongkong Land Holdings Ltd.		16,700		112,787
Hysan Development Co. Ltd.		15,000		68,362
Jardine Matheson Holdings Ltd.		3,100		191,193
Kerry Properties Ltd.		2,500		7,075
Li & Fung Ltd.		130,000		56,372
Link REIT		30,000		205,007
Melco Crown Entertainment Ltd. — ADR		2,297		38,681
MGM China Holdings Ltd.		14,000		27,194
MTR Corp. Ltd.		22,000		111,763
New World Development Co. Ltd.		60,000		69,228
NWS Holdings Ltd.		11,295		20,297
PCCW Ltd.		102,000		61,910
Power Assets Holdings Ltd.		17,000		162,892

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 35

Schedule of Investments (continued) BlackRock MSCI World Index Fund

Common Stocks	Shares		Value
Hong Kong (continued)
Sands China Ltd.		29,200	$	128,479
Shangri-La Asia Ltd.		16,000		17,797
Sino Land Co. Ltd.		34,000		56,180
SJM Holdings Ltd.		17,000		13,507
Sun Hung Kai Properties Ltd.		17,000		233,938
Swire Pacific Ltd., Class A		5,500		56,033
Swire Properties Ltd.		18,000		50,648
Techtronic Industries Co. Ltd.		12,500		43,232
WH Group Ltd. (c)		81,500		61,903
Wharf Holdings Ltd.		19,000		142,467
Wheelock & Co. Ltd.		11,000		66,857
Wynn Macau Ltd.		14,800		26,916
Yue Yuen Industrial Holdings Ltd.		6,500		23,792
				5,237,767
Ireland — 0.6%
Bank of Ireland (b)		378,850		101,781
CRH PLC		10,646		369,263
DCC PLC		1,063		85,745
Experian PLC		11,240		217,070
James Hardie Industries PLC		7,199		113,070
Kerry Group PLC, Class A		2,141		150,460
Medtronic PLC		17,623		1,339,700
Paddy Power Betfair PLC		876		91,538
Seagate Technology PLC		3,334		150,530
Weatherford International PLC (b)		9,576		49,891
XL Group Ltd.		2,930		110,080
				2,779,128
Israel — 0.2%
Azrieli Group Ltd.		353		16,113
Bank Hapoalim BM		15,396		93,025
Bank Leumi Le-Israel BM (b)		17,440		72,134
Bezeq The Israeli Telecommunication Corp. Ltd.		18,930		33,069
Check Point Software Technologies Ltd. (b)		1,757		173,539
Elbit Systems Ltd.		343		37,799
Frutarom Industries, Ltd.		666		35,188
Israel Chemicals Ltd.		13,160		60,483
Mizrahi Tefahot Bank Ltd.		422		6,500
Mobileye NV (b)		1,856		79,734
NICE Ltd.		770		53,883
Taro Pharmaceutical Industries Ltd. (b)		234		24,450
Teva Pharmaceutical Industries Ltd. — ADR		11,917		398,385
				1,084,302
Italy — 0.6%
Assicurazioni Generali SpA		15,535		247,893
Atlantia SpA		5,722		130,403
Enel SpA		92,076		384,936
Eni SpA		30,726		472,437
Ferrari NV		1,208		75,303
Intesa Sanpaolo SpA		176,588		413,789
Luxottica Group SpA		1,746		93,748
Mediobanca SpA		4,831		41,595
Poste Italiane SpA (c)		7,200		45,308
Prysmian SpA		2,468		64,200
Saipem SpA (b)		75,921		38,984
Snam SpA		34,139		129,937
Telecom Italia SpA (b)		143,547		123,438
Telecom Italia SpA, Non-Convertible Savings Shares (b)		97,247		69,434
Tenaris SA		6,566		115,016
Terna — Rete Elettrica Nazionale SpA		24,823		108,869
UniCredit SpA		6,732		183,764
UnipolSai SpA		9,911		20,670
				2,759,724

Common Stocks	Shares		Value
Japan — 8.7%
ABC-Mart, Inc.		300	$	17,466
Acom Co. Ltd. (b)		2,100		9,032
Aeon Co. Ltd.		6,800		98,279
AEON Financial Service Co. Ltd.		600		10,742
Aeon Mall Co. Ltd.		1,000		14,493
Air Water, Inc.		1,000		18,516
Aisin Seiki Co. Ltd.		2,000		91,489
Ajinomoto Co., Inc.		7,200		142,110
Alfresa Holdings Corp.		1,600		26,337
Alps Electric Co. Ltd.		2,200		58,599
Amada Holdings Co. Ltd.		3,300		38,787
ANA Holdings, Inc.		16,000		47,525
Aozora Bank Ltd.		12,000		43,704
Asahi Glass Co. Ltd.		15,000		111,444
Asahi Group Holdings Ltd.		4,500		158,353
Asahi Kasei Corp.		18,000		167,878
Asics Corp.		1,900		37,012
Astellas Pharma, Inc.		27,600		370,441
Bandai Namco Holdings, Inc.		2,100		57,836
Bank of Kyoto Ltd.		3,000		23,452
Benesse Holdings, Inc.		500		14,553
Bridgestone Corp.		7,900		289,740
Brother Industries Ltd.		2,700		49,836
Calbee, Inc.		800		26,042
Canon, Inc.		14,100		417,168
Casio Computer Co. Ltd.		2,800		38,688
Central Japan Railway Co.		1,900		307,014
Chiba Bank Ltd.		11,000		71,955
Chubu Electric Power Co., Inc.		8,100		108,139
Chugai Pharmaceutical Co. Ltd.		2,300		67,594
Chugoku Bank Ltd.		1,800		26,478
Chugoku Electric Power Co., Inc.		2,400		27,024
Concordia Financial Group Ltd.		12,600		66,458
Credit Saison Co. Ltd.		900		16,398
CYBERDYNE, Inc. (b)		1,300		18,349
Dai Nippon Printing Co. Ltd.		5,000		50,868
Dai-ichi Life Insurance Co. Ltd.		12,600		228,424
Daicel Corp.		2,100		23,222
Daiichi Sankyo Co. Ltd.		7,000		156,611
Daikin Industries Ltd.		3,000		297,787
Daito Trust Construction Co. Ltd.		1,000		139,799
Daiwa House Industry Co. Ltd.		8,100		219,365
Daiwa House REIT Investment Corp.		18		45,325
Daiwa Securities Group, Inc.		21,000		133,902
DeNA Co. Ltd.		1,200		26,813
Denso Corp.		5,700		246,836
Dentsu, Inc.		3,000		138,657
Don Quijote Holdings Co. Ltd.		1,400		50,813
East Japan Railway Co.		4,000		362,228
Eisai Co. Ltd.		3,600		198,434
Electric Power Development Co. Ltd.		1,700		39,513
FamilyMart UNY Holdings Co. Ltd.		800		50,687
FANUC Corp.		2,400		471,184
Fast Retailing Co. Ltd.		800		251,612
Fuji Electric Co. Ltd.		4,000		23,698
Fuji Heavy Industries Ltd.		7,900		316,127
FUJIFILM Holdings Corp.		5,800		224,606
Fujitsu Ltd.		27,000		156,923
Fukuoka Financial Group, Inc.		14,000		61,800
Hachijuni Bank Ltd.		3,000		17,658
Hakuhodo DY Holdings, Inc.		1,600		19,685
Hamamatsu Photonics KK		2,000		57,759
Hankyu Hanshin Holdings, Inc.		2,400		81,432
Hikari Tsushin, Inc.		300		27,415
Hino Motors Ltd.		2,000		21,101
Hirose Electric Co. Ltd.		300		39,054
Hiroshima Bank Ltd.		4,000		18,689

See Notes to Financial Statements.

36 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock MSCI World Index Fund

Common Stocks	Shares		Value
Japan (continued)
Hisamitsu Pharmaceutical Co., Inc.		500	$	26,100
Hitachi Chemical Co. Ltd.		1,000		28,391
Hitachi Construction Machinery Co. Ltd.		1,100		25,297
Hitachi High-Technologies Corp.		700		29,984
Hitachi Ltd.		62,000		354,978
Hitachi Metals Ltd.		1,700		23,567
Hokuriku Electric Power Co.		1,600		16,120
Honda Motor Co. Ltd.		21,200		630,889
Hoshizaki Corp.		600		48,895
Hoya Corp.		4,600		200,500
Hulic Co. Ltd.		2,100		20,477
Idemitsu Kosan Co. Ltd.		1,100		34,014
IHI Corp. (b)		23,000		61,935
Iida Group Holdings Co. Ltd.		1,300		24,330
Inpex Corp.		14,100		138,366
Isetan Mitsukoshi Holdings Ltd.		3,400		39,771
Isuzu Motors Ltd.		8,100		108,685
ITOCHU Corp.		19,700		271,385
J. Front Retailing Co. Ltd.		3,900		56,284
Japan Airlines Co. Ltd.		1,400		44,580
Japan Airport Terminal Co. Ltd.		600		21,452
Japan Exchange Group, Inc.		7,600		112,963
Japan Post Bank Co. Ltd.		7,300		88,675
Japan Post Holdings Co. Ltd.		7,100		89,153
Japan Prime Realty Investment Corp.		15		60,195
Japan Real Estate Investment Corp.		16		90,919
Japan Retail Fund Investment Corp.		28		59,866
Japan Tobacco, Inc.		14,200		458,029
JFE Holdings, Inc.		6,300		110,276
JGC Corp.		1,600		27,775
JSR Corp.		2,000		34,279
JTEKT Corp.		3,600		59,125
JX Holdings, Inc.		31,000		146,195
Kajima Corp.		9,000		62,728
Kakaku.com, Inc.		1,500		27,154
Kamigumi Co. Ltd.		2,000		19,441
Kaneka Corp.		3,000		25,849
Kansai Electric Power Co., Inc. (b)		9,500		101,519
Kansai Paint Co. Ltd.		3,100		60,220
Kao Corp.		6,200		306,805
Kawasaki Heavy Industries Ltd.		17,000		53,196
KDDI Corp.		23,500		631,407
Keihan Holdings Co. Ltd.		4,000		26,644
Keikyu Corp.		7,000		82,089
Keio Corp.		5,000		41,098
Keisei Electric Railway Co. Ltd.		1,500		35,514
Keyence Corp.		1,200		466,040
Kikkoman Corp.		3,000		94,444
Kintetsu Group Holdings Co. Ltd.		22,000		84,574
Kirin Holdings Co. Ltd.		9,400		154,026
Kobe Steel Ltd. (b)		2,200		21,399
Koito Manufacturing Co. Ltd.		1,100		58,350
Komatsu Ltd.		12,500		295,983
Konami Holdings Corp.		1,700		67,982
Konica Minolta, Inc.		5,500		56,975
Kose Corp.		200		17,032
Kubota Corp.		14,700		233,690
Kuraray Co. Ltd.		4,000		63,400
Kurita Water Industries Ltd.		800		18,977
Kyocera Corp.		4,500		234,273
Kyowa Hakko Kirin Co. Ltd.		4,700		63,645
Kyushu Electric Power Co. Inc.		7,100		79,250
Kyushu Financial Group, Inc.		6,400		44,097
Lawson, Inc.		1,100		80,292
LINE Corp. (b)		1,000		32,026
Lion Corp.		3,000		52,180
LIXIL Group Corp.		3,500		81,720

Common Stocks	Shares		Value
Japan (continued)
M3, Inc.		1,900	$	51,047
Mabuchi Motor Co. Ltd.		400		20,562
Makita Corp.		1,200		83,348
Marubeni Corp.		22,900		139,334
Marui Group Co. Ltd.		1,400		20,018
Maruichi Steel Tube Ltd.		500		16,766
Mazda Motor Corp.		8,100		119,201
McDonald’s Holdings Co. Japan Ltd.		700		18,404
Mebuki Financial Group, Inc.		15,610		59,947
Medipal Holdings Corp.		3,800		61,588
Meiji Holdings Co. Ltd.		1,400		108,439
Minebea Co. Ltd.		4,100		40,758
Miraca Holdings, Inc.		400		18,230
MISUMI Group, Inc.		3,000		56,051
Mitsubishi Chemical Holdings Corp.		20,600		143,684
Mitsubishi Corp.		19,500		440,507
Mitsubishi Electric Corp.		24,400		371,335
Mitsubishi Estate Co. Ltd.		17,000		323,577
Mitsubishi Gas Chemical Co., Inc.		2,000		38,361
Mitsubishi Heavy Industries Ltd.		47,000		211,132
Mitsubishi Logistics Corp.		2,000		28,450
Mitsubishi Materials Corp.		2,100		71,663
Mitsubishi Motors Corp.		7,000		37,920
Mitsubishi Tanabe Pharma Corp.		2,700		54,154
Mitsubishi UFJ Financial Group, Inc.		163,900		1,049,537
Mitsubishi UFJ Lease & Finance Co. Ltd.		6,700		35,714
Mitsui & Co. Ltd.		20,700		303,791
Mitsui Chemicals, Inc.		10,000		47,026
Mitsui Fudosan Co. Ltd.		12,000		277,046
Mitsui OSK Lines Ltd.		16,000		50,846
Mixi, Inc.		700		30,370
Mizuho Financial Group, Inc.		318,600		591,190
MS&AD Insurance Group Holdings, Inc.		7,100		237,520
Murata Manufacturing Co. Ltd.		2,600		350,179
Nabtesco Corp.		900		23,473
Nagoya Railroad Co. Ltd.		11,000		54,150
NEC Corp.		39,000		90,012
Nexon Co. Ltd.		1,100		16,748
NGK Insulators Ltd.		3,900		76,470
NGK Spark Plug Co. Ltd.		3,000		67,570
NH Foods Ltd.		2,000		54,432
Nidec Corp.		3,200		300,459
Nikon Corp.		4,800		77,468
Nintendo Co. Ltd.		1,600		327,491
Nippon Building Fund, Inc.		14		80,401
Nippon Electric Glass Co. Ltd.		4,000		23,026
Nippon Express Co. Ltd.		12,000		63,481
Nippon Paint Holdings Co. Ltd.		1,700		49,588
Nippon Prologis REIT, Inc.		30		62,689
Nippon Steel & Sumitomo Metal Corp.		9,500		229,497
Nippon Telegraph & Telephone Corp.		8,500		375,464
Nippon Yusen KK		31,000		65,555
Nissan Chemical Industries Ltd.		1,300		46,418
Nissan Motor Co. Ltd.		32,800		324,496
Nisshin Seifun Group, Inc.		1,500		22,819
Nissin Foods Holdings Co. Ltd.		400		21,109
Nitori Holdings Co. Ltd.		1,200		134,486
Nitto Denko Corp.		2,300		181,991
NOK Corp.		900		18,290
Nomura Holdings, Inc.		49,800		308,703
Nomura Real Estate Holdings, Inc.		1,000		17,200
Nomura Real Estate Master Fund, Inc.		52		81,019
Nomura Research Institute Ltd.		2,390		81,662
NSK Ltd.		4,400		53,413
NTT Data Corp.		1,400		70,556
NTT Docomo, Inc.		17,400		416,035
Obayashi Corp.		9,200		87,641

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 37

Schedule of Investments (continued) BlackRock MSCI World Index Fund

Common Stocks	Shares		Value
Japan (continued)
Obic Co. Ltd.		1,100	$	52,798
Odakyu Electric Railway Co. Ltd.		4,600		91,100
Oji Holdings Corp.		14,000		61,966
Olympus Corp.		3,700		127,999
Omron Corp.		2,900		118,984
Ono Pharmaceutical Co. Ltd.		5,000		102,581
Oracle Corp. Japan		400		22,412
Oriental Land Co. Ltd.		2,500		136,998
ORIX Corp.		18,200		274,588
Osaka Gas Co. Ltd.		21,000		78,717
Otsuka Corp.		400		20,586
Otsuka Holdings Co. Ltd.		5,200		239,554
Panasonic Corp.		29,900		311,107
Park24 Co. Ltd.		700		19,320
Pola Orbis Holdings, Inc.		100		9,500
Rakuten, Inc.		11,900		118,788
Recruit Holdings Co. Ltd.		4,300		188,235
Resona Holdings, Inc.		30,500		165,129
Ricoh Co. Ltd.		9,400		83,862
Rinnai Corp.		600		50,989
Rohm Co. Ltd.		1,300		83,130
Ryohin Keikaku Co. Ltd.		500		93,729
Sankyo Co. Ltd.		500		16,694
Santen Pharmaceutical Co. Ltd.		5,100		64,086
SBI Holdings, Inc.		1,700		23,466
Secom Co. Ltd.		2,500		180,794
Sega Sammy Holdings, Inc.		1,900		29,834
Seibu Holdings, Inc.		1,600		26,960
Seiko Epson Corp.		3,200		65,923
Sekisui Chemical Co. Ltd.		6,200		101,169
Sekisui House Ltd.		8,400		135,881
Seven & i Holdings Co. Ltd.		10,100		403,276
Seven Bank Ltd.		2,700		7,735
Sharp Corp. (b)		17,000		45,973
Shimadzu Corp.		2,000		33,752
Shimamura Co. Ltd.		300		39,320
Shimano, Inc.		1,000		157,688
Shimizu Corp.		5,000		45,957
Shin-Etsu Chemical Co. Ltd.		4,800		414,099
Shinsei Bank Ltd.		21,000		36,119
Shionogi & Co. Ltd.		3,500		168,568
Shiseido Co. Ltd.		5,000		139,745
Shizuoka Bank Ltd.		6,000		52,210
Showa Shell Sekiyu KK		1,400		13,724
SMC Corp.		700		191,085
Softbank Group Corp.		12,200		939,885
Sohgo Security Services Co. Ltd.		500		18,813
Sompo Holdings, Inc.		4,500		162,944
Sony Corp.		16,000		484,444
Sony Financial Holdings, Inc.		3,200		53,594
Stanley Electric Co. Ltd.		2,600		73,248
Start Today Co. Ltd.		1,800		33,904
Sumitomo Chemical Co. Ltd.		17,000		90,576
Sumitomo Corp.		13,700		171,740
Sumitomo Dainippon Pharma Co. Ltd.		1,500		25,445
Sumitomo Electric Industries Ltd.		9,900		144,053
Sumitomo Heavy Industries Ltd.		11,000		75,629
Sumitomo Metal Mining Co. Ltd.		5,000		67,741
Sumitomo Mitsui Financial Group, Inc.		16,600		651,251
Sumitomo Mitsui Trust Holdings, Inc.		4,100		152,821
Sumitomo Realty & Development Co. Ltd.		5,000		135,258
Sumitomo Rubber Industries Ltd.		1,400		21,866
Sundrug Co. Ltd.		400		27,584
Suntory Beverage & Food Ltd.		1,300		55,312
Suruga Bank Ltd.		3,000		68,346
Suzuken Co. Ltd.		900		29,713
Suzuki Motor Corp.		4,800		185,246

Common Stocks	Shares		Value
Japan (continued)
Sysmex Corp.		2,400	$	144,192
T&D Holdings, Inc.		6,200		91,850
Taiheiyo Cement Corp.		12,000		41,931
Taisei Corp.		14,000		99,450
Taisho Pharmaceutical Holdings Co. Ltd.		300		25,358
Taiyo Nippon Sanso Corp.		1,800		21,258
Takashimaya Co. Ltd.		5,000		43,060
Takeda Pharmaceutical Co. Ltd.		8,700		364,405
TDK Corp.		1,700		122,190
Teijin Ltd.		2,000		42,214
Terumo Corp.		4,300		159,074
THK Co. Ltd.		1,000		24,641
Tobu Railway Co. Ltd.		17,000		86,279
Toho Co. Ltd.		1,400		40,375
Toho Gas Co. Ltd.		9,000		67,327
Tohoku Electric Power Co., Inc.		7,300		89,115
Tokio Marine Holdings, Inc.		8,300		346,060
Tokyo Electric Power Co. Holdings, Inc. (b)		15,100		57,835
Tokyo Electron Ltd.		2,100		217,528
Tokyo Gas Co. Ltd.		26,000		115,384
Tokyo Tatemono Co. Ltd.		1,600		21,189
Tokyu Corp.		14,000		103,108
Tokyu Fudosan Holdings Corp.		3,700		21,630
TonenGeneral Sekiyu KK		3,000		35,280
Toppan Printing Co. Ltd.		6,000		58,896
Toray Industries, Inc.		19,000		164,520
Toshiba Corp. (b)		49,000		105,074
Toto Ltd.		1,400		56,387
Toyo Seikan Kaisha Ltd.		1,400		25,821
Toyo Suisan Kaisha Ltd.		1,300		46,386
Toyoda Gosei Co. Ltd.		700		16,862
Toyota Industries Corp.		2,400		115,824
Toyota Motor Corp.		33,900		1,971,382
Toyota Tsusho Corp.		2,000		55,012
Trend Micro, Inc.		1,400		54,329
Tsuruha Holdings, Inc.		300		28,200
Unicharm Corp.		5,700		128,376
United Urban Investment Corp.		36		57,420
USS Co. Ltd.		3,300		57,919
West Japan Railway Co.		1,800		117,275
Yahoo! Japan Corp.		22,700		95,268
Yakult Honsha Co. Ltd.		1,500		77,086
Yamada Denki Co. Ltd.		5,400		29,751
Yamaguchi Financial Group, Inc.		2,000		21,790
Yamaha Corp.		1,800		54,982
Yamaha Motor Co. Ltd.		2,900		60,318
Yamato Holdings Co. Ltd.		3,600		72,552
Yamazaki Baking Co. Ltd.		1,000		20,111
Yaskawa Electric Corp.		2,500		45,080
Yokogawa Electric Corp.		1,600		25,568
Yokohama Rubber Co. Ltd.		1,000		17,587
				38,491,986
Luxembourg — 0.0%
Eurofins Scientific SE		118		52,978
RTL Group SA (b)		260		19,863
				72,841
Mexico — 0.0%
Fresnillo PLC		1,783		32,730
Netherlands — 1.8%
ABN AMRO Group NV (c)		2,857		67,204
Aegon NV		26,877		146,090
AerCap Holdings NV (b)		2,198		97,305
Akzo Nobel NV		3,125		212,079
Altice NV Class A (b)		5,606		123,073
Altice NV Class B (b)		2,261		49,900

See Notes to Financial Statements.

38 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock MSCI World Index Fund

Common Stocks	Shares		Value
Netherlands (continued)
ASML Holding NV		4,687	$	569,113
CNH Industrial NV		14,413		128,041
Core Laboratories NV		474		55,377
EXOR NV		1,768		80,671
Gemalto NV		766		44,516
Heineken Holding NV		991		69,616
Heineken NV		3,000		224,367
ING Groep NV		47,864		687,612
Koninklijke Ahold Delhaize NV		16,895		359,927
Koninklijke Boskalis Westminster NV		1,674		61,935
Koninklijke DSM NV		2,182		139,103
Koninklijke KPN NV		39,299		113,219
Koninklijke Philips NV		11,534		338,436
Koninklijke Vopak NV		563		24,184
NN Group NV		3,933		139,290
NXP Semiconductor NV (b)		3,675		359,599
QIAGEN NV (b)		1,965		57,194
Randstad Holding NV		1,821		105,945
Royal Dutch Shell PLC, Class A		55,731		1,511,517
Royal Dutch Shell PLC, Class B		47,366		1,337,824
Sensata Technologies Holding NV (b)		2,422		101,603
Unilever NV CVA		20,255		821,579
Wolters Kluwer NV		4,338		165,893
				8,192,212
New Zealand — 0.1%
Auckland International Airport Ltd.		12,237		61,380
Contact Energy Ltd.		17,654		61,864
Fletcher Building Ltd.		8,290		63,870
Mercury NZ Ltd.		7,580		17,081
Meridian Energy Ltd.		9,623		18,592
Ryman Healthcare Ltd.		3,091		19,757
Spark New Zealand Ltd.		20,014		51,570
				294,114
Norway — 0.3%
DNB ASA		11,351		189,363
Gjensidige Forsikring ASA		3,186		54,828
Marine Harvest ASA (b)		5,247		92,640
Norsk Hydro ASA		20,249		115,507
Orkla ASA		12,309		114,841
Schibsted ASA, Class A		1,912		50,559
Schibsted ASA, Class B		808		20,118
Statoil ASA		13,548		252,632
Telenor ASA		8,552		135,570
Yara International ASA		1,796		75,729
				1,101,787
Portugal — 0.0%
EDP — Energias de Portugal SA		17,442		50,723
Galp Energia SGPS SA		4,087		60,219
Jeronimo Martins SGPS SA		4,509		76,318
				187,260
Singapore — 0.7%
Ascendas Real Estate Investment Trust		27,497		48,011
Broadcom Ltd.		5,072		1,011,864
CapitaLand Commercial Trust Ltd.		18,700		20,259
CapitaLand Ltd.		41,800		97,550
CapitaLand Mall Trust		33,000		45,346
City Developments Ltd.		7,000		45,948
ComfortDelGro Corp. Ltd.		43,100		73,752
DBS Group Holdings Ltd.		19,400		262,287
Genting Singapore PLC		105,700		72,905
Global Logistic Properties Ltd.		48,300		89,016
Golden Agri-Resources Ltd.		65,200		19,612
Hutchison Port Holdings Trust		104,400		44,404
Jardine Cycle & Carriage Ltd.		900		26,391

Common Stocks	Shares		Value
Singapore (continued)
Keppel Corp. Ltd.		21,400	$	93,905
Oversea-Chinese Banking Corp. Ltd.		42,000		280,124
SATS, Ltd.		10,800		40,461
SembCorp Industries Ltd.		9,300		20,770
Singapore Airlines Ltd.		5,600		39,441
Singapore Exchange Ltd.		4,400		23,144
Singapore Press Holdings Ltd.		5,600		13,732
Singapore Technologies Engineering Ltd.		25,100		58,823
Singapore Telecommunications Ltd.		109,800		301,883
StarHub Ltd.		6,700		14,107
Suntec Real Estate Investment Trust		35,000		43,015
United Overseas Bank Ltd.		15,676		233,133
UOL Group Ltd.		4,200		19,022
Wilmar International Ltd.		20,300		55,866
Yangzijiang Shipbuilding Holdings Ltd.		31,000		17,728
				3,112,499
Spain — 1.1%
Abertis Infraestructuras SA		8,462		121,258
ACS Actividades de Construccion y Servicios SA		2,693		82,999
Aena SA (c)		972		141,355
Amadeus IT Group SA		5,101		235,976
Banco Bilbao Vizcaya Argentaria SA		80,328		546,278
Banco de Sabadell SA		85,952		129,763
Banco Popular Espanol SA		35,333		36,587
Banco Santander SA		187,901		1,049,777
Bankia SA		77,644		82,082
Bankinter SA		6,680		53,768
CaixaBank SA		42,273		154,951
Distribuidora Internacional de Alimentacion SA		7,093		37,542
Enagas SA		716		17,584
Endesa SA		3,615		74,550
Ferrovial SA		7,139		129,589
Gas Natural SDG SA		3,368		64,969
Grifols SA		4,695		100,793
Iberdrola SA		68,554		432,996
Iberdrola SA (b)		1,354		8,525
Industria de Diseno Textil SA		13,940		461,073
International Consolidated Airlines Group SA		14,232		85,565
Mapfre SA		14,471		43,877
Red Electrica Corp. SA		2,654		47,459
Repsol SA		16,238		240,675
Telefonica SA		57,350		554,867
Zardoya Otis SA		1,808		15,261
				4,950,119
Sweden — 1.1%
Alfa Laval AB		3,766		70,410
Assa Abloy AB, Class B		13,294		251,555
Atlas Copco AB, A Shares		8,126		260,615
Atlas Copco AB, B Shares		4,390		127,316
Autoliv, Inc.		1,163		134,513
Boliden AB		2,858		83,375
Electrolux AB, Class B		3,781		100,541
Getinge AB, Class B		2,556		41,292
Hennes & Mauritz AB, Class B		11,411		326,491
Hexagon AB, Class B		3,736		147,784
Husqvarna AB, Class B		3,673		30,763
ICA Gruppen AB		579		18,921
Industrivarden AB, Class C		1,356		26,275
Investor AB, Class B		5,292		211,237
Kinnevik AB		3,667		94,141
L E Lundbergforetagen AB, -B Shares		593		38,155
Lundin Petroleum AB (b)		1,782		38,456
Millicom International Cellular SA		776		38,429
Nordea Bank AB		39,588		477,917
Sandvik AB		12,772		172,404

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 39

Schedule of Investments (continued) BlackRock MSCI World Index Fund

Common Stocks	Shares		Value
Sweden (continued)
Securitas AB, Class B		4,304	$	68,534
Skandinaviska Enskilda Banken AB, Class A		18,019		202,404
Skanska AB, Class B		4,598		112,422
SKF AB, Class B		6,315		127,069
Svenska Cellulosa AB, B Shares		8,461		254,605
Svenska Handelsbanken AB, Class A		18,891		282,018
Swedbank AB, Class A		11,382		287,794
Swedish Match AB		2,064		67,197
Tele2 AB, Class B		7,257		63,983
Telefonaktiebolaget LM Ericsson, Class B		40,738		241,101
TeliaSonera AB		34,113		138,377
Volvo AB, Class B		18,158		232,382
				4,768,476
Switzerland — 3.4%
ABB Ltd., Registered Shares (b)		24,299		579,065
Actelion Ltd., Registered Shares (b)		1,209		315,661
Adecco SA, Registered Shares		2,208		157,993
Aryzta AG (b)		1,310		36,084
Baloise Holding AG, Registered Shares		609		78,417
Barry Callebaut AG, Registered Shares (b)		20		24,748
Cie Financiere Richemont SA, Registered Shares		6,588		513,071
Coca-Cola HBC AG (b)		3,025		69,146
Credit Suisse Group AG, Registered Shares (b)		25,612		390,970
Dufry AG (b)		728		103,927
EMS-Chemie Holding AG, Registered Shares		102		52,653
Galenica AG		35		38,374
Geberit AG, Registered Shares		420		179,504
Givaudan SA, Registered Shares		103		185,692
Glencore PLC (b)		153,879		637,318
Julius Baer Group Ltd. (b)		3,134		147,332
Kuehne & Nagel International AG, Registered Shares		691		94,548
LafargeHolcim Ltd. (b)		5,761		310,194
Lindt & Spruengli AG		16		88,806
Lindt & Spruengli AG, Registered Shares		1		64,859
Lonza Group AG, Registered Shares (b)		752		138,157
Nestle SA, Registered Shares		39,357		2,883,471
Novartis AG, Registered Shares		28,239		2,084,816
Pargesa Holding SA, Bearer Shares		334		22,249
Partners Group Holding AG		214		108,149
Roche Holding AG		8,885		2,105,285
Schindler Holding AG, Participation Certificates		437		83,300
Schindler Holding AG, Registered Shares		380		71,583
SGS SA, Registered Shares		69		146,403
Sika AG, Bearer Shares		31		162,913
Sonova Holding AG, Registered Shares		512		67,791
STMicroelectronics NV		8,975		118,453
Swatch Group AG, Bearer Shares		437		154,875
Swatch Group AG, Registered Shares		1,000		69,870
Swiss Life Holding AG, Registered Shares (b)		464		140,864
Swiss Prime Site AG, Registered Shares (b)		626		52,148
Swiss Re AG		4,125		385,475
Swisscom AG, Registered Shares		329		145,137
Syngenta AG, Registered Shares		1,209		513,841
TE Connectivity Ltd.		4,421		328,701
UBS Group AG, Registered Shares		44,512		723,379
Zurich Insurance Group AG (b)		1,830		526,992
				15,102,214
United Arab Emirates — 0.0%
Mediclinic International PLC		3,047		30,147
United Kingdom — 6.0%
3i Group PLC		11,859		104,760
Aberdeen Asset Management PLC		10,586		35,034
Admiral Group PLC		1,803		40,395
Anglo American PLC (b)		18,216		314,013
Antofagasta PLC		4,892		51,687

Common Stocks	Shares		Value
United Kingdom (continued)
Ashtead Group PLC		7,345	$	148,915
Associated British Foods PLC		4,683		141,123
AstraZeneca PLC		16,188		859,081
Auto Trader Group PLC (c)		17,858		90,194
Aviva PLC		54,111		325,796
Babcock International Group PLC		3,103		34,947
BAE Systems PLC		43,693		320,912
Barclays PLC		209,805		582,276
Barratt Developments PLC		14,586		87,962
Berkeley Group Holdings PLC		1,444		51,001
BHP Billiton PLC		26,512		483,520
BP PLC		235,442		1,406,185
British American Tobacco PLC		23,577		1,455,358
British Land Co. PLC		7,180		52,774
BT Group PLC		107,504		412,279
Bunzl PLC		4,094		107,920
Burberry Group PLC		5,493		113,592
Capita PLC		5,414		34,158
Carnival PLC		2,248		120,265
Centrica PLC		63,441		179,603
Cobham PLC		15,416		26,380
Coca-Cola European Partners PLC		2,243		77,454
Compass Group PLC		20,080		357,364
Croda International PLC		1,507		63,636
Delphi Automotive PLC		3,579		250,745
Diageo PLC		31,326		870,169
Direct Line Insurance Group PLC		14,001		62,722
Dixons Carphone PLC		16,826		67,118
easyJet PLC		1,336		16,016
Fiat Chrysler Automobiles NV (b)		12,922		141,489
G4S PLC		25,652		82,642
GKN PLC		23,837		103,352
GlaxoSmithKline PLC		62,056		1,199,230
Hammerson PLC		8,380		57,758
Hargreaves Lansdown PLC		3,139		53,625
Hikma Pharmaceuticals PLC		1,324		30,496
HSBC Holdings PLC		251,559		2,146,029
IHS Markit, Ltd. (b)		5,158		203,483
IMI PLC		4,912		72,276
Imperial Brands PLC		12,486		578,447
Inmarsat PLC		3,662		28,057
InterContinental Hotels Group PLC		2,218		102,997
Intertek Group PLC		2,293		98,156
Intu Properties PLC		16,499		56,274
Investec PLC		7,068		50,148
ITV PLC		40,042		102,749
J. Sainsbury PLC		22,766		74,071
Johnson Matthey PLC		2,989		122,603
Kingfisher PLC		21,365		90,647
Land Securities Group PLC		8,038		100,737
Legal & General Group PLC		74,489		220,912
Liberty Global PLC, Class A (b)		2,659		97,000
Liberty Global PLC, Class C (b)		8,163		286,766
Liberty Global PLC LiLAC, Class C (b)		729		16,271
Lloyds Banking Group PLC		834,344		684,329
London Stock Exchange Group PLC		4,227		169,233
Marks & Spencer Group PLC		20,912		88,638
Meggitt PLC		7,666		40,430
Merlin Entertainments PLC (c)		7,685		46,203
Mondi PLC		3,822		84,474
National Grid PLC		48,098		563,381
Next PLC		1,735		83,715
Old Mutual PLC		60,857		159,806
Pearson PLC		12,164		94,831
Pentair PLC		2,188		128,282
Persimmon PLC		4,587		111,723
Petrofac Ltd.		2,236		25,891

See Notes to Financial Statements.

40 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock MSCI World Index Fund

Common Stocks	Shares		Value
United Kingdom (continued)
Provident Financial PLC		2,321	$	79,925
Prudential PLC		32,670		633,103
Randgold Resources Ltd.		1,437		122,319
Reckitt Benckiser Group PLC		7,964		683,355
RELX NV		11,621		196,287
RELX PLC		14,548		261,138
Rio Tinto PLC		15,680		694,670
Rolls-Royce Holdings PLC (b)		22,138		186,460
Royal Bank of Scotland Group PLC (b)		45,280		126,850
Royal Mail PLC		10,324		53,616
RSA Insurance Group PLC		11,778		85,278
Sage Group PLC		16,060		124,210
Schroders PLC		1,572		58,303
Segro PLC		8,485		49,289
Severn Trent PLC		2,385		68,362
Shire PLC		11,419		635,761
Sky PLC		12,338		155,886
Smith & Nephew PLC		10,883		162,806
Smiths Group PLC		5,578		105,725
SSE PLC		12,563		236,167
St. James’s Place PLC		5,787		78,290
Standard Chartered PLC (b)		43,739		428,307
Standard Life PLC		23,358		102,052
Tate & Lyle PLC		5,376		45,440
Taylor Wimpey PLC		47,099		99,436
TechnipFMC PLC (b)		5,034		167,012
Tesco PLC (b)		104,108		255,748
Travis Perkins PLC		4,478		82,130
Unilever PLC		16,016		648,741
United Utilities Group PLC		8,099		93,791
Vodafone Group PLC		331,012		810,824
Weir Group PLC		2,371		60,064
Whitbread PLC		2,840		140,586
William Hill PLC		10,334		33,708
Willis Towers Watson PLC		1,517		189,822
WM Morrison Supermarkets PLC		27,049		80,641
Wolseley PLC		3,057		189,321
Worldpay Group PLC (c)		26,755		96,521
WPP PLC		16,575		385,768
				26,450,217
United States — 57.7%
3M Co.		7,665		1,339,995
Abbott Laboratories		21,727		907,537
AbbVie, Inc.		20,893		1,276,771
Accenture PLC, Class A		8,028		914,148
Activision Blizzard, Inc.		7,631		306,843
Acuity Brands, Inc.		604		125,167
Adobe Systems, Inc. (b)		6,157		698,081
Advance Auto Parts, Inc.		909		149,294
AES Corp.		7,348		84,061
Aetna, Inc.		4,144		491,520
Affiliated Managers Group, Inc. (b)		692		105,433
Aflac, Inc.		5,506		385,365
AGCO Corp.		1,150		72,220
Agilent Technologies, Inc.		3,911		191,522
AGNC Investment Corp.		4,633		86,498
Air Products & Chemicals, Inc.		2,506		350,239
Akamai Technologies, Inc. (b)		2,262		155,151
Albemarle Corp.		1,550		143,592
Alexandria Real Estate Equities, Inc.		885		98,076
Alexion Pharmaceuticals, Inc. (b)		2,725		356,103
Align Technology, Inc. (b)		779		71,427
Alkermes PLC (b)		2,207		119,421
Alleghany Corp. (b)		130		79,504
Allergan PLC (b)		4,961		1,085,913
Alliance Data Systems Corp.		701		160,094

Common Stocks	Shares		Value
United States (continued)
Alliant Energy Corp.		3,275	$	123,304
Allstate Corp.		4,557		342,732
Ally Financial, Inc.		6,617		139,751
Alphabet, Inc., Class A (b)		3,729		3,058,489
Alphabet, Inc., Class C (b)		3,911		3,116,246
Altria Group, Inc.		24,916		1,773,521
Amazon.com, Inc. (b)		5,096		4,196,454
AMERCO, Inc.		58		21,847
Ameren Corp.		3,033		159,687
American Airlines Group, Inc.		1,624		71,862
American Electric Power Co., Inc.		6,522		417,799
American Express Co.		10,117		772,736
American International Group, Inc.		13,394		860,698
American Tower Corp.		5,555		574,942
American Water Works Co., Inc.		2,350		172,584
Ameriprise Financial, Inc.		1,938		217,579
AmerisourceBergen Corp.		2,234		194,984
AMETEK, Inc.		2,931		149,774
Amgen, Inc.		9,464		1,482,820
Amphenol Corp., Class A		4,002		270,095
Anadarko Petroleum Corp.		6,738		468,493
Analog Devices, Inc.		3,854		288,819
Annaly Capital Management, Inc.		12,024		122,885
ANSYS, Inc. (b)		1,057		98,576
Antero Resources Corp. (b)		1,468		35,834
Anthem, Inc.		3,328		512,978
AO Smith Corp.		1,964		95,745
Aon PLC		3,463		390,280
Apache Corp.		4,993		298,681
Apple, Inc.		68,143		8,269,153
Applied Materials, Inc.		14,036		480,733
Aramark		2,312		78,238
Arch Capital Group Ltd. (b)		1,637		144,629
Archer-Daniels-Midland Co.		7,467		330,489
Arconic, Inc.		5,906		134,598
Arrow Electronics, Inc. (b)		1,441		105,942
Arthur J Gallagher & Co.		2,488		133,929
Ashland Global Holdings, Inc.		875		104,151
Assurant, Inc.		913		88,680
AT&T, Inc.		77,799		3,280,006
Atmos Energy Corp.		1,082		82,427
Autodesk, Inc. (b)		2,379		193,508
Automatic Data Processing, Inc.		5,985		604,425
AutoNation, Inc. (b)		571		30,332
AutoZone, Inc. (b)		389		282,017
AvalonBay Communities, Inc.		1,695		293,760
Avery Dennison Corp.		1,090		79,592
Avnet, Inc.		1,174		54,521
Axalta Coating Systems Ltd. (b)		3,047		88,363
Axis Capital Holdings Ltd.		1,335		85,453
B/E Aerospace, Inc.		1,136		69,830
Baker Hughes, Inc.		5,400		340,632
Ball Corp.		2,115		161,290
Bank of America Corp.		129,051		2,921,715
Bank of New York Mellon Corp.		13,769		615,887
Baxter International, Inc.		5,605		268,536
BB&T Corp.		9,930		458,667
Becton Dickinson & Co.		2,595		460,068
Bed Bath & Beyond, Inc.		2,508		101,198
Berkshire Hathaway, Inc., Class B (b)		15,407		2,528,905
Best Buy Co., Inc.		3,322		147,895
Biogen, Inc. (b)		2,800		776,272
BioMarin Pharmaceutical, Inc. (b)		2,283		200,059
BlackRock, Inc. (d)		1,542		576,677
Boeing Co.		7,378		1,205,713
BorgWarner, Inc.		2,847		116,243
Boston Properties, Inc.		1,932		252,899

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 41

Schedule of Investments (continued) BlackRock MSCI World Index Fund

Common Stocks	Shares		Value
United States (continued)
Boston Scientific Corp. (b)		17,204	$	413,928
Bristol-Myers Squibb Co.		20,911		1,027,985
Brixmor Property Group, Inc.		4,579		110,491
Broadridge Financial Solutions, Inc.		1,406		93,541
Brown-Forman Corp., Class B		3,170		144,552
Bunge Ltd.		1,712		118,488
C.H. Robinson Worldwide, Inc.		1,957		148,849
C.R. Bard, Inc.		995		236,143
CA, Inc.		3,370		105,380
Cabot Oil & Gas Corp.		5,728		123,037
Cadence Design Systems, Inc. (b)		3,742		97,404
Calpine Corp. (b)		3,625		42,775
Camden Property Trust		916		76,550
Campbell Soup Co.		2,442		151,966
Capital One Financial Corp.		6,350		554,926
Cardinal Health, Inc.		4,077		305,612
CarMax, Inc. (b)		2,543		169,644
Carnival Corp.		4,517		250,151
Caterpillar, Inc.		7,221		690,761
CBRE Group, Inc., Class A (b)		4,159		126,267
CBS Corp., Class B		5,217		336,444
CDK Global, Inc.		1,768		110,588
CDW Corp.		1,577		81,231
Celanese Corp., Series A		1,988		167,787
Celgene Corp. (b)		9,911		1,151,163
Centene Corp. (b)		1,765		111,672
CenterPoint Energy, Inc.		5,470		143,369
CenturyLink, Inc.		7,860		203,260
Cerner Corp. (b)		3,630		194,967
CF Industries Holdings, Inc.		2,464		86,955
Charles Schwab Corp.		15,201		626,889
Charter Communications, Inc., Class A (b)		2,774		898,637
Cheniere Energy, Inc. (b)		3,018		143,808
Chevron Corp.		23,857		2,656,477
Chipotle Mexican Grill, Inc. (b)		353		148,768
Chubb Ltd.		5,739		754,621
Church & Dwight Co., Inc.		3,222		145,699
Cigna Corp.		3,128		457,376
Cimarex Energy Co.		1,209		163,469
Cincinnati Financial Corp.		1,864		131,561
Cintas Corp.		1,042		120,987
Cisco Systems, Inc.		63,615		1,954,253
CIT Group, Inc.		2,080		85,675
Citigroup, Inc.		36,742		2,051,306
Citizens Financial Group, Inc.		6,418		232,139
Citrix Systems, Inc. (b)		1,855		169,157
Clorox Co.		1,513		181,560
CME Group, Inc.		4,372		529,362
CMS Energy Corp.		3,553		151,358
Coach, Inc.		3,667		136,962
Coca-Cola Co.		51,852		2,155,488
Cognizant Technology Solutions Corp., Class A (b)		7,870		413,883
Colgate-Palmolive Co.		10,980		709,088
Colony NorthStar, Inc., Class A		6,355		88,462
Comcast Corp., Class A		30,381		2,291,335
Comerica, Inc.		2,377		160,519
Computer Sciences Corp.		1,518		94,420
Conagra Brands, Inc.		5,035		196,818
Concho Resources, Inc. (b)		1,639		228,542
ConocoPhillips		15,342		748,076
Consolidated Edison, Inc.		3,911		290,783
Constellation Brands, Inc., Class A		2,364		354,033
Continental Resources, Inc. (b)		829		40,256
Cooper Cos., Inc.		727		134,211
Corning, Inc.		13,221		350,224
CoStar Group, Inc. (b)		352		71,139
Costco Wholesale Corp.		5,457		894,675

Common Stocks		Shares		Value
United States (continued)
Coty, Inc., Class A			7,115	$	136,608
Crown Castle International Corp.			4,157		365,109
Crown Holdings, Inc. (b)			1,436		77,788
CSX Corp.			12,044		558,721
Cummins, Inc.			2,076		305,193
CVS Health Corp.			13,308		1,048,803
D.R. Horton, Inc.			4,644		138,902
Danaher Corp.			8,064		676,731
Darden Restaurants, Inc.			1,799		131,831
DaVita, Inc. (b)			2,146		136,807
Deere & Co.			3,218		344,487
Dell Technologies, Inc., Class V (b)			2,759		173,789
Delta Air Lines, Inc.			2,380		112,431
Dentsply Sirona, Inc.			2,897		164,260
Devon Energy Corp.			6,367		289,953
DexCom, Inc. (b)			907		71,789
Diamondback Energy, Inc. (b)			1,237		130,095
Dick’s Sporting Goods, Inc.			987		50,929
Digital Realty Trust, Inc.			2,029		218,381
Discover Financial Services			5,280		365,798
Discovery Communications, Inc., Class A (b)			1,706		48,365
Discovery Communications, Inc., Class C (b)			2,192		60,740
DISH Network Corp., Class A (b)			2,701		159,818
Dollar General Corp.			3,763		277,785
Dollar Tree, Inc. (b)			2,715		209,571
Dominion Resources, Inc.			8,040		613,291
Domino’s Pizza, Inc.			622		108,564
Dover Corp.			2,042		158,765
Dow Chemical Co.			14,267		850,741
Dr. Pepper Snapple Group, Inc.			2,515		229,368
DTE Energy Co.			2,400		236,736
Duke Energy Corp.			8,610		676,229
Duke Realty Corp.			4,907		119,387
Dun & Bradstreet Corp.			306		37,522
E*Trade Financial Corp. (b)			2,940		110,103
E.I. du Pont de Nemours & Co.			11,135		840,692
Eastman Chemical Co.			1,973		152,907
Eaton Corp. PLC			5,467		386,954
Eaton Vance Corp.			1,566		65,662
eBay, Inc. (b)			13,944		443,838
Ecolab, Inc.			3,447		414,088
Edgewell Personal Care Co. (b)			1,008		79,471
Edison International			4,100		298,808
Edwards Lifesciences Corp. (b)			2,648		254,844
Electronic Arts, Inc. (b)			3,682		307,189
Eli Lilly & Co.			12,696		977,973
Emerson Electric Co.			8,086		474,325
Endo International PLC (b)			1,958		23,966
Entergy Corp.			2,207		158,109
Envision Healthcare Corp. (b)			1,295		88,060
EOG Resources, Inc.			7,417		753,419
EQT Corp.			1,948		118,107
Equifax, Inc.			1,434		168,180
Equinix, Inc.			887		341,477
Equity Residential			4,450		270,426
Essex Property Trust, Inc.			899		201,646
Estee Lauder Cos., Inc., Class A	��		2,921		237,214
Everest Re Group Ltd.			310		68,178
Eversource Energy			4,395		243,131
Exelon Corp.			11,221		402,609
Expedia, Inc.			1,723		209,500
Expeditors International of Washington, Inc.			2,100		109,368
Express Scripts Holding Co. (b)			8,218		566,056
Extra Space Storage, Inc.			1,622		116,865
Exxon Mobil Corp.			52,439		4,399,108
F5 Networks, Inc. (b)			842		112,853
Facebook, Inc., Class A (b)			29,376		3,828,280

See Notes to Financial Statements.

42 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock MSCI World Index Fund

Common Stocks	Shares		Value
United States (continued)
Fastenal Co.		3,355	$	166,676
Federal Realty Investment Trust		922		129,476
FedEx Corp.		3,254		615,364
Fidelity National Information Services, Inc.		4,030		320,063
Fifth Third Bancorp		10,266		267,943
First Data Corp., Class A (b)		3,322		50,959
First Republic Bank		1,832		172,813
FirstEnergy Corp.		4,699		142,474
Fiserv, Inc. (b)		2,595		278,781
FleetCor Technologies, Inc. (b)		1,043		153,832
Flex Ltd. (b)		7,136		111,821
FLIR Systems, Inc.		1,512		53,419
Flowserve Corp.		1,663		81,753
Fluor Corp.		1,605		89,078
FMC Corp.		1,878		112,980
FNF Group		3,365		118,986
Foot Locker, Inc.		1,987		136,189
Ford Motor Co.		48,035		593,713
Fortinet, Inc. (b)		2,400		79,824
Fortive Corp.		3,604		199,337
Fortune Brands Home & Security, Inc.		2,314		127,571
Franklin Resources, Inc.		4,426		175,889
Freeport-McMoRan, Inc. (b)		16,711		278,238
Frontier Communications Corp.		15,469		53,987
Gap, Inc.		2,622		60,385
Garmin Ltd.		1,553		74,994
Gartner, Inc. (b)		1,257		124,896
General Dynamics Corp.		3,299		597,383
General Electric Co.		113,325		3,365,752
General Mills, Inc.		7,496		468,350
General Motors Co.		18,259		668,462
Genuine Parts Co.		1,775		171,838
GGP, Inc.		6,633		164,764
Gilead Sciences, Inc.		16,538		1,198,178
Global Payments, Inc.		1,843		142,427
Goldman Sachs Group, Inc.		4,538		1,040,654
Goodyear Tire & Rubber Co.		4,171		135,099
H&R Block, Inc.		3,364		72,191
Halliburton Co.		10,660		603,036
Hanesbrands, Inc.		5,612		133,061
Harley-Davidson, Inc.		2,333		133,074
Harman International Industries, Inc.		871		96,820
Harris Corp.		1,586		162,898
Hartford Financial Services Group, Inc.		5,280		257,189
Hasbro, Inc.		1,352		111,554
HCA Holdings, Inc. (b)		3,852		309,239
HCP, Inc.		6,588		199,748
Helmerich & Payne, Inc.		1,233		87,740
Henry Schein, Inc. (b)		956		152,826
Hershey Co.		1,700		179,299
Hess Corp.		3,395		183,941
Hewlett Packard Enterprise Co.		20,439		463,557
Hilton Worldwide Holdings, Inc.		2,788		160,533
HollyFrontier Corp.		1,631		47,250
Hologic, Inc. (b)		3,454		139,991
Home Depot, Inc.		15,625		2,149,687
Honeywell International, Inc.		8,987		1,063,342
Hormel Foods Corp.		3,876		140,699
Host Hotels & Resorts, Inc.		9,072		163,931
HP, Inc.		21,948		330,317
Humana, Inc.		2,015		399,977
Huntington Bancshares, Inc.		12,395		167,704
Huntington Ingalls Industries, Inc.		506		98,144
IDEXX Laboratories, Inc. (b)		1,275		155,971
Illinois Tool Works, Inc.		4,004		509,309
Illumina, Inc. (b)		1,985		317,798
Incyte Corp. (b)		2,194		265,935

Common Stocks	Shares		Value
United States (continued)
Ingersoll-Rand PLC		3,353	$	266,061
Ingredion, Inc.		1,084		138,958
Intel Corp.		59,715		2,198,706
Intercontinental Exchange, Inc.		7,795		454,916
International Business Machines Corp.		11,483		2,004,013
International Flavors & Fragrances, Inc.		1,157		135,612
International Paper Co.		5,110		289,226
Interpublic Group of Cos., Inc.		4,333		101,955
Intuit, Inc.		3,268		387,519
Intuitive Surgical, Inc. (b)		460		318,637
Invesco Ltd.		4,996		144,484
Iron Mountain, Inc.		3,192		114,274
J.M. Smucker Co.		1,352		183,669
Jacobs Engineering Group, Inc. (b)		1,221		71,490
Jazz Pharmaceuticals PLC (b)		936		114,117
JB Hunt Transport Services, Inc.		943		93,432
Johnson & Johnson		34,598		3,918,223
Johnson Controls International PLC		11,915		524,022
Jones Lang LaSalle, Inc.		420		43,273
JPMorgan Chase & Co.		45,678		3,865,729
Juniper Networks, Inc.		4,983		133,445
Kansas City Southern		1,505		129,295
Kellogg Co.		3,378		245,614
KeyCorp		14,527		261,050
Kimberly-Clark Corp.		4,403		533,335
Kimco Realty Corp.		5,186		129,080
Kinder Morgan, Inc.		23,624		527,760
KLA-Tencor Corp.		1,969		167,582
Kohl’s Corp.		2,230		88,821
Kraft Heinz Co.		7,850		700,926
Kroger Co.		10,855		368,636
L Brands, Inc.		3,461		208,387
L3 Technologies, Inc.		907		143,932
Laboratory Corp. of America Holdings (b)		1,165		156,355
Lam Research Corp.		2,164		248,557
Las Vegas Sands Corp.		5,410		284,458
Lear Corp.		1,058		150,331
Leggett & Platt, Inc.		2,066		98,590
Lennar Corp., Class A		2,674		119,394
Leucadia National Corp.		3,998		95,352
Level 3 Communications, Inc. (b)		3,522		209,418
Liberty Broadband Corp., Class C (b)		1,594		136,032
Liberty Interactive Corp QVC Group, Series A (b)		5,487		105,241
Liberty Media Corp. — Liberty SiriusXM, Class A (b)		618		22,396
Liberty Media Corp. — Liberty SiriusXM, Class C (b)		2,089		74,974
Liberty Property Trust		1,416		54,360
Lincoln National Corp.		3,023		204,083
Linear Technology Corp.		2,840		179,289
LKQ Corp. (b)		3,691		117,780
Lockheed Martin Corp.		3,337		838,688
Loews Corp.		3,495		162,797
Lowe’s Cos., Inc.		11,308		826,389
lululemon athletica, Inc. (b)		1,148		77,501
LyondellBasell Industries NV, Class A		4,408		411,134
M&T Bank Corp.		1,884		306,282
Macerich Co.		1,670		114,712
Macquarie Infrastructure Corp.		837		62,767
Macy’s, Inc.		3,959		116,949
Mallinckrodt PLC (b)		1,032		50,289
ManpowerGroup, Inc.		986		94,124
Marathon Oil Corp.		10,622		177,918
Marathon Petroleum Corp.		6,542		314,343
Markel Corp. (b)		169		156,325
Marriott International, Inc., Class A		4,127		349,144
Marsh & McLennan Cos., Inc.		6,741		458,523
Martin Marietta Materials, Inc.		715		164,164
Masco Corp.		4,087		134,667

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 43

Schedule of Investments (continued) BlackRock MSCI World Index Fund

Common Stocks	Shares		Value
United States (continued)
Mastercard, Inc., Class A		12,382	$	1,316,578
Mattel, Inc.		4,750		124,498
Maxim Integrated Products, Inc.		3,812		169,558
McCormick & Co., Inc.		1,239		118,386
McDonald’s Corp.		10,792		1,322,775
McKesson Corp.		2,887		401,726
Mead Johnson Nutrition Co.		2,254		158,817
MEDNAX, Inc. (b)		1,308		89,402
Merck & Co., Inc.		34,969		2,167,728
MetLife, Inc.		11,930		649,111
Mettler-Toledo International, Inc. (b)		316		134,815
MGM Resorts International (b)		5,788		166,694
Michael Kors Holdings Ltd. (b)		1,849		79,156
Microchip Technology, Inc.		2,596		174,841
Micron Technology, Inc. (b)		13,390		322,833
Microsoft Corp.		93,618		6,052,404
Mid-America Apartment Communities, Inc.		1,227		116,504
Middleby Corp. (b)		622		83,460
Mohawk Industries, Inc. (b)		773		166,844
Molson Coors Brewing Co., Class B		2,414		232,999
Mondelez International, Inc., Class A		19,379		858,102
Monsanto Co.		5,405		585,416
Monster Beverage Corp. (b)		5,576		237,538
Moody’s Corp.		2,288		237,197
Morgan Stanley		18,028		766,010
Mosaic Co.		4,595		144,145
Motorola Solutions, Inc.		2,014		162,550
MSCI, Inc.		1,142		94,501
Murphy Oil Corp.		1,578		45,620
Mylan NV (b)		5,301		201,703
Nasdaq, Inc.		1,658		116,955
National Oilwell Varco, Inc.		5,368		202,964
National Retail Properties, Inc.		1,590		69,324
Navient Corp.		4,485		67,454
NetApp, Inc.		3,058		117,183
Netflix, Inc. (b)		5,463		768,699
New York Community Bancorp, Inc.		4,928		74,856
Newell Brands, Inc.		5,575		263,865
Newfield Exploration Co. (b)		2,649		106,172
Newmont Mining Corp.		6,732		244,237
News Corp., Class A		4,384		53,879
NextEra Energy, Inc.		5,744		710,648
Nielsen Holdings PLC		4,548		186,059
NIKE, Inc., Class B		17,233		911,626
NiSource, Inc.		3,916		87,601
Noble Energy, Inc.		4,949		196,772
Nordstrom, Inc.		1,424		62,969
Norfolk Southern Corp.		3,615		424,618
Northern Trust Corp.		2,935		243,488
Northrop Grumman Corp.		2,130		487,940
Norwegian Cruise Line Holdings Ltd. (b)		1,670		78,490
Nuance Communications, Inc. (b)		2,784		44,154
Nucor Corp.		4,345		252,401
NVIDIA Corp.		6,620		722,772
O’Reilly Automotive, Inc. (b)		1,178		308,954
Occidental Petroleum Corp.		9,636		653,032
OGE Energy Corp.		2,238		75,063
Omnicom Group, Inc.		3,147		269,541
ONEOK, Inc.		2,715		149,624
Oracle Corp.		39,103		1,568,421
PACCAR, Inc.		4,505		303,232
Packaging Corp. of America		1,375		126,748
Palo Alto Networks, Inc. (b)		1,154		170,284
Parker Hannifin Corp.		1,801		264,981
Parsley Energy, Inc., Class A (b)		2,786		98,123
Patterson Cos., Inc.		561		23,343
Paychex, Inc.		4,463		269,074

Common Stocks	Shares		Value
United States (continued)
PayPal Holdings, Inc. (b)		13,687	$	544,469
People’s United Financial, Inc.		4,316		80,925
PepsiCo, Inc.		18,241		1,893,051
Perrigo Co. PLC		1,796		136,765
Pfizer, Inc.		76,707		2,433,913
PG&E Corp.		6,567		406,432
Philip Morris International, Inc.		19,688		1,892,607
Phillips 66		6,217		507,432
Pinnacle West Capital Corp.		1,627		126,304
Pioneer Natural Resources Co.		2,192		395,064
Plains GP Holdings LP, Class A Class A		1,061		34,429
PNC Financial Services Group, Inc. (d)		6,214		748,538
Polaris Industries, Inc.		544		45,734
PPG Industries, Inc.		3,233		323,332
PPL Corp.		9,156		318,995
Praxair, Inc.		3,676		435,385
Priceline Group, Inc. (b)		639		1,006,508
Principal Financial Group, Inc.		3,318		189,425
Procter & Gamble Co.		32,335		2,832,546
Progressive Corp.		7,583		283,908
Prologis, Inc.		6,892		336,674
Prudential Financial, Inc.		5,389		566,438
Public Service Enterprise Group, Inc.		6,826		302,050
Public Storage		1,860		399,900
PulteGroup, Inc.		4,809		103,442
PVH Corp.		833		78,144
Qorvo, Inc. (b)		1,959		125,787
QUALCOMM, Inc.		18,846		1,006,942
Quest Diagnostics, Inc.		1,831		168,306
Quintiles IMS Holdings, Inc. (b)		1,819		142,773
Ralph Lauren Corp.		629		55,622
Range Resources Corp.		1,772		57,306
Raymond James Financial, Inc.		1,608		120,487
Raytheon Co.		3,887		560,350
Realty Income Corp.		3,321		198,031
Red Hat, Inc. (b)		2,076		157,527
Regency Centers Corp.		1,584		110,452
Regeneron Pharmaceuticals, Inc. (b)		1,002		360,009
Regions Financial Corp.		15,227		219,421
Reinsurance Group of America, Inc.		692		86,825
RenaissanceRe Holdings Ltd.		254		34,625
Republic Services, Inc.		3,241		185,969
ResMed, Inc.		2,031		137,174
Reynolds American, Inc.		10,929		657,161
Rite Aid Corp. (b)		14,956		84,053
Robert Half International, Inc.		1,759		82,779
Rockwell Automation, Inc.		1,509		223,317
Rockwell Collins, Inc.		1,670		151,569
Roper Technologies, Inc.		1,373		263,410
Ross Stores, Inc.		4,746		313,758
Royal Caribbean Cruises Ltd.		1,993		186,605
S&P Global, Inc.		3,299		396,474
Sabre Corp.		3,111		76,220
salesforce.com, Inc. (b)		8,412		665,389
SBA Communications Corp. (b)		1,432		150,732
SCANA Corp.		1,810		124,347
Schlumberger Ltd.		17,418		1,458,061
Scripps Networks Interactive, Inc., Class A		831		63,289
Sealed Air Corp.		2,830		137,255
Seattle Genetics, Inc. (b)		1,071		64,517
SEI Investments Co.		1,947		94,449
Sempra Energy		2,927		299,696
ServiceNow, Inc. (b)		1,876		170,003
Sherwin-Williams Co.		960		291,658
Signature Bank (b)		810		127,591
Signet Jewelers Ltd.		717		55,689
Simon Property Group, Inc.		4,020		738,755

See Notes to Financial Statements.

44 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock MSCI World Index Fund

Common Stocks	Shares		Value
United States (continued)
Sirius XM Holdings, Inc.		23,361	$	110,264
Skyworks Solutions, Inc.		2,595		238,065
SL Green Realty Corp.		1,279		139,373
Snap-on, Inc.		823		149,399
Southern Co.		12,492		617,480
Southwest Airlines Co.		2,052		107,340
Southwestern Energy Co. (b)		7,733		69,674
Spectra Energy Corp.		8,481		353,234
Spectrum Brands Holdings, Inc.		295		39,350
Splunk, Inc. (b)		1,318		76,259
Sprint Corp. (b)		11,215		103,514
Stanley Black & Decker, Inc.		1,811		224,564
Staples, Inc.		8,395		77,234
Starbucks Corp.		18,448		1,018,699
State Street Corp.		4,889		372,542
Stericycle, Inc. (b)		872		67,266
Stryker Corp.		4,211		520,185
SunTrust Banks, Inc.		6,439		365,864
Symantec Corp.		7,880		217,094
Synchrony Financial		10,187		364,898
Synopsys, Inc. (b)		2,252		141,628
Sysco Corp.		6,429		337,265
T-Mobile U.S., Inc. (b)		4,000		249,080
T. Rowe Price Group, Inc.		3,308		223,092
Targa Resources Corp.		1,801		103,774
Target Corp.		6,667		429,888
TD Ameritrade Holding Corp.		3,576		165,032
TEGNA, Inc.		3,484		79,818
Teleflex, Inc.		476		79,839
Tesla Motors, Inc. (b)		1,617		407,371
Tesoro Corp.		1,429		115,535
Texas Instruments, Inc.		12,518		945,610
Textron, Inc.		3,545		167,927
Thermo Fisher Scientific, Inc.		5,101		777,341
Tiffany & Co.		1,819		143,192
Time Warner, Inc.		9,627		932,375
TJX Cos., Inc.		8,604		644,612
Toll Brothers, Inc. (b)		1,581		49,580
Torchmark Corp.		1,376		101,191
Total System Services, Inc.		2,429		123,102
Tractor Supply Co.		1,715		126,344
TransDigm Group, Inc.		612		132,437
Travelers Cos., Inc.		3,805		448,153
Trimble, Inc. (b)		3,448		102,130
TripAdvisor, Inc. (b)		1,178		62,316
Twenty-First Century Fox, Inc., Class A		13,154		412,773
Twenty-First Century Fox, Inc., Class B		5,274		163,547
Twitter, Inc. (b)		7,107		125,225
Tyson Foods, Inc., Class A		4,107		257,879
UDR, Inc.		2,869		100,272
UGI Corp.		2,559		118,661
Ulta Salon Cosmetics & Fragrance, Inc. (b)		693		188,690
Under Armour, Inc., Class A (b)		1,730		37,178
Under Armour, Inc., Class C (b)		2,939		56,488
Union Pacific Corp.		10,364		1,104,595
United Continental Holdings, Inc. (b)		777		54,755
United Parcel Service, Inc., Class B		8,707		950,195
United Rentals, Inc. (b)		940		118,919
United Technologies Corp.		10,174		1,115,783
United Therapeutics Corp. (b)		622		101,778
UnitedHealth Group, Inc.		12,044		1,952,332
Universal Health Services, Inc., Class B		1,222		137,634
Unum Group		2,960		134,473
US Bancorp		21,378		1,125,552
Valero Energy Corp.		5,598		368,124
Valspar Corp.		901		99,714
Vantiv, Inc., Class A (b)		2,205		137,239

Common Stocks	Shares		Value
United States (continued)
Varex Imaging Corp. (b)		448	$	12,892
Varian Medical Systems, Inc. (b)		1,121		87,046
Ventas, Inc.		4,401		271,410
VEREIT, Inc.		14,625		124,751
VeriSign, Inc. (b)		998		80,050
Verisk Analytics, Inc. (b)		1,865		154,124
Verizon Communications, Inc.		51,550		2,526,465
Vertex Pharmaceuticals, Inc. (b)		3,318		284,917
VF Corp.		3,848		198,095
Viacom, Inc., Class B		4,670		196,794
Visa, Inc., Class A		23,856		1,973,130
VMware, Inc., Class A (b)(e)		835		73,096
Vornado Realty Trust		2,257		239,942
Voya Financial, Inc.		2,712		109,077
Vulcan Materials Co.		1,812		232,534
W.R. Berkley Corp.		1,461		98,194
W.W. Grainger, Inc.		701		177,052
WABCO Holdings, Inc. (b)		486		52,989
Wabtec Corp.		1,113		96,430
Wal-Mart Stores, Inc.		19,559		1,305,368
Walgreens Boots Alliance, Inc.		11,732		961,320
Walt Disney Co.		19,307		2,136,320
Waste Management, Inc.		5,403		375,508
Waters Corp. (b)		1,067		151,141
WEC Energy Group, Inc.		4,371		258,108
Wells Fargo & Co.		60,616		3,414,499
Welltower, Inc.		4,601		305,046
Westar Energy, Inc.		1,907		104,294
Western Digital Corp.		3,860		307,758
Western Union Co.		6,607		129,365
WestRock Co.		3,025		161,414
Weyerhaeuser Co.		9,416		295,003
Whirlpool Corp.		941		164,571
WhiteWave Foods Co. (b)		2,507		138,035
Whole Foods Market, Inc.		3,906		118,039
Williams Cos., Inc.		9,857		284,276
Workday, Inc., Class A (b)		1,625		135,021
WR Grace & Co.		1,097		76,066
Wyndham Worldwide Corp.		1,454		114,953
Wynn Resorts Ltd.		850		86,216
Xcel Energy, Inc.		6,749		278,869
Xerox Corp.		11,333		78,538
Xilinx, Inc.		2,994		174,251
Xylem, Inc.		2,502		123,374
Yahoo!, Inc. (b)		11,347		500,062
Yum! Brands, Inc.		4,760		311,923
Zayo Group Holdings, Inc. (b)		1,705		54,492
Zillow Group, Inc., Class C (b)		880		31,134
Zimmer Biomet Holdings, Inc.		2,536		300,085
Zoetis, Inc.		5,905		324,421
				255,994,255
Total Common Stocks — 98.1%				435,284,873
Preferred Stock — 0.1%
Germany — 0.1%
Volkswagen AG, Preference Shares, 0.00%		2,256		352,288
Rights — 0.0%
Spain — 0.0%
ACS Actividades de Construccion y Servicios SA (b)		2,693		1,209
Total Long-Term Investments (Cost — $394,223,689) — 98.2%				435,638,370

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 45

Schedule of Investments (continued) BlackRock MSCI World Index Fund

Short-Term Securities	Shares		Value
BlackRock Liquidity Funds, T-Fund, Institutional Class, 0.40% (d)(f)		11,917,267	$	11,917,267
SL Liquidity Series, LLC, Money Market Series, 0.94% (d)(f)(g)		73,346		73,360
Total Short-Term Securities (Cost — $11,990,619) — 2.7%				11,990,627
Total Investments (Cost — $406,214,308) — 100.9%				447,628,997
Liabilities in Excess of Other Assets — (0.9)%				(3,872,082	)
Net Assets — 100.0%			$	443,756,915

Notes to Schedule of Investments

(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) During the six months ended January 31, 2017, 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 July 31, 2016		Shares Purchased			Shares Sold			Shares Held at January 31, 2017		Value at January 31, 2017		Income			Net Realized Gain1		Change in Unrealized Appreciation
BlackRock, Inc.		1,168		374			—			1,542	$	576,677	$	5,627			—	$	86,115
BlackRock Liquidity Funds, T-Fund, Institutional Class		—		11,917,267	2		—			11,917,267		11,917,267		8,331		$	39		—
BlackRock Premier Government Institutional Fund		1,751,171		—			(1,751,171	)3		—		—		2,317			—		—
PNC Financial Services Group, Inc.		4,505		1,709			—			6,214		748,538		5,945			—		114,664
SL Liquidity Series, LLC, Money Market Series		10,972		62,374	2		—			73,346		73,360		5,886	4		4		8
Total											$	13,315,842	$	28,106		$	43	$	200,787
1   Includes net capital gain distributions.
2   Represents net shares purchased.
3   Represents net shares sold.
4   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) Security, or a portion of security, is on loan.

(f) Current yield as of period end.

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

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts
Contracts Long		Issue	Expiration	Notional Value		Unrealized Appreciation (Depreciation)
	25	Euro Stoxx 50 Index	March 2017	$	872,775	$	(8,843	)
	8	FTSE 100 Index	March 2017	$	709,059		(1,259	)
	6	Nikkei 225 Index	March 2017	$	504,561		(6,441	)
	37	S&P 500 E-Mini Index	March 2017	$	4,207,825		6,876
	Total					$	(9,667	)

See Notes to Financial Statements.

46 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock MSCI World Index Fund

Derivative Financial Instruments Outstanding as of Period End

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

Assets — Derivative Financial Instruments		Commodity Contracts		Credit Contracts		Equity Contracts			Foreign Currency Exchange Contracts		Interest Rate Contracts		Other Contracts		Total
Futures contracts	Net unrealized appreciation		—		—	$	6,876			—		—		—	$	6,876
Liabilities — Derivative Financial Instruments
Futures contracts	Net unrealized depreciation		—		—	$	16,543			—		—		—	$	16,543
For the six month ended January 31, 2017, the effect of derivative financial instruments in the Statements of Operations were as follows:
Net Realized Gain (Loss) from:
Futures contracts			—		—	$	551,279			—		—		—	$	551,279
Net Change in Unrealized Appreciation (Depreciation) on:
Futures contracts			—		—	$	(35,236	)		—		—		—	$	(35,236	)

Average Quarterly Balances of Outstanding Derivative Financial Instruments

Futures contracts:
Average notional value of contracts — long	$	7,681,709

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:
Common Stocks:
Argentina	$	79,718		—		—	$	79,718
Australia		—	$	11,789,145		—		11,789,145
Austria		—		345,960		—		345,960
Belgium		—		1,784,938		—		1,784,938
Bermuda		71,867		—		—		71,867
Canada		16,288,307		—		—		16,288,307
Denmark		—		2,651,937		—		2,651,937
Finland		—		1,469,820		—		1,469,820
France		—		15,561,827		—		15,561,827
Germany		47,612		14,551,964		—		14,599,576
Hong Kong		62,473		5,175,294		—		5,237,767
Ireland		1,892,199		886,929		—		2,779,128
Israel		676,108		408,194		—		1,084,302
Italy		—		2,759,724		—		2,759,724
Japan		—		38,491,986		—		38,491,986
Luxembourg		—		72,841		—		72,841
Mexico		—		32,730		—		32,730
Netherlands		613,884		7,578,328		—		8,192,212
New Zealand		—		294,114		—		294,114
Norway		—		1,101,787		—		1,101,787
Portugal		—		187,260		—		187,260
Singapore		1,052,325		2,060,174		—		3,112,499
Spain		—		4,950,119		—		4,950,119
Sweden		134,513		4,633,963		—		4,768,476
Switzerland		328,701		14,773,513		—		15,102,214
United Arab Emirates		—		30,147		—		30,147
United Kingdom		1,339,381		25,110,836		—		26,450,217
United States		255,994,255		—		—		255,994,255

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 47

Schedule of Investments (concluded) BlackRock MSCI World Index Fund

	Level 1			Level 2		Level 3		Total
Preferred Stock		—		$	352,288		—	$	352,288
Rights	$	1,209			—		—		1,209
Short-Term Investment Fund		11,917,267			—		—		11,917,267
Subtotal	$	290,499,819		$	157,055,818		—	$	447,555,637
Investments valued at NAV1									73,360
Total								$	447,628,997
	Level 1			Level 2		Level 3		Total
Derivative Financial Instruments 2
Assets:
Equity contracts	$	6,876			—		—	$	6,876
Liabilities:
Equity contracts		(16,543	)		—		—		(16,543	)
Total	$	(9,667	)		—		—	$	(9,667	)
1   As of January 31, 2017, certain of the Fund’s investments were fair valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.
2   Derivative financial instruments are futures contracts, which are valued at the unrealized appreciation (depreciation) on the instrument.

During the six months ended January 31, 2017, there were no transfers between levels.

See Notes to Financial Statements.

48 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments January 31, 2017 (Unaudited) BlackRock Small/Mid Cap Index Fund (Percentages shown are based on Net Assets)

Common Stocks	Shares		Value
Aerospace & Defense — 1.5%
AAR Corp.		585	$	18,714
Aerojet Rocketdyne Holdings, Inc. (a)		1,061		19,215
Aerovironment, Inc. (a)		354		9,271
Astronics Corp. (a)		323		10,598
B/E Aerospace, Inc.		1,758		108,064
Cubic Corp.		445		21,160
Curtiss-Wright Corp.		754		73,937
DigitalGlobe, Inc. (a)		1,109		31,107
Ducommun, Inc. (a)		176		5,215
Engility Holdings, Inc. (a)		313		9,180
Esterline Technologies Corp. (a)		503		43,082
HEICO Corp.		348		26,778
HEICO Corp., Class A		653		43,294
Hexcel Corp.		1,593		81,800
Huntington Ingalls Industries, Inc.		798		154,780
KEYW Holding Corp. (a)		505		5,055
KLX, Inc. (a)		919		45,022
Kratos Defense & Security Solutions, Inc. (a)		970		7,993
Moog, Inc., Class A (a)		548		36,097
National Presto Industries, Inc.		79		8,406
Orbital ATK, Inc.		1,002		87,124
Sparton Corp. (a)		111		2,406
Spirit Aerosystems Holdings, Inc., Class A		2,094		125,745
Taser International, Inc. (a)		912		22,782
Teledyne Technologies, Inc. (a)		585		71,879
Triumph Group, Inc.		857		22,925
Vectrus, Inc. (a)		194		4,373
				1,096,002
Air Freight & Logistics — 0.3%
Air Transport Services Group, Inc. (a)		787		12,694
Atlas Air Worldwide Holdings, Inc. (a)		426		22,472
Echo Global Logistics, Inc. (a)		486		11,543
Forward Air Corp.		540		26,023
Hub Group, Inc., Class A (a)		603		26,743
Park-Ohio Holdings Corp.		159		7,131
Radiant Logistics, Inc. (a)		682		2,503
XPO Logistics, Inc. (a)		1,675		74,939
				184,048
Airlines — 0.7%
Alaska Air Group, Inc.		2,060		193,269
Allegiant Travel Co.		223		38,356
Copa Holdings SA, Class A		534		52,060
Hawaiian Holdings, Inc. (a)		916		46,670
JetBlue Airways Corp. (a)		5,546		108,757
SkyWest, Inc.		875		30,975
Spirit Airlines, Inc. (a)		1,222		66,037
				536,124
Auto Components — 1.3%
Allison Transmission Holdings, Inc.		2,431		85,036
American Axle & Manufacturing Holdings, Inc. (a)		1,335		27,234
Cooper Tire & Rubber Co.		942		34,147
Cooper-Standard Holding, Inc. (a)		263		27,689
Dana, Inc.		2,555		51,458
Dorman Products, Inc. (a)		447		30,852
Fox Factory Holding Corp. (a)		365		9,454
Gentex Corp.		4,865		101,630
Gentherm, Inc. (a)		635		22,479
Goodyear Tire & Rubber Co.		4,594		148,800
Horizon Global Corp. (a)		262		5,127
LCI Industries		401		44,010
Lear Corp.		1,271		180,596
Metaldyne Performance Group, Inc.		264		6,230
Modine Manufacturing Co. (a)		767		10,431
Motorcar Parts of America, Inc. (a)		320		8,394
Spartan Motors, Inc.		534		4,219

Common Stocks	Shares		Value
Auto Components (continued)
Standard Motor Products, Inc.		375	$	18,701
Stoneridge, Inc. (a)		407		6,679
Strattec Security Corp.		68		2,094
Superior Industries International, Inc.		410		9,451
Tenneco, Inc. (a)		973		65,629
Tower International, Inc.		357		9,353
Visteon Corp. (a)		583		52,219
Workhorse Group, Inc. (a)		173		561
				962,473
Automobiles — 0.1%
Thor Industries, Inc.		827		85,595
Winnebago Industries, Inc.		436		13,690
				99,285
Banks — 7.4%
1st Source Corp.		261		11,774
Access National Corp.		120		3,202
ACNB Corp.		97		2,910
Allegiance Bancshares, Inc. (a)		181		5,873
American National Bankshares, Inc.		112		3,976
Ameris Bancorp		631		28,458
Ames National Corp.		115		3,715
Arrow Financial Corp.		172		6,072
Associated Banc-Corp		2,615		66,159
Atlantic Capital Bancshares, Inc. (a)		293		5,596
Bancfirst Corp.		129		12,171
Banco Latinoamericano de Comercio Exterior SA		500		13,600
Bancorp, Inc. (a)		718		4,301
BancorpSouth, Inc.		1,526		45,322
Bank of Hawaii Corp.		735		63,144
Bank of Marin Bancorp		98		6,586
The Bank of NT Butterfield & Son, Ltd.		200		6,578
Bank of the Ozarks, Inc.		1,525		83,677
BankUnited, Inc.		1,735		66,277
Bankwell Financial Group, Inc.		100		2,931
Banner Corp.		561		31,483
Bar Harbor Bankshares		146		6,326
Blue Hills Bancorp, Inc.		452		8,588
BNC Bancorp		776		27,354
BOK Financial Corp.		463		38,077
Boston Private Financial Holdings, Inc.		1,448		23,892
Bridge Bancorp, Inc.		334		12,074
Bryn Mawr Bank Corp.		269		10,773
C&F Financial Corp.		55		2,384
Camden National Corp.		252		10,453
Capital Bank Financial Corp., Class A		438		17,257
Capital City Bank Group, Inc.		169		3,497
Cardinal Financial Corp.		522		16,370
Carolina Financial Corp.		183		5,481
Cascade Bancorp (a)		459		3,658
Cathay General Bancorp		1,285		46,825
Centerstate Banks, Inc.		854		20,829
Central Pacific Financial Corp.		546		17,106
Central Valley Community Bancorp		117		2,367
Century Bancorp, Inc., Class A		53		3,196
Chemical Financial Corp.		1,150		56,844
Chemung Financial Corp.		55		1,880
Citizens & Northern Corp.		150		3,564
City Holding Co.		262		17,054
CNB Financial Corp.		227		5,325
CoBiz Financial, Inc.		679		11,896
Codorus Valley Bancorp, Inc.		129		3,311
Columbia Banking System, Inc.		1,004		39,919
Commerce Bancshares, Inc.		1,524		86,152
Community Bank System, Inc.		741		43,245
Community Trust Bancorp, Inc.		243		11,239

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 49

Schedule of Investments (continued) BlackRock Small/Mid Cap Index Fund

Common Stocks	Shares		Value
Banks (continued)
ConnectOne Bancorp, Inc.		543	$	13,412
County Bancorp, Inc.		96		2,621
CU Bancorp (a)		270		9,788
Cullen/Frost Bankers, Inc.		921		82,337
Customers Bancorp, Inc. (a)		405		13,956
CVB Financial Corp.		1,761		39,693
Eagle Bancorp, Inc. (a)		527		32,279
East West Bancorp, Inc.		2,484		127,777
Enterprise Bancorp, Inc.		157		5,277
Enterprise Financial Services Corp.		309		12,870
Equity Bancshares, Inc., Class A (a)		139		4,540
Farmers Capital Bank Corp.		99		3,678
Farmers National Banc Corp.		430		5,418
FB Financial Corp. (a)		117		2,979
FCB Financial Holdings, Inc., Class A (a)		551		25,869
Fidelity Southern Corp.		391		9,091
Financial Institutions, Inc.		211		6,952
First Bancorp, Inc.		202		5,454
First Bancorp, North Carolina		366		10,713
First BanCorp, Puerto Rico (a)		1,993		13,393
First Busey Corp.		557		16,292
First Business Financial Services, Inc.		134		3,247
First Citizens BancShares, Inc., Class A		130		47,676
First Commonwealth Financial Corp.		1,565		22,098
First Community Bancshares, Inc.		233		6,780
First Community Financial Partners, Inc. (a)		224		2,666
First Connecticut Bancorp, Inc.		308		6,976
First Financial Bancorp		1,070		29,479
First Financial Bankshares, Inc.		1,098		46,830
First Financial Corp.		166		8,026
First Financial Northwest, Inc.		162		3,362
First Foundation, Inc. (a)		420		6,090
First Hawaiian, Inc.		398		13,130
First Horizon National Corp.		4,006		80,120
First Internet Bancorp		97		3,022
First Interstate Bancsystem, Inc., Class A		321		13,209
First Merchants Corp.		719		27,559
First Mid-Illinois Bancshares, Inc.		114		3,592
First Midwest Bancorp, Inc.		1,402		34,041
First NBC Bank Holding Co. (a)		221		884
First Northwest Bancorp (a)		195		2,888
First of Long Island Corp.		352		9,539
FNB Corp.		3,670		54,830
Franklin Financial Network, Inc. (a)		178		6,862
Fulton Financial Corp.		2,962		53,908
German American Bancorp, Inc.		231		11,086
Glacier Bancorp, Inc.		1,316		46,757
Great Southern Bancorp, Inc.		202		10,110
Great Western Bancorp, Inc.		1,021		43,648
Green Bancorp, Inc. (a)		410		7,032
Guaranty Bancorp		301		7,284
Hancock Holding Co.		1,117		51,214
Hanmi Financial Corp.		560		18,564
HarborOne Bancorp, Inc. (a)		248		4,618
Heartland Financial USA, Inc.		394		18,439
Heritage Commerce Corp.		528		7,413
Heritage Financial Corp.		473		12,062
Heritage Oaks Bancorp		336		4,549
Home BancShares, Inc.		2,060		55,496
HomeTrust Bancshares, Inc. (a)		314		7,772
Hope Bancorp, Inc.		2,218		46,378
Horizon Bancorp		356		9,124
Huntington Bancshares, Inc.		18,580		251,387
Iberiabank Corp.		761		62,516
Independent Bank Corp.		769		34,757
Independent Bank Group, Inc.		186		11,560
International Bancshares Corp.		950		35,245

Common Stocks	Shares		Value
Banks (continued)
Investors Bancorp, Inc.		5,118	$	73,443
Lakeland Bancorp, Inc.		630		11,687
Lakeland Financial Corp.		426		18,923
LCNB Corp.		146		3,285
LegacyTexas Financial Group, Inc.		800		33,056
Live Oak Bancshares, Inc.		506		10,348
Macatawa Bank Corp.		372		3,802
MainSource Financial Group, Inc.		370		12,158
MB Financial, Inc.		1,292		57,533
MBT Financial Corp.		283		3,056
Mercantile Bank Corp.		258		8,333
Merchants Bancshares, Inc.		111		5,661
Middleburg Financial Corp.		77		2,644
Midland States Bancorp, Inc.		58		1,964
MidWestOne Financial Group, Inc.		170		6,003
MutualFirst Financial, Inc.		99		3,094
National Bank Holdings Corp., Class A		396		12,870
National Bankshares, Inc.		95		4,137
National Commerce Corp. (a)		161		6,038
NBT Bancorp, Inc.		738		30,066
Nicolet Bankshares, Inc. (a)		111		5,380
Northrim BanCorp, Inc.		108		3,051
OFG Bancorp		686		9,090
Old Line Bancshares, Inc.		140		3,753
Old National Bancorp		2,310		41,002
Old Second Bancorp, Inc.		550		5,940
Opus Bank		326		6,634
Orrstown Financial Services, Inc.		126		2,766
Pacific Continental Corp.		317		7,862
Pacific Mercantile Bancorp (a)		227		1,623
Pacific Premier Bancorp, Inc. (a)		508		19,990
PacWest Bancorp		2,057		113,958
Park National Corp.		234		25,925
Park Sterling Corp.		872		10,202
Peapack Gladstone Financial Corp.		271		8,186
Penns Woods Bancorp, Inc.		67		3,095
People’s Utah Bancorp		248		6,262
Peoples Bancorp, Inc.		266		8,259
Peoples Financial Services Corp.		135		5,805
Pinnacle Financial Partners, Inc.		742		49,603
Popular, Inc.		1,784		79,263
Preferred Bank		216		11,969
Premier Financial Bancorp, Inc.		145		2,656
PrivateBancorp, Inc.		1,345		73,518
Prosperity Bancshares, Inc.		1,152		83,670
QCR Holdings, Inc.		209		8,768
Renasant Corp.		750		29,850
Republic Bancorp, Inc., Class A		157		5,440
Republic First Bancorp, Inc. (a)		784		5,919
S&T Bancorp, Inc.		602		22,647
Sandy Spring Bancorp, Inc.		421		17,248
Seacoast Banking Corp. of Florida (a)		467		10,171
ServisFirst Bancshares, Inc.		789		31,592
Shore Bancshares, Inc.		212		3,411
Sierra Bancorp		226		6,048
Signature Bank (a)		914		143,973
Simmons First National Corp., Class A		513		30,857
South State Corp.		452		40,409
Southern First Bancshares, Inc. (a)		94		3,328
Southern National Bancorp of Virginia, Inc.		179		2,869
Southside Bancshares, Inc.		449		15,338
Southwest Bancorp, Inc.		303		8,393
State Bank Financial Corp.		560		14,806
Sterling Bancorp		2,186		52,136
Stock Yards Bancorp, Inc.		373		16,710
Stonegate Bank		221		10,058
Suffolk Bancorp		196		8,118

See Notes to Financial Statements.

50 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Small/Mid Cap Index Fund

Common Stocks	Shares		Value
Banks (continued)
Summit Financial Group, Inc.		128	$	3,347
Sun Bancorp, Inc.		145		3,625
SVB Financial Group (a)		893		153,801
Synovus Financial Corp.		2,163		90,154
TCF Financial Corp.		2,743		47,591
Texas Capital Bancshares, Inc. (a)		862		71,115
Tompkins Financial Corp.		258		23,362
TowneBank		966		31,105
Trico Bancshares		320		11,798
Tristate Capital Holdings, Inc. (a)		329		7,304
Triumph Bancorp, Inc. (a)		252		6,817
Trustmark Corp.		1,169		39,302
UMB Financial Corp.		766		59,089
Umpqua Holdings Corp.		3,777		69,157
Union Bankshares Corp.		761		27,974
Union Bankshares, Inc. (b)		61		2,532
United Bankshares, Inc.		1,200		53,760
United Community Banks, Inc.		1,223		34,403
Univest Corp. of Pennsylvania		396		11,147
Valley National Bancorp		4,277		51,794
Veritex Holdings, Inc. (a)		220		5,975
Washington Trust Bancorp, Inc.		241		13,135
WashingtonFirst Bankshares, Inc.		124		3,453
Webster Financial Corp.		1,575		82,719
WesBanco, Inc.		704		29,216
West BanCorp., Inc.		253		5,768
Westamerica BanCorp		466		26,446
Western Alliance Bancorp (a)		1,615		79,749
Wintrust Financial Corp.		878		62,865
Xenith Bankshares, Inc. (a)		139		3,620
Yadkin Financial Corp.		905		28,960
Zions Bancorporation		3,480		146,821
				5,392,511
Beverages — 0.1%
Boston Beer Co., Inc., Class A (a)		156		23,977
Coca-Cola Bottling Co. Consolidated		78		13,170
Craft Brew Alliance, Inc. (a)		194		2,949
MGP Ingredients, Inc.		201		8,521
National Beverage Corp.		201		10,088
Primo Water Corp. (a)		383		4,948
				63,653
Biotechnology — 3.2%
ACADIA Pharmaceuticals, Inc. (a)		1,661		57,454
Acceleron Pharma, Inc. (a)		464		11,266
Achillion Pharmaceuticals, Inc. (a)		2,147		8,953
Acorda Therapeutics, Inc. (a)		730		14,965
Adamas Pharmaceuticals, Inc. (a)		291		4,618
Aduro Biotech, Inc. (a)		556		6,589
Advaxis, Inc. (a)		609		5,457
Adverum Biotechnologies, Inc. (a)		597		1,731
Aevi Genomic Medicine, Inc. (a)		486		2,313
Agenus, Inc. (a)		1,059		4,236
Agios Pharmaceuticals, Inc. (a)		553		23,796
Aimmune Therapeutics, Inc. (a)		480		8,774
Akebia Therapeutics, Inc. (a)		582		5,837
Alder Biopharmaceuticals, Inc. (a)		764		15,700
Alkermes PLC (a)		2,594		140,361
Alnylam Pharmaceuticals, Inc. (a)		1,296		51,827
AMAG Pharmaceuticals, Inc. (a)		571		13,761
Amicus Therapeutics, Inc. (a)		2,406		13,233
Anavex Life Sciences Corp. (a)(b)		651		2,930
Anthera Pharmaceuticals, Inc. (a)		419		227
Applied Genetic Technologies Corp. (a)		277		2,008
Aptevo Therapeutics, Inc. (a)		858		1,707
AquaBounty Technologies, Inc. (a)		13		179

Common Stocks	Shares		Value
Biotechnology (continued)
Ardelyx, Inc. (a)		451	$	5,412
Arena Pharmaceuticals, Inc. (a)		3,876		5,969
Argos Therapeutics, Inc. (a)		349		1,588
Ariad Pharmaceuticals, Inc. (a)		3,162		75,319
Array BioPharma, Inc. (a)		2,896		31,480
Arrowhead Pharmaceuticals, Inc. (a)		997		1,934
Asterias Biotherapeutics, Inc. (a)		387		1,645
Atara Biotherapeutics, Inc. (a)		441		5,931
Athersys, Inc. (a)		519		566
Audentes Therapeutics, Inc. (a)		102		1,665
Avexis, Inc. (a)		108		6,024
Axovant Sciences Ltd. (a)		393		4,814
Bellicum Pharmaceuticals, Inc. (a)		304		4,068
BioCryst Pharmaceuticals, Inc. (a)		1,120		7,056
Biospecifics Technologies Corp. (a)		100		5,129
BioTime, Inc. (a)		1,256		3,931
Bluebird Bio, Inc. (a)		716		53,342
Blueprint Medicines Corp. (a)		427		14,552
Cara Therapeutics, Inc. (a)		404		6,189
Celldex Therapeutics, Inc. (a)		1,599		5,213
Cellular Biomedicine Group, Inc. (a)		207		2,567
ChemoCentryx, Inc. (a)		243		1,767
Chimerix, Inc. (a)		1,140		6,202
Cidara Therapeutics, Inc. (a)		173		1,713
Clovis Oncology, Inc. (a)		633		41,018
Coherus Biosciences, Inc. (a)		485		13,531
Concert Pharmaceuticals, Inc. (a)		325		2,876
Curis, Inc. (a)		1,794		5,149
Cytokinetics, Inc. (a)		492		5,141
CytomX Therapeutics, Inc. (a)		382		4,439
Dynavax Technologies Corp. (a)		509		2,087
Eagle Pharmaceuticals, Inc. (a)		149		10,312
Edge Therapeutics, Inc. (a)		292		2,812
Editas Medicine, Inc. (a)(b)		149		2,596
Emergent Biosolutions, Inc. (a)		542		16,406
Enanta Pharmaceuticals, Inc. (a)		286		9,474
Epizyme, Inc. (a)		685		7,193
Esperion Therapeutics, Inc. (a)		284		3,442
Exact Sciences Corp. (a)		1,828		34,641
Exelixis, Inc. (a)		3,928		71,175
FibroGen, Inc. (a)		858		19,434
Five Prime Therapeutics, Inc. (a)		482		22,080
Flexion Therapeutics, Inc. (a)		478		9,273
Fortress Biotech, Inc. (a)		699		1,713
Foundation Medicine, Inc. (a)		230		4,497
Genomic Health, Inc. (a)		348		9,563
Geron Corp. (a)		2,223		4,624
Global Blood Therapeutics, Inc. (a)		297		4,797
GlycoMimetics, Inc. (a)		274		1,559
Halozyme Therapeutics, Inc. (a)		1,784		20,605
Heron Therapeutics, Inc. (a)		731		9,503
Idera Pharmaceuticals, Inc. (a)		1,739		2,435
Ignyta, Inc. (a)		468		2,293
Immune Design Corp. (a)		227		1,283
ImmunoGen, Inc. (a)		1,104		2,583
Immunomedics, Inc. (a)		1,512		6,804
Infinity Pharmaceuticals, Inc. (a)		1,559		3,227
Innoviva, Inc. (a)		1,326		14,056
Inotek Pharmaceuticals Corp. (a)		120		192
Inovio Pharmaceuticals, Inc. (a)		969		6,395
Insmed, Inc. (a)		1,089		16,085
Insys Therapeutics, Inc. (a)(b)		386		3,953
Intellia Therapeutics, Inc. (a)		151		1,951
Intercept Pharmaceuticals, Inc. (a)		307		33,693
Intrexon Corp. (a)		921		19,488
Invitae Corp., cost $28,390,380) (Acquired 10/08/14, cost (a)		399		3,340

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 51

Schedule of Investments (continued) BlackRock Small/Mid Cap Index Fund

Common Stocks	Shares		Value
Biotechnology (continued)
Ionis Pharmaceuticals, Inc. (a)		2,087	$	92,871
Ironwood Pharmaceuticals, Inc. (a)		2,228		32,039
Juno Therapeutics, Inc. (a)		1,036		22,108
Karyopharm Therapeutics, Inc. (a)		378		3,912
Keryx Biopharmaceuticals, Inc. (a)		1,146		5,719
Kite Pharma, Inc. (a)(b)		679		34,609
La Jolla Pharmaceutical Co. (a)		238		4,629
Lexicon Pharmaceuticals, Inc. (a)		756		10,833
Ligand Pharmaceuticals, Inc. (a)		325		34,453
Lion Biotechnologies, Inc. (a)		919		6,663
Loxo Oncology, Inc. (a)		285		11,181
MacroGenics, Inc. (a)		575		10,620
MannKind Corp. (a)		4,524		3,185
MediciNova, Inc. (a)		452		2,513
Merrimack Pharmaceuticals, Inc. (a)		1,787		5,558
MiMedx Group, Inc. (a)		1,688		13,639
Minerva Neurosciences, Inc. (a)		292		3,095
Mirati Therapeutics, Inc. (a)		323		1,647
Momenta Pharmaceuticals, Inc. (a)		1,070		20,223
Myovant Sciences, Ltd. (a)		157		1,749
Myriad Genetics, Inc. (a)		1,209		19,562
NantKwest, Inc. (a)		249		1,335
Natera, Inc. (a)		444		3,978
Neurocrine Biosciences, Inc. (a)		1,494		64,108
NewLink Genetics Corp. (a)		343		4,174
Novavax, Inc. (a)		3,817		5,000
OncoMed Pharmaceuticals, Inc. (a)		349		2,883
Ophthotech Corp. (a)		446		2,123
OPKO Health, Inc. (a)		5,557		48,290
Organovo Holdings, Inc. (a)		1,510		5,572
Osiris Therapeutics, Inc. (a)		295		1,658
Otonomy, Inc. (a)		347		5,084
OvaScience, Inc. (a)		285		450
PDL BioPharma, Inc.		3,504		7,709
Pfenex, Inc. (a)		315		2,514
PharmAthene, Inc. (a)		916		2,840
Portola Pharmaceuticals, Inc. (a)		807		21,991
Progenics Pharmaceuticals, Inc. (a)		1,097		9,785
Protagonist Therapeutics, Inc. (a)		83		1,497
Proteostasis Therapeutics, Inc. (a)		84		1,239
Prothena Corp. PLC (a)		653		31,971
PTC Therapeutics, Inc. (a)		617		8,083
Puma Biotechnology, Inc. (a)		464		15,034
Ra Pharmaceuticals, Inc. (a)		111		1,769
Radius Health, Inc. (a)		556		24,197
REGENXBIO, Inc. (a)		304		5,624
Regulus Therapeutics, Inc. (a)		261		313
Repligen Corp. (a)		558		16,762
Retrophin, Inc. (a)		613		12,027
Rigel Pharmaceuticals, Inc. (a)		1,631		3,392
Sage Therapeutics, Inc. (a)		528		25,333
Sangamo Therapeutics, Inc. (a)		1,111		3,889
Sarepta Therapeutics, Inc. (a)		872		27,084
Seattle Genetics, Inc. (a)		1,666		100,360
Selecta Biosciences, Inc. (a)		73		1,022
Seres Therapeutics, Inc. (a)		232		2,294
Sorrento Therapeutics, Inc. (a)		262		1,415
Spark Therapeutics, Inc. (a)		315		19,864
Spectrum Pharmaceuticals, Inc. (a)		1,300		6,058
Stemline Therapeutics, Inc. (a)		387		3,947
Synergy Pharmaceuticals, Inc. (a)		2,962		20,941
Synthetic Biologics, Inc. (a)		521		442
Syros Pharmaceuticals, Inc. (a)		132		1,432
T2 Biosystems, Inc. (a)		101		545
TESARO, Inc. (a)		497		80,931
Tetraphase Pharmaceuticals, Inc. (a)		462		1,769
TG Therapeutics, Inc. (a)		642		3,082

Common Stocks	Shares		Value
Biotechnology (continued)
Trevena, Inc. (a)		1,128	$	7,873
Trovagene, Inc. (a)		194		388
Ultragenyx Pharmaceutical, Inc. (a)		619		46,431
United Therapeutics Corp. (a)		764		125,013
Vanda Pharmaceuticals, Inc. (a)		659		9,325
Versartis, Inc. (a)		557		7,965
Vital Therapies, Inc. (a)		481		2,381
Voyager Therapeutics, Inc. (a)		211		2,515
XBiotech, Inc. (a)(b)		339		3,865
Xencor, Inc. (a)		602		14,346
Zafgen, Inc. (a)		217		914
ZIOPHARM Oncology, Inc. (a)(b)		2,150		12,728
				2,296,078
Building Products — 1.5%
AAON, Inc.		666		22,611
Advanced Drainage Systems, Inc.		585		14,099
Allegion PLC		1,660		109,012
Ameresco, Inc., Class A (a)		314		1,633
American Woodmark Corp. (a)		245		17,444
AO Smith Corp.		2,509		122,314
Apogee Enterprises, Inc.		530		30,252
Armstrong Flooring, Inc. (a)		412		8,664
Armstrong World Industries, Inc. (a)		804		32,120
Builders FirstSource, Inc. (a)		1,357		14,601
Caesarstone Ltd. (a)		395		11,988
Continental Building Products, Inc. (a)		573		13,322
CSW Industrials, Inc. (a)		228		8,333
Fortune Brands Home & Security, Inc.		2,634		145,212
Gibraltar Industries, Inc. (a)		577		25,330
Griffon Corp.		493		12,547
Insteel Industries, Inc.		295		10,927
Lennox International, Inc.		684		107,258
Masonite International Corp. (a)		520		34,632
NCI Building Systems, Inc. (a)		491		7,856
Owens Corning		1,980		109,395
Patrick Industries, Inc. (a)		266		21,746
PGT Innovations, Inc. (a)		816		9,384
Ply Gem Holdings, Inc. (a)		365		5,895
Quanex Building Products Corp.		561		11,080
Simpson Manufacturing Co., Inc.		709		30,856
Trex Co., Inc. (a)		510		34,542
Universal Forest Products, Inc.		348		35,395
USG Corp. (a)		1,516		46,375
				1,054,823
Capital Markets — 1.8%
Artisan Partners Asset Management, Inc., Class A		698		20,207
Associated Capital Group, Inc., Class A		106		3,731
B. Riley Financial, Inc.		120		2,262
BGC Partners, Inc., Class A		3,840		42,509
Calamos Asset Management, Inc., Class A		339		2,854
Cohen & Steers, Inc.		373		13,014
Cowen Group, Inc., Class A (a)		475		7,125
Diamond Hill Investment Group, Inc.		56		11,323
Donnelley Financial Solutions, Inc. (a)		451		10,860
E*Trade Financial Corp. (a)		4,837		181,146
Eaton Vance Corp.		1,933		81,051
Evercore Partners, Inc., Class A		681		52,744
FBR & Co.		154		2,202
Federated Investors, Inc., Class B		809		21,042
Financial Engines, Inc.		942		36,314
Gain Capital Holdings, Inc.		728		5,467
GAMCO Investors, Inc., Class A		110		3,212
Greenhill & Co., Inc.		481		14,214
Hannon Armstrong Sustainable Infrastructure Capital, Inc.		777		14,204
Hennessy Advisors, Inc.		79		2,197

See Notes to Financial Statements.

52 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Small/Mid Cap Index Fund

Common Stocks	Shares		Value
Capital Markets (continued)
HFF, Inc., Class A		649	$	19,262
Houlihan Lokey, Inc.		234		7,277
INTL. FCStone, Inc. (a)		271		9,995
Investment Technology Group, Inc.		288		5,795
Janus Capital Group, Inc.		2,564		32,050
KCG Holdings, Inc., Class A (a)		920		12,852
Ladenburg Thalmann Financial Services, Inc. (a)		1,649		3,793
Lazard Ltd., Class A		2,225		94,518
Legg Mason, Inc.		1,738		55,077
LPL Financial Holdings, Inc.		1,504		59,107
Manning & Napier, Inc.		336		2,335
Marcus & Millichap, Inc. (a)		286		7,370
Moelis & Co., Class A		432		14,731
OM Asset Management PLC		741		10,448
Oppenheimer Holdings, Inc., Class A		167		2,856
Piper Jaffray Cos. (a)		268		18,894
PJT Partners, Inc., Class A		306		9,716
Pzena Investment Management, Inc., Class A		361		3,606
Raymond James Financial, Inc.		2,192		164,247
Safeguard Scientifics, Inc. (a)		347		4,181
SEI Investments Co.		2,228		108,080
Silvercrest Asset Management Group, Inc., Class A		132		1,835
Stifel Financial Corp. (a)		1,115		56,118
Virtu Financial, Inc., Class A		459		8,055
Virtus Investment Partners, Inc.		88		9,592
Waddell & Reed Financial, Inc., Class A		1,435		25,902
Walter Investment Management Corp. (a)		209		794
Westwood Holdings Group, Inc.		148		8,276
Wins Finance Holdings, Inc. (a)		28		6,781
WisdomTree Investments, Inc.		1,886		19,426
				1,310,647
Chemicals — 2.7%
A. Schulman, Inc.		459		15,835
AgroFresh Solutions, Inc. (a)		256		673
Albemarle Corp.		1,930		178,795
American Vanguard Corp.		507		8,720
Ashland Global Holdings, Inc.		1,070		127,362
Axalta Coating Systems Ltd. (a)		2,837		82,273
Balchem Corp.		536		45,689
Cabot Corp.		1,063		58,858
Calgon Carbon Corp.		817		12,949
Chase Corp.		110		9,680
Chemours Co.		3,138		82,906
Chemtura Corp. (a)		1,104		36,542
Codexis, Inc. (a)		588		2,793
Ferro Corp. (a)		1,455		20,574
Flotek Industries, Inc. (a)		1,015		10,729
FutureFuel Corp.		472		6,131
GCP Applied Technologies, Inc. (a)		1,263		34,038
Hawkins, Inc.		160		8,584
HB Fuller Co.		858		42,359
Huntsman Corp.		3,432		69,978
Ingevity Corp. (a)		728		40,469
Innophos Holdings, Inc.		343		16,683
Innospec, Inc.		410		29,253
KMG Chemicals, Inc.		141		5,197
Koppers Holdings, Inc. (a)		333		13,470
Kraton Corp. (a)		496		13,323
Kronos Worldwide, Inc.		310		4,098
Landec Corp. (a)		488		6,149
LSB Industries, Inc. (a)		395		3,361
Minerals Technologies, Inc.		591		47,369
NewMarket Corp.		127		54,759
Olin Corp.		2,831		74,200
OMNOVA Solutions, Inc. (a)		686		6,243
Platform Specialty Products Corp. (a)		3,436		41,713

Common Stocks	Shares		Value
Chemicals (continued)
PolyOne Corp.		1,442	$	49,187
Quaker Chemical Corp.		222		28,527
Rayonier Advanced Materials, Inc.		738		10,015
RPM International, Inc.		2,246		117,376
Scotts Miracle-Gro Co., Class A		776		71,369
Sensient Technologies Corp.		769		59,021
Stepan Co.		344		26,870
TerraVia Holdings, Inc. (a)		2,111		2,048
Trecora Resources (a)		399		4,948
Tredegar Corp.		423		9,412
Trinseo SA		473		30,627
Tronox Ltd., Class A		1,092		13,672
Valhi, Inc.		605		1,882
Valspar Corp.		1,351		149,515
Valvoline, Inc.		613		14,191
Westlake Chemical Corp.		656		40,613
WR Grace & Co.		1,220		84,595
				1,925,623
Commercial Services & Supplies — 1.8%
ABM Industries, Inc.		951		38,411
ACCO Brands Corp. (a)		1,841		23,473
Advanced Disposal Services, Inc. (a)		424		9,417
Aqua Metals, Inc. (a)		180		2,009
ARC Document Solutions, Inc. (a)		659		3,104
Brink’s Co.		801		35,645
Casella Waste Systems, Inc., Class A (a)		674		7,791
Ceco Environmental Corp.		445		5,838
Clean Harbors, Inc. (a)		917		50,894
Copart, Inc. (a)		1,676		95,096
Covanta Holding Corp.		2,035		32,764
Deluxe Corp.		846		61,631
Encore Capital Group, Inc. (a)		223		6,902
Ennis, Inc.		438		7,402
Essendant, Inc.		598		12,492
G&K Services, Inc., Class A		332		31,892
Healthcare Services Group, Inc.		1,196		47,541
Heritage-Crystal Clean, Inc. (a)		194		2,900
Herman Miller, Inc.		1,029		32,105
HNI Corp.		774		39,017
InnerWorkings, Inc. (a)		585		5,622
Interface, Inc.		1,127		20,511
Iron Mountain, Inc.		4,521		161,852
KAR Auction Services, Inc.		2,384		108,591
Kimball International, Inc., Class B		601		10,055
Knoll, Inc.		833		21,750
LSC Communications, Inc.		452		11,851
McGrath RentCorp		375		14,355
Mobile Mini, Inc.		766		24,933
MSA Safety, Inc.		532		37,958
Multi-Color Corp.		228		17,602
Pitney Bowes, Inc.		3,241		51,597
Quad/Graphics, Inc.		478		12,519
Rollins, Inc.		1,619		57,086
RR Donnelley & Sons Co.		1,175		20,151
Steelcase, Inc., Class A		1,488		24,998
Sykes Enterprises, Inc. (a)		637		17,791
Team, Inc. (a)		517		17,371
Tetra Tech, Inc.		974		42,564
TRC Cos., Inc. (a)		311		2,892
U.S. Ecology, Inc.		386		19,783
UniFirst Corp.		257		32,870
Viad Corp.		330		14,471
VSE Corp.		141		5,257
West Corp.		790		19,173
				1,319,927

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 53

Schedule of Investments (continued) BlackRock Small/Mid Cap Index Fund

Common Stocks	Shares		Value
Communications Equipment — 1.3%
ADTRAN, Inc.		866	$	18,965
Aerohive Networks, Inc. (a)		464		2,659
Applied Optoelectronics, Inc. (a)		293		9,013
Arista Networks, Inc. (a)		671		63,074
ARRIS International PLC (a)		3,250		92,885
Bel Fuse, Inc., Class B		122		3,880
Black Box Corp.		212		2,830
Brocade Communications Systems, Inc.		6,905		86,105
CalAmp Corp. (a)		628		9,433
Calix, Inc. (a)		575		4,140
Ciena Corp. (a)		2,361		57,467
Clearfield, Inc. (a)		168		2,890
CommScope Holding Co., Inc. (a)		2,212		83,658
Comtech Telecommunications Corp.		441		4,732
Digi International, Inc. (a)		432		5,638
EchoStar Corp., Class A (a)		790		40,235
Emcore Corp.		178		1,602
Extreme Networks, Inc. (a)		1,760		9,733
Finisar Corp. (a)		1,864		55,118
Harmonic, Inc. (a)		1,418		7,515
Infinera Corp. (a)		2,443		22,011
InterDigital, Inc.		604		56,414
Ixia (a)		1,125		21,881
KVH Industries, Inc. (a)		273		2,839
Loral Space & Communications, Inc. (a)		219		8,924
Lumentum Holdings, Inc. (a)		864		32,789
NETGEAR, Inc. (a)		555		31,580
Numerex Corp., Class A (a)		184		1,082
Oclaro, Inc. (a)		1,969		19,316
Plantronics, Inc.		573		32,420
Quantenna Communications, Inc. (a)		108		2,031
ShoreTel, Inc. (a)		1,204		8,368
Silicom, Ltd.		82		3,002
Sonus Networks, Inc. (a)		690		4,402
Ubiquiti Networks, Inc. (a)		468		29,203
ViaSat, Inc. (a)		876		56,861
Viavi Solutions, Inc. (a)		4,036		36,122
				930,817
Construction & Engineering — 1.0%
AECOM (a)		2,632		97,200
Aegion Corp. (a)		563		13,095
Argan, Inc.		238		17,552
Chicago Bridge & Iron Co. NV		1,808		60,044
Comfort Systems USA, Inc.		646		21,867
Dycom Industries, Inc. (a)		525		42,346
EMCOR Group, Inc.		1,040		72,478
Granite Construction, Inc.		678		38,056
Great Lakes Dredge & Dock Corp. (a)		921		4,789
HC2 Holdings, Inc. (a)		600		3,990
IES Holdings, Inc. (a)		357		6,961
Jacobs Engineering Group, Inc. (a)		2,063		120,789
KBR, Inc.		2,486		42,287
Layne Christensen Co. (a)		293		3,056
MasTec, Inc. (a)		1,129		42,055
MYR Group, Inc. (a)		248		9,541
NV5 Global Inc. (a)		98		3,994
Orion Group Holdings, Inc. (a)		365		3,833
Primoris Services Corp.		644		15,984
Quanta Services, Inc. (a)		2,481		89,043
Tutor Perini Corp. (a)		667		19,877
				728,837
Construction Materials — 0.3%
Eagle Materials, Inc.		804		84,082
Forterra, Inc. (a)		288		5,541
Headwaters, Inc. (a)		1,254		29,055

Common Stocks	Shares		Value
Construction Materials (continued)
Summit Materials, Inc., Class A (a)		1,841	$	46,209
United States Lime & Minerals, Inc.		18		1,368
US Concrete, Inc. (a)		257		16,834
				183,089
Consumer Discretionary — 0.1%
Acushnet Holdings Corp. (a)		338		6,270
American Outdoor Brands Corp. (a)		961		20,469
At Home Group, Inc. (a)		88		1,341
Camping World Holdings, Inc., Class A		183		5,761
SP Plus Corp. (a)		252		6,981
				40,822
Consumer Finance — 0.5%
Credit Acceptance Corp. (a)(b)		146		29,971
Enova International, Inc. (a)		410		5,781
Ezcorp, Inc., Class A (a)		913		9,039
Green Dot Corp., Class A (a)		705		18,894
Navient Corp.		5,238		78,779
Nelnet, Inc., Class A		373		18,288
OneMain Holdings, Inc. (a)		949		21,239
PRA Group, Inc. (a)		831		33,074
Regional Management Corp. (a)		188		4,702
Santander Consumer USA Holdings, Inc. (a)		1,924		25,435
SLM Corp. (a)		7,386		87,746
World Acceptance Corp. (a)		92		4,514
				337,462
Containers & Packaging — 1.5%
Aptargroup, Inc.		1,069		78,005
Avery Dennison Corp.		1,535		112,086
Bemis Co., Inc.		1,628		79,316
Berry Plastics Group, Inc. (a)		2,175		110,990
Crown Holdings, Inc. (a)		2,321		125,729
Graphic Packaging Holding Co.		5,495		68,742
Greif, Inc., Class A		447		25,738
Greif, Inc., Class B		89		6,337
Multi Packaging Solutions International Ltd. (a)		356		6,344
Myers Industries, Inc.		322		4,444
Owens-Illinois, Inc. (a)		2,800		52,920
Packaging Corp. of America		1,610		148,410
Sealed Air Corp.		3,394		164,609
Silgan Holdings, Inc.		643		37,622
Sonoco Products Co.		1,711		94,019
UFP Technologies, Inc. (a)		109		2,719
				1,118,030
Distributors — 0.1%
Core-Mark Holding Co., Inc.		790		27,595
Pool Corp.		698		73,681
Weyco Group, Inc.		103		2,902
				104,178
Diversified Consumer Services — 1.0%
2U, Inc. (a)		639		21,752
American Public Education, Inc. (a)		289		7,023
Apollo Education Group, Inc. (a)		1,396		13,946
Ascent Capital Group, Inc., Class A (a)		270		4,182
Bridgepoint Education, Inc. (a)		291		3,096
Bright Horizons Family Solutions, Inc. (a)		762		53,995
Capella Education Co.		181		15,476
Career Education Corp. (a)		1,107		10,815
Carriage Services, Inc.		256		6,643
Collectors Universe, Inc.		114		2,356
DeVry Education Group, Inc.		1,108		37,118
Graham Holdings Co., Class B		75		38,966
Grand Canyon Education, Inc. (a)		766		45,179
H&R Block, Inc.		3,615		77,578

See Notes to Financial Statements.

54 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Small/Mid Cap Index Fund

Common Stocks	Shares		Value
Diversified Consumer Services (continued)
Hillenbrand, Inc.		1,008	$	36,842
Houghton Mifflin Harcourt Co. (a)		2,144		24,227
K12, Inc. (a)		580		11,559
Liberty Tax, Inc.		144		1,930
LifeLock, Inc. (a)		1,464		35,078
Matthews International Corp., Class A		548		36,963
Regis Corp. (a)		657		9,146
Service Corp. International		3,216		93,682
ServiceMaster Global Holdings, Inc. (a)		2,342		86,607
Sotheby’s (a)		855		33,952
Strayer Education, Inc. (a)		171		13,851
Weight Watchers International, Inc. (a)(b)		434		5,403
				727,365
Diversified Financial Services — 0.8%
CBOE Holdings, Inc.		1,415		112,662
FactSet Research Systems, Inc.		692		119,751
FNFV Group (a)		1,216		15,808
MarketAxess Holdings, Inc.		636		119,091
Marlin Business Services Corp.		144		3,305
Morningstar, Inc.		319		24,292
MSCI, Inc.		1,574		130,248
NewStar Financial, Inc. (a)		287		2,549
On Deck Capital, Inc. (a)		712		3,581
PHH Corp. (a)		885		12,903
PICO Holdings, Inc. (a)		400		5,700
Tiptree, Inc., Class A		771		5,050
				554,940
Diversified Telecommunication Services — 0.5%
8x8, Inc. (a)		1,529		24,235
ATN International, Inc.		168		13,489
Cincinnati Bell, Inc. (a)		766		17,580
Cogent Communications Holdings, Inc.		708		29,594
Consolidated Communications Holdings, Inc.		870		22,890
Fairpoint Communications, Inc. (a)		336		6,216
Frontier Communications Corp.		20,203		70,508
General Communication, Inc., Class A (a)		416		8,370
Globalstar, Inc. (a)(b)		6,987		11,039
Hawaiian Telcom Holdco, Inc. (a)		118		2,930
IDT Corp., Class B		279		5,357
Inteliquent, Inc.		535		12,251
Intelsat SA (a)		436		1,574
Iridium Communications, Inc. (a)		1,357		13,706
Lumos Networks Corp. (a)		326		5,043
ORBCOMM, Inc. (a)		1,099		8,979
pdvWireless, Inc. (a)		163		3,472
Straight Path Communications, Inc., Class B (a)		152		5,326
Vonage Holdings Corp. (a)		3,332		23,624
Windstream Holdings, Inc. (b)		1,596		12,896
Zayo Group Holdings, Inc. (a)		2,814		89,935
				389,014
Electric Utilities — 1.2%
ALLETE, Inc.		864		56,463
El Paso Electric Co.		694		31,855
Great Plains Energy, Inc.		3,710		102,211
Hawaiian Electric Industries, Inc.		1,838		61,536
IDACORP, Inc.		867		69,377
MGE Energy, Inc.		588		37,426
OGE Energy Corp.		3,441		115,411
Otter Tail Corp.		654		24,754
Pinnacle West Capital Corp.		1,905		147,885
PNM Resources, Inc.		1,361		46,818
Portland General Electric Co.		1,542		67,247
Spark Energy, Inc., Class A		108		2,792
Unitil Corp.		221		10,115
Westar Energy, Inc.		2,431		132,951
				906,841

Common Stocks	Shares		Value
Electrical Equipment — 0.7%
Allied Motion Technologies, Inc.		123	$	2,711
American Superconductor Corp. (a)		219		1,531
Atkore International Group, Inc. (a)		206		5,504
AZZ, Inc.		470		27,989
Babcock & Wilcox Enterprises, Inc. (a)		755		12,563
Brady Corp., Class A		792		28,789
Encore Wire Corp.		327		13,816
Energous Corp. (a)(b)		272		3,933
EnerSys		743		57,917
Franklin Electric Co., Inc.		796		32,119
FuelCell Energy, Inc. (a)		171		257
Generac Holdings, Inc. (a)		1,125		45,292
General Cable Corp.		786		15,956
Hubbell, Inc.		944		115,244
II-VI, Inc. (a)		1,018		37,157
LSI Industries, Inc.		336		3,199
Plug Power, Inc. (a)(b)		2,769		2,935
Powell Industries, Inc.		131		5,041
Power Solutions International, Inc. (a)		126		932
Preformed Line Products Co.		33		1,802
Regal-Beloit Corp.		764		55,466
Sunrun, Inc. (a)		990		5,237
Thermon Group Holdings, Inc. (a)		542		11,252
TPI Composites, Inc. (a)		62		1,203
Vicor Corp. (a)		227		3,473
				491,318
Electronic Equipment, Instruments & Components — 2.8%
Agilysys, Inc. (a)		267		2,598
Anixter International, Inc. (a)		497		42,494
Arrow Electronics, Inc. (a)		1,569		115,353
Avnet, Inc.		2,216		102,911
AVX Corp.		766		12,409
Badger Meter, Inc.		494		19,044
Belden, Inc.		731		55,900
Benchmark Electronics, Inc. (a)		930		28,458
CDW Corp.		2,802		144,331
Cognex Corp.		1,399		94,517
Coherent, Inc. (a)		412		64,985
Control4 Corp. (a)		391		4,215
CTS Corp.		514		11,051
Daktronics, Inc.		691		7,021
Dolby Laboratories, Inc., Class A		872		41,778
Electro Scientific Industries, Inc. (a)		512		3,364
Fabrinet (a)		626		26,373
FARO Technologies, Inc. (a)		282		10,462
Fitbit, Inc., Series A (a)		2,109		12,675
FLIR Systems, Inc.		2,349		82,990
Insight Enterprises, Inc. (a)		680		25,248
InvenSense, Inc. (a)		1,352		17,116
IPG Photonics Corp. (a)		611		70,259
Itron, Inc. (a)		571		35,231
Jabil Circuit, Inc.		3,248		77,887
Keysight Technologies, Inc. (a)		2,962		109,801
Kimball Electronics, Inc. (a)		434		7,421
Knowles Corp. (a)		1,516		27,318
Littelfuse, Inc.		376		59,299
Maxwell Technologies, Inc. (a)		557		2,651
Mercury Systems, Inc. (a)		682		22,997
Mesa Laboratories, Inc.		46		5,480
Methode Electronics, Inc.		667		28,047
MTS Systems Corp.		269		15,629
National Instruments Corp.		1,791		56,273
Novanta, Inc. (a)		520		11,622
OSI Systems, Inc. (a)		305		22,774
Park Electrochemical Corp.		264		4,839
PC Connection, Inc.		173		4,719

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 55

Schedule of Investments (continued) BlackRock Small/Mid Cap Index Fund

Common Stocks	Shares		Value
Electronic Equipment, Instruments & Components (continued)
Plexus Corp. (a)		576	$	31,277
Radisys Corp. (a)		655		2,889
Rogers Corp. (a)		312		24,944
Sanmina Corp. (a)		1,259		49,038
ScanSource, Inc. (a)		443		17,521
SYNNEX Corp.		505		60,691
Tech Data Corp. (a)		596		50,994
Trimble, Inc. (a)		4,340		128,551
TTM Technologies, Inc. (a)		1,287		19,086
Universal Display Corp. (a)		711		46,926
Vishay Intertechnology, Inc.		2,341		38,861
Vishay Precision Group, Inc. (a)		176		2,930
Zebra Technologies Corp., Class A (a)		895		74,885
				2,036,133
Energy Equipment & Services — 1.3%
Archrock, Inc.		1,241		18,119
Atwood Oceanics, Inc. (a)		1,340		16,294
Bristow Group, Inc.		592		10,455
CARBO Ceramics, Inc. (a)		429		6,092
Dawson Geophysical Co. (a)		464		3,675
Diamond Offshore Drilling, Inc. (a)		1,154		18,903
Dril-Quip, Inc. (a)		655		40,741
Ensco PLC, Class A		5,181		56,576
Era Group, Inc. (a)		360		5,638
Exterran Corp. (a)		519		16,099
Fairmount Santrol Holdings, Inc. (a)		1,508		18,880
Forum Energy Technologies, Inc. (a)		1,040		22,568
Frank’s International NV		649		7,684
Geospace Technologies Corp. (a)		247		5,765
Helix Energy Solutions Group, Inc. (a)		2,395		20,310
Hornbeck Offshore Services, Inc. (a)		657		4,763
Independence Contract Drilling, Inc. (a)		549		3,481
Mammoth Energy Services, Inc. (a)		97		1,746
Matrix Service Co. (a)		466		10,438
McDermott International, Inc. (a)		4,302		34,846
Nabors Industries Ltd.		4,743		77,074
Natural Gas Services Group, Inc. (a)		203		5,826
Newpark Resources, Inc. (a)		1,424		10,751
Noble Corp. PLC		4,232		28,566
Oceaneering International, Inc.		1,698		47,289
Oil States International, Inc. (a)		883		34,878
Parker Drilling Co. (a)		1,886		4,809
Patterson-UTI Energy, Inc.		2,475		69,399
PHI, Inc. (a)		199		3,154
Pioneer Energy Services Corp. (a)		1,368		8,618
RigNet, Inc. (a)		232		4,582
Rowan Cos. PLC, Class A (a)		2,164		38,779
RPC, Inc.		1,012		21,778
SEACOR Holdings, Inc. (a)		277		20,379
Seadrill Ltd. (a)(b)		6,732		12,589
Smart Sand, Inc. (a)		180		3,132
Superior Energy Services, Inc. (a)		2,573		45,465
Tesco Corp. (a)		748		6,433
TETRA Technologies, Inc. (a)		1,986		9,851
Tidewater, Inc.		564		1,241
Transocean Ltd. (a)		5,980		83,541
Unit Corp. (a)		892		23,192
Weatherford International PLC (a)		16,862		87,851
Willbros Group, Inc. (a)		832		2,521
				974,771
Equity Real Estate Investment Trusts (REITs) — 0.3%
Colony NorthStar, Inc., Class A		9,476		131,906
Gramercy Property Trust		2,467		64,981
MedEquities Realty Trust, Inc.		332		3,619
				200,506

Common Stocks	Shares		Value
Food & Staples Retailing — 0.6%
Andersons, Inc.		469	$	17,705
Casey’s General Stores, Inc.		668		76,753
Chefs’ Warehouse, Inc. (a)		303		5,060
Diplomat Pharmacy, Inc. (a)		794		10,910
Ingles Markets, Inc., Class A		228		10,317
Natural Grocers by Vitamin Cottage, Inc. (a)		158		1,997
Performance Food Group Co. (a)		614		13,600
PriceSmart, Inc.		347		29,391
Rite Aid Corp. (a)		17,773		99,884
Smart & Final Stores, Inc. (a)		332		4,764
SpartanNash Co.		640		24,230
Sprouts Farmers Market, Inc. (a)		2,280		42,568
Supervalu, Inc. (a)		4,769		18,694
U.S. Foods Holding Corp. (a)		794		21,597
United Natural Foods, Inc. (a)		875		39,988
Village Super Market, Inc., Class A		88		2,666
Weis Markets, Inc.		167		9,926
				430,050
Food Products — 1.6%
AdvancePierre Foods Holdings, Inc.		376		10,419
Alico, Inc.		65		1,752
Amplify Snack Brands, Inc. (a)(b)		443		4,266
B&G Foods, Inc.		1,151		51,047
Blue Buffalo Pet Products, Inc. (a)		1,070		25,947
Cal-Maine Foods, Inc. (b)		545		22,726
Calavo Growers, Inc.		249		13,770
Darling Ingredients, Inc. (a)		2,904		34,848
Dean Foods Co.		1,581		31,399
Farmer Bros Co. (a)		144		5,011
Flowers Foods, Inc.		3,001		60,350
Fresh Del Monte Produce, Inc.		554		31,716
Freshpet, Inc. (a)		351		3,914
Hain Celestial Group, Inc. (a)		1,762		69,705
Ingredion, Inc.		1,237		158,571
Inventure Foods, Inc. (a)		329		1,971
J&J Snack Foods Corp.		256		32,658
John B Sanfilippo & Son, Inc.		146		9,605
Lancaster Colony Corp.		318		41,674
Limoneira Co.		174		2,958
Omega Protein Corp. (a)		383		9,556
Pilgrim’s Pride Corp.		1,077		20,614
Pinnacle Foods, Inc.		1,996		106,167
Post Holdings, Inc. (a)		1,107		92,634
Sanderson Farms, Inc.		354		32,214
Seneca Foods Corp., Class A (a)		92		3,298
Snyders-Lance, Inc.		1,375		52,772
Tootsie Roll Industries, Inc.		285		10,673
TreeHouse Foods, Inc. (a)		950		72,086
WhiteWave Foods Co. (a)		2,993		164,795
				1,179,116
Gas Utilities — 1.0%
Atmos Energy Corp.		1,736		132,249
Chesapeake Utilities Corp.		276		18,050
Delta Natural Gas Co., Inc.		116		3,053
National Fuel Gas Co.		1,303		73,163
New Jersey Resources Corp.		1,496		56,399
Northwest Natural Gas Co.		470		27,683
ONE Gas, Inc.		898		58,029
South Jersey Industries, Inc.		1,364		45,012
Southwest Gas Corp.		815		65,665
Spire, Inc.		760		49,400
UGI Corp.		2,961		137,302
WGL Holdings, Inc.		866		70,960
				736,965

See Notes to Financial Statements.

56 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Small/Mid Cap Index Fund

Common Stocks	Shares		Value
Health Care Equipment & Supplies — 3.2%
Abaxis, Inc.		356	$	18,140
ABIOMED, Inc. (a)		687		73,076
Accuray, Inc. (a)		1,208		6,946
Alere, Inc. (a)		1,498		55,426
Align Technology, Inc. (a)		1,242		113,879
Analogic Corp.		203		15,763
AngioDynamics, Inc. (a)		405		6,518
Anika Therapeutics, Inc. (a)		240		12,130
AtriCure, Inc. (a)		525		8,542
Atrion Corp.		22		10,749
Avinger, Inc. (a)		446		1,160
AxoGen, Inc. (a)		372		4,055
Cantel Medical Corp.		610		47,220
Cardiovascular Systems, Inc. (a)		527		13,017
Cerus Corp. (a)		1,868		7,958
ConforMIS, Inc. (a)		592		4,914
CONMED Corp.		488		21,760
Cooper Cos., Inc.		818		151,011
CryoLife, Inc. (a)		537		10,203
Cutera, Inc. (a)		187		3,459
Cynosure, Inc., Class A (a)		419		22,375
DexCom, Inc. (a)		1,419		112,314
Endologix, Inc. (a)		1,433		9,830
Entellus Medical, Inc. (a)		145		2,481
Exactech, Inc. (a)		186		4,585
GenMark Diagnostics, Inc. (a)		791		9,595
Glaukos Corp. (a)		291		11,995
Globus Medical, Inc., Class A (a)		1,268		33,424
Haemonetics Corp. (a)		876		34,917
Halyard Health, Inc. (a)		855		32,892
Hill-Rom Holdings, Inc.		1,121		65,993
Hologic, Inc. (a)		4,816		195,192
ICU Medical, Inc. (a)		252		34,549
IDEXX Laboratories, Inc. (a)		1,530		187,165
Inogen, Inc. (a)		264		16,994
Insulet Corp. (a)		995		41,392
Integra LifeSciences Holdings Corp. (a)		1,030		42,982
Invacare Corp.		513		5,899
InVivo Therapeutics Holdings Corp. (a)		626		2,973
iRhythm Technologies, Inc. (a)		108		3,524
IRIDEX Corp. (a)		90		1,256
K2M Group Holdings, Inc. (a)		453		9,205
LeMaitre Vascular, Inc.		210		4,769
Masimo Corp. (a)		697		51,285
Meridian Bioscience, Inc.		641		8,397
Merit Medical Systems, Inc. (a)		700		17,780
Natus Medical, Inc. (a)		574		22,415
Neogen Corp. (a)		622		41,077
Nevro Corp. (a)		410		35,678
Novocure Ltd. (a)		686		4,356
NuVasive, Inc. (a)		847		59,942
NxStage Medical, Inc. (a)		1,177		31,661
Ocular Therapeutix, Inc. (a)		196		1,286
OraSure Technologies, Inc. (a)		989		8,723
Orthofix International NV (a)		300		10,782
Oxford Immunotec Global PLC (a)		367		4,958
Quidel Corp. (a)		480		9,110
ResMed, Inc.		2,400		162,096
Rockwell Medical, Inc. (a)(b)		691		4,015
RTI Surgical, Inc. (a)		1,125		3,656
Senseonics Holdings, Inc. (a)		343		954
Spectranetics Corp. (a)		758		19,594
STAAR Surgical Co. (a)		576		5,702
SurModics, Inc. (a)		218		5,276
Tactile Systems Technology, Inc. (a)		109		1,680
Tandem Diabetes Care, Inc. (a)		128		301
Teleflex, Inc.		753		126,301

Common Stocks	Shares		Value
Health Care Equipment & Supplies (continued)
TransEnterix, Inc. (a)		752	$	1,105
Utah Medical Products, Inc.		49		3,048
Vascular Solutions, Inc. (a)		273		15,274
Veracyte, Inc. (a)		229		1,690
West Pharmaceutical Services, Inc.		1,236		104,603
Wright Medical Group NV (a)		1,765		44,443
Zeltiq Aesthetics, Inc. (a)		637		28,245
				2,307,660
Health Care Providers & Services — 2.0%
AAC Holdings, Inc. (a)		267		2,123
Acadia Healthcare Co., Inc. (a)		1,275		48,922
Addus HomeCare Corp. (a)		105		3,586
Adeptus Health, Inc., Class A (a)		332		2,380
Air Methods Corp. (a)		584		20,849
Almost Family, Inc. (a)		189		8,930
Amedisys, Inc. (a)		483		22,131
American Renal Associates Holdings, Inc. (a)		137		2,633
AMN Healthcare Services, Inc. (a)		819		29,361
BioScrip, Inc. (a)		1,492		2,044
BioTelemetry, Inc. (a)		469		10,810
Brookdale Senior Living, Inc. (a)		3,183		47,649
Capital Senior Living Corp. (a)		425		7,085
Chemed Corp.		274		45,509
Civitas Solutions, Inc. (a)		275		5,032
Community Health Systems, Inc. (a)		1,957		12,525
Corvel Corp. (a)		187		7,171
Cross Country Healthcare, Inc. (a)		500		7,235
Ensign Group, Inc.		776		15,784
Envision Healthcare Corp. (a)		1,999		135,932
Genesis Healthcare, Inc. (a)		519		2,133
HealthEquity, Inc. (a)		771		35,659
HealthSouth Corp.		1,519		58,968
HMS Holdings Corp. (a)		1,516		27,531
Integer Holdings Corp. (a)		510		16,524
Kindred Healthcare, Inc.		1,506		10,015
Landauer, Inc.		173		8,884
LHC Group, Inc. (a)		253		12,683
LifePoint Health, Inc. (a)		643		38,162
Magellan Health, Inc. (a)		403		30,205
MEDNAX, Inc. (a)		1,573		107,515
Molina Healthcare, Inc. (a)		739		41,916
National Healthcare Corp.		188		14,072
National Research Corp.		114		1,989
Nobilis Health Corp. (a)		1,073		2,307
Owens & Minor, Inc.		1,079		38,715
Patterson Cos., Inc.		1,458		60,667
Penumbra, Inc. (a)		460		32,913
PharMerica Corp. (a)		514		12,747
Premier, Inc., Class A (a)		801		25,520
Providence Service Corp. (a)		233		9,005
Quorum Health Corp. (a)		580		5,098
RadNet, Inc. (a)		664		3,851
Select Medical Holdings Corp. (a)		1,851		23,045
Surgery Partners, Inc. (a)		331		6,123
Surgical Care Affiliates, Inc. (a)		464		26,216
Team Health Holdings, Inc. (a)		1,162		50,500
Teladoc, Inc. (a)		357		7,140
Tenet Healthcare Corp. (a)		1,418		24,943
Tivity Health, Inc. (a)		535		13,723
Triple-S Management Corp., Class B (a)		443		8,466
U.S. Physical Therapy, Inc.		200		14,030
Universal American Corp. (a)		745		7,405
VCA, Inc. (a)		1,342		121,585
WellCare Health Plans, Inc. (a)		787		114,540
				1,452,486

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 57

Schedule of Investments (continued) BlackRock Small/Mid Cap Index Fund

Common Stocks	Shares		Value
Health Care Technology — 0.4%
athenahealth, Inc. (a)		675	$	85,043
Castlight Health, Inc., Class B (a)		628		1,947
Computer Programs & Systems, Inc.		161		3,639
Cotiviti Holdings, Inc. (a)		243		8,228
Evolent Health, Inc., Class A (a)		243		4,423
HealthStream, Inc. (a)		432		9,919
Inovalon Holdings, Inc., Class A (a)		1,050		12,127
Medidata Solutions, Inc. (a)		944		46,766
NantHealth, Inc. (a)		95		773
Omnicell, Inc. (a)		622		22,330
Quality Systems, Inc. (a)		858		12,878
Tabula Rasa HealthCare, Inc. (a)		93		1,308
Veeva Systems, Inc., Class A (a)		1,654		70,014
Vocera Communications, Inc. (a)		391		8,113
				287,508
Hotels, Restaurants & Leisure — 2.6%
Aramark		4,180		141,451
Belmond Ltd., Class A (a)		1,458		20,193
Biglari Holdings, Inc. (a)		17		7,534
BJ’s Restaurants, Inc. (a)		381		13,545
Bloomin’ Brands, Inc.		1,805		30,884
Bob Evans Farms, Inc.		352		19,863
Bojangles’, Inc. (a)		156		3,089
Boyd Gaming Corp. (a)		1,335		27,127
Brinker International, Inc.		859		38,225
Buffalo Wild Wings, Inc. (a)		311		46,961
Caesars Acquisition Co., Class A (a)		810		12,150
Caesars Entertainment Corp. (a)		848		7,590
Carrols Restaurant Group, Inc. (a)		577		8,280
Century Casinos, Inc. (a)		411		2,898
Cheesecake Factory, Inc.		784		47,244
Choice Hotels International, Inc.		580		32,190
Churchill Downs, Inc.		232		33,257
Chuy’s Holdings, Inc. (a)		293		8,614
ClubCorp Holdings, Inc.		1,047		17,275
Cracker Barrel Old Country Store, Inc.		324		51,211
Dave & Buster’s Entertainment, Inc. (a)		655		35,671
Del Frisco’s Restaurant Group, Inc. (a)		424		7,420
Del Taco Restaurants, Inc. (a)		380		5,183
Denny’s Corp. (a)		1,224		14,896
DineEquity, Inc.		320		21,946
Domino’s Pizza, Inc.		862		150,453
Dunkin’ Brands Group, Inc.		1,585		82,214
El Pollo Loco Holdings, Inc. (a)		369		4,594
Eldorado Resorts, Inc. (a)		459		7,114
Empire Resorts, Inc. (a)		81		1,839
Extended Stay America, Inc.		1,337		21,673
Fiesta Restaurant Group, Inc. (a)		430		11,309
Fogo De Chao, Inc. (a)		126		1,739
Golden Entertainment, Inc.		211		2,325
Habit Restaurants, Inc., Class A (a)		315		4,568
Hyatt Hotels Corp., Class A (a)		582		31,841
ILG, Inc.		2,016		38,203
International Game Technology PLC		1,611		42,547
International Speedway Corp., Class A		382		14,000
Intrawest Resorts Holdings, Inc. (a)		274		5,647
Isle of Capri Casinos, Inc. (a)		453		10,786
J Alexander’s Holdings, Inc. (a)		266		2,660
Jack in the Box, Inc.		563		60,759
Jamba, Inc. (a)		88		801
Kona Grill, Inc. (a)		137		1,254
La Quinta Holdings, Inc. (a)		1,389		19,627
Lindblad Expeditions Holdings, Inc. (a)		281		2,526
Luby’s, Inc. (a)		415		1,523
Marcus Corp.		265		7,857
Marriott Vacations Worldwide Corp.		389		33,641

Common Stocks	Shares		Value
Hotels, Restaurants & Leisure (continued)
Monarch Casino & Resort, Inc. (a)		126	$	2,994
Nathan’s Famous, Inc. (a)		50		3,125
Panera Bread Co., Class A (a)		384		80,279
Papa John’s International, Inc.		473		40,309
Penn National Gaming, Inc. (a)		1,228		16,922
Pinnacle Entertainment, Inc. (a)		903		13,906
Planet Fitness, Inc., Class A		482		10,141
Popeyes Louisiana Kitchen, Inc. (a)		340		21,485
Potbelly Corp. (a)		395		5,135
Red Lion Hotels Corp. (a)		209		1,672
Red Robin Gourmet Burgers, Inc. (a)		212		10,081
Red Rock Resorts, Inc., Class A		548		12,867
Ruby Tuesday, Inc. (a)		1,089		2,134
Ruth’s Hospitality Group, Inc.		534		9,158
Ryman Hospitality Properties, Inc.		754		46,130
Scientific Games Corp., Class A (a)		862		14,654
SeaWorld Entertainment, Inc.		1,172		21,225
Shake Shack, Inc., Class A (a)		283		9,993
Six Flags Entertainment Corp.		1,223		72,866
Sonic Corp.		747		18,600
Speedway Motorsports, Inc.		164		3,524
Texas Roadhouse, Inc.		1,124		52,423
Vail Resorts, Inc.		668		114,589
Wendy’s Co.		3,654		49,439
Wingstop, Inc.		291		8,285
Zoe’s Kitchen, Inc. (a)		355		7,750
				1,865,883
Household Durables — 1.7%
Bassett Furniture Industries, Inc.		149		4,202
Beazer Homes USA, Inc. (a)		594		8,470
CalAtlantic Group, Inc.		1,294		45,122
Cavco Industries, Inc. (a)		137		13,460
Century Communities, Inc. (a)		226		5,141
CSS Industries, Inc.		123		3,028
Ethan Allen Interiors, Inc.		397		11,553
Flexsteel Industries, Inc.		103		5,239
GoPro, Inc., Class A (a)(b)		1,662		17,866
Green Brick Partners, Inc. (a)		347		3,331
Harman International Industries, Inc.		1,216		135,171
Helen of Troy Ltd. (a)		481		44,877
Hooker Furniture Corp.		175		5,810
Hovnanian Enterprises, Inc., Class A (a)		1,763		4,178
Installed Building Products, Inc. (a)		326		13,333
iRobot Corp. (a)		480		29,069
KB Home		1,466		24,013
La-Z-Boy, Inc.		846		24,196
Leggett & Platt, Inc.		2,282		108,897
Lennar Corp., Class A		3,122		139,397
Lennar Corp., Class B		169		6,077
LGI Homes, Inc. (a)		276		8,573
Libbey, Inc.		551		9,428
Lifetime Brands, Inc.		182		2,721
M/I Homes, Inc. (a)		406		10,207
MDC Holdings, Inc.		739		19,983
Meritage Homes Corp. (a)		667		24,512
NACCO Industries, Inc., Class A		62		4,573
New Home Co., Inc. (a)		238		2,485
NVR, Inc. (a)		60		111,480
PulteGroup, Inc.		5,956		128,114
Taylor Morrison Home Corp., Class A (a)		529		10,263
Tempur Sealy International, Inc. (a)		923		39,689
Toll Brothers, Inc. (a)		2,676		83,919
TopBuild Corp. (a)		722		26,793
TRI Pointe Group, Inc. (a)		2,690		33,006
Tupperware Brands Corp.		854		51,547
UCP, Inc., Class A (a)		159		1,805

See Notes to Financial Statements.

58 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Small/Mid Cap Index Fund

Common Stocks	Shares		Value
Household Durables (continued)
Universal Electronics, Inc. (a)		225	$	13,387
WCI Communities, Inc. (a)		402		9,407
William Lyon Homes, Class A (a)		365		6,442
ZAGG, Inc. (a)		434		2,908
				1,253,672
Household Products — 0.3%
Central Garden & Pet Co. (a)		170		5,584
Central Garden and Pet Co., Class A (a)		549		16,898
Energizer Holdings, Inc.		1,052		53,094
HRG Group, Inc. (a)		2,052		34,535
Oil-Dri Corp. of America		78		2,625
Orchids Paper Products Co.		173		4,725
Spectrum Brands Holdings, Inc.		425		56,691
WD-40 Co.		245		25,762
				199,914
Independent Power and Renewable Electricity Producers — 0.4%
Atlantic Power Corp. (a)		2,207		5,186
Atlantica Yield PLC		1,045		22,363
Calpine Corp. (a)		6,251		73,762
Dynegy, Inc. (a)		1,910		18,240
Genie Energy Ltd., Class B (a)		286		1,650
NRG Energy, Inc.		5,444		90,044
NRG Yield, Inc., Class A		633		10,286
NRG Yield, Inc., Class C		1,007		17,069
Ormat Technologies, Inc.		670		35,979
Pattern Energy Group, Inc.		1,150		22,701
TerraForm Global, Inc., Class A (a)		1,300		5,720
TerraForm Power, Inc., Class A (a)		1,556		18,470
Vivint Solar, Inc. (a)(b)		597		1,821
				323,291
Industrial Conglomerates — 0.3%
BWX Technologies, Inc.		1,606		66,633
Carlisle Cos., Inc.		1,076		117,402
Raven Industries, Inc.		577		14,454
Seaboard Corp. (a)		4		15,400
Standex International Corp.		223		19,446
				233,335
Insurance — 4.3%
Alleghany Corp. (a)		160		97,851
Allied World Assurance Co. Holdings AG		1,569		83,361
Ambac Financial Group, Inc. (a)		64		1,339
American Equity Investment Life Holding Co.		183		4,319
American Financial Group, Inc.		1,273		109,694
American National Insurance Co.		206		24,017
AMERISAFE, Inc.		335		21,122
AmTrust Financial Services, Inc.		1,713		45,206
Arch Capital Group Ltd. (a)		2,048		180,941
Argo Group International Holdings Ltd.		510		32,614
Arthur J Gallagher & Co.		3,033		163,266
Aspen Insurance Holdings Ltd.		1,151		64,916
Assurant, Inc.		1,036		100,627
Assured Guaranty Ltd.		2,425		94,357
Atlas Financial Holdings, Inc. (a)		266		4,522
Axis Capital Holdings Ltd.		1,686		107,921
Baldwin & Lyons, Inc., Class B		339		8,136
Blue Capital Reinsurance Holdings Ltd.		310		5,905
Brown & Brown, Inc.		2,016		84,934
Citizens, Inc. (a)		884		8,186
CNO Financial Group, Inc.		2,585		48,882
Crawford & Co., Class B		130		1,576
Donegal Group, Inc., Class A		476		7,840
eHealth, Inc. (a)		293		3,592
EMC Insurance Group, Inc.		308		8,978
Employers Holdings, Inc.		640		23,328

Common Stocks	Shares		Value
Insurance (continued)
Endurance Specialty Holdings Ltd.		1,056	$	97,881
Enstar Group Ltd. (a)		234		45,314
Erie Indemnity Co., Class A		417		46,750
Everest Re Group Ltd.		420		92,371
FBL Financial Group, Inc., Class A		247		17,241
Federated National Holding Co.		382		7,006
Fidelity & Guaranty Life		360		8,622
First American Financial Corp.		1,762		66,216
Genworth Financial, Inc., Class A (a)		6,227		20,923
Global Indemnity, Ltd. (a)		248		9,798
Greenlight Capital Re Ltd., Class A (a)		829		18,735
Hallmark Financial Services, Inc. (a)		565		6,181
Hanover Insurance Group, Inc.		818		68,663
HCI Group, Inc.		88		3,640
Heritage Insurance Holdings, Inc.		530		7,515
Hilltop Holdings, Inc.		1,302		35,649
Horace Mann Educators Corp.		882		36,471
Independence Holding Co.		313		6,229
Infinity Property & Casualty Corp.		257		22,320
Investors Title Co.		45		5,468
James River Group Holdings Ltd.		364		14,433
Kemper Corp.		824		35,597
Kinsale Capital Group, Inc.		168		4,931
Maiden Holdings Ltd.		1,008		17,892
MBIA, Inc. (a)		2,471		25,204
Mercury General Corp.		409		25,869
National General Holdings Corp.		976		23,902
National Western Life Group, Inc., Class A		51		14,951
Navigators Group, Inc.		418		23,471
Old Republic International Corp.		3,995		83,096
OneBeacon Insurance Group Ltd., Class A		669		10,858
Patriot National, Inc. (a)		142		608
Primerica, Inc.		768		57,946
ProAssurance Corp.		868		47,219
Reinsurance Group of America, Inc.		1,057		132,622
RenaissanceRe Holdings Ltd.		212		28,900
RLI Corp.		740		43,971
Safety Insurance Group, Inc.		207		14,842
Selective Insurance Group, Inc.		280		11,676
State Auto Financial Corp.		444		11,215
State National Cos., Inc.		725		9,976
Stewart Information Services Corp.		453		19,787
Third Point Reinsurance Ltd. (a)		1,418		16,236
Torchmark Corp.		2,091		153,772
Trupanion, Inc. (a)(b)		278		4,445
United Fire Group, Inc.		312		14,726
United Insurance Holdings Corp.		183		2,502
Universal Insurance Holdings, Inc.		625		16,344
Validus Holdings Ltd.		1,430		81,510
W.R. Berkley Corp.		1,767		118,760
White Mountains Insurance Group Ltd.		82		74,600
WMIH Corp. (a)		3,618		5,608
				3,107,892
Internet & Direct Marketing Retail — 0.4%
1-800-Flowers.com, Inc., Class A (a)		465		4,185
Blue Nile, Inc.		196		7,979
Duluth Holdings, Inc., Class B (a)		178		4,026
Etsy, Inc. (a)		1,827		23,039
FTD Cos., Inc. (a)		281		6,457
Groupon, Inc. (a)		6,462		22,294
HSN, Inc.		560		19,740
Lands’ End, Inc. (a)(b)		218		3,346
Liberty Expedia Holdings, Inc., Class A (a)		920		40,489
Liberty TripAdvisor Holdings, Inc., Series A (a)		1,275		22,886
Liberty Ventures (a)		1,372		59,888
Nutrisystem, Inc.		465		15,368

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 59

Schedule of Investments (continued) BlackRock Small/Mid Cap Index Fund

Common Stocks	Shares		Value
Internet & Direct Marketing Retail (continued)
Overstock.com, Inc. (a)		189	$	3,138
PetMed Express, Inc.		283		5,997
RetailMeNot, Inc. (a)		624		5,647
Shutterfly, Inc. (a)		614		31,517
Wayfair, Inc., Class A (a)(b)		554		23,024
				299,020
Internet Software & Services — 1.7%
Alarm.com Holdings, Inc. (a)		163		4,416
Amber Road, Inc. (a)		274		2,425
Angie’s List, Inc. (a)		595		3,731
Appfolio, Inc., Class A (a)		90		2,039
Apptio Inc., Class A (a)		104		1,439
Autobytel, Inc. (a)		57		784
Bankrate, Inc. (a)		847		9,232
Bazaarvoice, Inc. (a)		1,189		5,588
Benefitfocus, Inc. (a)		203		6,141
Blucora, Inc. (a)		720		10,872
Box, Inc., Class A (a)		825		14,083
Brightcove, Inc. (a)		506		3,643
Carbonite, Inc. (a)		295		5,089
Care.com, Inc. (a)		110		928
ChannelAdvisor Corp. (a)		381		5,277
Chegg, Inc. (a)		1,372		9,865
Cimpress NV (a)		433		36,541
CommerceHub, Inc., Series A (a)		217		3,188
CommerceHub, Inc., Series C (a)		445		6,488
ComScore, Inc. (a)		825		27,679
Cornerstone OnDemand, Inc. (a)		862		35,075
CoStar Group, Inc. (a)		552		111,559
Coupa Software, Inc. (a)		132		3,431
DHI Group, Inc. (a)		783		4,463
EarthLink Holdings Corp.		1,792		11,487
Endurance International Group Holdings, Inc. (a)		1,088		8,378
Envestnet, Inc. (a)		746		28,199
Five9, Inc. (a)		574		8,874
Global Eagle Entertainment, Inc. (a)		657		4,047
GoDaddy, Inc., Class A (a)		821		29,334
Gogo, Inc. (a)(b)		1,003		9,177
GrubHub, Inc. (a)		1,378		57,256
GTT Communications, Inc. (a)		432		12,204
Hortonworks, Inc. (a)		642		6,227
IAC/InterActiveCorp (a)		1,211		83,329
Instructure, Inc. (a)		197		4,295
j2 Global, Inc.		803		67,299
LendingClub Corp. (a)		5,798		35,774
Limelight Networks, Inc. (a)		832		1,822
Liquidity Services, Inc. (a)		470		4,583
LivePerson, Inc. (a)		978		7,139
LogMeIn, Inc.		890		96,209
Marchex, Inc., Class B (a)		675		1,829
Match Group, Inc. (a)(b)		552		9,588
MeetMe, Inc. (a)		817		4,020
MINDBODY, Inc., Class A (a)		224		5,454
New Relic, Inc. (a)		377		13,647
NIC, Inc.		1,093		26,341
Nutanix, Inc., Class A (a)(b)		282		8,536
Pandora Media, Inc. (a)		3,868		50,284
Perficient, Inc. (a)		604		10,709
Q2 Holdings, Inc. (a)		422		13,398
QuinStreet, Inc. (a)		483		1,691
Quotient Technology, Inc. (a)		1,075		11,449
RealNetworks, Inc. (a)		359		1,921
Reis, Inc.		139		2,780
Rightside Group Ltd. (a)		146		1,232
Shutterstock, Inc. (a)		310		16,678
SPS Commerce, Inc. (a)		293		20,217

Common Stocks	Shares		Value
Internet Software & Services (continued)
Stamps.com, Inc. (a)		277	$	33,669
TechTarget, Inc. (a)		128		1,128
The Trade Desk, Inc., Class A (a)		83		2,462
TrueCar, Inc. (a)		910		11,966
Twilio, Inc. (a)		355		10,235
Web.com Group, Inc. (a)		697		13,208
WebMD Health Corp. (a)		643		32,079
Xactly Corp. (a)		368		4,471
XO Group, Inc. (a)		459		8,643
Yelp, Inc. (a)		1,174		49,050
Zillow Group, Inc., Class A (a)		897		32,274
Zillow Group, Inc., Class C (a)		1,764		62,410
				1,250,978
IT Services — 2.5%
Acxiom Corp. (a)		1,340		34,974
ALJ Regional Holdings, Inc. (a)		284		1,133
Black Knight Financial Services, Inc., Class A (a)		390		14,216
Blackhawk Network Holdings, Inc. (a)		966		34,486
Booz Allen Hamilton Holding Corp.		1,972		66,693
Broadridge Financial Solutions, Inc.		2,035		135,389
CACI International, Inc., Class A (a)		415		50,962
Cardtronics PLC, Class A (a)		775		42,299
Cass Information Systems, Inc.		179		11,773
Convergys Corp.		1,542		38,272
CoreLogic, Inc. (a)		1,547		54,563
CSG Systems International, Inc.		588		28,459
CSRA, Inc.		2,836		87,973
DST Systems, Inc.		574		66,096
EPAM Systems, Inc. (a)		839		53,998
Euronet Worldwide, Inc. (a)		866		61,936
EVERTEC, Inc.		1,150		19,608
ExlService Holdings, Inc. (a)		594		27,294
Forrester Research, Inc.		157		6,406
Gartner, Inc. (a)		1,381		137,216
Genpact Ltd. (a)		2,615		64,538
Hackett Group, Inc.		419		6,809
Information Services Group, Inc. (a)		536		1,769
Jack Henry & Associates, Inc.		1,360		122,101
Leidos Holdings, Inc.		2,288		110,556
Lionbridge Technologies, Inc. (a)		868		4,965
Mantech International Corp., Class A		398		15,498
MAXIMUS, Inc.		1,117		61,591
MoneyGram International, Inc. (a)		477		6,058
NCI, Inc., Class A		134		1,702
PFSweb, Inc. (a)		317		2,381
Planet Payment, Inc. (a)		708		2,988
Sabre Corp.		3,585		87,832
Science Applications International Corp.		732		59,599
ServiceSource International, Inc. (a)		847		4,489
Square, Inc., Class A (a)		900		13,158
Syntel, Inc.		579		12,194
TeleTech Holdings, Inc.		298		8,821
Teradata Corp. (a)		2,248		66,001
Travelport Worldwide Ltd.		2,102		30,185
Unisys Corp. (a)		845		10,858
VeriFone Systems, Inc. (a)		1,905		34,614
Virtusa Corp. (a)		452		11,517
WEX, Inc. (a)		668		76,372
				1,790,342
Leisure Products — 0.4%
Arctic Cat, Inc. (a)		222		4,174
Brunswick Corp.		1,563		93,561
Callaway Golf Co.		1,657		18,774
Escalade, Inc.		129		1,703
JAKKS Pacific, Inc. (a)		105		535

See Notes to Financial Statements.

60 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Small/Mid Cap Index Fund

Common Stocks	Shares		Value
Leisure Products (continued)
Johnson Outdoors, Inc., Class A		75	$	2,586
Malibu Boats, Inc. (a)		259		4,807
Marine Products Corp.		150		1,711
MCBC Holdings, Inc.		133		1,855
Nautilus, Inc. (a)		534		9,265
Polaris Industries, Inc.		1,038		87,265
Sturm Ruger & Co., Inc.		332		17,513
Vista Outdoor, Inc. (a)		1,055		30,395
				274,144
Life Sciences Tools & Services — 1.3%
Accelerate Diagnostics, Inc. (a)		414		8,673
Albany Molecular Research, Inc. (a)		395		7,268
Bio-Rad Laboratories, Inc., Class A (a)		361		68,619
Bio-Techne Corp.		640		65,120
Bruker Corp.		1,861		44,162
Cambrex Corp. (a)		591		30,998
Charles River Laboratories International, Inc. (a)		812		65,610
ChromaDex Corp. (a)		675		1,876
Enzo Biochem, Inc. (a)		698		4,663
Fluidigm Corp. (a)		200		1,266
INC Research Holdings, Inc., Class A (a)		720		38,160
Luminex Corp. (a)		656		13,264
Medpace Holdings, Inc. (a)		132		4,605
NanoString Technologies, Inc. (a)		247		4,456
NeoGenomics, Inc. (a)		780		6,287
Pacific Biosciences of California, Inc. (a)		1,505		7,254
PAREXEL International Corp. (a)		910		64,510
Patheon NV (a)		546		15,665
PerkinElmer, Inc.		1,874		99,678
PRA Health Sciences, Inc. (a)		422		24,725
QIAGEN NV (a)		3,802		110,182
Quintiles IMS Holdings, Inc. (a)		2,427		190,495
VWR Corp. (a)		1,417		36,714
				914,250
Machinery — 4.3%
Actuant Corp., Class A		1,011		26,438
AGCO Corp.		1,201		75,423
Alamo Group, Inc.		155		11,723
Albany International Corp., Class A		497		23,583
Altra Industrial Motion Corp.		401		14,957
American Railcar Industries, Inc.		143		6,369
Ampco-Pittsburgh Corp.		119		1,791
Astec Industries, Inc.		332		23,233
Barnes Group, Inc.		856		41,199
Blue Bird Corp. (a)		107		1,803
Briggs & Stratton Corp.		687		14,880
Chart Industries, Inc. (a)		536		20,791
CIRCOR International, Inc.		293		18,248
CLARCOR, Inc.		817		67,656
Colfax Corp. (a)		1,699		66,261
Columbus McKinnon Corp.		332		9,127
Crane Co.		840		60,514
DMC Global, Inc.		204		3,254
Donaldson Co., Inc.		2,183		92,232
Douglas Dynamics, Inc.		361		12,202
Energy Recovery, Inc. (a)		658		6,738
EnPro Industries, Inc.		386		26,213
ESCO Technologies, Inc.		420		24,444
ExOne Co. (a)		461		4,541
Federal Signal Corp.		988		15,354
Flowserve Corp.		2,242		110,217
FreightCar America, Inc.		204		2,948
Gencor Industries, Inc. (a)		109		1,706
Global Brass & Copper Holdings, Inc.		341		11,304
Gorman-Rupp Co.		275		8,927

Common Stocks	Shares		Value
Machinery (continued)
Graco, Inc.		952	$	85,290
Graham Corp.		141		3,133
Greenbrier Cos., Inc.		474		20,737
Hardinge, Inc.		149		1,579
Harsco Corp. (a)		1,414		18,877
Hurco Cos., Inc.		97		2,968
Hyster-Yale Materials Handling, Inc.		160		9,843
IDEX Corp.		1,307		117,839
ITT, Inc.		1,574		64,329
John Bean Technologies Corp.		495		42,743
Joy Global, Inc.		1,713		48,170
Kadant, Inc.		177		10,903
Kennametal, Inc.		1,361		48,642
Lincoln Electric Holdings, Inc.		1,056		88,039
Lindsay Corp.		184		13,863
Lydall, Inc. (a)		294		17,934
Manitowoc Co., Inc. (a)		3,340		22,812
Manitowoc Foodservice, Inc. (a)		1,898		36,404
Meritor, Inc. (a)		1,448		20,895
Middleby Corp. (a)		975		130,825
Milacron Holdings Corp. (a)		266		4,400
Miller Industries, Inc.		135		3,578
Mueller Industries, Inc.		964		38,811
Mueller Water Products, Inc., Series A		2,665		35,871
Navistar International Corp. (a)		859		23,425
NN, Inc.		474		9,172
Nordson Corp.		981		111,373
Omega Flex, Inc.		34		1,613
Oshkosh Corp.		1,253		87,246
Proto Labs, Inc. (a)		431		22,627
RBC Bearings, Inc. (a)		386		35,755
Rexnord Corp. (a)		1,504		33,223
Snap-on, Inc.		995		180,622
SPX Corp. (a)		820		20,459
SPX FLOW, Inc. (a)		606		21,143
Sun Hydraulics Corp.		371		14,536
Supreme Industries, Inc., Class A		240		4,406
Tennant Co.		305		21,121
Terex Corp.		1,830		58,194
Timken Co.		1,209		53,680
Titan International, Inc.		766		10,180
Toro Co.		1,838		108,313
TriMas Corp. (a)		722		15,379
Trinity Industries, Inc.		2,584		71,163
Valmont Industries, Inc.		380		54,720
Wabash National Corp.		1,143		20,174
WABCO Holdings, Inc. (a)		908		98,999
Wabtec Corp.		1,474		127,707
Watts Water Technologies, Inc., Class A		475		31,350
Woodward, Inc.		894		62,258
Xylem, Inc.		3,080		151,875
				3,143,274
Marine — 0.1%
Costamare, Inc.		423		2,246
Kirby Corp. (a)		912		58,778
Matson, Inc.		761		27,137
Scorpio Bulkers, Inc. (a)		851		6,085
				94,246
Media — 1.7%
AMC Entertainment Holdings, Inc., Class A		476		16,065
AMC Networks, Inc., Class A (a)		1,045		59,931
Cable One, Inc.		80		50,590
Central European Media Enterprises Ltd., Class A (a)		1,186		3,084
Cinemark Holdings, Inc.		1,809		76,882
Clear Channel Outdoor Holdings, Inc., Class A		637		3,153

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 61

Schedule of Investments (continued) BlackRock Small/Mid Cap Index Fund

Common Stocks	Shares		Value
Media (continued)
Daily Journal Corp. (a)		20	$	4,328
Entercom Communications Corp., Class A		388		5,510
Entravision Communications Corp., Class A		979		5,287
Eros International PLC (a)		486		5,783
EW Scripps Co., Class A (a)		1,050		20,454
Gannett Co., Inc.		2,113		20,327
Global Sources Ltd. (a)		197		1,812
Gray Television, Inc. (a)		1,095		12,976
IMAX Corp. (a)		1,010		32,926
Interpublic Group of Cos., Inc.		6,935		163,181
John Wiley & Sons, Inc., Class A		775		42,702
Liberty Braves Group, Class A (a)		150		2,993
Liberty Braves Group, Class C (a)		512		10,230
Liberty Media Corp. — Liberty Formula One, Class A (a)		387		11,215
Liberty Media Corp. — Liberty Formula One, Class C (a)		767		22,044
Lions Gate Entertainment Corp., Class A		1,125		32,366
Lions Gate Entertainment Corp., Class B (a)		1,767		47,338
Live Nation Entertainment, Inc. (a)		2,245		64,252
Madison Square Garden Co., Class A (a)		318		55,863
MDC Partners, Inc., Class A		746		4,774
Meredith Corp.		616		37,761
MSG Networks, Inc., Class A (a)		1,014		23,525
National CineMedia, Inc.		1,018		14,924
New Media Investment Group, Inc.		842		12,832
New York Times Co., Class A		2,352		31,752
Nexstar Broadcasting Group, Inc., Class A		757		49,508
Radio One, Inc., Class D (a)		587		1,761
Reading International, Inc., Class A (a)		226		3,695
Regal Entertainment Group, Class A		1,395		31,611
Saga Communications, Inc., Class A		61		3,068
Scholastic Corp.		484		22,158
Sinclair Broadcast Group, Inc., Class A		1,158		39,082
TEGNA, Inc.		3,774		86,462
Time, Inc.		1,855		35,709
TiVo Corp. (a)		2,019		38,159
Townsquare Media, Inc. (a)		141		1,506
Tribune Media Co., Class A		1,355		39,078
TRONC, Inc. (a)		405		5,370
World Wrestling Entertainment, Inc., Class A		608		11,905
				1,265,932
Metals & Mining — 1.4%
AK Steel Holding Corp. (a)		5,416		43,761
Allegheny Technologies, Inc.		1,863		40,483
Carpenter Technology Corp.		817		32,696
Century Aluminum Co. (a)		873		13,444
Cliffs Natural Resources, Inc. (a)		3,795		33,282
Coeur Mining, Inc. (a)		3,096		36,068
Commercial Metals Co.		1,966		40,165
Compass Minerals International, Inc.		576		48,154
Ferroglobe PLC		1,945		11,015
Gold Resource Corp.		914		4,917
Handy & Harman Ltd. (a)		75		2,115
Haynes International, Inc.		218		8,962
Hecla Mining Co.		6,496		41,834
Kaiser Aluminum Corp.		304		23,852
Materion Corp.		319		12,537
Olympic Steel, Inc.		112		2,520
Real Industry, Inc. (a)		473		2,554
Reliance Steel & Aluminum Co.		1,197		95,341
Royal Gold, Inc.		1,123		81,047
Ryerson Holding Corp. (a)		207		2,194
Schnitzer Steel Industries, Inc., Class A		433		10,240
Steel Dynamics, Inc.		4,038		136,525
Stillwater Mining Co. (a)		2,112		35,904
SunCoke Energy, Inc. (a)		1,068		9,420
Tahoe Resources, Inc.		5,154		47,108

Common Stocks	Shares		Value
Metals & Mining (continued)
TimkenSteel Corp. (a)		668	$	11,263
U.S. Silica Holdings, Inc.		1,271		75,167
United States Steel Corp.		2,649		86,649
Worthington Industries, Inc.		770		36,798
				1,026,015
Multi-Utilities — 0.6%
Alliant Energy Corp.		3,909		147,174
Avista Corp.		1,077		41,615
Black Hills Corp.		898		56,170
MDU Resources Group, Inc.		3,342		98,088
NorthWestern Corp.		829		47,344
Vectren Corp.		1,437		78,877
				469,268
Multiline Retail — 0.3%
Big Lots, Inc.		769		38,450
Burlington Stores, Inc. (a)		1,213		101,528
Dillard’s, Inc., Class A		312		17,609
FirstCash, Inc.		831		35,484
Fred’s, Inc., Class A		485		7,066
JC Penney Co., Inc. (a)		5,250		34,912
Ollie’s Bargain Outlet Holdings, Inc. (a)		330		10,082
Sears Holdings Corp. (a)(b)		172		1,201
Tuesday Morning Corp. (a)		754		3,242
				249,574
Oil & Gas Exploration & Production — 0.1%
Carrizo Oil & Gas, Inc. (a)		1,073		37,941
Oil, Gas & Consumable Fuels — 3.2%
Abraxas Petroleum Corp. (a)		2,886		7,128
Adams Resources & Energy, Inc.		43		1,666
Alon USA Energy, Inc.		498		5,607
Ardmore Shipping Corp.		703		5,167
Bill Barrett Corp. (a)		1,169		7,657
California Resources Corp. (a)		552		11,824
Callon Petroleum Co. (a)		3,243		49,553
Chesapeake Energy Corp. (a)		10,626		68,538
Clayton Williams Energy, Inc. (a)		105		15,272
Clean Energy Fuels Corp. (a)		1,286		3,331
Cobalt International Energy, Inc. (a)		6,815		6,684
CONSOL Energy, Inc.		3,962		67,116
Contango Oil & Gas Co. (a)		408		3,305
CVR Energy, Inc.		244		5,419
Delek U.S. Holdings, Inc.		1,071		23,990
Denbury Resources, Inc. (a)		6,260		20,971
DHT Holdings, Inc.		1,466		6,876
Diamondback Energy, Inc. (a)		1,569		165,012
Dorian LPG Ltd. (a)		487		5,508
Eclipse Resources Corp. (a)		1,131		2,782
Energen Corp. (a)		1,702		91,721
EP Energy Corp., Class A (a)		661		3,464
Evolution Petroleum Corp.		605		5,264
EXCO Resources, Inc. (a)		2,654		1,776
Frontline Ltd.		1,263		8,765
GasLog Ltd.		855		14,278
Gener8 Maritime, Inc. (a)		694		3,505
Golar LNG Ltd.		1,634		42,255
Green Plains, Inc.		586		13,185
Gulfport Energy Corp. (a)		2,794		58,395
HollyFrontier Corp.		2,812		81,464
International Seaways, Inc. (a)		244		4,241
Isramco, Inc. (a)		23		2,880
Jones Energy, Inc., Class A (a)		1,146		5,100
Kosmos Energy Ltd. (a)		2,960		19,358
Laredo Petroleum, Inc. (a)		2,550		34,552
Matador Resources Co. (a)		1,573		41,417

See Notes to Financial Statements.

62 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Small/Mid Cap Index Fund

Common Stocks	Shares		Value
Oil, Gas & Consumable Fuels (continued)
Murphy Oil Corp.		2,860	$	82,683
Murphy USA, Inc. (a)		644		41,023
Navios Maritime Acquisition Corp.		1,649		3,067
Newfield Exploration Co. (a)		3,461		138,717
Nordic American Tankers Ltd.		1,626		14,049
Northern Oil and Gas, Inc. (a)		1,126		4,054
Oasis Petroleum, Inc. (a)		4,048		57,239
Overseas Shipholding Group, Inc., Class A		473		2,322
Pacific Ethanol, Inc. (a)		404		2,868
Panhandle Oil and Gas, Inc., Class A		321		7,062
Par Pacific Holdings, Inc. (a)		536		7,788
Parsley Energy, Inc., Class A (a)		3,229		113,725
PBF Energy, Inc., Class A		1,902		44,107
PDC Energy, Inc. (a)		983		72,683
QEP Resources, Inc. (a)		4,201		73,265
Renewable Energy Group, Inc. (a)		549		4,776
REX American Resources Corp. (a)		100		8,303
Rice Energy, Inc. (a)		1,170		23,201
Ring Energy, Inc. (a)		785		10,362
RSP Permian, Inc. (a)		1,717		73,076
Sanchez Energy Corp. (a)		514		6,816
Scorpio Tankers, Inc.		2,752		10,540
SemGroup Corp., Class A		1,137		45,139
Ship Finance International Ltd.		981		14,715
SM Energy Co.		1,700		51,867
Southwestern Energy Co. (a)		8,535		76,900
Synergy Resources Corp. (a)		3,332		28,689
Targa Resources Corp.		2,845		163,929
Teekay Corp.		953		9,578
Teekay Tankers Ltd., Class A		2,075		5,084
W&T Offshore, Inc. (a)		1,101		3,193
Western Refining, Inc.		1,410		49,364
Westmoreland Coal Co. (a)		280		5,082
Whiting Petroleum Corp. (a)		3,502		38,837
World Fuel Services Corp.		1,200		53,376
WPX Energy, Inc. (a)		6,679		93,038
				2,355,543
Paper & Forest Products — 0.3%
Boise Cascade Co. (a)		644		15,971
Clearwater Paper Corp. (a)		275		17,298
Deltic Timber Corp.		174		13,219
Domtar Corp.		1,093		47,753
KapStone Paper and Packaging Corp.		1,509		36,186
Louisiana-Pacific Corp. (a)		2,477		47,385
Neenah Paper, Inc.		295		24,234
PH Glatfelter Co.		701		17,111
Schweitzer-Mauduit International, Inc.		528		23,406
				242,563
Personal Products — 0.6%
Avon Products, Inc. (a)		7,521		44,148
Coty, Inc., Class A		7,871		151,123
Edgewell Personal Care Co. (a)		1,014		79,944
elf Beauty, Inc. (a)		144		3,594
Herbalife Ltd. (a)		1,292		72,610
Inter Parfums, Inc.		290		9,889
Lifevantage Corp. (a)		93		671
Medifast, Inc.		186		7,844
Natural Health Trends Corp.		87		2,182
Nature’s Sunshine Products, Inc.		97		1,237
Nu Skin Enterprises, Inc., Class A		945		49,027
Nutraceutical International Corp.		110		3,685
Revlon, Inc., Class A (a)		218		7,292
Synutra International, Inc. (a)		335		1,943
USANA Health Sciences, Inc. (a)		180		11,214
				446,403

Common Stocks	Shares		Value
Pharmaceuticals — 0.8%
AcelRx Pharmaceuticals, Inc. (a)		373	$	988
Aclaris Therapeutics, Inc. (a)		171		4,537
Aerie Pharmaceuticals, Inc. (a)		511		22,433
Agile Therapeutics, Inc. (a)		252		580
Akorn, Inc. (a)		1,561		29,815
Amphastar Pharmaceuticals, Inc. (a)		609		9,592
ANI Pharmaceuticals, Inc. (a)		144		8,705
Aratana Therapeutics, Inc. (a)		598		4,778
Axsome Therapeutics, Inc. (a)		257		1,259
Bio-Path Holdings, Inc. (a)		1,942		1,845
Catalent, Inc. (a)		1,715		45,893
Cempra, Inc. (a)		759		2,391
Clearside Biomedical, Inc. (a)		89		663
Collegium Pharmaceutical, Inc. (a)		307		5,164
Corcept Therapeutics, Inc. (a)		1,342		9,542
Depomed, Inc. (a)		998		18,054
Dermira, Inc. (a)		405		11,923
Durect Corp. (a)		2,155		2,284
Egalet Corp. (a)		661		3,232
Endo International PLC (a)		3,590		43,942
Endocyte, Inc. (a)		262		579
Flex Pharma, Inc. (a)		116		506
Heska Corp. (a)		113		8,997
Horizon Pharma PLC (a)		2,785		45,590
Impax Laboratories, Inc. (a)		1,202		15,806
Intersect ENT, Inc. (a)		474		6,399
Intra-Cellular Therapies, Inc. (a)		616		8,895
Lannett Co., Inc. (a)		506		10,196
Lipocine, Inc. (a)(b)		114		413
Medicines Co. (a)		1,154		41,602
MyoKardia, Inc. (a)		236		2,643
Nektar Therapeutics (a)		2,614		31,656
Neos Therapeutics, Inc. (a)		95		556
Novan, Inc. (a)		69		280
Omeros Corp. (a)(b)		706		6,841
Pacira Pharmaceuticals, Inc. (a)		639		24,570
Paratek Pharmaceuticals, Inc. (a)		312		4,711
Phibro Animal Health Corp., Class A		431		11,508
Prestige Brands Holdings, Inc. (a)		911		48,064
Reata Pharmaceuticals, Inc. (a)		126		3,137
Revance Therapeutics, Inc. (a)		298		5,960
Sciclone Pharmaceuticals, Inc. (a)		890		9,033
Sucampo Pharmaceuticals, Inc., Class A (a)		340		3,791
Supernus Pharmaceuticals, Inc. (a)		826		22,343
Teligent, Inc. (a)		615		4,305
TherapeuticsMD, Inc. (a)(b)		2,442		14,188
Theravance Biopharma, Inc. (a)		651		19,504
Titan Pharmaceuticals, Inc. (a)		221		961
WaVe Life Sciences Ltd. (a)		120		3,450
Zogenix, Inc. (a)		364		2,930
				587,034
Producer Durables: Miscellaneous — 0.0%
Actua Corp. (a)		628		8,980
PROS Holdings, Inc. (a)		447		10,004
				18,984
Professional Services — 1.1%
Acacia Research Corp. (a)		169		989
Advisory Board Co. (a)		711		32,350
Barrett Business Services, Inc.		131		7,874
CBIZ, Inc. (a)		926		12,131
CEB, Inc.		572		43,729
CRA International, Inc.		114		3,788
Dun & Bradstreet Corp.		633		77,618
Exponent, Inc.		466		27,051
Franklin Covey Co. (a)		153		2,678

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 63

Schedule of Investments (continued) BlackRock Small/Mid Cap Index Fund

Common Stocks	Shares		Value
Professional Services (continued)
FTI Consulting, Inc. (a)		745	$	31,394
GP Strategies Corp. (a)		175		4,498
Heidrick & Struggles International, Inc.		284		6,347
Hill International, Inc. (a)		674		3,640
Huron Consulting Group, Inc. (a)		356		16,127
ICF International, Inc. (a)		297		15,444
Insperity, Inc.		276		19,734
Kelly Services, Inc., Class A		477		10,680
Kforce, Inc.		420		9,660
Korn/Ferry International		991		28,789
ManpowerGroup, Inc.		1,155		110,256
Mistras Group, Inc. (a)		268		6,185
Navigant Consulting, Inc. (a)		847		20,921
On Assignment, Inc. (a)		874		39,575
Paylocity Holding Corp. (a)		363		11,202
Resources Connection, Inc.		602		10,053
Robert Half International, Inc.		2,200		103,532
RPX Corp. (a)		915		9,937
TransUnion (a)		939		29,607
TriNet Group, Inc. (a)		758		19,276
TrueBlue, Inc. (a)		690		17,078
WageWorks, Inc. (a)		624		45,022
				777,165
Real Estate Investment Trusts (REITs) — 9.6%
Acadia Realty Trust		1,340		42,666
AG Mortgage Investment Trust, Inc.		405		7,096
AGNC Investment Corp.		5,774		107,801
Agree Realty Corp.		439		20,589
Alexander’s, Inc.		40		16,912
Alexandria Real Estate Equities, Inc.		1,335		147,945
American Assets Trust, Inc.		703		30,180
American Campus Communities, Inc.		2,270		110,367
American Homes 4 Rent, Class A		2,897		64,545
Anworth Mortgage Asset Corp.		1,381		7,085
Apartment Investment & Management Co., Class A		2,729		120,267
Apollo Commercial Real Estate Finance, Inc.		1,471		25,610
Apple Hospitality REIT, Inc.		2,917		58,398
Ares Commercial Real Estate Corp.		395		5,325
Armada Hoffler Properties, Inc.		602		8,296
ARMOUR Residential REIT, Inc.		646		13,579
Ashford Hospitality Prime, Inc.		370		4,973
Ashford Hospitality Trust, Inc.		1,377		10,465
Bluerock Residential Growth REIT, Inc.		501		6,553
Brandywine Realty Trust		3,033		48,831
Brixmor Property Group, Inc.		3,369		81,294
Camden Property Trust		1,479		123,600
Capstead Mortgage Corp.		1,468		15,664
Care Capital Properties, Inc.		1,508		37,263
Catchmark Timber Trust, Inc., Class A		801		8,242
CBL & Associates Properties, Inc.		3,068		33,288
Cedar Realty Trust, Inc.		1,172		7,044
Chatham Lodging Trust		552		11,117
Chesapeake Lodging Trust		1,069		27,366
Chimera Investment Corp.		3,375		59,501
City Office REIT, Inc.		381		4,797
Colony Starwood Homes		1,133		35,633
Columbia Property Trust, Inc.		2,197		48,883
Communications Sales & Leasing, Inc.		2,084		54,767
Community Healthcare Trust, Inc.		217		4,681
CoreCivic, Inc.		1,931		56,076
CorEnergy Infrastructure Trust, Inc.		230		8,257
Coresite Realty Corp.		578		49,783
Corporate Office Properties Trust		1,656		52,694
Cousins Properties, Inc.		5,870		49,895
CubeSmart		3,113		78,230
CyrusOne, Inc.		1,232		59,333

Common Stocks	Shares		Value
Real Estate Investment Trusts (REITs) (continued)
CYS Investments, Inc.		2,915	$	22,067
DCT Industrial Trust, Inc.		1,593		71,191
DDR Corp.		5,296		80,393
DiamondRock Hospitality Co.		3,507		39,524
Douglas Emmett, Inc.		2,454		92,859
Duke Realty Corp.		6,014		146,321
DuPont Fabros Technology, Inc.		1,314		62,389
Dynex Capital, Inc.		687		4,589
Easterly Government Properties, Inc.		458		9,023
EastGroup Properties, Inc.		300		21,231
Education Realty Trust, Inc.		1,270		51,067
Empire State Realty Trust, Inc., Class A		2,141		43,869
EPR Properties		1,099		81,293
Equity Commonwealth (a)		2,123		65,473
Equity Lifestyle Properties, Inc.		1,333		98,562
Equity One, Inc.		1,627		50,746
Farmland Partners, Inc.		230		2,613
FelCor Lodging Trust, Inc.		2,461		18,950
First Industrial Realty Trust, Inc.		2,031		52,501
First Potomac Realty Trust		1,126		11,530
Forest City Realty Trust, Inc., Class A		3,987		90,266
Four Corners Property Trust, Inc.		1,055		23,010
Franklin Street Properties Corp.		1,883		24,008
Gaming and Leisure Properties, Inc.		3,295		104,221
Geo Group, Inc.		1,284		53,312
Getty Realty Corp.		457		11,786
Gladstone Commercial Corp.		414		8,131
Global Net Lease, Inc.		3,530		27,357
Great Ajax Corp.		220		2,862
Healthcare Realty Trust, Inc.		1,993		60,209
Healthcare Trust of America, Inc., Class A		2,388		69,419
Hersha Hospitality Trust		734		14,673
Highwoods Properties, Inc.		1,680		86,369
Hospitality Properties Trust		1,984		61,762
Hudson Pacific Properties, Inc.		1,973		69,864
Independence Realty Trust, Inc.		1,144		10,559
InfraREIT, Inc.		694		11,437
Invesco Mortgage Capital, Inc.		2,060		30,014
Investors Real Estate Trust		2,021		13,015
iStar, Inc. (a)		1,185		13,296
Kilroy Realty Corp.		1,668		124,850
Kite Realty Group Trust		1,357		32,595
Lamar Advertising Co., Class A		1,430		107,994
LaSalle Hotel Properties		1,845		55,664
Lexington Realty Trust		4,026		43,159
Liberty Property Trust		2,555		98,086
Life Storage, Inc.		805		65,567
LTC Properties, Inc.		677		31,596
Mack-Cali Realty Corp.		1,585		44,412
Medical Properties Trust, Inc.		5,169		65,905
MFA Financial, Inc.		6,481		51,135
Mid-America Apartment Communities, Inc.		1,951		185,247
Monmouth Real Estate Investment Corp.		1,216		17,754
Monogram Residential Trust, Inc.		3,298		33,541
MTGE Investment Corp.		664		10,558
National Health Investors, Inc.		650		48,093
National Retail Properties, Inc.		2,485		108,346
National Storage Affiliates Trust		688		15,308
New Residential Investment Corp.		4,187		63,433
New Senior Investment Group, Inc.		1,408		14,094
New York Mortgage Trust, Inc.		1,603		10,275
NexPoint Residential Trust, Inc.		284		6,563
NorthStar Realty Europe Corp.		1,014		12,178
Omega Healthcare Investors, Inc.		3,215		103,105
One Liberty Properties, Inc.		219		5,072
Orchid Island Capital, Inc.		442		5,229
Outfront Media, Inc.		2,422		66,435

See Notes to Financial Statements.

64 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Small/Mid Cap Index Fund

Common Stocks	Shares		Value
Real Estate Investment Trusts (REITs) (continued)
Owens Realty Mortgage, Inc.		163	$	2,761
Paramount Group, Inc.		3,215		53,658
Parkway, Inc. (a)		717		15,265
Pebblebrook Hotel Trust		1,323		39,571
Pennsylvania Real Estate Investment Trust		1,110		19,880
PennyMac Mortgage Investment Trust (c)		983		16,662
Physicians Realty Trust		2,355		43,685
Piedmont Office Realty Trust, Inc., Class A		2,546		55,299
Potlatch Corp.		688		28,346
Preferred Apartment Communities, Inc., Class A		485		6,567
PS Business Parks, Inc.		345		38,654
QTS Realty Trust, Inc., Class A		820		41,320
RAIT Financial Trust		701		2,425
Ramco-Gershenson Properties Trust		1,439		23,398
Rayonier, Inc.		2,177		60,716
Redwood Trust, Inc.		1,428		22,134
Regency Centers Corp.		1,793		125,026
Resource Capital Corp.		497		4,085
Retail Opportunity Investments Corp.		1,552		32,902
Retail Properties of America, Inc., Class A		4,205		62,949
Rexford Industrial Realty, Inc.		1,077		24,459
RLJ Lodging Trust		2,125		49,321
Sabra Health Care REIT, Inc.		1,143		29,032
Saul Centers, Inc.		177		11,238
Select Income REIT		1,135		28,386
Senior Housing Properties Trust		3,420		65,151
Seritage Growth Properties, Class A (b)		378		15,422
Silver Bay Realty Trust Corp.		585		9,857
Spirit Realty Capital, Inc.		8,360		87,947
STAG Industrial, Inc.		1,349		31,216
Starwood Property Trust, Inc.		4,342		96,653
STORE Capital Corp.		2,621		62,013
Summit Hotel Properties, Inc.		1,420		22,479
Sun Communities, Inc.		1,168		91,992
Sunstone Hotel Investors, Inc.		3,820		56,230
Tanger Factory Outlet Centers, Inc.		1,642		56,140
Taubman Centers, Inc.		1,045		74,028
Terreno Realty Corp.		756		20,556
Tier REIT, Inc.		787		14,331
Two Harbors Investment Corp.		6,207		54,435
UMH Properties, Inc.		433		6,343
Universal Health Realty Income Trust		12		745
Urban Edge Properties		1,473		41,200
Urstadt Biddle Properties, Inc., Class A		194		4,355
Washington Prime Group, Inc.		3,467		33,457
Washington Real Estate Investment Trust		1,308		41,137
Weingarten Realty Investors		2,031		72,364
Western Asset Mortgage Capital Corp.		590		5,953
Whitestone REIT		550		7,650
WP Carey, Inc.		1,806		111,864
Xenia Hotels & Resorts, Inc.		1,720		31,562
				6,955,665
Real Estate Management & Development — 0.5%
Alexander & Baldwin, Inc.		800		35,616
Altisource Portfolio Solutions SA (a)		175		4,987
Altisource Residential Corp.		957		11,618
AV Homes, Inc. (a)		191		3,371
CareTrust REIT, Inc.		994		15,069
Consolidated-Tomoka Land Co.		60		3,300
Forestar Group, Inc. (a)		523		6,825
FRP Holdings, Inc. (a)		88		3,432
Global Medical REIT, Inc.		162		1,434
Howard Hughes Corp. (a)		618		65,885
Jones Lang LaSalle, Inc.		793		81,703
Kennedy-Wilson Holdings, Inc.		1,431		29,264
RE/MAX Holdings, Inc., Class A		282		15,806

Common Stocks	Shares		Value
Real Estate Management & Development (continued)
Realogy Holdings Corp.		2,549	$	66,044
RMR Group, Inc., Class A		112		5,354
St. Joe Co. (a)		729		12,284
Stratus Properties, Inc. (a)		102		3,121
Tejon Ranch Co. (a)		228		5,388
Trinity Place Holdings, Inc. (a)		309		2,494
				372,995
Road & Rail — 0.8%
AMERCO, Inc.		107		40,304
ArcBest Corp.		406		12,830
Avis Budget Group, Inc. (a)		1,353		50,359
Celadon Group, Inc.		464		3,526
Covenant Transportation Group, Inc., Class A (a)		166		3,574
Genesee & Wyoming, Inc., Class A (a)		1,042		78,525
Heartland Express, Inc.		726		14,956
Hertz Global Holdings, Inc. (a)		1,261		26,443
Knight Transportation, Inc.		1,130		37,742
Landstar System, Inc.		727		61,504
Marten Transport Ltd.		375		8,569
Old Dominion Freight Line, Inc. (a)		1,155		101,963
Roadrunner Transportation Systems, Inc. (a)		540		4,277
Ryder System, Inc.		927		71,935
Saia, Inc. (a)		450		21,623
Swift Transportation Co. (a)		1,294		29,542
Universal Logistics Holdings, Inc.		113		1,633
USA Truck, Inc. (a)		61		515
Werner Enterprises, Inc.		795		22,339
YRC Worldwide, Inc. (a)		587		8,764
				600,923
Semiconductors & Semiconductor Equipment — 2.3%
Acacia Communications, Inc. (a)		81		4,712
Advanced Energy Industries, Inc. (a)		673		39,599
Advanced Micro Devices, Inc. (a)		12,868		133,441
Alpha & Omega Semiconductor Ltd. (a)		336		6,838
Ambarella, Inc. (a)		555		27,534
Amkor Technology, Inc. (a)		1,794		16,881
Axcelis Technologies, Inc. (a)		428		6,506
Brooks Automation, Inc.		1,187		20,677
Cabot Microelectronics Corp.		429		28,962
Cavium, Inc. (a)		1,109		73,427
CEVA, Inc. (a)		334		11,807
Cirrus Logic, Inc. (a)		1,072		64,663
Cohu, Inc.		419		5,531
Cree, Inc. (a)		1,713		47,244
Cypress Semiconductor Corp.		5,381		63,496
Diodes, Inc. (a)		613		15,258
DSP Group, Inc. (a)		294		3,190
Entegris, Inc. (a)		2,420		45,375
Exar Corp. (a)		588		6,027
First Solar, Inc. (a)		1,316		41,046
FormFactor, Inc. (a)		1,127		14,031
GigPeak, Inc. (a)		634		1,636
Impinj, Inc. (a)		94		3,310
Inphi Corp. (a)		694		31,799
Integrated Device Technology, Inc. (a)		2,336		58,844
Intersil Corp., Class A		2,287		51,297
IXYS Corp.		425		5,142
Kopin Corp. (a)		1,064		3,394
Lattice Semiconductor Corp. (a)		1,946		13,992
MACOM Technology Solutions Holdings, Inc. (a)		547		26,016
Marvell Technology Group Ltd.		6,920		102,900
MaxLinear, Inc., Class A (a)		970		24,813
Microsemi Corp. (a)		1,944		103,324
MKS Instruments, Inc.		908		59,837
Monolithic Power Systems, Inc.		662		57,753

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 65

Schedule of Investments (continued) BlackRock Small/Mid Cap Index Fund

Common Stocks	Shares		Value
Semiconductors & Semiconductor Equipment (continued)
Nanometrics, Inc. (a)		398	$	10,233
NeoPhotonics Corp. (a)		445		4,873
NVE Corp.		82		6,362
ON Semiconductor Corp. (a)		7,121		94,852
PDF Solutions, Inc. (a)		451		10,152
Photronics, Inc. (a)		1,079		12,408
Power Integrations, Inc.		468		33,228
Rambus, Inc. (a)		1,970		25,571
Rudolph Technologies, Inc. (a)		498		11,429
Semtech Corp. (a)		1,109		36,541
Sigma Designs, Inc. (a)		534		3,257
Silicon Laboratories, Inc. (a)		704		45,901
SunPower Corp. (a)		836		5,551
Teradyne, Inc.		3,502		99,387
Tessera Holding Corp.		841		38,013
Ultra Clean Holdings, Inc. (a)		546		6,841
Ultratech, Inc. (a)		373		9,668
Veeco Instruments, Inc. (a)		700		18,025
Xcerra Corp. (a)		954		7,231
				1,699,825
Software — 3.5%
A10 Networks, Inc. (a)		650		5,180
ACI Worldwide, Inc. (a)		1,970		38,218
Allscripts Healthcare Solutions, Inc. (a)		3,341		39,123
American Software, Inc., Class A		327		3,430
ANSYS, Inc. (a)		1,517		141,475
Aspen Technology, Inc. (a)		1,336		70,955
Atlassian Corp. PLC, Class A (a)		448		12,378
Barracuda Networks, Inc. (a)		399		9,373
Blackbaud, Inc.		815		53,472
Blackline, Inc. (a)		155		4,213
Bottomline Technologies, Inc. (a)		650		16,718
BroadSoft, Inc. (a)		517		21,714
Cadence Design Systems, Inc. (a)		5,161		134,341
Callidus Software, Inc. (a)		1,075		19,834
CommVault Systems, Inc. (a)		665		32,651
Digimarc Corp. (a)		155		4,092
Ebix, Inc.		442		24,531
Ellie Mae, Inc. (a)		554		45,838
EnerNOC, Inc. (a)		468		2,668
ePlus, Inc. (a)		102		11,429
Everbridge, Inc. (a)		132		2,438
Exa Corp. (a)		206		3,193
Fair Isaac Corp.		532		65,596
FireEye, Inc. (a)		2,658		36,016
Fortinet, Inc. (a)		2,506		83,350
Gigamon, Inc. (a)		570		18,895
Globant SA (a)		417		13,824
Glu Mobile, Inc. (a)		1,837		4,225
Guidance Software, Inc. (a)		393		2,853
Guidewire Software, Inc. (a)		1,260		65,936
HubSpot, Inc. (a)		501		25,701
Imperva, Inc. (a)		505		21,084
Jive Software, Inc. (a)		1,151		4,374
Manhattan Associates, Inc. (a)		1,251		64,126
Mentor Graphics Corp.		1,835		67,730
MicroStrategy, Inc., Class A (a)		163		32,812
Mitek Systems, Inc. (a)		515		3,399
MobileIron, Inc. (a)		750		3,263
Model N, Inc. (a)		344		3,027
Monotype Imaging Holdings, Inc.		660		14,454
Netscout Systems, Inc. (a)		1,532		51,016
Nuance Communications, Inc. (a)		3,814		60,490
Park City Group, Inc. (a)		160		2,024
Paycom Software, Inc. (a)		756		34,957
Pegasystems, Inc.		659		25,569

Common Stocks	Shares		Value
Software (continued)
Progress Software Corp.		823	$	23,060
Proofpoint, Inc. (a)		701		56,192
PTC, Inc. (a)		1,968		103,458
QAD, Inc., Class A		124		3,584
Qualys, Inc. (a)		442		15,868
Rapid7, Inc. (a)		353		4,402
RealPage, Inc. (a)		942		28,825
Rosetta Stone, Inc. (a)		347		3,054
Rubicon Project, Inc. (a)		550		4,658
Sapiens International Corp. NV		381		5,090
SecureWorks Corp., Class A (a)		142		1,468
Silver Spring Networks, Inc. (a)		660		8,435
Splunk, Inc. (a)		2,262		130,879
SS&C Technologies Holdings, Inc.		2,913		93,595
Synchronoss Technologies, Inc. (a)		742		28,582
Synopsys, Inc. (a)		2,606		163,891
Tableau Software, Inc., Class A (a)		950		45,448
Take-Two Interactive Software, Inc. (a)		1,425		76,451
Tangoe, Inc. (a)		377		2,745
TeleNav, Inc. (a)		508		4,521
Tyler Technologies, Inc. (a)		571		83,377
Ultimate Software Group, Inc. (a)		474		91,795
Varonis Systems, Inc. (a)		172		5,143
VASCO Data Security International, Inc. (a)		544		8,269
Verint Systems, Inc. (a)		1,072		40,039
VirnetX Holding Corp. (a)		876		2,278
Workiva, Inc. (a)		333		4,196
Zendesk, Inc. (a)		1,431		34,244
Zix Corp. (a)		922		4,398
Zynga, Inc., Class A (a)		12,920		32,558
				2,512,488
Specialty Retail — 2.2%
Aaron’s, Inc.		1,138		35,210
Abercrombie & Fitch Co., Class A		1,142		13,259
America’s Car-Mart, Inc. (a)		110		4,614
American Eagle Outfitters, Inc.		2,880		43,517
Asbury Automotive Group, Inc. (a)		350		22,960
Ascena Retail Group, Inc. (a)		2,795		13,444
AutoNation, Inc. (a)		1,131		60,079
Barnes & Noble Education, Inc. (a)		611		6,140
Barnes & Noble, Inc.		1,055		10,761
Big 5 Sporting Goods Corp.		288		4,435
BMC Stock Holdings, Inc. (a)		886		16,568
Boot Barn Holdings, Inc. (a)		421		4,568
Buckle, Inc.		522		11,040
Build-A-Bear Workshop, Inc., Class A (a)		212		2,544
Cabela’s, Inc. (a)		879		49,127
Caleres, Inc.		747		22,970
Cato Corp., Class A		418		10,613
Chico’s FAS, Inc.		2,258		30,460
Children’s Place, Inc.		322		31,234
Citi Trends, Inc.		225		3,611
Conn’s, Inc. (a)		363		3,830
Container Store Group, Inc. (a)		305		1,485
CST Brands, Inc.		1,296		62,441
Destination XL Group, Inc. (a)		666		2,364
Dick’s Sporting Goods, Inc.		1,510		77,916
DSW, Inc., Class A		1,173		24,821
Express, Inc. (a)		1,251		13,298
Finish Line, Inc., Class A		690		11,868
Five Below, Inc. (a)		936		37,300
Foot Locker, Inc.		2,328		159,561
Francesca’s Holdings Corp. (a)		640		11,162
GameStop Corp., Class A		1,770		43,347
Genesco, Inc. (a)		359		21,612
GNC Holdings, Inc., Class A		1,167		10,351

See Notes to Financial Statements.

66 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Small/Mid Cap Index Fund

Common Stocks	Shares		Value
Specialty Retail (continued)
Group 1 Automotive, Inc.		362	$	29,246
Guess?, Inc.		1,036		13,230
Haverty Furniture Cos., Inc.		339		7,390
Hibbett Sports, Inc. (a)		374		12,342
Kirkland’s, Inc. (a)		239		3,317
Lithia Motors, Inc., Class A		413		42,589
Lumber Liquidators Holdings, Inc. (a)		501		7,846
MarineMax, Inc. (a)		451		9,674
Michaels Cos., Inc. (a)		1,637		32,200
Monro Muffler Brake, Inc.		568		34,023
Office Depot, Inc.		9,584		42,649
Party City Holdco, Inc. (a)		395		5,708
Penske Automotive Group, Inc.		675		36,693
Pier 1 Imports, Inc.		1,345		9,778
Rent-A-Center, Inc.		727		6,514
RH (a)(b)		696		18,806
Sally Beauty Holdings, Inc. (a)		2,545		60,571
Sears Hometown and Outlet Stores, Inc. (a)		269		982
Select Comfort Corp. (a)		745		15,034
Shoe Carnival, Inc.		195		4,986
Sonic Automotive, Inc., Class A		480		11,232
Sportsman’s Warehouse Holdings, Inc. (a)		468		3,482
Stage Stores, Inc.		294		823
Staples, Inc.		11,127		102,368
Stein Mart, Inc.		575		2,104
Systemax, Inc.		197		1,671
Tailored Brands, Inc.		869		18,466
Tile Shop Holdings, Inc. (a)		548		10,467
Tilly’s, Inc., Class A (a)		187		2,506
Urban Outfitters, Inc. (a)		1,555		41,270
Vitamin Shoppe, Inc. (a)		424		9,180
West Marine, Inc. (a)		309		2,864
Williams-Sonoma, Inc.		1,527		73,617
Winmark Corp.		45		4,984
Zumiez, Inc. (a)		257		5,153
				1,562,275
Technology Hardware, Storage & Peripherals — 0.4%
3D Systems Corp. (a)		1,832		30,210
Avid Technology, Inc. (a)		628		3,360
CPI Card Group, Inc.		229		1,042
Cray, Inc. (a)		656		11,250
Diebold Nixdorf, Inc.		1,211		32,939
Eastman Kodak Co. (a)		270		3,618
Electronics for Imaging, Inc. (a)		807		36,266
Immersion Corp. (a)		421		4,332
NCR Corp. (a)		2,131		91,676
Nimble Storage, Inc. (a)		1,061		9,093
Pure Storage, Inc., Class A (a)		1,130		12,848
Stratasys Ltd. (a)		801		15,796
Super Micro Computer, Inc. (a)		679		17,959
Synaptics, Inc. (a)		618		34,843
USA Technologies, Inc. (a)		508		2,134
				307,366
Textiles, Apparel & Luxury Goods — 0.7%
Carter’s, Inc.		867		72,611
Columbia Sportswear Co.		483		26,261
Crocs, Inc. (a)		1,319		9,629
Culp, Inc.		147		4,733
Deckers Outdoor Corp. (a)		564		32,486
Delta Apparel, Inc. (a)		133		2,492
Fossil Group, Inc. (a)		748		19,126
G-III Apparel Group Ltd. (a)		762		20,010
Iconix Brand Group, Inc. (a)		796		8,191
Kate Spade & Co. (a)		2,205		40,815
lululemon athletica, Inc. (a)		1,673		112,944

Common Stocks	Shares		Value
Textiles, Apparel & Luxury Goods (continued)
Movado Group, Inc.		283	$	7,683
Oxford Industries, Inc.		248		13,645
Perry Ellis International, Inc. (a)		234		5,520
Sequential Brands Group, Inc. (a)		637		2,949
Skechers U.S.A., Inc., Class A (a)		2,272		57,073
Steven Madden Ltd. (a)		1,050		36,960
Superior Uniform Group, Inc.		125		2,128
Unifi, Inc. (a)		229		6,158
Vera Bradley, Inc. (a)		263		3,014
Vince Holding Corp. (a)		233		711
Wolverine World Wide, Inc.		1,700		39,933
				525,072
Thrifts & Mortgage Finance — 1.3%
Astoria Financial Corp.		1,646		31,126
Banc of California, Inc.		837		13,225
Bank Mutual Corp.		813		7,764
BankFinancial Corp.		225		3,031
Bear State Financial, Inc.		299		3,011
Beneficial Bancorp, Inc.		1,235		22,045
Berkshire Hills Bancorp, Inc.		554		19,612
BofI Holding, Inc. (a)		1,045		30,827
Brookline Bancorp, Inc.		1,145		18,034
BSB Bancorp, Inc. (a)		121		3,358
Capitol Federal Financial, Inc.		2,225		34,376
Charter Financial Corp.		214		3,676
Clifton Bancorp, Inc.		298		4,625
Dime Community Bancshares, Inc.		540		11,556
ESSA Bancorp, Inc.		159		2,517
Essent Group Ltd. (a)		1,429		49,400
EverBank Financial Corp.		1,795		34,877
Federal Agricultural Mortgage Corp., Class C		170		9,462
First Defiance Financial Corp.		157		7,608
Flagstar Bancorp, Inc. (a)		384		9,896
Flushing Financial Corp.		460		12,512
Hingham Institution for Savings		20		3,868
Home Bancorp, Inc.		91		3,237
HomeStreet, Inc. (a)		399		10,454
Impac Mortgage Holdings, Inc. (a)		184		2,543
Kearny Financial Corp.		1,449		22,097
Ladder Capital Corp.		871		11,811
LendingTree, Inc. (a)		111		12,421
Meridian Bancorp, Inc.		786		14,816
Meta Financial Group, Inc.		157		13,792
MGIC Investment Corp. (a)		6,053		64,464
Nationstar Mortgage Holdings, Inc. (a)		525		9,523
NMI Holdings, Inc., Class A (a)		1,022		11,038
Northfield Bancorp, Inc.		679		12,256
Northwest Bancshares, Inc.		1,757		29,992
OceanFirst Financial Corp.		446		12,671
Ocwen Financial Corp. (a)		1,677		8,838
Oritani Financial Corp.		640		11,104
People’s United Financial, Inc.		5,372		100,725
Provident Financial Holdings, Inc.		127		2,353
Provident Financial Services, Inc.		1,122		29,699
Radian Group, Inc.		3,819		70,270
SI Financial Group, Inc.		203		3,055
Southern Missouri Bancorp, Inc.		97		3,265
Territorial Bancorp, Inc.		106		3,357
TFS Financial Corp.		937		16,388
TrustCo Bank Corp. NY		1,487		12,491
United Community Financial Corp.		726		6,178
United Financial Bancorp, Inc.		839		15,144
Walker & Dunlop, Inc. (a)		464		14,574
Washington Federal, Inc.		1,575		51,739
Waterstone Financial, Inc.		437		7,910
Western New England Bancorp, Inc.		317		3,075
WSFS Financial Corp.		531		24,054
				951,740

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 67

Schedule of Investments (continued) BlackRock Small/Mid Cap Index Fund

Common Stocks	Shares		Value
Tobacco — 0.1%
Alliance One International, Inc. (a)		176	$	2,931
Turning Point Brands, Inc. (a)		122		1,620
Universal Corp.		379		25,772
Vector Group Ltd.		1,573		34,700
				65,023
Trading Companies & Distributors — 1.4%
Aceto Corp.		491		9,373
Air Lease Corp.		1,675		60,937
Aircastle Ltd.		857		19,111
Applied Industrial Technologies, Inc.		623		37,660
Beacon Roofing Supply, Inc. (a)		1,023		44,777
CAI International, Inc. (a)		303		4,890
DXP Enterprises, Inc. (a)		276		10,438
GATX Corp.		693		40,069
GMS, Inc. (a)		117		3,491
H&E Equipment Services, Inc.		527		13,628
HD Supply Holdings, Inc. (a)		3,476		147,035
Herc Holdings, Inc. (a)		430		21,358
Kaman Corp.		505		25,518
Lawson Products, Inc. (a)		117		3,025
MRC Global, Inc. (a)		1,624		33,373
MSC Industrial Direct Co., Inc., Class A		760		77,634
Neff Corp., Class A (a)		140		2,198
NOW, Inc. (a)		1,851		39,352
Rush Enterprises, Inc., Class A (a)		515		16,866
Rush Enterprises, Inc., Class B (a)		112		3,444
SiteOne Landscape Supply, Inc. (a)		198		7,607
Textainer Group Holdings Ltd.		414		5,962
Titan Machinery, Inc. (a)		258		3,563
Triton International, Ltd.		691		16,819
United Rentals, Inc. (a)		1,523		192,675
Univar, Inc. (a)		749		22,335
Veritiv Corp. (a)		152		8,520
Watsco, Inc.		446		68,122
WESCO International, Inc. (a)		843		59,600
Willis Lease Finance Corp. (a)		56		1,427
				1,000,807
Transportation Infrastructure — 0.2%
Macquarie Infrastructure Corp.		1,301		97,562
Wesco Aircraft Holdings, Inc. (a)		910		13,787
				111,349

Common Stocks	Shares		Value
Water Utilities — 0.3%
American States Water Co.		671	$	29,376
Aqua America, Inc.		3,054		92,872
AquaVenture Holdings, Ltd. (a)		106		2,044
Artesian Resources Corp., Class A		106		3,289
California Water Service Group		863		29,773
Connecticut Water Service, Inc.		163		8,809
Consolidated Water Co. Ltd.		249		2,565
Middlesex Water Co.		252		9,528
SJW Corp.		265		13,276
York Water Co.		232		8,306
				199,838
Wireless Telecommunication Services — 0.2%
Boingo Wireless, Inc. (a)		629		7,359
NII Holdings, Inc. (a)		1,367		3,862
RingCentral, Inc., Class��A (a)		1,017		23,747
Shenandoah Telecommunications Co.		866		23,599
Spok Holdings, Inc.		348		7,151
Telephone & Data Systems, Inc.		1,663		50,971
United States Cellular Corp. (a)		243		10,835
				127,524
Total Common Stocks — 98.5%				71,578,655
Rights — 0.0%
Biotechnology — 0.0%
Dyax Corp. (a)		502		1,150
Total Long-Term Investments (Cost — $66,335,754) — 98.5%				71,579,805
Short-Term Securities
BlackRock Liquidity Funds, T-Fund, Institutional Class, 0.40% (c)(d)		3,704,020		3,704,020
SL Liquidity Series, LLC, Money Market Series, 0.94% (c)(d)(e)		283,228		283,285
Total Short-Term Securities (Cost — $3,987,267) — 5.5%				3,987,305
Total Investments (Cost — $70,323,021) — 104.0%				75,567,110
Liabilities in Excess of Other Assets — (4.0)%				(2,874,137	)
Net Assets — 100.0%			$	72,692,973

Notes to Schedule of Investments

(a) Non-income producing security.

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

(c) During the six months ended January 31, 2017, 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 July 31, 2016		Shares Purchased			Shares Sold			Shares Held at January 31, 2017		Value at January 31, 2017		Income			Net Realized Gain1		Change in Unrealized Appreciation
BlackRock Liquidity Funds, T-Fund, Institutional Class		—	$	3,704,020	2		—			3,704,020	$	3,704,020	$	2,217		$	11		—
BlackRock Premier Government Institutional Fund	$	2,735,369		—			(2,735,369	)3		—		—		980			—		—
PennyMac Mortgage Investment Trust		521		462			—			983		16,662		775			—	$	724
SL Liquidity Series, LLC, Money Market Series		136,471		146,757			—		$	283,228		283,285		10,300	4		10		38
Total											$	4,003,967	$	14,272		$	21	$	762
1   Includes net capital gain distributions.
2   Represents net shares purchased.
3   Represents net shares sold.
4   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.

See Notes to Financial Statements.

68 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Small/Mid Cap Index Fund

(d) Current yield as of period end.

(e) Security was purchased with the cash collateral from loaned 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 rating 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
Contracts Long		Issue	Expiration		Notional Value		Unrealized Appreciation (Depreciation)
	9	Russell 2000 Mini Index		March 2017	$	611,775	$	(1,865	)
	2	S&P MidCap 400 E-Mini Index		March 2017	$	337,100		2,284
	Total						$	419

Derivative Financial Instruments Outstanding as of Period End

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

Assets — Derivative Financial Instruments		Commodity Contracts		Credit Contracts		Equity Contracts			Foreign Currency Exchange Contracts		Interest Rate Contracts		Other Contracts		Total
Futures contracts	Net unrealized appreciation		—		—	$	2,284			—		—		—	$	2,284
Liabilities — Derivative Financial Instruments
Futures contracts	Net unrealized depreciation		—		—	$	1,865			—		—		—	$	1,865
For the six months ended January 31, 2017, the effect of derivative financial instruments in the Statements of Operations was as follows:
Net Realized Gain (Loss) from:
Futures contracts			—		—	$	194,522			—				—	$	194,522
Net Change in Unrealized Appreciation (Depreciation) on:
Futures contracts			—		—	$	(2,629	)		—		—		—	$	(2,629	)

Average Quarterly Balances of Outstanding Derivative Financial Instruments

Futures contracts:
Average notional value of contracts — long	$	938,318

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 Investments1:
Common Stocks	$	71,578,655		—		—	$	71,578,655
Rights		—		—	$	1,150		1,150
Short-Term Securities		3,704,020		—		—		3,704,020
Subtotal	$	75,282,675		—	$	1,150	$	75,283,825
Investments valued at NAV2								283,285
Total							$	75,567,110

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 69

Schedule of Investments (concluded) BlackRock Small/Mid Cap Index Fund

	Level 1			Level 2		Level 3		Total
Derivative Financial Instruments 3
Assets:
Equity contracts	$	2,284			—		—	$	2,284
Liabilities:
Equity contracts		(1,865	)		—		—		(1,865	)
Total	$	419			—		—	$	419
1   See above Schedule of Investments for values in each sector.
2   As of January 31, 2017, certain of the Fund’s investments were fair valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.
3   Derivative financial instruments are futures contracts, which are valued at the unrealized appreciation (depreciation) on the instrument.

During the six months ended January 31, 2017, there were no transfers between levels.

See Notes to Financial Statements.

70 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments January 31, 2017 (Unaudited) BlackRock Total Stock Market Index Fund (Percentages shown are based on Net Assets)

Common Stocks	Shares		Value
Aerospace & Defense — 2.0%
AAR Corp.		576	$	18,426
Aerojet Rocketdyne Holdings, Inc. (a)		1,016		18,400
Aerovironment, Inc. (a)		274		7,176
Arconic, Inc.		9,777		222,818
Astronics Corp. (a)		299		9,810
B/E Aerospace, Inc.		2,279		140,090
Boeing Co.		13,654		2,231,337
Cubic Corp.		548		26,057
Curtiss-Wright Corp.		963		94,432
DigitalGlobe, Inc. (a)		1,557		43,674
Ducommun, Inc. (a)		229		6,785
Engility Holdings, Inc. (a)		406		11,908
Esterline Technologies Corp. (a)		696		59,612
General Dynamics Corp.		5,526		1,000,648
HEICO Corp.		382		29,395
HEICO Corp., Class A		1,542		102,235
Hexcel Corp.		2,007		103,059
Huntington Ingalls Industries, Inc.		999		193,766
KEYW Holding Corp. (a)		934		9,349
KLX, Inc. (a)		1,279		62,658
Kratos Defense & Security Solutions, Inc. (a)		883		7,276
L3 Technologies, Inc.		1,914		303,733
Lockheed Martin Corp.		5,802		1,458,217
Moog, Inc., Class A (a)		1,056		69,559
National Presto Industries, Inc.		82		8,725
Northrop Grumman Corp.		3,756		860,425
Orbital ATK, Inc.		1,348		117,209
Raytheon Co.		6,719		968,611
Rockwell Collins, Inc.		2,879		261,298
Sparton Corp. (a)		231		5,008
Spirit Aerosystems Holdings, Inc., Class A		2,664		159,973
Taser International, Inc. (a)		1,444		36,071
Teledyne Technologies, Inc. (a)		688		84,535
Textron, Inc.		6,038		286,020
TransDigm Group, Inc.		1,107		239,555
Triumph Group, Inc.		1,299		34,748
United Technologies Corp.		17,732		1,944,668
Vectrus, Inc. (a)		359		8,092
				11,245,358
Air Freight & Logistics — 0.6%
Air Transport Services Group, Inc. (a)		816		13,162
Atlas Air Worldwide Holdings, Inc. (a)		475		25,056
C.H. Robinson Worldwide, Inc.		3,114		236,851
Echo Global Logistics, Inc. (a)		550		13,063
Expeditors International of Washington, Inc.		3,924		204,362
FedEx Corp.		5,682		1,074,523
Forward Air Corp.		560		26,986
Hub Group, Inc., Class A (a)		632		28,029
Park-Ohio Holdings Corp.		132		5,920
Radiant Logistics, Inc. (a)		1,065		3,909
United Parcel Service, Inc., Class B		15,836		1,728,183
XPO Logistics, Inc. (a)		2,256		100,933
				3,460,977
Airlines — 0.6%
Alaska Air Group, Inc.		2,678		251,250
Allegiant Travel Co.		307		52,804
American Airlines Group, Inc.		12,046		533,035
Copa Holdings SA, Class A		806		78,577
Delta Air Lines, Inc.		17,521		827,692
Hawaiian Holdings, Inc. (a)		1,184		60,325
JetBlue Airways Corp. (a)		7,418		145,467
SkyWest, Inc.		966		34,196
Southwest Airlines Co.		14,520		759,541
Spirit Airlines, Inc. (a)		1,641		88,680
United Continental Holdings, Inc. (a)		7,170		505,270
				3,336,837

Common Stocks	Shares		Value
Auto Components — 0.5%
Adient PLC (a)		2,281	$	144,821
Allison Transmission Holdings, Inc.		3,103		108,543
American Axle & Manufacturing Holdings, Inc. (a)		1,972		40,229
BorgWarner, Inc.		4,943		201,823
Cooper Tire & Rubber Co.		1,248		45,240
Cooper-Standard Holding, Inc. (a)		383		40,322
Dana, Inc.		3,424		68,959
Delphi Automotive PLC		6,171		432,340
Dorman Products, Inc. (a)		620		42,792
Fox Factory Holding Corp. (a)		691		17,897
Gentex Corp.		6,260		130,771
Gentherm, Inc. (a)		724		25,630
Goodyear Tire & Rubber Co.		6,066		196,478
Horizon Global Corp. (a)		519		10,157
Johnson Controls International PLC		20,805		915,004
LCI Industries		539		59,155
Lear Corp.		1,684		239,280
Metaldyne Performance Group, Inc.		260		6,136
Modine Manufacturing Co. (a)		686		9,330
Motorcar Parts of America, Inc. (a)		249		6,531
Spartan Motors, Inc.		620		4,898
Standard Motor Products, Inc.		386		19,250
Stoneridge, Inc. (a)		452		7,417
Strattec Security Corp.		195		6,006
Superior Industries International, Inc.		483		11,133
Tenneco, Inc. (a)		1,503		101,377
Tower International, Inc.		322		8,436
Visteon Corp. (a)		826		73,985
				2,973,940
Automobiles — 0.6%
Ford Motor Co.		88,306		1,091,462
General Motors Co.		31,797		1,164,088
Harley-Davidson, Inc.		4,062		231,696
Tesla Motors, Inc. (a)		2,848		717,497
Thor Industries, Inc.		1,051		108,779
Winnebago Industries, Inc.		515		16,171
				3,329,693
Banks — 6.6%
1st Source Corp.		180		8,120
ACNB Corp.		387		11,610
Allegiance Bancshares, Inc. (a)		408		13,240
American National Bankshares, Inc.		234		8,307
Ameris Bancorp		882		39,778
Ames National Corp.		233		7,526
Arrow Financial Corp.		430		15,179
Associated Banc-Corp		3,670		92,851
Bancfirst Corp.		95		8,963
Banco Latinoamericano de Comercio Exterior SA		516		14,035
BancorpSouth, Inc.		2,073		61,568
Bank of America Corp.		235,130		5,323,343
Bank of Hawaii Corp.		882		75,773
Bank of the Ozarks, Inc.		1,875		102,881
BankUnited, Inc.		2,121		81,022
Banner Corp.		592		33,223
Bar Harbor Bankshares		1,443		62,525
BB&T Corp.		18,323		846,339
Blue Hills Bancorp, Inc.		840		15,960
BNC Bancorp		1,442		50,831
BOK Financial Corp.		589		48,439
Boston Private Financial Holdings, Inc.		4,725		77,963
Bridge Bancorp, Inc.		369		13,339
Bryn Mawr Bank Corp.		476		19,064
Camden National Corp.		528		21,901
Capital Bank Financial Corp., Class A		303		11,938
Cardinal Financial Corp.		474		14,865

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 71

Schedule of Investments (continued) BlackRock Total Stock Market Index Fund

Common Stocks	Shares		Value
Banks (continued)
Carolina Financial Corp.		506	$	15,155
Cathay General Bancorp		2,019		73,572
Centerstate Banks, Inc.		3,196		77,950
Central Pacific Financial Corp.		427		13,378
Chemical Financial Corp.		1,425		70,438
CIT Group, Inc.		4,529		186,550
Citigroup, Inc.		63,756		3,559,498
Citizens & Northern Corp.		322		7,651
Citizens Financial Group, Inc.		11,677		422,357
City Holding Co.		249		16,207
CoBiz Financial, Inc.		792		13,876
Codorus Valley Bancorp, Inc.		295		7,573
Columbia Banking System, Inc.		991		39,402
Comerica, Inc.		3,790		255,939
Commerce Bancshares, Inc.		1,992		112,608
Community Bank System, Inc.		1,056		61,628
Community Trust Bancorp, Inc.		312		14,430
ConnectOne Bancorp, Inc.		619		15,289
CU Bancorp (a)		561		20,336
Cullen/Frost Bankers, Inc.		1,116		99,770
Customers Bancorp, Inc. (a)		320		11,027
CVB Financial Corp.		3,868		87,185
Eagle Bancorp, Inc. (a)		521		31,911
East West Bancorp, Inc.		3,363		172,993
Enterprise Financial Services Corp.		346		14,411
Farmers Capital Bank Corp.		262		9,733
FCB Financial Holdings, Inc., Class A (a)		513		24,085
Fidelity Southern Corp.		744		17,298
Fifth Third Bancorp		16,772		437,749
Financial Institutions, Inc.		439		14,465
First Bancorp, Inc.		314		8,478
First Bancorp, North Carolina		584		17,094
First BanCorp, Puerto Rico (a)		1,903		12,788
First Busey Corp.		408		11,934
First Business Financial Services, Inc.		443		10,734
First Citizens BancShares, Inc., Class A		164		60,145
First Commonwealth Financial Corp.		1,105		15,603
First Community Bancshares, Inc.		576		16,762
First Community Financial Partners, Inc. (a)		703		8,366
First Financial Bancorp		1,627		44,824
First Financial Bankshares, Inc.		1,943		82,869
First Financial Corp.		269		13,006
First Foundation, Inc. (a)		1,126		16,327
First Hawaiian, Inc.		374		12,338
First Horizon National Corp.		5,041		100,820
First Interstate Bancsystem, Inc., Class A		383		15,760
First Merchants Corp.		616		23,611
First Midwest Bancorp, Inc.		3,356		81,484
First NBC Bank Holding Co. (a)		204		816
First of Long Island Corp.		640		17,344
First Republic Bank		3,188		300,724
FNB Corp.		5,076		75,835
Franklin Financial Network, Inc. (a)		413		15,921
Fulton Financial Corp.		2,904		52,853
German American Bancorp, Inc.		417		20,012
Glacier Bancorp, Inc.		2,406		85,485
Great Southern Bancorp, Inc.		266		13,313
Great Western Bancorp, Inc.		1,678		71,735
Hancock Holding Co.		816		37,414
Hanmi Financial Corp.		471		15,614
Heartland Financial USA, Inc.		347		16,240
Heritage Commerce Corp.		1,357		19,052
Heritage Financial Corp.		731		18,641
Home BancShares, Inc.		2,685		72,334
HomeTrust Bancshares, Inc. (a)		642		15,890
Hope Bancorp, Inc.		3,638		76,071
Horizon Bancorp		598		15,327

Common Stocks	Shares		Value
Banks (continued)
Huntington Bancshares, Inc.		22,957	$	310,608
Iberiabank Corp.		1,353		111,149
Independent Bank Corp.		1,342		46,252
Independent Bank Group, Inc.		156		9,695
International Bancshares Corp.		909		33,724
Investors Bancorp, Inc.		6,086		87,334
JPMorgan Chase & Co.		83,335		7,052,641
KeyCorp		23,724		426,320
Lakeland Bancorp, Inc.		1,021		18,940
Lakeland Financial Corp.		316		14,037
LCNB Corp.		345		7,763
LegacyTexas Financial Group, Inc.		863		35,659
M&T Bank Corp.		3,310		538,107
Macatawa Bank Corp.		816		8,340
MainSource Financial Group, Inc.		511		16,791
MB Financial, Inc.		1,595		71,025
MBT Financial Corp.		784		8,467
Mercantile Bank Corp.		497		16,053
Merchants Bancshares, Inc.		158		8,058
Middleburg Financial Corp.		417		14,320
MutualFirst Financial, Inc.		253		7,906
National Bank Holdings Corp., Class A		665		21,613
National Bankshares, Inc.		185		8,057
NBT Bancorp, Inc.		716		29,170
Nicolet Bankshares, Inc. (a)		324		15,704
OFG Bancorp		1,049		13,899
Old Line Bancshares, Inc.		322		8,633
Old National Bancorp		2,410		42,778
Opus Bank		316		6,431
Orrstown Financial Services, Inc.		348		7,639
Pacific Continental Corp.		915		22,692
Pacific Premier Bancorp, Inc. (a)		500		19,675
PacWest Bancorp		2,573		142,544
Park National Corp.		310		34,345
Park Sterling Corp.		2,049		23,973
Peapack Gladstone Financial Corp.		523		15,797
Penns Woods Bancorp, Inc.		162		7,484
Peoples Bancorp, Inc.		664		20,617
Peoples Financial Services Corp.		169		7,267
Pinnacle Financial Partners, Inc.		1,031		68,922
PNC Financial Services Group, Inc. (b)		11,332		1,365,053
Popular, Inc.		2,812		124,937
Preferred Bank		405		22,441
Premier Financial Bancorp, Inc.		400		7,328
PrivateBancorp, Inc.		1,663		90,900
Prosperity Bancshares, Inc.		1,572		114,174
QCR Holdings, Inc.		413		17,325
Regions Financial Corp.		27,992		403,365
Renasant Corp.		687		27,343
Republic First Bancorp, Inc. (a)		1,213		9,158
S&T Bancorp, Inc.		563		21,180
Sandy Spring Bancorp, Inc.		402		16,470
Seacoast Banking Corp. of Florida (a)		515		11,217
ServisFirst Bancshares, Inc.		1,364		54,615
Signature Bank (a)		1,190		187,449
Simmons First National Corp., Class A		548		32,962
South State Corp.		686		61,328
Southside Bancshares, Inc.		1,883		64,323
Southwest Bancorp, Inc.		219		6,066
State Bank Financial Corp.		612		16,181
Sterling Bancorp		3,268		77,942
Stock Yards Bancorp, Inc.		496		22,221
Stonegate Bank		463		21,071
Suffolk Bancorp		407		16,858
Summit Financial Group, Inc.		488		12,761
SunTrust Banks, Inc.		11,116		631,611
SVB Financial Group (a)		1,131		194,792

See Notes to Financial Statements.

72 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Total Stock Market Index Fund

Common Stocks	Shares		Value
Banks (continued)
Synovus Financial Corp.		2,536	$	105,700
TCF Financial Corp.		4,103		71,187
Texas Capital Bancshares, Inc. (a)		1,429		117,893
Tompkins Financial Corp.		237		21,460
TowneBank		886		28,529
Trico Bancshares		439		16,186
Tristate Capital Holdings, Inc. (a)		771		17,116
Triumph Bancorp, Inc. (a)		569		15,391
Trustmark Corp.		1,081		36,343
UMB Financial Corp.		908		70,043
Umpqua Holdings Corp.		4,658		85,288
Union Bankshares Corp.		1,170		43,009
Union Bankshares, Inc. (c)		330		13,695
United Bankshares, Inc.		1,511		67,693
United Community Banks, Inc.		1,961		55,163
Univest Corp. of Pennsylvania		396		11,147
US Bancorp		37,097		1,953,157
Valley National Bancorp		6,763		81,900
Washington Trust Bancorp, Inc.		276		15,042
WashingtonFirst Bankshares, Inc.		301		8,383
Webster Financial Corp.		1,967		103,307
Wells Fargo & Co.		104,646		5,894,709
WesBanco, Inc.		1,029		42,704
Westamerica BanCorp		648		36,774
Western Alliance Bancorp (a)		1,950		96,291
Wintrust Financial Corp.		1,095		78,402
Yadkin Financial Corp.		842		26,944
Zions Bancorporation		4,494		189,602
				36,773,169
Beverages — 1.6%
Boston Beer Co., Inc., Class A (a)		166		25,514
Brown-Forman Corp., Class A		1,148		53,703
Brown-Forman Corp., Class B		4,214		192,158
Coca-Cola Bottling Co. Consolidated		89		15,027
Coca-Cola Co.		89,451		3,718,478
Constellation Brands, Inc., Class A		3,752		561,899
Craft Brew Alliance, Inc. (a)		284		4,317
Dr. Pepper Snapple Group, Inc.		4,143		377,842
MGP Ingredients, Inc.		219		9,283
Molson Coors Brewing Co., Class B		3,878		374,305
Monster Beverage Corp. (a)		9,576		407,938
National Beverage Corp.		227		11,393
PepsiCo, Inc.		33,128		3,438,024
Primo Water Corp. (a)		879		11,357
				9,201,238
Biotechnology — 2.9%
AbbVie, Inc.		37,228		2,275,003
ACADIA Pharmaceuticals, Inc. (a)		2,668		92,286
Acceleron Pharma, Inc. (a)		555		13,475
Achillion Pharmaceuticals, Inc. (a)		2,422		10,100
Acorda Therapeutics, Inc. (a)		1,558		31,939
Adamas Pharmaceuticals, Inc. (a)		202		3,206
Aduro Biotech, Inc. (a)		478		5,664
Advaxis, Inc. (a)		420		3,763
Aevi Genomic Medicine, Inc. (a)		709		3,375
Agenus, Inc. (a)		860		3,440
Agios Pharmaceuticals, Inc. (a)		616		26,506
Aimmune Therapeutics, Inc. (a)		432		7,897
Akebia Therapeutics, Inc. (a)		437		4,383
Alder Biopharmaceuticals, Inc. (a)		843		17,324
Alexion Pharmaceuticals, Inc. (a)		5,017		655,622
Alkermes PLC (a)		3,521		190,521
Alnylam Pharmaceuticals, Inc. (a)		2,085		83,379
AMAG Pharmaceuticals, Inc. (a)		692		16,677
Amgen, Inc.		17,267		2,705,394

Common Stocks	Shares		Value
Biotechnology (continued)
Amicus Therapeutics, Inc. (a)		2,618	$	14,399
Anavex Life Sciences Corp. (a)(c)		580		2,610
Applied Genetic Technologies Corp. (a)		171		1,240
Aptevo Therapeutics, Inc. (a)		323		643
AquaBounty Technologies, Inc. (a)		16		221
Ardelyx, Inc. (a)		547		6,564
Arena Pharmaceuticals, Inc. (a)		3,789		5,835
Ariad Pharmaceuticals, Inc. (a)		4,169		99,306
Array BioPharma, Inc. (a)		3,222		35,023
Arrowhead Pharmaceuticals, Inc. (a)		681		1,321
Atara Biotherapeutics, Inc. (a)		449		6,039
Athersys, Inc. (a)		1,234		1,345
Avexis, Inc. (a)		61		3,403
Axovant Sciences Ltd. (a)		290		3,553
Bellicum Pharmaceuticals, Inc. (a)		229		3,064
BioCryst Pharmaceuticals, Inc. (a)		2,094		13,192
Biogen, Inc. (a)		5,034		1,395,626
BioMarin Pharmaceutical, Inc. (a)		3,835		336,061
Biospecifics Technologies Corp. (a)		73		3,744
BioTime, Inc. (a)		1,303		4,078
Bluebird Bio, Inc. (a)		1,050		78,225
Blueprint Medicines Corp. (a)		404		13,768
Cara Therapeutics, Inc. (a)		462		7,078
Celgene Corp. (a)		17,658		2,050,977
Celldex Therapeutics, Inc. (a)		2,655		8,655
Cellular Biomedicine Group, Inc. (a)		281		3,484
ChemoCentryx, Inc. (a)		482		3,504
Chimerix, Inc. (a)		931		5,065
Clovis Oncology, Inc. (a)		806		52,229
Coherus Biosciences, Inc. (a)		566		15,791
Concert Pharmaceuticals, Inc. (a)		219		1,938
Curis, Inc. (a)		1,975		5,668
Cytokinetics, Inc. (a)		407		4,253
CytomX Therapeutics, Inc. (a)		253		2,940
Dynavax Technologies Corp. (a)		478		1,960
Eagle Pharmaceuticals, Inc. (a)		156		10,797
Edge Therapeutics, Inc. (a)		255		2,456
Editas Medicine, Inc. (a)(c)		30		523
Emergent Biosolutions, Inc. (a)		869		26,305
Enanta Pharmaceuticals, Inc. (a)		421		13,946
Epizyme, Inc. (a)		581		6,100
Esperion Therapeutics, Inc. (a)		354		4,290
Exact Sciences Corp. (a)		2,903		55,012
Exelixis, Inc. (a)		5,307		96,163
FibroGen, Inc. (a)		1,025		23,216
Five Prime Therapeutics, Inc. (a)		764		34,999
Flexion Therapeutics, Inc. (a)		493		9,564
Foundation Medicine, Inc. (a)		293		5,728
Genomic Health, Inc. (a)		261		7,172
Geron Corp. (a)		2,354		4,896
Gilead Sciences, Inc.		30,410		2,203,204
Global Blood Therapeutics, Inc. (a)		145		2,342
Halozyme Therapeutics, Inc. (a)		3,170		36,613
Heron Therapeutics, Inc. (a)		376		4,888
Idera Pharmaceuticals, Inc. (a)		2,309		3,233
Ignyta, Inc. (a)		481		2,357
ImmunoGen, Inc. (a)		2,093		4,898
Immunomedics, Inc. (a)		1,402		6,309
Incyte Corp. (a)		3,758		455,507
Innoviva, Inc. (a)		2,582		27,369
Inotek Pharmaceuticals Corp. (a)		326		522
Inovio Pharmaceuticals, Inc. (a)		806		5,320
Insmed, Inc. (a)		1,242		18,344
Insys Therapeutics, Inc. (a)(c)		259		2,652
Intercept Pharmaceuticals, Inc. (a)		320		35,120
Intrexon Corp. (a)		1,092		23,107

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 73

Schedule of Investments (continued) BlackRock Total Stock Market Index Fund

Common Stocks	Shares		Value
Biotechnology (continued)
Invitae Corp., cost $28,390,380) (Acquired 10/08/14, cost (a)		635	$	5,315
Ionis Pharmaceuticals, Inc. (a)		2,778		123,621
Ironwood Pharmaceuticals, Inc. (a)		3,329		47,871
Juno Therapeutics, Inc. (a)		1,860		39,692
Karyopharm Therapeutics, Inc. (a)		521		5,392
Keryx Biopharmaceuticals, Inc. (a)		1,317		6,572
Kite Pharma, Inc. (a)(c)		1,099		56,016
La Jolla Pharmaceutical Co. (a)		192		3,734
Lexicon Pharmaceuticals, Inc. (a)		862		12,352
Ligand Pharmaceuticals, Inc. (a)		551		58,412
Lion Biotechnologies, Inc. (a)		1,066		7,728
Loxo Oncology, Inc. (a)		149		5,845
MacroGenics, Inc. (a)		529		9,771
MannKind Corp. (a)		2,524		1,777
MediciNova, Inc. (a)		353		1,963
Merrimack Pharmaceuticals, Inc. (a)		2,034		6,326
MiMedx Group, Inc. (a)		1,930		15,594
Minerva Neurosciences, Inc. (a)		223		2,364
Momenta Pharmaceuticals, Inc. (a)		1,073		20,280
Myriad Genetics, Inc. (a)		1,797		29,075
Natera, Inc. (a)		274		2,455
Neurocrine Biosciences, Inc. (a)		2,159		92,643
NewLink Genetics Corp. (a)		181		2,203
Novavax, Inc. (a)		5,716		7,488
OncoMed Pharmaceuticals, Inc. (a)		75		620
Ophthotech Corp. (a)		521		2,480
OPKO Health, Inc. (a)		7,590		65,957
Organovo Holdings, Inc. (a)		1,130		4,170
Otonomy, Inc. (a)		261		3,824
OvaScience, Inc. (a)		115		182
PDL BioPharma, Inc.		4,251		9,352
Pfenex, Inc. (a)		404		3,224
Portola Pharmaceuticals, Inc. (a)		1,510		41,147
Progenics Pharmaceuticals, Inc. (a)		1,204		10,740
Protagonist Therapeutics, Inc. (a)		153		2,760
Prothena Corp. PLC (a)		661		32,363
PTC Therapeutics, Inc. (a)		727		9,524
Puma Biotechnology, Inc. (a)		555		17,982
Radius Health, Inc. (a)		623		27,113
Regeneron Pharmaceuticals, Inc. (a)		1,797		645,644
REGENXBIO, Inc. (a)		258		4,773
Regulus Therapeutics, Inc. (a)		434		521
Repligen Corp. (a)		657		19,736
Retrophin, Inc. (a)		615		12,066
Rigel Pharmaceuticals, Inc. (a)		1,849		3,846
Sage Therapeutics, Inc. (a)		816		39,152
Sangamo Therapeutics, Inc. (a)		1,093		3,826
Sarepta Therapeutics, Inc. (a)		974		30,252
Seattle Genetics, Inc. (a)		2,268		136,624
Seres Therapeutics, Inc. (a)		199		1,968
Sorrento Therapeutics, Inc. (a)		164		886
Spark Therapeutics, Inc. (a)		361		22,765
Spectrum Pharmaceuticals, Inc. (a)		1,047		4,879
Stemline Therapeutics, Inc. (a)		346		3,529
Synergy Pharmaceuticals, Inc. (a)		3,590		25,381
Synthetic Biologics, Inc. (a)		1,301		1,103
TESARO, Inc. (a)		681		110,894
Tetraphase Pharmaceuticals, Inc. (a)		851		3,259
TG Therapeutics, Inc. (a)		479		2,299
Trevena, Inc. (a)		537		3,748
Ultragenyx Pharmaceutical, Inc. (a)		938		70,359
United Therapeutics Corp. (a)		1,031		168,703
Vanda Pharmaceuticals, Inc. (a)		666		9,424
Versartis, Inc. (a)		676		9,667
Vertex Pharmaceuticals, Inc. (a)		5,710		490,318
XBiotech, Inc. (a)(c)		186		2,120

Common Stocks	Shares		Value
Biotechnology (continued)
Xencor, Inc. (a)		1,364	$	32,504
ZIOPHARM Oncology, Inc. (a)(c)		2,000		11,840
				16,143,721
Building Products — 0.3%
AAON, Inc.		790		26,820
Advanced Drainage Systems, Inc.		647		15,593
Allegion PLC		2,215		145,459
American Woodmark Corp. (a)		274		19,509
AO Smith Corp.		3,326		162,142
Apogee Enterprises, Inc.		558		31,851
Armstrong Flooring, Inc. (a)		377		7,928
Armstrong World Industries, Inc. (a)		1,159		46,302
Builders FirstSource, Inc. (a)		1,712		18,421
Caesarstone Ltd. (a)		516		15,661
Continental Building Products, Inc. (a)		596		13,857
CSW Industrials, Inc. (a)		435		15,899
Fortune Brands Home & Security, Inc.		3,478		191,742
Gibraltar Industries, Inc. (a)		600		26,340
Griffon Corp.		454		11,554
Insteel Industries, Inc.		261		9,667
Lennox International, Inc.		894		140,188
Masco Corp.		7,504		247,257
Masonite International Corp. (a)		1,175		78,255
NCI Building Systems, Inc. (a)		625		10,000
Owens Corning		2,609		144,147
Patrick Industries, Inc. (a)		267		21,827
PGT Innovations, Inc. (a)		761		8,752
Ply Gem Holdings, Inc. (a)		364		5,879
Quanex Building Products Corp.		446		8,809
Simpson Manufacturing Co., Inc.		1,080		47,002
Trex Co., Inc. (a)		730		49,443
Universal Forest Products, Inc.		485		49,329
USG Corp. (a)		2,327		71,183
				1,640,816
Capital Markets — 2.2%
Affiliated Managers Group, Inc. (a)		1,193		181,766
Ameriprise Financial, Inc.		3,572		401,028
Artisan Partners Asset Management, Inc., Class A		738		21,365
Associated Capital Group, Inc., Class A		152		5,350
B. Riley Financial, Inc.		227		4,279
Bank of New York Mellon Corp.		23,793		1,064,261
BGC Partners, Inc., Class A		5,772		63,896
BlackRock, Inc. (b)		2,852		1,066,591
Charles Schwab Corp.		26,728		1,102,263
CME Group, Inc.		7,716		934,253
Cohen & Steers, Inc.		390		13,607
Cowen Group, Inc., Class A (a)		773		11,595
Diamond Hill Investment Group, Inc.		56		11,323
Donnelley Financial Solutions, Inc. (a)		406		9,776
E*Trade Financial Corp. (a)		6,375		238,744
Eaton Vance Corp.		2,759		115,685
Evercore Partners, Inc., Class A		930		72,029
Federated Investors, Inc., Class B		1,311		34,099
Financial Engines, Inc.		1,437		55,396
Franklin Resources, Inc.		8,259		328,213
Gain Capital Holdings, Inc.		726		5,452
Goldman Sachs Group, Inc.		8,822		2,023,061
Greenhill & Co., Inc.		453		13,386
Hannon Armstrong Sustainable Infrastructure Capital, Inc.		739		13,509
HFF, Inc., Class A		701		20,806
Houlihan Lokey, Inc.		453		14,088
INTL. FCStone, Inc. (a)		199		7,339
Invesco Ltd.		9,422		272,484
Janus Capital Group, Inc.		3,891		48,638

See Notes to Financial Statements.

74 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Total Stock Market Index Fund

Common Stocks	Shares		Value
Capital Markets (continued)
KCG Holdings, Inc., Class A (a)		920	$	12,852
Ladenburg Thalmann Financial Services, Inc. (a)		380		874
Lazard Ltd., Class A		3,007		127,737
Legg Mason, Inc.		2,813		89,144
LPL Financial Holdings, Inc.		2,333		91,687
Marcus & Millichap, Inc. (a)		477		12,292
Moelis & Co., Class A		295		10,060
Morgan Stanley		32,687		1,388,871
Northern Trust Corp.		4,633		384,354
OM Asset Management PLC		855		12,056
Oppenheimer Holdings, Inc., Class A		269		4,600
Piper Jaffray Cos. (a)		266		18,753
PJT Partners, Inc., Class A		381		12,097
Raymond James Financial, Inc.		2,874		215,349
Safeguard Scientifics, Inc. (a)		589		7,097
SEI Investments Co.		2,908		141,067
State Street Corp.		8,997		685,571
Stifel Financial Corp. (a)		1,834		92,305
T. Rowe Price Group, Inc.		5,541		373,685
TD Ameritrade Holding Corp.		5,695		262,824
Virtu Financial, Inc., Class A		804		14,110
Virtus Investment Partners, Inc.		98		10,682
Waddell & Reed Financial, Inc., Class A		2,763		49,872
Westwood Holdings Group, Inc.		168		9,395
WisdomTree Investments, Inc.		2,265		23,330
				12,204,946
Chemicals — 2.2%
A. Schulman, Inc.		547		18,872
AdvanSix, Inc. (a)		1,613		41,438
Air Products & Chemicals, Inc.		4,443		620,954
Albemarle Corp.		2,536		234,935
American Vanguard Corp.		632		10,870
Ashland Global Holdings, Inc.		1,362		162,119
Axalta Coating Systems Ltd. (a)		4,856		140,824
Balchem Corp.		746		63,589
Cabot Corp.		1,678		92,911
Calgon Carbon Corp.		890		14,107
Celanese Corp., Series A		3,302		278,689
CF Industries Holdings, Inc.		5,349		188,766
Chase Corp.		109		9,592
Chemours Co.		4,126		109,009
Chemtura Corp. (a)		1,580		52,298
Codexis, Inc. (a)		807		3,833
Dow Chemical Co.		25,642		1,529,032
E.I. du Pont de Nemours & Co.		20,025		1,511,888
Eastman Chemical Co.		3,349		259,548
Ecolab, Inc.		5,862		704,202
Ferro Corp. (a)		1,490		21,069
Flotek Industries, Inc. (a)		1,115		11,786
FMC Corp.		2,958		177,953
GCP Applied Technologies, Inc. (a)		1,898		51,151
Hawkins, Inc.		210		11,267
HB Fuller Co.		1,285		63,440
Huntsman Corp.		4,632		94,446
Ingevity Corp. (a)		1,059		58,870
Innophos Holdings, Inc.		357		17,364
Innospec, Inc.		470		33,535
International Flavors & Fragrances, Inc.		1,797		210,626
KMG Chemicals, Inc.		107		3,944
Koppers Holdings, Inc. (a)		1,213		49,066
Kraton Corp. (a)		594		15,955
Landec Corp. (a)		899		11,327
LSB Industries, Inc. (a)		74		630
LyondellBasell Industries NV, Class A		7,883		735,247
Minerals Technologies, Inc.		798		63,960
Monsanto Co.		9,991		1,082,125

Common Stocks	Shares		Value
Chemicals (continued)
Mosaic Co.		8,024	$	251,713
NewMarket Corp.		165		71,143
Olin Corp.		3,854		101,013
OMNOVA Solutions, Inc. (a)		1,355		12,331
Platform Specialty Products Corp. (a)		4,855		58,940
PolyOne Corp.		2,489		84,900
PPG Industries, Inc.		6,035		603,560
Praxair, Inc.		6,507		770,689
Quaker Chemical Corp.		362		46,517
Rayonier Advanced Materials, Inc.		841		11,412
RPM International, Inc.		3,020		157,825
Scotts Miracle-Gro Co., Class A		1,001		92,062
Sensient Technologies Corp.		1,195		91,716
Sherwin-Williams Co.		1,824		554,149
Stepan Co.		356		27,807
TerraVia Holdings, Inc. (a)		1,012		982
Trecora Resources (a)		733		9,089
Tredegar Corp.		681		15,152
Trinseo SA		561		36,325
Tronox Ltd., Class A		1,229		15,387
Valspar Corp.		1,756		194,337
Westlake Chemical Corp.		854		52,871
WR Grace & Co.		1,645		114,064
				12,135,221
Commercial Services & Supplies — 0.6%
ABM Industries, Inc.		1,274		51,457
ACCO Brands Corp. (a)		2,042		26,036
Aqua Metals, Inc. (a)		1,057		11,796
ARC Document Solutions, Inc. (a)		941		4,432
Brink’s Co.		1,070		47,615
Casella Waste Systems, Inc., Class A (a)		782		9,040
Ceco Environmental Corp.		925		12,136
Cintas Corp.		1,904		221,073
Clean Harbors, Inc. (a)		1,173		65,101
Copart, Inc. (a)		2,102		119,267
Covanta Holding Corp.		3,235		52,083
Deluxe Corp.		1,071		78,022
Encore Capital Group, Inc. (a)		330		10,214
Ennis, Inc.		495		8,366
Essendant, Inc.		636		13,286
G&K Services, Inc., Class A		453		43,515
Healthcare Services Group, Inc.		1,716		68,211
Heritage-Crystal Clean, Inc. (a)		397		5,935
Herman Miller, Inc.		1,453		45,334
HNI Corp.		1,046		52,729
InnerWorkings, Inc. (a)		577		5,545
Interface, Inc.		1,200		21,840
Iron Mountain, Inc.		5,730		205,134
KAR Auction Services, Inc.		3,005		136,878
Kimball International, Inc., Class B		1,050		17,567
Knoll, Inc.		939		24,517
LSC Communications, Inc.		406		10,645
McGrath RentCorp		1,491		57,075
Mobile Mini, Inc.		1,241		40,395
MSA Safety, Inc.		774		55,225
Multi-Color Corp.		716		55,275
Pitney Bowes, Inc.		4,306		68,552
Quad/Graphics, Inc.		390		10,214
Republic Services, Inc.		4,870		279,441
Rollins, Inc.		2,129		75,069
RR Donnelley & Sons Co.		1,032		17,699
Steelcase, Inc., Class A		2,295		38,556
Stericycle, Inc. (a)		1,902		146,720
Sykes Enterprises, Inc. (a)		779		21,757
Team, Inc. (a)		528		17,741
Tetra Tech, Inc.		1,295		56,591

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 75

Schedule of Investments (continued) BlackRock Total Stock Market Index Fund

Common Stocks	Shares		Value
Commercial Services & Supplies (continued)
TRC Cos., Inc. (a)		473	$	4,399
U.S. Ecology, Inc.		462		23,678
UniFirst Corp.		464		59,346
Viad Corp.		392		17,189
VSE Corp.		300		11,184
Waste Management, Inc.		9,800		681,100
West Corp.		787		19,100
				3,124,080
Communications Equipment — 1.1%
ADTRAN, Inc.		877		19,206
Applied Optoelectronics, Inc. (a)		273		8,397
Arista Networks, Inc. (a)		862		81,028
ARRIS International PLC (a)		4,421		126,352
Bel Fuse, Inc., Class B		206		6,551
Black Box Corp.		669		8,931
Brocade Communications Systems, Inc.		9,056		112,928
CalAmp Corp. (a)		488		7,330
Calix, Inc. (a)		1,374		9,893
Ciena Corp. (a)		3,484		84,801
Cisco Systems, Inc.		115,129		3,536,763
Clearfield, Inc. (a)		214		3,681
CommScope Holding Co., Inc. (a)		2,790		105,518
Comtech Telecommunications Corp.		769		8,251
Digi International, Inc. (a)		916		11,954
EchoStar Corp., Class A (a)		1,063		54,139
Extreme Networks, Inc. (a)		2,054		11,359
F5 Networks, Inc. (a)		1,490		199,705
Finisar Corp. (a)		2,523		74,605
Harmonic, Inc. (a)		2,232		11,830
Harris Corp.		2,815		289,129
Infinera Corp. (a)		4,027		36,283
InterDigital, Inc.		833		77,802
Ixia (a)		1,123		21,842
Juniper Networks, Inc.		8,498		227,576
KVH Industries, Inc. (a)		368		3,827
Loral Space & Communications, Inc. (a)		204		8,313
Lumentum Holdings, Inc. (a)		1,209		45,881
Motorola Solutions, Inc.		3,927		316,948
NETGEAR, Inc. (a)		814		46,317
Oclaro, Inc. (a)		2,007		19,689
Palo Alto Networks, Inc. (a)		2,000		295,120
Plantronics, Inc.		930		52,619
ShoreTel, Inc. (a)		1,555		10,807
Silicom, Ltd.		179		6,553
Sonus Networks, Inc. (a)		1,319		8,415
Ubiquiti Networks, Inc. (a)		493		30,763
ViaSat, Inc. (a)		1,226		79,580
Viavi Solutions, Inc. (a)		6,068		54,309
				6,114,995
Construction & Engineering — 0.2%
AECOM (a)		3,399		125,525
Aegion Corp. (a)		2,164		50,335
Argan, Inc.		230		16,963
Chicago Bridge & Iron Co. NV		2,644		87,807
Comfort Systems USA, Inc.		787		26,640
Dycom Industries, Inc. (a)		696		56,139
EMCOR Group, Inc.		1,403		97,775
Fluor Corp.		3,184		176,712
Granite Construction, Inc.		918		51,527
Great Lakes Dredge & Dock Corp. (a)		1,265		6,578
IES Holdings, Inc. (a)		192		3,744
Jacobs Engineering Group, Inc. (a)		2,695		157,792
KBR, Inc.		3,434		58,412
Layne Christensen Co. (a)		427		4,454
MasTec, Inc. (a)		1,468		54,683
MYR Group, Inc. (a)		480		18,466

Common Stocks	Shares		Value
Construction & Engineering (continued)
NV5 Global Inc. (a)		93	$	3,790
Orion Group Holdings, Inc. (a)		507		5,324
Primoris Services Corp.		732		18,168
Quanta Services, Inc. (a)		3,211		115,243
Tutor Perini Corp. (a)		738		21,992
				1,158,069
Construction Materials — 0.2%
Eagle Materials, Inc.		1,025		107,194
Headwaters, Inc. (a)		1,754		40,640
Martin Marietta Materials, Inc.		1,410		323,736
Summit Materials, Inc., Class A (a)		1,903		47,765
US Concrete, Inc. (a)		263		17,227
Vulcan Materials Co.		2,917		374,339
				910,901
Consumer Discretionary — 0.0%
American Outdoor Brands Corp. (a)		1,541		32,823
SP Plus Corp. (a)		321		8,892
				41,715
Consumer Finance — 0.8%
Ally Financial, Inc.		10,199		215,403
American Express Co.		18,323		1,399,511
Capital One Financial Corp.		10,818		945,385
Credit Acceptance Corp. (a)(c)		264		54,194
Discover Financial Services		9,302		644,443
Enova International, Inc. (a)		433		6,105
Ezcorp, Inc., Class A (a)		876		8,672
Green Dot Corp., Class A (a)		809		21,681
Navient Corp.		6,422		96,587
Nelnet, Inc., Class A		380		18,632
OneMain Holdings, Inc. (a)		1,024		22,917
PRA Group, Inc. (a)		1,617		64,357
Regional Management Corp. (a)		217		5,427
Santander Consumer USA Holdings, Inc. (a)		2,774		36,672
SLM Corp. (a)		12,060		143,273
Synchrony Financial		18,987		680,114
World Acceptance Corp. (a)		213		10,452
				4,373,825
Containers & Packaging — 0.5%
Aptargroup, Inc.		1,305		95,226
Avery Dennison Corp.		1,917		139,979
Ball Corp.		3,827		291,847
Bemis Co., Inc.		2,239		109,084
Berry Plastics Group, Inc. (a)		2,767		141,200
Crown Holdings, Inc. (a)		3,127		169,390
Graphic Packaging Holding Co.		7,110		88,946
Greif, Inc., Class A		953		54,874
International Paper Co.		9,210		521,286
Multi Packaging Solutions International Ltd. (a)		375		6,683
Myers Industries, Inc.		350		4,830
Owens-Illinois, Inc. (a)		4,255		80,420
Packaging Corp. of America		2,123		195,698
Sealed Air Corp.		4,419		214,321
Silgan Holdings, Inc.		735		43,005
Sonoco Products Co.		2,231		122,593
UFP Technologies, Inc. (a)		191		4,765
WestRock Co.		5,624		300,097
				2,584,244
Distributors — 0.1%
Core-Mark Holding Co., Inc.		1,195		41,741
Genuine Parts Co.		3,241		313,761
LKQ Corp. (a)		6,849		218,552
Pool Corp.		895		94,476
				668,530

See Notes to Financial Statements.

76 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Total Stock Market Index Fund

Common Stocks	Shares		Value
Diversified Consumer Services — 0.2%
2U, Inc. (a)		688	$	23,420
American Public Education, Inc. (a)		306		7,436
Apollo Education Group, Inc. (a)		1,545		15,435
Ascent Capital Group, Inc., Class A (a)		65		1,007
Bright Horizons Family Solutions, Inc. (a)		1,113		78,867
Capella Education Co.		507		43,349
Career Education Corp. (a)		1,520		14,850
Carriage Services, Inc.		331		8,589
Collectors Universe, Inc.		191		3,948
DeVry Education Group, Inc.		1,501		50,284
Graham Holdings Co., Class B		93		48,318
Grand Canyon Education, Inc. (a)		1,000		58,980
H&R Block, Inc.		4,843		103,931
Hillenbrand, Inc.		1,417		51,791
Houghton Mifflin Harcourt Co. (a)		3,459		39,087
K12, Inc. (a)		695		13,851
LifeLock, Inc. (a)		2,041		48,902
Matthews International Corp., Class A		706		47,620
Regis Corp. (a)		590		8,213
Service Corp. International		4,141		120,627
ServiceMaster Global Holdings, Inc. (a)		2,988		110,496
Sotheby’s (a)		1,241		49,280
Strayer Education, Inc. (a)		164		13,284
Weight Watchers International, Inc. (a)(c)		256		3,187
				964,752
Diversified Financial Services — 1.8%
Berkshire Hathaway, Inc., Class B (a)		43,251		7,099,219
CBOE Holdings, Inc.		1,847		147,058
FactSet Research Systems, Inc.		916		158,514
FNFV Group (a)		2,019		26,247
Interactive Brokers Group, Inc., Class A		1,812		67,660
Intercontinental Exchange, Inc.		13,485		786,985
Leucadia National Corp.		7,432		177,253
MarketAxess Holdings, Inc.		814		152,421
Marlin Business Services Corp.		218		5,003
Moody’s Corp.		3,841		398,196
Morningstar, Inc.		330		25,130
MSCI, Inc.		2,056		170,134
Nasdaq, Inc.		2,464		173,811
On Deck Capital, Inc. (a)		454		2,284
PHH Corp. (a)		1,066		15,542
PICO Holdings, Inc. (a)		421		5,999
S&P Global, Inc.		6,011		722,402
Voya Financial, Inc.		4,530		182,197
				10,316,055
Diversified Telecommunication Services — 2.2%
8x8, Inc. (a)		3,052		48,374
AT&T, Inc.		140,936		5,941,862
ATN International, Inc.		207		16,620
CenturyLink, Inc.		11,623		300,571
Cincinnati Bell, Inc. (a)		747		17,144
Cogent Communications Holdings, Inc.		1,020		42,636
Consolidated Communications Holdings, Inc.		1,206		31,730
Fairpoint Communications, Inc. (a)		393		7,271
Frontier Communications Corp.		26,001		90,744
General Communication, Inc., Class A (a)		528		10,623
Globalstar, Inc. (a)(c)		4,973		7,857
Hawaiian Telcom Holdco, Inc. (a)		433		10,751
IDT Corp., Class B		292		5,606
Inteliquent, Inc.		621		14,221
Iridium Communications, Inc. (a)		1,532		15,473
Level 3 Communications, Inc. (a)		6,531		388,333
Lumos Networks Corp. (a)		416		6,436
ORBCOMM, Inc. (a)		751		6,136
pdvWireless, Inc. (a)		207		4,409

Common Stocks	Shares		Value
Diversified Telecommunication Services (continued)
SBA Communications Corp. (a)		2,823	$	297,149
Straight Path Communications, Inc., Class B (a)		159		5,571
Verizon Communications, Inc.		93,368		4,575,966
Vonage Holdings Corp. (a)		5,249		37,216
Windstream Holdings, Inc. (c)		1,642		13,267
Zayo Group Holdings, Inc. (a)		3,643		116,430
				12,012,396
Electric Utilities — 1.6%
ALLETE, Inc.		1,629		106,455
American Electric Power Co., Inc.		11,200		717,472
Avangrid, Inc.		1,026		39,809
Duke Energy Corp.		15,841		1,244,152
Edison International		7,043		513,294
El Paso Electric Co.		757		34,746
Entergy Corp.		3,989		285,772
Eversource Energy		7,083		391,832
Exelon Corp.		20,198		724,704
FirstEnergy Corp.		9,808		297,379
Great Plains Energy, Inc.		4,900		134,995
Hawaiian Electric Industries, Inc.		3,349		112,124
IDACORP, Inc.		1,438		115,069
MGE Energy, Inc.		789		50,220
NextEra Energy, Inc.		10,548		1,304,998
OGE Energy Corp.		4,356		146,100
Otter Tail Corp.		899		34,027
Pinnacle West Capital Corp.		2,365		183,595
PNM Resources, Inc.		1,430		49,192
Portland General Electric Co.		2,619		114,215
PPL Corp.		15,342		534,515
Southern Co.		21,583		1,066,848
Spark Energy, Inc., Class A		146		3,774
Unitil Corp.		397		18,171
Westar Energy, Inc.		3,085		168,719
Xcel Energy, Inc.		11,335		468,362
				8,860,539
Electrical Equipment — 0.6%
Acuity Brands, Inc.		990		205,158
Allied Motion Technologies, Inc.		178		3,923
AMETEK, Inc.		5,109		261,070
AZZ, Inc.		702		41,804
Babcock & Wilcox Enterprises, Inc. (a)		834		13,878
Brady Corp., Class A		832		30,243
Eaton Corp. PLC		10,343		732,078
Emerson Electric Co.		14,539		852,858
Encore Wire Corp.		372		15,717
Energous Corp. (a)(c)		545		7,881
EnerSys		1,136		88,551
Franklin Electric Co., Inc.		1,139		45,959
Generac Holdings, Inc. (a)		1,440		57,974
General Cable Corp.		903		18,331
Hubbell, Inc.		1,114		135,997
II-VI, Inc. (a)		1,436		52,414
LSI Industries, Inc.		297		2,827
Plug Power, Inc. (a)(c)		1,890		2,003
Powell Industries, Inc.		173		6,657
Preformed Line Products Co.		83		4,532
Regal-Beloit Corp.		1,187		86,176
Rockwell Automation, Inc.		2,892		427,987
Sunrun, Inc. (a)		588		3,111
Thermon Group Holdings, Inc. (a)		457		9,487
				3,106,616
Electronic Equipment, Instruments & Components — 0.7%
Amphenol Corp., Class A		6,675		450,496
Anixter International, Inc. (a)		670		57,285

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 77

Schedule of Investments (continued) BlackRock Total Stock Market Index Fund

Common Stocks	Shares		Value
Electronic Equipment, Instruments & Components (continued)
Arrow Electronics, Inc. (a)		2,022	$	148,657
Avnet, Inc.		2,960		137,462
AVX Corp.		510		8,262
Badger Meter, Inc.		507		19,545
Belden, Inc.		1,078		82,435
Benchmark Electronics, Inc. (a)		2,189		66,983
CDW Corp.		3,700		190,587
Cognex Corp.		1,844		124,581
Coherent, Inc. (a)		571		90,064
Control4 Corp. (a)		363		3,913
Corning, Inc.		21,271		563,469
CTS Corp.		459		9,869
Daktronics, Inc.		624		6,340
Dolby Laboratories, Inc., Class A		1,174		56,246
Electro Scientific Industries, Inc. (a)		703		4,619
Fabrinet (a)		1,162		48,955
FARO Technologies, Inc. (a)		224		8,310
Fitbit, Inc., Series A (a)		2,526		15,181
FLIR Systems, Inc.		2,839		100,302
Insight Enterprises, Inc. (a)		683		25,360
InvenSense, Inc. (a)		1,536		19,446
IPG Photonics Corp. (a)		815		93,717
Itron, Inc. (a)		986		60,836
Jabil Circuit, Inc.		4,200		100,716
Keysight Technologies, Inc. (a)		3,773		139,865
Kimball Electronics, Inc. (a)		871		14,894
Knowles Corp. (a)		1,663		29,967
Littelfuse, Inc.		526		82,956
Maxwell Technologies, Inc. (a)		878		4,179
Mercury Systems, Inc. (a)		711		23,975
Mesa Laboratories, Inc.		63		7,506
Methode Electronics, Inc.		948		39,863
MTS Systems Corp.		301		17,488
National Instruments Corp.		2,646		83,137
Novanta, Inc. (a)		537		12,002
OSI Systems, Inc. (a)		325		24,268
Park Electrochemical Corp.		658		12,061
Plexus Corp. (a)		864		46,915
Radisys Corp. (a)		1,745		7,695
Rogers Corp. (a)		597		47,730
Sanmina Corp. (a)		1,905		74,200
ScanSource, Inc. (a)		458		18,114
SYNNEX Corp.		663		79,679
Tech Data Corp. (a)		766		65,539
Trimble, Inc. (a)		5,756		170,493
TTM Technologies, Inc. (a)		2,582		38,291
Universal Display Corp. (a)		998		65,868
Vishay Intertechnology, Inc.		3,295		54,697
Vishay Precision Group, Inc. (a)		235		3,913
Zebra Technologies Corp., Class A (a)		1,207		100,990
				3,759,921
Energy Equipment & Services — 1.1%
Archrock, Inc.		1,293		18,878
Atwood Oceanics, Inc. (a)		1,144		13,911
Baker Hughes, Inc.		9,903		624,681
Bristow Group, Inc.		553		9,766
CARBO Ceramics, Inc. (a)		1,879		26,682
Dawson Geophysical Co. (a)		321		2,542
Diamond Offshore Drilling, Inc. (a)		1,152		18,870
Dril-Quip, Inc. (a)		906		56,353
Ensco PLC, Class A		7,902		86,290
Era Group, Inc. (a)		614		9,615
Exterran Corp. (a)		755		23,420
Fairmount Santrol Holdings, Inc. (a)		2,774		34,731
Forum Energy Technologies, Inc. (a)		1,055		22,894
Frank’s International NV		468		5,541

Common Stocks	Shares		Value
Energy Equipment & Services (continued)
Geospace Technologies Corp. (a)		309	$	7,212
Halliburton Co.		19,477		1,101,814
Helix Energy Solutions Group, Inc. (a)		2,186		18,537
Helmerich & Payne, Inc.		2,193		156,054
Hornbeck Offshore Services, Inc. (a)		88		638
Matrix Service Co. (a)		641		14,358
McDermott International, Inc. (a)		4,928		39,917
Nabors Industries Ltd.		7,211		117,179
National Oilwell Varco, Inc.		8,487		320,894
Natural Gas Services Group, Inc. (a)		149		4,276
Newpark Resources, Inc. (a)		1,377		10,396
Noble Corp. PLC		6,973		47,068
Oceaneering International, Inc.		2,768		77,089
Oil States International, Inc. (a)		1,277		50,442
Parker Drilling Co. (a)		1,353		3,450
Patterson-UTI Energy, Inc.		3,011		84,428
PHI, Inc. (a)		118		1,870
Pioneer Energy Services Corp. (a)		3,963		24,967
RigNet, Inc. (a)		264		5,214
Rowan Cos. PLC, Class A (a)		3,264		58,491
RPC, Inc.		1,370		29,482
Schlumberger Ltd.		31,806		2,662,480
SEACOR Holdings, Inc. (a)		311		22,880
Seadrill Ltd. (a)(c)		7,260		13,576
Superior Energy Services, Inc. (a)		4,664		82,413
Tesco Corp. (a)		1,478		12,711
TETRA Technologies, Inc. (a)		1,785		8,854
Transocean Ltd. (a)		8,132		113,604
Unit Corp. (a)		973		25,298
Weatherford International PLC (a)		23,537		122,628
				6,192,394
Food & Staples Retailing — 1.7%
Andersons, Inc.		506		19,101
Casey’s General Stores, Inc.		852		97,895
Chefs’ Warehouse, Inc. (a)		397		6,630
Costco Wholesale Corp.		9,957		1,632,450
CVS Health Corp.		24,547		1,934,549
Diplomat Pharmacy, Inc. (a)		690		9,481
Ingles Markets, Inc., Class A		278		12,579
Kroger Co.		21,651		735,268
Natural Grocers by Vitamin Cottage, Inc. (a)		357		4,512
Performance Food Group Co. (a)		681		15,084
PriceSmart, Inc.		389		32,948
Rite Aid Corp. (a)		23,919		134,425
Smart & Final Stores, Inc. (a)		347		4,979
SpartanNash Co.		667		25,253
Sprouts Farmers Market, Inc. (a)		3,238		60,453
Supervalu, Inc. (a)		4,842		18,981
Sysco Corp.		11,922		625,428
U.S. Foods Holding Corp. (a)		779		21,189
United Natural Foods, Inc. (a)		1,207		55,160
Village Super Market, Inc., Class A		168		5,089
Wal-Mart Stores, Inc.		34,613		2,310,072
Walgreens Boots Alliance, Inc.		19,655		1,610,531
Weis Markets, Inc.		138		8,203
Whole Foods Market, Inc.		7,231		218,521
				9,598,781
Food Products — 1.6%
AdvancePierre Foods Holdings, Inc.		402		11,139
Amplify Snack Brands, Inc. (a)(c)		258		2,485
Archer-Daniels-Midland Co.		12,980		574,495
B&G Foods, Inc.		1,561		69,230
Blue Buffalo Pet Products, Inc. (a)		1,104		26,772
Bunge Ltd.		3,380		233,930
Cal-Maine Foods, Inc. (c)		578		24,103

See Notes to Financial Statements.

78 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Total Stock Market Index Fund

Common Stocks	Shares		Value
Food Products (continued)
Calavo Growers, Inc.		294	$	16,258
Campbell Soup Co.		4,169		259,437
Conagra Brands, Inc.		9,834		384,411
Darling Ingredients, Inc. (a)		4,145		49,740
Dean Foods Co.		2,435		48,359
Farmer Bros Co. (a)		293		10,196
Flowers Foods, Inc.		4,297		86,413
Fresh Del Monte Produce, Inc.		1,062		60,800
Freshpet, Inc. (a)		494		5,508
General Mills, Inc.		13,557		847,041
Hain Celestial Group, Inc. (a)		2,408		95,260
Hershey Co.		3,158		333,074
Hormel Foods Corp.		6,124		222,301
Ingredion, Inc.		1,560		199,976
Inventure Foods, Inc. (a)		551		3,300
J&J Snack Foods Corp.		400		51,028
J.M. Smucker Co.		2,592		352,123
John B Sanfilippo & Son, Inc.		174		11,447
Kellogg Co.		5,643		410,303
Kraft Heinz Co.		13,682		1,221,666
Lamb Weston Holdings, Inc.		3,302		123,363
Lancaster Colony Corp.		420		55,041
Limoneira Co.		296		5,032
McCormick & Co., Inc.		2,557		244,321
Mead Johnson Nutrition Co.		4,287		302,062
Mondelez International, Inc., Class A		34,208		1,514,730
Omega Protein Corp. (a)		425		10,604
Pilgrim’s Pride Corp.		1,080		20,671
Pinnacle Foods, Inc.		2,487		132,284
Post Holdings, Inc. (a)		1,468		122,842
Sanderson Farms, Inc.		495		45,045
Seneca Foods Corp., Class A (a)		168		6,023
Snyders-Lance, Inc.		1,855		71,195
Tootsie Roll Industries, Inc.		246		9,213
TreeHouse Foods, Inc. (a)		1,170		88,780
Tyson Foods, Inc., Class A		6,572		412,656
WhiteWave Foods Co. (a)		3,933		216,551
				8,991,208
Gas Utilities — 0.2%
Atmos Energy Corp.		2,168		165,158
Chesapeake Utilities Corp.		423		27,664
National Fuel Gas Co.		1,655		92,929
New Jersey Resources Corp.		2,331		87,879
Northwest Natural Gas Co.		1,112		65,497
ONE Gas, Inc.		1,081		69,854
South Jersey Industries, Inc.		2,044		67,452
Southwest Gas Corp.		1,295		104,338
Spire, Inc.		1,112		72,280
UGI Corp.		3,754		174,073
WGL Holdings, Inc.		1,230		100,786
				1,027,910
Health Care Equipment & Supplies — 2.3%
Abaxis, Inc.		413		21,044
Abbott Laboratories		39,182		1,636,632
ABIOMED, Inc. (a)		919		97,754
Accuray, Inc. (a)		2,245		12,909
Alere, Inc. (a)		2,151		79,587
Align Technology, Inc. (a)		1,602		146,887
Analogic Corp.		235		18,248
AngioDynamics, Inc. (a)		820		13,198
Anika Therapeutics, Inc. (a)		299		15,111
AtriCure, Inc. (a)		723		11,763
Atrion Corp.		20		9,772
AxoGen, Inc. (a)		532		5,799
Baxter International, Inc.		10,454		500,851

Common Stocks	Shares		Value
Health Care Equipment & Supplies (continued)
Becton Dickinson & Co.		4,778	$	847,092
Boston Scientific Corp. (a)		30,765		740,206
C.R. Bard, Inc.		1,651		391,832
Cantel Medical Corp.		828		64,095
Cardiovascular Systems, Inc. (a)		623		15,388
Cerus Corp. (a)		1,475		6,284
ConforMIS, Inc. (a)		375		3,113
CONMED Corp.		528		23,544
Cooper Cos., Inc.		1,055		194,764
CryoLife, Inc. (a)		601		11,419
Cutera, Inc. (a)		240		4,440
Cynosure, Inc., Class A (a)		485		25,899
Dentsply Sirona, Inc.		5,176		293,479
DexCom, Inc. (a)		1,962		155,292
Edwards Lifesciences Corp. (a)		4,819		463,781
Endologix, Inc. (a)		1,592		10,921
Exactech, Inc. (a)		193		4,757
GenMark Diagnostics, Inc. (a)		801		9,716
Glaukos Corp. (a)		323		13,314
Globus Medical, Inc., Class A (a)		1,950		51,402
Haemonetics Corp. (a)		1,356		54,050
Halyard Health, Inc. (a)		1,343		51,665
Hill-Rom Holdings, Inc.		1,527		89,895
Hologic, Inc. (a)		6,384		258,744
ICU Medical, Inc. (a)		362		49,630
IDEXX Laboratories, Inc. (a)		1,999		244,538
Inogen, Inc. (a)		305		19,633
Insulet Corp. (a)		1,480		61,568
Integra LifeSciences Holdings Corp. (a)		1,456		60,759
Intuitive Surgical, Inc. (a)		858		594,328
Invacare Corp.		859		9,879
InVivo Therapeutics Holdings Corp. (a)		784		3,724
K2M Group Holdings, Inc. (a)		494		10,038
LeMaitre Vascular, Inc.		180		4,088
Masimo Corp. (a)		936		68,871
Medtronic PLC		32,184		2,446,628
Meridian Bioscience, Inc.		886		11,607
Merit Medical Systems, Inc. (a)		800		20,320
Natus Medical, Inc. (a)		623		24,328
Neogen Corp. (a)		901		59,502
Nevro Corp. (a)		602		52,386
Novocure Ltd. (a)		1,006		6,388
NuVasive, Inc. (a)		1,351		95,610
NxStage Medical, Inc. (a)		1,886		50,733
Ocular Therapeutix, Inc. (a)		390		2,558
OraSure Technologies, Inc. (a)		891		7,859
Orthofix International NV (a)		352		12,651
Oxford Immunotec Global PLC (a)		422		5,701
Quidel Corp. (a)		467		8,864
ResMed, Inc.		3,158		213,291
Rockwell Medical, Inc. (a)(c)		732		4,253
RTI Surgical, Inc. (a)		1,373		4,462
Spectranetics Corp. (a)		819		21,171
STAAR Surgical Co. (a)		712		7,049
Stryker Corp.		7,669		947,352
SurModics, Inc. (a)		407		9,849
Teleflex, Inc.		1,014		170,078
Utah Medical Products, Inc.		90		5,598
Varex Imaging Corp. (a)		870		25,024
Varian Medical Systems, Inc. (a)		2,176		168,966
Vascular Solutions, Inc. (a)		317		17,736
West Pharmaceutical Services, Inc.		1,569		132,784
Wright Medical Group NV (a)		3,158		79,518
Zeltiq Aesthetics, Inc. (a)		924		40,970
Zimmer Biomet Holdings, Inc.		4,208		497,933
				12,632,872

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 79

Schedule of Investments (continued) BlackRock Total Stock Market Index Fund

Common Stocks	Shares		Value
Health Care Providers & Services — 2.4%
Acadia Healthcare Co., Inc. (a)		1,710	$	65,613
Addus HomeCare Corp. (a)		156		5,327
Adeptus Health, Inc., Class A (a)		127		911
Aetna, Inc.		7,755		919,821
Air Methods Corp. (a)		995		35,521
Almost Family, Inc. (a)		340		16,065
Amedisys, Inc. (a)		535		24,514
AmerisourceBergen Corp.		3,742		326,602
AMN Healthcare Services, Inc. (a)		1,123		40,260
Anthem, Inc.		6,010		926,381
BioTelemetry, Inc. (a)		528		12,170
Brookdale Senior Living, Inc. (a)		4,520		67,664
Capital Senior Living Corp. (a)		492		8,202
Cardinal Health, Inc.		7,417		555,978
Centene Corp. (a)		3,782		239,287
Chemed Corp.		377		62,616
Cigna Corp.		5,764		842,812
Civitas Solutions, Inc. (a)		124		2,269
Community Health Systems, Inc. (a)		2,135		13,664
Corvel Corp. (a)		227		8,705
Cross Country Healthcare, Inc. (a)		730		10,563
DaVita, Inc. (a)		3,759		239,636
Ensign Group, Inc.		699		14,218
Envision Healthcare Corp. (a)		2,630		178,840
Express Scripts Holding Co. (a)		14,432		994,076
Genesis Healthcare, Inc. (a)		1,147		4,714
HCA Holdings, Inc. (a)		6,922		555,698
HealthEquity, Inc. (a)		849		39,266
HealthSouth Corp.		2,739		106,328
Henry Schein, Inc. (a)		1,818		290,625
HMS Holdings Corp. (a)		1,582		28,729
Humana, Inc.		3,389		672,716
Integer Holdings Corp. (a)		576		18,662
Kindred Healthcare, Inc.		1,627		10,820
Laboratory Corp. of America Holdings (a)		2,361		316,870
Landauer, Inc.		189		9,705
LHC Group, Inc. (a)		270		13,535
LifePoint Health, Inc. (a)		1,198		71,101
Magellan Health, Inc. (a)		689		51,641
McKesson Corp.		5,134		714,396
MEDNAX, Inc. (a)		1,967		134,444
Molina Healthcare, Inc. (a)		1,032		58,535
National Healthcare Corp.		195		14,596
Nobilis Health Corp. (a)		1,564		3,363
Owens & Minor, Inc.		1,771		63,543
Patterson Cos., Inc.		2,273		94,580
Penumbra, Inc. (a)		669		47,867
PharMerica Corp. (a)		536		13,293
Premier, Inc., Class A (a)		1,479		47,121
Providence Service Corp. (a)		166		6,416
Quest Diagnostics, Inc.		3,102		285,136
Quorum Health Corp. (a)		712		6,258
RadNet, Inc. (a)		791		4,588
Select Medical Holdings Corp. (a)		2,053		25,560
Surgery Partners, Inc. (a)		153		2,831
Surgical Care Affiliates, Inc. (a)		500		28,250
Team Health Holdings, Inc. (a)		1,410		61,279
Teladoc, Inc. (a)		206		4,120
Tenet Healthcare Corp. (a)		2,167		38,118
Tivity Health, Inc. (a)		640		16,416
Triple-S Management Corp., Class B (a)		307		5,867
U.S. Physical Therapy, Inc.		224		15,714
UnitedHealth Group, Inc.		21,412		3,470,885
Universal American Corp. (a)		1,250		12,425
Universal Health Services, Inc., Class B		1,932		217,601
VCA, Inc. (a)		1,733		157,010
WellCare Health Plans, Inc. (a)		1,030		149,906
				13,502,243

Common Stocks	Shares		Value
Health Care Technology — 0.1%
athenahealth, Inc. (a)		939	$	118,305
Castlight Health, Inc., Class B (a)		894		2,771
Cerner Corp. (a)		6,679		358,729
Computer Programs & Systems, Inc.		171		3,865
Cotiviti Holdings, Inc. (a)		325		11,004
Evolent Health, Inc., Class A (a)		139		2,530
HealthStream, Inc. (a)		385		8,840
Inovalon Holdings, Inc., Class A (a)		906		10,464
Medidata Solutions, Inc. (a)		1,317		65,244
Omnicell, Inc. (a)		643		23,084
Quality Systems, Inc. (a)		929		13,944
Veeva Systems, Inc., Class A (a)		2,251		95,285
Vocera Communications, Inc. (a)		531		11,018
				725,083
Hotels, Restaurants & Leisure — 1.9%
Aramark		5,511		186,492
Belmond Ltd., Class A (a)		1,504		20,830
Biglari Holdings, Inc. (a)		20		8,864
BJ’s Restaurants, Inc. (a)		523		18,593
Bloomin’ Brands, Inc.		2,096		35,863
Bob Evans Farms, Inc.		387		21,838
Boyd Gaming Corp. (a)		1,494		30,358
Brinker International, Inc.		1,020		45,390
Buffalo Wild Wings, Inc. (a)		294		44,394
Caesars Acquisition Co., Class A (a)		944		14,160
Caesars Entertainment Corp. (a)		1,014		9,075
Carnival Corp.		9,041		500,691
Carrols Restaurant Group, Inc. (a)		896		12,858
Cheesecake Factory, Inc.		1,100		66,286
Chipotle Mexican Grill, Inc. (a)		649		273,515
Choice Hotels International, Inc.		809		44,899
Churchill Downs, Inc.		346		49,599
Chuy’s Holdings, Inc. (a)		256		7,526
ClubCorp Holdings, Inc.		1,347		22,226
Cracker Barrel Old Country Store, Inc.		444		70,179
Darden Restaurants, Inc.		2,604		190,821
Dave & Buster’s Entertainment, Inc. (a)		911		49,613
Del Frisco’s Restaurant Group, Inc. (a)		854		14,945
Del Taco Restaurants, Inc. (a)		678		9,248
Denny’s Corp. (a)		1,350		16,430
DineEquity, Inc.		333		22,837
Domino’s Pizza, Inc.		1,122		195,834
Dunkin’ Brands Group, Inc.		2,053		106,489
El Pollo Loco Holdings, Inc. (a)		399		4,968
Eldorado Resorts, Inc. (a)		405		6,278
Extended Stay America, Inc.		1,447		23,456
Fiesta Restaurant Group, Inc. (a)		480		12,624
Golden Entertainment, Inc.		302		3,328
Habit Restaurants, Inc., Class A (a)		422		6,119
Hilton Grand Vacations, Inc. (a)		1,042		30,562
Hilton Worldwide Holdings, Inc.		4,064		234,005
Hyatt Hotels Corp., Class A (a)		964		52,740
ILG, Inc.		2,894		54,841
International Game Technology PLC		2,458		64,916
International Speedway Corp., Class A		397		14,550
Intrawest Resorts Holdings, Inc. (a)		223		4,596
Isle of Capri Casinos, Inc. (a)		670		15,953
Jack in the Box, Inc.		727		78,458
La Quinta Holdings, Inc. (a)		1,573		22,226
Las Vegas Sands Corp.		8,370		440,095
Marcus Corp.		514		15,240
Marriott International, Inc., Class A		7,369		623,417
Marriott Vacations Worldwide Corp.		580		50,158
McDonald’s Corp.		19,122		2,343,784
MGM Resorts International (a)		10,820		311,616
Monarch Casino & Resort, Inc. (a)		228		5,417

See Notes to Financial Statements.

80 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Total Stock Market Index Fund

Common Stocks	Shares		Value
Hotels, Restaurants & Leisure (continued)
Nathan’s Famous, Inc. (a)		78	$	4,875
Norwegian Cruise Line Holdings Ltd. (a)		3,804		178,788
Panera Bread Co., Class A (a)		523		109,338
Papa John’s International, Inc.		627		53,433
Penn National Gaming, Inc. (a)		1,613		22,227
Pinnacle Entertainment, Inc. (a)		1,064		16,386
Planet Fitness, Inc., Class A		452		9,510
Popeyes Louisiana Kitchen, Inc. (a)		397		25,086
Potbelly Corp. (a)		715		9,295
Red Robin Gourmet Burgers, Inc. (a)		269		12,791
Red Rock Resorts, Inc., Class A		727		17,070
Royal Caribbean Cruises Ltd.		3,735		349,708
Ruby Tuesday, Inc. (a)		1,314		2,575
Ruth’s Hospitality Group, Inc.		527		9,038
Ryman Hospitality Properties, Inc.		1,083		66,258
Scientific Games Corp., Class A (a)		1,050		17,850
SeaWorld Entertainment, Inc.		1,271		23,018
Shake Shack, Inc., Class A (a)		304		10,734
Six Flags Entertainment Corp.		1,572		93,660
Sonic Corp.		1,583		39,417
Starbucks Corp.		32,766		1,809,339
Texas Roadhouse, Inc.		1,686		78,635
Vail Resorts, Inc.		878		150,612
Wendy’s Co.		4,960		67,109
Wingstop, Inc.		315		8,968
Wyndham Worldwide Corp.		2,539		200,733
Wynn Resorts Ltd.		1,768		179,328
Yum China Holdings, Inc. (a)		7,884		216,652
Yum! Brands, Inc.		7,900		517,687
Zoe’s Kitchen, Inc. (a)		407		8,885
				10,818,205
Household Durables — 0.6%
Bassett Furniture Industries, Inc.		182		5,132
Beazer Homes USA, Inc. (a)		349		4,977
CalAtlantic Group, Inc.		2,025		70,612
Cavco Industries, Inc. (a)		160		15,720
Century Communities, Inc. (a)		541		12,308
CSS Industries, Inc.		356		8,765
D.R. Horton, Inc.		7,624		228,034
Ethan Allen Interiors, Inc.		482		14,026
Flexsteel Industries, Inc.		220		11,189
Garmin Ltd.		2,594		125,264
GoPro, Inc., Class A (a)(c)		1,770		19,028
Green Brick Partners, Inc. (a)		414		3,974
Harman International Industries, Inc.		1,609		178,856
Helen of Troy Ltd. (a)		880		82,104
Hooker Furniture Corp.		333		11,056
Hovnanian Enterprises, Inc., Class A (a)		2,660		6,304
Installed Building Products, Inc. (a)		348		14,233
iRobot Corp. (a)		675		40,878
KB Home		2,137		35,004
La-Z-Boy, Inc.		896		25,626
Leggett & Platt, Inc.		2,745		130,991
Lennar Corp., Class A		4,143		184,985
Lennar Corp., Class B		259		9,314
LGI Homes, Inc. (a)		223		6,926
Libbey, Inc.		628		10,745
Lifetime Brands, Inc.		222		3,319
M/I Homes, Inc. (a)		425		10,685
MDC Holdings, Inc.		713		19,280
Meritage Homes Corp. (a)		1,018		37,411
Mohawk Industries, Inc. (a)		1,328		286,636
NACCO Industries, Inc., Class A		95		7,006
New Home Co., Inc. (a)		329		3,435
Newell Brands, Inc.		10,601		501,745
NVR, Inc. (a)		78		144,924

Common Stocks	Shares		Value
Household Durables (continued)
PulteGroup, Inc.		7,569	$	162,809
Taylor Morrison Home Corp., Class A (a)		547		10,612
Tempur Sealy International, Inc. (a)		1,277		54,911
Toll Brothers, Inc. (a)		3,440		107,878
TopBuild Corp. (a)		712		26,422
TRI Pointe Group, Inc. (a)		3,712		45,546
Tupperware Brands Corp.		1,230		74,243
Universal Electronics, Inc. (a)		483		28,738
WCI Communities, Inc. (a)		617		14,438
Whirlpool Corp.		1,647		288,044
William Lyon Homes, Class A (a)		595		10,502
ZAGG, Inc. (a)		555		3,719
				3,098,354
Household Products — 1.5%
Central Garden & Pet Co. (a)		682		22,404
Central Garden and Pet Co., Class A (a)		912		28,071
Church & Dwight Co., Inc.		5,783		261,507
Clorox Co.		2,865		343,800
Colgate-Palmolive Co.		19,818		1,279,846
Energizer Holdings, Inc.		1,436		72,475
HRG Group, Inc. (a)		2,266		38,137
Kimberly-Clark Corp.		8,175		990,238
Oil-Dri Corp. of America		141		4,744
Orchids Paper Products Co.		354		9,668
Procter & Gamble Co.		58,563		5,130,119
Spectrum Brands Holdings, Inc.		579		77,233
WD-40 Co.		268		28,180
				8,286,422
Independent Power and Renewable Electricity Producers — 0.1%
AES Corp.		14,901		170,468
Atlantic Power Corp. (a)		4,381		10,295
Atlantica Yield PLC		1,316		28,163
Calpine Corp. (a)		8,469		99,934
Dynegy, Inc. (a)		3,577		34,160
NRG Energy, Inc.		8,441		139,614
NRG Yield, Inc., Class A		765		12,431
NRG Yield, Inc., Class C		989		16,764
Ormat Technologies, Inc.		964		51,767
Pattern Energy Group, Inc.		1,245		24,576
TerraForm Global, Inc., Class A (a)		891		3,920
TerraForm Power, Inc., Class A (a)		1,562		18,541
				610,633
Industrial Conglomerates — 2.2%
3M Co.		13,462		2,353,427
BWX Technologies, Inc.		2,153		89,328
Carlisle Cos., Inc.		1,383		150,899
Danaher Corp.		13,821		1,159,858
General Electric Co.		210,805		6,260,908
Honeywell International, Inc.		17,396		2,058,295
Raven Industries, Inc.		668		16,733
Roper Technologies, Inc.		2,236		428,977
Seaboard Corp. (a)		4		15,400
Standex International Corp.		278		24,242
				12,558,067
Insurance — 2.8%
Aflac, Inc.		9,227		645,798
Alleghany Corp. (a)		228		139,438
Allied World Assurance Co. Holdings AG		2,169		115,239
Allstate Corp.		8,430		634,020
American Equity Investment Life Holding Co.		1,135		26,786
American Financial Group, Inc.		1,591		137,096
American International Group, Inc.		23,393		1,503,234
American National Insurance Co.		143		16,672
AMERISAFE, Inc.		355		22,383

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 81

Schedule of Investments (continued) BlackRock Total Stock Market Index Fund

Common Stocks	Shares		Value
Insurance (continued)
AmTrust Financial Services, Inc.		2,434	$	64,233
Aon PLC		5,929		668,198
Arch Capital Group Ltd. (a)		3,002		265,227
Argo Group International Holdings Ltd.		725		46,364
Arthur J Gallagher & Co.		3,923		211,175
Aspen Insurance Holdings Ltd.		2,318		130,735
Assurant, Inc.		1,296		125,880
Assured Guaranty Ltd.		3,178		123,656
Axis Capital Holdings Ltd.		2,100		134,421
Baldwin & Lyons, Inc., Class B		404		9,696
Brown & Brown, Inc.		2,515		105,957
Chubb Ltd.		10,620		1,396,424
Cincinnati Financial Corp.		3,353		236,655
Citizens, Inc. (a)		1,392		12,890
CNA Financial Corp.		602		25,073
CNO Financial Group, Inc.		2,178		41,186
Crawford & Co., Class B		288		3,491
eHealth, Inc. (a)		206		2,526
EMC Insurance Group, Inc.		502		14,633
Employers Holdings, Inc.		1,780		64,881
Endurance Specialty Holdings Ltd.		1,429		132,454
Enstar Group Ltd. (a)		410		79,397
Erie Indemnity Co., Class A		538		60,315
Everest Re Group Ltd.		513		112,824
FBL Financial Group, Inc., Class A		849		59,260
Federated National Holding Co.		170		3,118
First American Financial Corp.		2,427		91,207
FNF Group		5,982		211,524
Genworth Financial, Inc., Class A (a)		4,655		15,641
Greenlight Capital Re Ltd., Class A (a)		575		12,995
Hanover Insurance Group, Inc.		1,020		85,619
Hartford Financial Services Group, Inc.		8,824		429,817
Heritage Insurance Holdings, Inc.		585		8,295
Hilltop Holdings, Inc.		1,395		38,195
Horace Mann Educators Corp.		1,675		69,261
Independence Holding Co.		268		5,333
Infinity Property & Casualty Corp.		337		29,268
Investors Title Co.		51		6,198
James River Group Holdings Ltd.		302		11,974
Kemper Corp.		1,892		81,734
Lincoln National Corp.		5,437		367,052
Loews Corp.		6,045		281,576
Maiden Holdings Ltd.		1,108		19,667
Markel Corp. (a)		310		286,750
Marsh & McLennan Cos., Inc.		11,825		804,337
MBIA, Inc. (a)		2,769		28,244
MetLife, Inc.		21,390		1,163,830
National General Holdings Corp.		1,074		26,302
National Western Life Group, Inc., Class A		54		15,830
Navigators Group, Inc.		534		29,984
Old Republic International Corp.		5,173		107,598
OneBeacon Insurance Group Ltd., Class A		795		12,903
Primerica, Inc.		675		50,929
Principal Financial Group, Inc.		6,046		345,166
ProAssurance Corp.		1,196		65,062
Progressive Corp.		13,236		495,556
Prudential Financial, Inc.		10,123		1,064,029
Reinsurance Group of America, Inc.		1,167		146,423
RenaissanceRe Holdings Ltd.		433		59,027
RLI Corp.		1,127		66,966
Safety Insurance Group, Inc.		141		10,110
Selective Insurance Group, Inc.		533		22,226
State Auto Financial Corp.		446		11,266
State National Cos., Inc.		765		10,526
Third Point Reinsurance Ltd. (a)		1,141		13,064
Torchmark Corp.		2,598		191,057
Travelers Cos., Inc.		6,657		784,061

Common Stocks	Shares		Value
Insurance (continued)
Trupanion, Inc. (a)(c)		727	$	11,625
United Fire Group, Inc.		405		19,116
United Insurance Holdings Corp.		218		2,980
Universal Insurance Holdings, Inc.		610		15,952
Unum Group		5,418		246,140
Validus Holdings Ltd.		2,276		129,732
W.R. Berkley Corp.		2,236		150,282
White Mountains Insurance Group Ltd.		157		142,832
WMIH Corp. (a)		1,915		2,968
XL Group Ltd.		5,908		221,964
				15,891,528
Internet & Direct Marketing Retail — 2.1%
Amazon.com, Inc. (a)		8,895		7,324,855
Blue Nile, Inc.		293		11,928
Duluth Holdings, Inc., Class B (a)		128		2,895
Etsy, Inc. (a)		2,101		26,494
Expedia, Inc.		2,701		328,415
FTD Cos., Inc. (a)		264		6,067
Groupon, Inc. (a)		6,943		23,953
HSN, Inc.		590		20,798
Lands’ End, Inc. (a)(c)		215		3,300
Liberty Expedia Holdings, Inc., Class A (a)		1,515		66,675
Liberty Interactive Corp QVC Group, Series A (a)		9,810		188,156
Liberty TripAdvisor Holdings, Inc., Series A (a)		2,127		38,180
Liberty Ventures, Series A (a)		1,821		79,487
Netflix, Inc. (a)		9,306		1,309,447
Nutrisystem, Inc.		565		18,673
Overstock.com, Inc. (a)		145		2,407
PetMed Express, Inc.		418		8,857
Priceline Group, Inc. (a)		1,131		1,781,472
RetailMeNot, Inc. (a)		820		7,421
Shutterfly, Inc. (a)		886		45,478
TripAdvisor, Inc. (a)		2,640		139,656
Wayfair, Inc., Class A (a)(c)		600		24,936
				11,459,550
Internet Software & Services — 3.9%
Akamai Technologies, Inc. (a)		3,892		266,952
Alarm.com Holdings, Inc. (a)		128		3,468
Alphabet, Inc., Class A (a)		6,684		5,482,150
Alphabet, Inc., Class C (a)		6,808		5,424,546
Amber Road, Inc. (a)		336		2,974
Angie’s List, Inc. (a)		439		2,753
Appfolio, Inc., Class A (a)		182		4,122
Bankrate, Inc. (a)		823		8,971
Bazaarvoice, Inc. (a)		881		4,141
Benefitfocus, Inc. (a)		285		8,621
Blucora, Inc. (a)		670		10,117
Box, Inc., Class A (a)		928		15,841
Brightcove, Inc. (a)		354		2,549
Carbonite, Inc. (a)		278		4,795
ChannelAdvisor Corp. (a)		283		3,920
Chegg, Inc. (a)		1,883		13,539
Cimpress NV (a)		901		76,035
CommerceHub, Inc., Series A (a)		157		2,306
CommerceHub, Inc., Series C (a)		952		13,880
ComScore, Inc. (a)		1,519		50,962
Cornerstone OnDemand, Inc. (a)		1,249		50,822
CoStar Group, Inc. (a)		729		147,331
DHI Group, Inc. (a)		1,464		8,345
EarthLink Holdings Corp.		6,505		41,697
eBay, Inc. (a)		24,303		773,564
Endurance International Group Holdings, Inc. (a)		771		5,937
Envestnet, Inc. (a)		1,166		44,075
Facebook, Inc., Class A (a)		51,299		6,685,286
Five9, Inc. (a)		715		11,054

See Notes to Financial Statements.

82 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Total Stock Market Index Fund

Common Stocks	Shares		Value
Internet Software & Services (continued)
Global Eagle Entertainment, Inc. (a)		478	$	2,944
GoDaddy, Inc., Class A (a)		1,141		40,768
Gogo, Inc. (a)(c)		740		6,771
GrubHub, Inc. (a)		1,874		77,865
GTT Communications, Inc. (a)		498		14,068
Hortonworks, Inc. (a)		362		3,511
IAC/InterActiveCorp (a)		1,631		112,229
j2 Global, Inc.		992		83,140
LendingClub Corp. (a)		8,300		51,211
Liquidity Services, Inc. (a)		954		9,301
LivePerson, Inc. (a)		1,406		10,264
LogMeIn, Inc.		601		64,968
Match Group, Inc. (a)(c)		532		9,241
MeetMe, Inc. (a)		514		2,529
MINDBODY, Inc., Class A (a)		188		4,578
New Relic, Inc. (a)		420		15,204
NIC, Inc.		1,913		46,103
Pandora Media, Inc. (a)		5,453		70,889
Perficient, Inc. (a)		685		12,145
Q2 Holdings, Inc. (a)		486		15,430
Quotient Technology, Inc. (a)		984		10,480
Reis, Inc.		224		4,480
Shutterstock, Inc. (a)		357		19,207
SPS Commerce, Inc. (a)		314		21,666
Stamps.com, Inc. (a)		381		46,311
TrueCar, Inc. (a)		1,020		13,413
Twilio, Inc. (a)		835		24,073
Twitter, Inc. (a)		14,554		256,441
VeriSign, Inc. (a)		2,184		175,179
Web.com Group, Inc. (a)		796		15,084
WebMD Health Corp. (a)		937		46,747
Xactly Corp. (a)		252		3,062
XO Group, Inc. (a)		558		10,507
Yahoo!, Inc. (a)		19,787		872,013
Yelp, Inc. (a)		1,611		67,308
Zillow Group, Inc., Class A (a)		926		33,317
Zillow Group, Inc., Class C (a)		2,853		100,939
				21,544,139
IT Services — 3.6%
Accenture PLC, Class A		14,281		1,626,177
Acxiom Corp. (a)		1,980		51,678
Alliance Data Systems Corp.		1,312		299,635
Amdocs Ltd.		3,834		225,094
Automatic Data Processing, Inc.		10,388		1,049,084
Black Knight Financial Services, Inc., Class A (a)		469		17,095
Blackhawk Network Holdings, Inc. (a)		1,410		50,337
Booz Allen Hamilton Holding Corp.		2,512		84,956
Broadridge Financial Solutions, Inc.		2,585		171,980
CACI International, Inc., Class A (a)		543		66,680
Cardtronics PLC, Class A (a)		1,364		74,447
Cass Information Systems, Inc.		213		14,009
Cognizant Technology Solutions Corp., Class A (a)		13,781		724,743
Computer Sciences Corp.		3,094		192,447
Conduent, Inc. (a)		4,709		70,447
Convergys Corp.		2,145		53,239
CoreLogic, Inc. (a)		2,180		76,889
CSG Systems International, Inc.		603		29,185
CSRA, Inc.		3,751		116,356
DST Systems, Inc.		830		95,575
EPAM Systems, Inc. (a)		1,260		81,094
Euronet Worldwide, Inc. (a)		1,174		83,965
EVERTEC, Inc.		1,188		20,255
ExlService Holdings, Inc. (a)		612		28,121
Fidelity National Information Services, Inc.		7,313		580,798
First Data Corp., Class A (a)		7,147		109,635
Fiserv, Inc. (a)		4,952		531,993

Common Stocks	Shares		Value
IT Services (continued)
FleetCor Technologies, Inc. (a)		2,078	$	306,484
Forrester Research, Inc.		194		7,915
Gartner, Inc. (a)		1,804		179,245
Genpact Ltd. (a)		4,887		120,611
Global Payments, Inc.		3,477		268,703
Hackett Group, Inc.		467		7,589
International Business Machines Corp.		20,116		3,510,644
Jack Henry & Associates, Inc.		1,754		157,474
Leidos Holdings, Inc.		3,061		147,908
Lionbridge Technologies, Inc. (a)		1,118		6,395
Mantech International Corp., Class A		444		17,289
Mastercard, Inc., Class A		22,096		2,349,468
MAXIMUS, Inc.		1,709		94,234
MoneyGram International, Inc. (a)		577		7,328
Paychex, Inc.		7,237		436,319
PayPal Holdings, Inc. (a)		25,869		1,029,069
Planet Payment, Inc. (a)		1,065		4,494
Sabre Corp.		4,617		113,117
Science Applications International Corp.		967		78,733
ServiceSource International, Inc. (a)		904		4,791
Square, Inc., Class A (a)		845		12,354
Syntel, Inc.		464		9,772
TeleTech Holdings, Inc.		224		6,630
Teradata Corp. (a)		3,312		97,240
Total System Services, Inc.		3,749		189,999
Travelport Worldwide Ltd.		2,199		31,578
Unisys Corp. (a)		1,375		17,669
Vantiv, Inc., Class A (a)		3,451		214,790
VeriFone Systems, Inc. (a)		2,765		50,240
Virtusa Corp. (a)		504		12,842
Visa, Inc., Class A		43,679		3,612,690
Western Union Co.		11,224		219,766
WEX, Inc. (a)		888		101,525
Xerox Corp.		22,978		159,238
				20,110,057
Leisure Products — 0.1%
Brunswick Corp.		1,984		118,762
Callaway Golf Co.		1,951		22,105
Hasbro, Inc.		2,508		206,935
Malibu Boats, Inc. (a)		690		12,806
Mattel, Inc.		7,841		205,513
Nautilus, Inc. (a)		627		10,879
Polaris Industries, Inc.		1,387		116,605
Sturm Ruger & Co., Inc.		340		17,935
Vista Outdoor, Inc. (a)		1,584		45,635
				757,175
Life Sciences Tools & Services — 0.7%
Accelerate Diagnostics, Inc. (a)		394		8,254
Agilent Technologies, Inc.		7,332		359,048
Albany Molecular Research, Inc. (a)		557		10,249
Bio-Rad Laboratories, Inc., Class A (a)		507		96,370
Bio-Techne Corp.		848		86,284
Bruker Corp.		2,538		60,227
Cambrex Corp. (a)		804		42,170
Charles River Laboratories International, Inc. (a)		1,189		96,071
Enzo Biochem, Inc. (a)		451		3,013
Fluidigm Corp. (a)		250		1,582
Illumina, Inc. (a)		3,338		534,414
INC Research Holdings, Inc., Class A (a)		975		51,675
Luminex Corp. (a)		759		15,347
Medpace Holdings, Inc. (a)		111		3,873
Mettler-Toledo International, Inc. (a)		568		242,326
NanoString Technologies, Inc. (a)		178		3,211
NeoGenomics, Inc. (a)		792		6,383
Pacific Biosciences of California, Inc. (a)		1,535		7,399

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 83

Schedule of Investments (continued) BlackRock Total Stock Market Index Fund

Common Stocks	Shares		Value
Life Sciences Tools & Services (continued)
PAREXEL International Corp. (a)		1,298	$	92,015
Patheon NV (a)		701		20,112
PerkinElmer, Inc.		2,407		128,028
PRA Health Sciences, Inc. (a)		440		25,780
QIAGEN NV (a)		4,834		140,089
Quintiles IMS Holdings, Inc. (a)		3,129		245,595
Thermo Fisher Scientific, Inc.		8,953		1,364,348
VWR Corp. (a)		1,855		48,063
Waters Corp. (a)		1,715		242,930
				3,934,856
Machinery — 1.8%
Actuant Corp., Class A		1,827		47,776
AGCO Corp.		1,720		108,016
Alamo Group, Inc.		115		8,697
Albany International Corp., Class A		564		26,762
Altra Industrial Motion Corp.		1,768		65,946
American Railcar Industries, Inc.		85		3,786
Astec Industries, Inc.		906		63,402
Barnes Group, Inc.		1,133		54,531
Briggs & Stratton Corp.		751		16,267
Caterpillar, Inc.		12,664		1,211,438
Chart Industries, Inc. (a)		575		22,304
CIRCOR International, Inc.		306		19,058
CLARCOR, Inc.		1,172		97,053
Colfax Corp. (a)		2,125		82,875
Columbus McKinnon Corp.		232		6,378
Crane Co.		1,160		83,566
Cummins, Inc.		3,512		516,299
Deere & Co.		7,043		753,953
DMC Global, Inc.		301		4,801
Donaldson Co., Inc.		2,952		124,722
Douglas Dynamics, Inc.		346		11,695
Dover Corp.		3,329		258,830
Energy Recovery, Inc. (a)		703		7,199
EnPro Industries, Inc.		405		27,504
ESCO Technologies, Inc.		437		25,433
Federal Signal Corp.		1,085		16,861
Flowserve Corp.		2,957		145,366
Fortive Corp.		6,771		374,504
FreightCar America, Inc.		360		5,202
Global Brass & Copper Holdings, Inc.		409		13,558
Gorman-Rupp Co.		250		8,115
Graco, Inc.		1,256		112,525
Graham Corp.		286		6,355
Greenbrier Cos., Inc.		523		22,881
Harsco Corp. (a)		1,484		19,811
Hurco Cos., Inc.		172		5,263
Hyster-Yale Materials Handling, Inc.		114		7,013
IDEX Corp.		1,659		149,575
Illinois Tool Works, Inc.		6,603		839,902
Ingersoll-Rand PLC		5,556		440,869
ITT, Inc.		2,022		82,639
John Bean Technologies Corp.		793		68,476
Joy Global, Inc.		2,206		62,033
Kadant, Inc.		188		11,581
Kennametal, Inc.		2,293		81,952
Lincoln Electric Holdings, Inc.		1,320		110,048
Lindsay Corp.		471		35,485
Lydall, Inc. (a)		301		18,361
Manitowoc Co., Inc. (a)		2,432		16,611
Manitowoc Foodservice, Inc. (a)		3,379		64,809
Meritor, Inc. (a)		2,833		40,880
Middleby Corp. (a)		1,306		175,239
Miller Industries, Inc.		363		9,620
Mueller Industries, Inc.		1,332		53,626
Mueller Water Products, Inc., Series A		3,670		49,398

Common Stocks	Shares		Value
Machinery (continued)
Navistar International Corp. (a)		961	$	26,206
NN, Inc.		453		8,766
Nordson Corp.		1,290		146,454
Oshkosh Corp.		1,669		116,212
PACCAR, Inc.		7,680		516,941
Parker Hannifin Corp.		2,927		430,650
Pentair PLC		3,754		220,097
Proto Labs, Inc. (a)		639		33,548
RBC Bearings, Inc. (a)		547		50,669
Rexnord Corp. (a)		2,129		47,030
Snap-on, Inc.		1,242		225,460
SPX Corp. (a)		673		16,791
SPX FLOW, Inc. (a)		551		19,224
Stanley Black & Decker, Inc.		3,279		406,596
Sun Hydraulics Corp.		425		16,652
Supreme Industries, Inc., Class A		283		5,196
Tennant Co.		341		23,614
Terex Corp.		2,288		72,758
Timken Co.		1,581		70,196
Titan International, Inc.		1,283		17,051
Toro Co.		2,413		142,198
TriMas Corp. (a)		825		17,573
Trinity Industries, Inc.		3,493		96,197
Valmont Industries, Inc.		589		84,816
Wabash National Corp.		1,138		20,086
WABCO Holdings, Inc. (a)		1,225		133,562
Wabtec Corp.		1,986		172,067
Watts Water Technologies, Inc., Class A		811		53,526
Woodward, Inc.		1,245		86,702
Xylem, Inc.		3,887		191,668
				10,165,355
Marine — 0.0%
Kirby Corp. (a)		1,237		79,725
Matson, Inc.		1,263		45,038
Scorpio Bulkers, Inc. (a)		1,346		9,624
				134,387
Media — 3.1%
AMC Entertainment Holdings, Inc., Class A		969		32,704
AMC Networks, Inc., Class A (a)		1,411		80,921
Cable One, Inc.		103		65,135
CBS Corp., Class B		8,615		555,581
Charter Communications, Inc., Class A (a)		4,585		1,485,311
Cinemark Holdings, Inc.		2,217		94,222
Clear Channel Outdoor Holdings, Inc., Class A		713		3,529
Comcast Corp., Class A		55,099		4,155,567
Daily Journal Corp. (a)		28		6,059
Discovery Communications, Inc., Class A (a)		3,688		104,555
Discovery Communications, Inc., Class C (a)		4,600		127,466
DISH Network Corp., Class A (a)		4,967		293,897
Entercom Communications Corp., Class A		339		4,814
Entravision Communications Corp., Class A		1,689		9,121
Eros International PLC (a)		591		7,033
EW Scripps Co., Class A (a)		1,830		35,648
Gannett Co., Inc.		3,516		33,824
Gray Television, Inc. (a)		1,183		14,019
IMAX Corp. (a)		2,096		68,330
Interpublic Group of Cos., Inc.		8,964		210,923
John Wiley & Sons, Inc., Class A		1,333		73,448
Liberty Braves Group, Class A (a)		996		19,870
Liberty Braves Group, Class C (a)		944		18,861
Liberty Broadband Corp., Class A (a)		518		43,346
Liberty Broadband Corp., Class C (a)		2,613		222,993
Liberty Media Corp. — Liberty Formula One, Class A (a)		581		16,837
Liberty Media Corp. — Liberty Formula One, Class C (a)		951		27,332
Liberty Media Corp. — Liberty SiriusXM, Class A (a)		3,154		114,301

See Notes to Financial Statements.

84 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Total Stock Market Index Fund

Common Stocks	Shares		Value
Media (continued)
Liberty Media Corp. — Liberty SiriusXM, Class C (a)		2,993	$	107,419
Lions Gate Entertainment Corp., Class A		1,567		45,083
Lions Gate Entertainment Corp., Class B (a)		2,917		78,146
Live Nation Entertainment, Inc. (a)		2,817		80,623
Madison Square Garden Co., Class A (a)		370		64,998
MDC Partners, Inc., Class A		524		3,354
Meredith Corp.		677		41,500
MSG Networks, Inc., Class A (a)		1,652		38,326
National CineMedia, Inc.		1,170		17,152
New Media Investment Group, Inc.		543		8,275
New York Times Co., Class A		2,155		29,092
News Corp., Class A		8,027		98,652
News Corp., Class B		5,383		68,095
Nexstar Broadcasting Group, Inc., Class A		1,082		70,763
Omnicom Group, Inc.		5,306		454,459
Reading International, Inc., Class A (a)		655		10,709
Regal Entertainment Group, Class A		1,839		41,672
Scholastic Corp.		411		18,816
Scripps Networks Interactive, Inc., Class A		1,786		136,022
Sinclair Broadcast Group, Inc., Class A		1,713		57,814
Sirius XM Holdings, Inc.		38,989		184,028
TEGNA, Inc.		4,936		113,084
Thomson Reuters Corp.		7,393		331,502
Time Warner, Inc.		17,872		1,730,903
Time, Inc.		3,045		58,616
TiVo Corp. (a)		3,425		64,732
Tribune Media Co., Class A		2,318		66,851
TRONC, Inc. (a)		502		6,657
Twenty-First Century Fox, Inc., Class A		23,038		722,932
Twenty-First Century Fox, Inc., Class B		12,944		401,393
Viacom, Inc., Class A		144		6,516
Viacom, Inc., Class B		7,798		328,608
Walt Disney Co.		37,087		4,103,677
World Wrestling Entertainment, Inc., Class A		1,688		33,051
				17,549,167
Metals & Mining — 0.5%
AK Steel Holding Corp. (a)		7,016		56,689
Alcoa Corp.		3,830		139,603
Allegheny Technologies, Inc.		2,737		59,475
Carpenter Technology Corp.		1,214		48,584
Century Aluminum Co. (a)		998		15,369
Cliffs Natural Resources, Inc. (a)		5,416		47,498
Coeur Mining, Inc. (a)		5,267		61,361
Commercial Metals Co.		2,682		54,793
Compass Minerals International, Inc.		816		68,218
Ferroglobe PLC		2,093		13,127
Freeport-McMoRan, Inc. (a)		30,315		504,745
Haynes International, Inc.		363		14,923
Hecla Mining Co.		10,046		64,696
Kaiser Aluminum Corp.		329		25,813
Materion Corp.		360		14,148
Newmont Mining Corp.		11,877		430,898
Nucor Corp.		7,178		416,970
Olympic Steel, Inc.		97		2,183
Reliance Steel & Aluminum Co.		1,578		125,688
Royal Gold, Inc.		1,461		105,440
Ryerson Holding Corp. (a)		148		1,569
Schnitzer Steel Industries, Inc., Class A		603		14,261
Southern Copper Corp.		1,843		70,697
Steel Dynamics, Inc.		5,366		181,424
Stillwater Mining Co. (a)		2,990		50,830
SunCoke Energy, Inc. (a)		1,134		10,002
Tahoe Resources, Inc.		7,290		66,631
TimkenSteel Corp. (a)		882		14,871
U.S. Silica Holdings, Inc.		1,671		98,823
United States Steel Corp.		3,417		111,770

Common Stocks	Shares		Value
Metals & Mining (continued)
Worthington Industries, Inc.		1,046	$	49,988
				2,941,087
Multi-Utilities — 1.1%
Alliant Energy Corp.		4,791		180,381
Ameren Corp.		5,380		283,257
Avista Corp.		1,407		54,366
Black Hills Corp.		1,695		106,022
CenterPoint Energy, Inc.		9,633		252,481
CMS Energy Corp.		5,921		252,235
Consolidated Edison, Inc.		6,778		503,944
Dominion Resources, Inc.		14,109		1,076,235
DTE Energy Co.		3,917		386,373
MDU Resources Group, Inc.		4,307		126,410
NiSource, Inc.		5,769		129,053
NorthWestern Corp.		1,369		78,184
PG&E Corp.		11,284		698,367
Public Service Enterprise Group, Inc.		11,301		500,069
SCANA Corp.		2,770		190,299
Sempra Energy		5,562		569,493
Vectren Corp.		1,938		106,377
WEC Energy Group, Inc.		7,060		416,893
				5,910,439
Multiline Retail — 0.5%
Big Lots, Inc.		1,076		53,800
Burlington Stores, Inc. (a)		1,525		127,643
Dillard’s, Inc., Class A		348		19,641
Dollar General Corp.		6,436		475,106
Dollar Tree, Inc. (a)		5,148		397,374
FirstCash, Inc.		1,230		52,521
Fred’s, Inc., Class A		569		8,290
JC Penney Co., Inc. (a)		7,840		52,136
Kohl’s Corp.		4,324		172,225
Macy’s, Inc.		6,986		206,366
Nordstrom, Inc.		2,859		126,425
Ollie’s Bargain Outlet Holdings, Inc. (a)		360		10,998
Sears Holdings Corp. (a)		57		398
Target Corp.		13,438		866,482
Tuesday Morning Corp. (a)		1,836		7,895
				2,577,300
Oil & Gas Exploration & Production — 0.0%
Carrizo Oil & Gas, Inc. (a)		1,606		56,788
Oil, Gas & Consumable Fuels — 5.3%
Abraxas Petroleum Corp. (a)		2,071		5,115
Alon USA Energy, Inc.		547		6,159
Anadarko Petroleum Corp.		12,780		888,593
Antero Resources Corp. (a)		4,037		98,543
Apache Corp.		8,692		519,956
Ardmore Shipping Corp.		591		4,344
Bill Barrett Corp. (a)		1,200		7,860
Cabot Oil & Gas Corp.		10,360		222,533
California Resources Corp. (a)		958		20,520
Callon Petroleum Co. (a)		3,375		51,570
Cheniere Energy, Inc. (a)		4,580		218,237
Chesapeake Energy Corp. (a)		14,109		91,003
Chevron Corp.		43,005		4,788,607
Cimarex Energy Co.		2,101		284,076
Clayton Williams Energy, Inc. (a)		166		24,145
Clean Energy Fuels Corp. (a)		2,177		5,638
Cobalt International Energy, Inc. (a)		8,356		8,196
Concho Resources, Inc. (a)		3,202		446,487
ConocoPhillips		28,371		1,383,370
CONSOL Energy, Inc.		5,288		89,579
Contango Oil & Gas Co. (a)		215		1,742
Continental Resources, Inc. (a)		1,941		94,255

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 85

Schedule of Investments (continued) BlackRock Total Stock Market Index Fund

Common Stocks	Shares		Value
Oil, Gas & Consumable Fuels (continued)
Delek U.S. Holdings, Inc.		1,146	$	25,670
Denbury Resources, Inc. (a)		9,975		33,416
Devon Energy Corp.		11,980		545,569
DHT Holdings, Inc.		1,316		6,172
Diamondback Energy, Inc. (a)		1,742		183,206
Dorian LPG Ltd. (a)		197		2,228
Eclipse Resources Corp. (a)		580		1,427
Energen Corp. (a)		2,209		119,043
EOG Resources, Inc.		12,545		1,274,321
EP Energy Corp., Class A (a)		381		1,996
EQT Corp.		3,893		236,033
EXCO Resources, Inc. (a)		695		465
Exxon Mobil Corp.		95,470		8,008,978
Frontline Ltd.		788		5,469
GasLog Ltd.		733		12,241
Gener8 Maritime, Inc. (a)		963		4,863
Golar LNG Ltd.		3,482		90,045
Green Plains, Inc.		670		15,075
Gulfport Energy Corp. (a)		2,981		62,303
Hess Corp.		6,458		349,894
HollyFrontier Corp.		3,660		106,030
International Seaways, Inc. (a)		85		1,477
Jones Energy, Inc., Class A (a)		1,008		4,486
Kinder Morgan, Inc.		43,912		980,994
Kosmos Energy Ltd. (a)		2,757		18,031
Laredo Petroleum, Inc. (a)		3,468		46,991
Marathon Oil Corp.		19,378		324,582
Marathon Petroleum Corp.		11,961		574,726
Matador Resources Co. (a)		2,078		54,714
Murphy Oil Corp.		3,680		106,389
Murphy USA, Inc. (a)		872		55,546
Navios Maritime Acquisition Corp.		2,872		5,342
Newfield Exploration Co. (a)		4,421		177,194
Noble Energy, Inc.		9,719		386,428
Nordic American Tankers Ltd.		1,483		12,813
Northern Oil and Gas, Inc. (a)		1,813		6,527
Oasis Petroleum, Inc. (a)		5,445		76,992
Occidental Petroleum Corp.		17,497		1,185,772
ONEOK, Inc.		4,710		259,568
Overseas Shipholding Group, Inc., Class A		256		1,257
Pacific Ethanol, Inc. (a)		558		3,962
Panhandle Oil and Gas, Inc., Class A		196		4,312
Par Pacific Holdings, Inc. (a)		783		11,377
Parsley Energy, Inc., Class A (a)		3,746		131,934
PBF Energy, Inc., Class A		2,439		56,560
PDC Energy, Inc. (a)		1,282		94,791
Phillips 66		10,228		834,809
Pioneer Natural Resources Co.		3,699		666,671
QEP Resources, Inc. (a)		5,121		89,310
Range Resources Corp.		4,813		155,652
Renewable Energy Group, Inc. (a)		713		6,203
REX American Resources Corp. (a)		107		8,884
Rice Energy, Inc. (a)		1,755		34,802
Ring Energy, Inc. (a)		2,128		28,090
RSP Permian, Inc. (a)		2,357		100,314
Scorpio Tankers, Inc.		3,157		12,091
SemGroup Corp., Class A		1,583		62,845
Ship Finance International Ltd.		1,106		16,590
SM Energy Co.		2,297		70,082
Southwestern Energy Co. (a)		11,212		101,020
Spectra Energy Corp.		15,844		659,903
Synergy Resources Corp. (a)		4,863		41,870
Targa Resources Corp.		3,778		217,688
Teekay Corp.		710		7,136
Teekay Tankers Ltd., Class A		1,294		3,170
Tesoro Corp.		2,675		216,274
Valero Energy Corp.		10,670		701,659

Common Stocks	Shares		Value
Oil, Gas & Consumable Fuels (continued)
Western Refining, Inc.		1,873	$	65,574
Westmoreland Coal Co. (a)		343		6,226
Whiting Petroleum Corp. (a)		5,856		64,943
Williams Cos., Inc.		15,717		453,278
World Fuel Services Corp.		1,648		73,303
WPX Energy, Inc. (a)		7,799		108,640
				29,734,764
Paper & Forest Products — 0.1%
Boise Cascade Co. (a)		1,353		33,554
Clearwater Paper Corp. (a)		332		20,883
Deltic Timber Corp.		167		12,687
Domtar Corp.		1,535		67,064
KapStone Paper and Packaging Corp.		2,191		52,540
Louisiana-Pacific Corp. (a)		3,377		64,602
Neenah Paper, Inc.		304		24,974
PH Glatfelter Co.		807		19,699
Schweitzer-Mauduit International, Inc.		571		25,312	��
				321,315
Personal Products — 0.2%
Avon Products, Inc. (a)		10,458		61,388
Coty, Inc., Class A		10,496		201,523
Edgewell Personal Care Co. (a)		1,356		106,907
Estee Lauder Cos., Inc., Class A		4,883		396,548
Herbalife Ltd. (a)		1,729		97,170
Inter Parfums, Inc.		236		8,048
Lifevantage Corp. (a)		178		1,285
Medifast, Inc.		293		12,356
Natural Health Trends Corp.		98		2,458
Nature’s Sunshine Products, Inc.		255		3,251
Nu Skin Enterprises, Inc., Class A		1,295		67,185
Nutraceutical International Corp.		166		5,561
Revlon, Inc., Class A (a)		260		8,697
Synutra International, Inc. (a)		737		4,275
USANA Health Sciences, Inc. (a)		195		12,148
				988,800
Pharmaceuticals — 4.1%
Aclaris Therapeutics, Inc. (a)		156		4,139
Aerie Pharmaceuticals, Inc. (a)		1,137		49,914
Akorn, Inc. (a)		2,135		40,778
Allergan PLC (a)		7,666		1,678,011
Amphastar Pharmaceuticals, Inc. (a)		686		10,804
ANI Pharmaceuticals, Inc. (a)		175		10,579
Aratana Therapeutics, Inc. (a)		403		3,220
Bio-Path Holdings, Inc. (a)		1,124		1,068
Bristol-Myers Squibb Co.		38,222		1,878,993
Catalent, Inc. (a)		2,277		60,933
Cempra, Inc. (a)		856		2,696
Collegium Pharmaceutical, Inc. (a)		181		3,044
Corcept Therapeutics, Inc. (a)		1,196		8,504
Depomed, Inc. (a)		1,111		20,098
Dermira, Inc. (a)		392		11,540
Durect Corp. (a)		2,947		3,124
Eli Lilly & Co.		22,314		1,718,847
Endo International PLC (a)		5,144		62,963
Heska Corp. (a)		84		6,688
Horizon Pharma PLC (a)		4,324		70,784
Impax Laboratories, Inc. (a)		1,996		26,247
Intersect ENT, Inc. (a)		286		3,861
Intra-Cellular Therapies, Inc. (a)		732		10,570
Johnson & Johnson		62,920		7,125,690
Lannett Co., Inc. (a)		445		8,967
Mallinckrodt PLC (a)		2,493		121,484
Medicines Co. (a)		1,727		62,258
Merck & Co., Inc.		63,340		3,926,447

See Notes to Financial Statements.

86 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Total Stock Market Index Fund

Common Stocks	Shares		Value
Pharmaceuticals (continued)
Mylan NV (a)		10,390	$	395,339
MyoKardia, Inc. (a)		234		2,621
Nektar Therapeutics (a)		3,821		46,272
Omeros Corp. (a)(c)		872		8,450
Pacira Pharmaceuticals, Inc. (a)		686		26,377
Paratek Pharmaceuticals, Inc. (a)		182		2,748
Perrigo Co. PLC		3,199		243,604
Pfizer, Inc.		137,531		4,363,859
Phibro Animal Health Corp., Class A		430		11,481
Prestige Brands Holdings, Inc. (a)		1,262		66,583
Reata Pharmaceuticals, Inc. (a)		143		3,561
Revance Therapeutics, Inc. (a)		232		4,640
Sciclone Pharmaceuticals, Inc. (a)		3,392		34,429
Sucampo Pharmaceuticals, Inc., Class A (a)		534		5,954
Supernus Pharmaceuticals, Inc. (a)		895		24,210
Teligent, Inc. (a)		475		3,325
TherapeuticsMD, Inc. (a)(c)		2,459		14,287
Theravance Biopharma, Inc. (a)		733		21,961
WaVe Life Sciences Ltd. (a)		106		3,047
Zoetis, Inc.		10,373		569,893
Zogenix, Inc. (a)		502		4,041
				22,788,933
Producer Durables: Miscellaneous — 0.0%
Actua Corp. (a)		1,097		15,687
PROS Holdings, Inc. (a)		583		13,048
				28,735
Professional Services — 0.3%
Advisory Board Co. (a)		1,152		52,416
Barrett Business Services, Inc.		146		8,776
CBIZ, Inc. (a)		770		10,087
CEB, Inc.		843		64,447
CRA International, Inc.		196		6,513
Dun & Bradstreet Corp.		841		103,123
Equifax, Inc.		2,634		308,916
Exponent, Inc.		478		27,748
Franklin Covey Co. (a)		195		3,413
FTI Consulting, Inc. (a)		801		33,754
GP Strategies Corp. (a)		414		10,640
Heidrick & Struggles International, Inc.		563		12,583
Hill International, Inc. (a)		947		5,114
Huron Consulting Group, Inc. (a)		409		18,528
ICF International, Inc. (a)		336		17,472
Insperity, Inc.		297		21,235
Kelly Services, Inc., Class A		388		8,687
Kforce, Inc.		363		8,349
Korn/Ferry International		1,529		44,417
ManpowerGroup, Inc.		1,448		138,226
Mistras Group, Inc. (a)		335		7,732
Navigant Consulting, Inc. (a)		883		21,810
Nielsen Holdings PLC		8,181		334,685
On Assignment, Inc. (a)		1,216		55,060
Paylocity Holding Corp. (a)		416		12,838
Resources Connection, Inc.		605		10,103
Robert Half International, Inc.		2,878		135,439
RPX Corp. (a)		744		8,080
TransUnion (a)		994		31,341
TriNet Group, Inc. (a)		1,193		30,338
TrueBlue, Inc. (a)		763		18,884
Verisk Analytics, Inc. (a)		3,442		284,447
WageWorks, Inc. (a)		871		62,843
				1,918,044
Real Estate Investment Trusts (REITs) — 3.9%
Acadia Realty Trust		3,194		101,697
AG Mortgage Investment Trust, Inc.		900		15,768

Common Stocks	Shares		Value
Real Estate Investment Trusts (REITs) (continued)
AGNC Investment Corp.		7,338	$	137,000
Agree Realty Corp.		415		19,464
Alexander’s, Inc.		37		15,644
Alexandria Real Estate Equities, Inc.		1,705		188,948
American Assets Trust, Inc.		696		29,879
American Campus Communities, Inc.		2,798		136,039
American Homes 4 Rent, Class A		4,478		99,770
American Tower Corp.		9,623		995,980
Annaly Capital Management, Inc.		20,992		214,538
Anworth Mortgage Asset Corp.		2,687		13,784
Apartment Investment & Management Co., Class A		3,487		153,672
Apollo Commercial Real Estate Finance, Inc.		1,345		23,416
Apple Hospitality REIT, Inc.		4,029		80,661
Ares Commercial Real Estate Corp.		1,122		15,125
Armada Hoffler Properties, Inc.		1,336		18,410
ARMOUR Residential REIT, Inc.		558		11,729
Ashford Hospitality Prime, Inc.		837		11,249
Ashford Hospitality Trust, Inc.		1,493		11,347
AvalonBay Communities, Inc.		3,060		530,329
Bluerock Residential Growth REIT, Inc.		999		13,067
Boston Properties, Inc.		3,382		442,704
Brandywine Realty Trust		4,323		69,600
Brixmor Property Group, Inc.		4,055		97,847
Camden Property Trust		1,831		153,017
Capstead Mortgage Corp.		1,502		16,026
Care Capital Properties, Inc.		2,730		67,458
Catchmark Timber Trust, Inc., Class A		712		7,326
CBL & Associates Properties, Inc.		4,513		48,966
Cedar Realty Trust, Inc.		1,848		11,106
Chatham Lodging Trust		600		12,084
Chesapeake Lodging Trust		1,132		28,979
Chimera Investment Corp.		4,196		73,975
City Office REIT, Inc.		814		10,248
Colony NorthStar, Inc., Class A		12,972		180,570
Colony Starwood Homes		1,218		38,306
Columbia Property Trust, Inc.		3,723		82,837
Communications Sales & Leasing, Inc.		2,872		75,476
Community Healthcare Trust, Inc.		647		13,956
CoreCivic, Inc.		2,660		77,246
CorEnergy Infrastructure Trust, Inc.		292		10,483
Coresite Realty Corp.		803		69,162
Corporate Office Properties Trust		2,168		68,986
Cousins Properties, Inc.		7,863		66,836
Crown Castle International Corp.		8,164		717,044
CubeSmart		4,257		106,978
CyrusOne, Inc.		2,068		99,595
CYS Investments, Inc.		2,553		19,326
DCT Industrial Trust, Inc.		2,264		101,178
DDR Corp.		6,612		100,370
DiamondRock Hospitality Co.		5,063		57,060
Digital Realty Trust, Inc.		3,495		376,167
Douglas Emmett, Inc.		3,172		120,028
Duke Realty Corp.		7,613		185,224
DuPont Fabros Technology, Inc.		2,003		95,102
Dynex Capital, Inc.		2,085		13,928
Easterly Government Properties, Inc.		1,197		23,581
EastGroup Properties, Inc.		449		31,776
Education Realty Trust, Inc.		1,845		74,187
Empire State Realty Trust, Inc., Class A		3,002		61,511
EPR Properties		1,347		99,638
Equinix, Inc.		1,553		597,874
Equity Commonwealth (a)		2,980		91,903
Equity Lifestyle Properties, Inc.		1,757		129,913
Equity One, Inc.		2,462		76,790
Equity Residential		7,899		480,022
Essex Property Trust, Inc.		1,430		320,749
Extra Space Storage, Inc.		2,658		191,509

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 87

Schedule of Investments (continued) BlackRock Total Stock Market Index Fund

Common Stocks	Shares		Value
Real Estate Investment Trusts (REITs) (continued)
Federal Realty Investment Trust		1,588	$	223,003
FelCor Lodging Trust, Inc.		2,548		19,620
First Industrial Realty Trust, Inc.		3,831		99,031
First Potomac Realty Trust		1,256		12,861
Forest City Realty Trust, Inc., Class A		5,381		121,826
Four Corners Property Trust, Inc.		3,935		85,822
Franklin Street Properties Corp.		1,777		22,657
Gaming and Leisure Properties, Inc.		4,213		133,257
Geo Group, Inc.		1,713		71,124
Getty Realty Corp.		583		15,036
GGP, Inc.		14,217		353,150
Gladstone Commercial Corp.		957		18,795
Global Net Lease, Inc.		3,004		23,281
Gramercy Property Trust		3,429		90,320
Great Ajax Corp.		321		4,176
HCP, Inc.		10,473		317,541
Healthcare Realty Trust, Inc.		3,457		104,436
Healthcare Trust of America, Inc., Class A		3,425		99,565
Hersha Hospitality Trust		628		12,554
Highwoods Properties, Inc.		2,064		106,110
Hospitality Properties Trust		2,359		73,436
Host Hotels & Resorts, Inc.		16,400		296,348
Hudson Pacific Properties, Inc.		2,810		99,502
Independence Realty Trust, Inc.		1,495		13,799
InfraREIT, Inc.		504		8,306
Invesco Mortgage Capital, Inc.		2,091		30,466
Investors Real Estate Trust		1,698		10,935
iStar, Inc. (a)		1,081		12,129
Kilroy Realty Corp.		1,920		143,712
Kimco Realty Corp.		8,842		220,077
Kite Realty Group Trust		1,544		37,087
Lamar Advertising Co., Class A		1,870		141,222
LaSalle Hotel Properties		2,776		83,752
Lexington Realty Trust		9,410		100,875
Liberty Property Trust		3,162		121,389
Life Storage, Inc.		998		81,287
LTC Properties, Inc.		683		31,876
Macerich Co.		3,088		212,115
Mack-Cali Realty Corp.		1,583		44,356
Medical Properties Trust, Inc.		6,800		86,700
MFA Financial, Inc.		9,862		77,811
Mid-America Apartment Communities, Inc.		2,467		234,242
Monmouth Real Estate Investment Corp.		995		14,527
Monogram Residential Trust, Inc.		2,751		27,978
MTGE Investment Corp.		730		11,607
National Health Investors, Inc.		1,189		87,974
National Retail Properties, Inc.		3,198		139,433
National Storage Affiliates Trust		447		9,946
New Residential Investment Corp.		5,321		80,613
New Senior Investment Group, Inc.		1,250		12,513
New York Mortgage Trust, Inc.		2,062		13,217
NexPoint Residential Trust, Inc.		679		15,692
NorthStar Realty Europe Corp.		1,409		16,922
Omega Healthcare Investors, Inc.		4,037		129,467
One Liberty Properties, Inc.		642		14,869
Orchid Island Capital, Inc.		389		4,602
Outfront Media, Inc.		3,711		101,793
Owens Realty Mortgage, Inc.		267		4,523
Paramount Group, Inc.		4,520		75,439
Park Hotels & Resorts, Inc.		2,084		56,560
Parkway, Inc. (a)		681		14,498
Pebblebrook Hotel Trust		2,003		59,910
Pennsylvania Real Estate Investment Trust		1,280		22,925
PennyMac Mortgage Investment Trust (b)		1,256		21,289
Physicians Realty Trust		3,799		70,471
Piedmont Office Realty Trust, Inc., Class A		3,332		72,371
Potlatch Corp.		1,400		57,680

Common Stocks	Shares		Value
Real Estate Investment Trusts (REITs) (continued)
Preferred Apartment Communities, Inc., Class A		1,032	$	13,973
Prologis, Inc.		11,702		571,643
PS Business Parks, Inc.		655		73,386
Public Storage		3,348		719,820
QTS Realty Trust, Inc., Class A		1,286		64,802
Quality Care Properties, Inc. (a)		1,624		29,979
RAIT Financial Trust		337		1,166
Ramco-Gershenson Properties Trust		1,515		24,634
Rayonier, Inc.		3,685		102,775
Realty Income Corp.		5,709		340,428
Redwood Trust, Inc.		1,521		23,576
Regency Centers Corp.		2,243		156,404
Resource Capital Corp.		848		6,971
Retail Opportunity Investments Corp.		1,925		40,810
Retail Properties of America, Inc., Class A		6,809		101,931
Rexford Industrial Realty, Inc.		1,160		26,344
RLJ Lodging Trust		3,692		85,691
Sabra Health Care REIT, Inc.		1,182		30,023
Saul Centers, Inc.		143		9,079
Select Income REIT		1,201		30,037
Senior Housing Properties Trust		3,367		64,141
Seritage Growth Properties, Class A (c)		466		19,013
Silver Bay Realty Trust Corp.		932		15,704
Simon Property Group, Inc.		7,035		1,292,822
SL Green Realty Corp.		2,152		234,503
Spirit Realty Capital, Inc.		10,847		114,110
STAG Industrial, Inc.		3,704		85,711
Starwood Property Trust, Inc.		6,166		137,255
STORE Capital Corp.		3,412		80,728
Summit Hotel Properties, Inc.		1,562		24,726
Sun Communities, Inc.		1,484		116,880
Sunstone Hotel Investors, Inc.		5,845		86,038
Tanger Factory Outlet Centers, Inc.		2,740		93,681
Taubman Centers, Inc.		1,450		102,718
Terreno Realty Corp.		829		22,541
Tier REIT, Inc.		1,188		21,633
Two Harbors Investment Corp.		9,328		81,807
UDR, Inc.		5,808		202,990
UMH Properties, Inc.		764		11,193
Urban Edge Properties		2,029		56,751
Ventas, Inc.		7,470		460,675
VEREIT, Inc.		22,826		194,706
Vornado Realty Trust		3,780		401,852
Washington Prime Group, Inc.		7,572		73,070
Washington Real Estate Investment Trust		1,321		41,545
Weingarten Realty Investors		2,586		92,139
Welltower, Inc.		8,027		532,190
Western Asset Mortgage Capital Corp.		1,131		11,412
Weyerhaeuser Co.		16,930		530,417
Whitestone REIT		415		5,773
WP Carey, Inc.		2,284		141,471
Xenia Hotels & Resorts, Inc.		1,904		34,938
				21,803,174
Real Estate Management & Development — 0.1%
Alexander & Baldwin, Inc.		1,174		52,266
Altisource Portfolio Solutions SA (a)		294		8,379
Altisource Residential Corp.		1,032		12,528
AV Homes, Inc. (a)		236		4,165
CareTrust REIT, Inc.		892		13,523
CBRE Group, Inc., Class A (a)		6,863		208,361
Consolidated-Tomoka Land Co.		88		4,840
Forestar Group, Inc. (a)		840		10,962
Howard Hughes Corp. (a)		867		92,431
Jones Lang LaSalle, Inc.		1,042		107,357
Kennedy-Wilson Holdings, Inc.		2,259		46,197
RE/MAX Holdings, Inc., Class A		321		17,992

See Notes to Financial Statements.

88 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Total Stock Market Index Fund

Common Stocks	Shares		Value
Real Estate Management & Development (continued)
Realogy Holdings Corp.		3,502	$	90,737
RMR Group, Inc., Class A		188		8,986
Stratus Properties, Inc. (a)		132		4,039
Tejon Ranch Co. (a)		423		9,996
Trinity Place Holdings, Inc. (a)		384		3,099
				695,858
Road & Rail — 0.9%
AMERCO, Inc.		144		54,240
ArcBest Corp.		693		21,899
Avis Budget Group, Inc. (a)		1,821		67,778
Celadon Group, Inc.		608		4,621
Covenant Transportation Group, Inc., Class A (a)		245		5,275
CSX Corp.		21,710		1,007,127
Genesee & Wyoming, Inc., Class A (a)		1,273		95,933
Heartland Express, Inc.		815		16,789
Hertz Global Holdings, Inc. (a)		1,958		41,059
JB Hunt Transport Services, Inc.		2,003		198,457
Kansas City Southern		2,425		208,332
Knight Transportation, Inc.		1,626		54,308
Landstar System, Inc.		1,038		87,815
Marten Transport Ltd.		535		12,225
Norfolk Southern Corp.		6,697		786,630
Old Dominion Freight Line, Inc. (a)		1,545		136,393
PAM Transportation Services, Inc. (a)		369		8,601
Roadrunner Transportation Systems, Inc. (a)		671		5,314
Ryder System, Inc.		1,214		94,206
Saia, Inc. (a)		428		20,565
Swift Transportation Co. (a)		1,809		41,299
Union Pacific Corp.		19,279		2,054,756
USA Truck, Inc. (a)		50		423
Werner Enterprises, Inc.		852		23,941
YRC Worldwide, Inc. (a)		617		9,212
				5,057,198
Semiconductors & Semiconductor Equipment — 3.1%
Acacia Communications, Inc. (a)		109		6,341
Advanced Energy Industries, Inc. (a)		892		52,485
Advanced Micro Devices, Inc. (a)		17,341		179,826
Alpha & Omega Semiconductor Ltd. (a)		229		4,660
Ambarella, Inc. (a)		925		45,889
Amkor Technology, Inc. (a)		1,942		18,274
Analog Devices, Inc.		6,891		516,412
Applied Materials, Inc.		24,701		846,009
Axcelis Technologies, Inc. (a)		1,025		15,580
Broadcom Ltd.		8,597		1,715,101
Brooks Automation, Inc.		1,220		21,252
Cabot Microelectronics Corp.		485		32,742
Cavium, Inc. (a)		1,592		105,406
CEVA, Inc. (a)		291		10,287
Cirrus Logic, Inc. (a)		1,428		86,137
Cohu, Inc.		889		11,735
Cree, Inc. (a)		2,386		65,806
Cypress Semiconductor Corp.		8,170		96,406
Diodes, Inc. (a)		663		16,502
DSP Group, Inc. (a)		1,130		12,261
Entegris, Inc. (a)		3,287		61,631
Exar Corp. (a)		1,287		13,192
First Solar, Inc. (a)		1,598		49,842
FormFactor, Inc. (a)		1,041		12,960
Inphi Corp. (a)		1,003		45,957
Integrated Device Technology, Inc. (a)		3,433		86,477
Intel Corp.		108,063		3,978,880
Intersil Corp., Class A		3,003		67,357
IXYS Corp.		979		11,846
KLA-Tencor Corp.		3,476		295,842
Kopin Corp. (a)		1,560		4,976

Common Stocks	Shares		Value
Semiconductors & Semiconductor Equipment (continued)
Lam Research Corp.		3,555	$	408,327
Lattice Semiconductor Corp. (a)		2,141		15,394
Linear Technology Corp.		5,289		333,895
MACOM Technology Solutions Holdings, Inc. (a)		593		28,175
Marvell Technology Group Ltd.		10,034		149,206
Maxim Integrated Products, Inc.		6,325		281,336
MaxLinear, Inc., Class A (a)		1,037		26,526
Microchip Technology, Inc.		4,662		313,986
Micron Technology, Inc. (a)		23,512		566,874
Microsemi Corp. (a)		2,452		130,324
MKS Instruments, Inc.		1,416		93,314
Monolithic Power Systems, Inc.		1,049		91,515
Nanometrics, Inc. (a)		423		10,875
NeoPhotonics Corp. (a)		339		3,712
NVE Corp.		172		13,345
NVIDIA Corp.		11,599		1,266,379
ON Semiconductor Corp. (a)		9,213		122,717
PDF Solutions, Inc. (a)		466		10,490
Photronics, Inc. (a)		1,151		13,237
Power Integrations, Inc.		702		49,842
Qorvo, Inc. (a)		2,816		180,815
QUALCOMM, Inc.		33,584		1,794,393
Rambus, Inc. (a)		3,047		39,550
Rudolph Technologies, Inc. (a)		558		12,806
Semtech Corp. (a)		1,579		52,028
Sigma Designs, Inc. (a)		755		4,606
Silicon Laboratories, Inc. (a)		970		63,244
Skyworks Solutions, Inc.		4,261		390,904
SunPower Corp. (a)(c)		1,191		7,908
Teradyne, Inc.		4,660		132,251
Tessera Holding Corp.		1,193		53,924
Texas Instruments, Inc.		22,899		1,729,790
Ultra Clean Holdings, Inc. (a)		650		8,145
Ultratech, Inc. (a)		368		9,539
Veeco Instruments, Inc. (a)		722		18,592
Versum Materials, Inc. (a)		2,250		62,888
Xcerra Corp. (a)		1,092		8,277
Xilinx, Inc.		5,663		329,587
				17,316,787
Software — 4.3%
A10 Networks, Inc. (a)		1,111		8,855
ACI Worldwide, Inc. (a)		2,912		56,493
Activision Blizzard, Inc.		12,722		511,552
Adobe Systems, Inc. (a)		11,128		1,261,693
Allscripts Healthcare Solutions, Inc. (a)		4,856		56,864
ANSYS, Inc. (a)		1,916		178,686
Aspen Technology, Inc. (a)		1,712		90,924
Atlassian Corp. PLC, Class A (a)		484		13,373
Autodesk, Inc. (a)		4,841		393,767
Barracuda Networks, Inc. (a)		420		9,866
Blackbaud, Inc.		1,112		72,958
Bottomline Technologies, Inc. (a)		761		19,573
BroadSoft, Inc. (a)		548		23,016
CA, Inc.		6,396		200,003
Cadence Design Systems, Inc. (a)		6,668		173,568
Callidus Software, Inc. (a)		1,174		21,660
CDK Global, Inc.		3,530		220,801
Citrix Systems, Inc. (a)		3,495		318,709
CommVault Systems, Inc. (a)		1,238		60,786
Dell Technologies, Inc., Class V (a)		4,934		310,793
Digimarc Corp. (a)		290		7,656
Ebix, Inc.		642		35,631
Electronic Arts, Inc. (a)		6,578		548,803
Ellie Mae, Inc. (a)		747		61,807
EnerNOC, Inc. (a)		649		3,699
ePlus, Inc. (a)		149		16,695

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 89

Schedule of Investments (continued) BlackRock Total Stock Market Index Fund

Common Stocks	Shares		Value
Software (continued)
Exa Corp. (a)		324	$	5,022
Fair Isaac Corp.		664		81,871
FireEye, Inc. (a)		4,309		58,387
Fortinet, Inc. (a)		3,482		115,811
Gigamon, Inc. (a)		553		18,332
Globant SA (a)		447		14,818
Glu Mobile, Inc. (a)		377		867
Guidewire Software, Inc. (a)		1,840		96,287
HubSpot, Inc. (a)		783		40,168
Imperva, Inc. (a)		869		36,281
Intuit, Inc.		5,519		654,443
Manhattan Associates, Inc. (a)		1,637		83,913
Mentor Graphics Corp.		2,374		87,624
Microsoft Corp.		173,311		11,204,556
MicroStrategy, Inc., Class A (a)		249		50,124
Mitek Systems, Inc. (a)		331		2,185
MobileIron, Inc. (a)		923		4,015
Monotype Imaging Holdings, Inc.		756		16,556
Netscout Systems, Inc. (a)		2,124		70,729
Nuance Communications, Inc. (a)		5,457		86,548
Oracle Corp.		67,694		2,715,206
Park City Group, Inc. (a)		251		3,175
Paycom Software, Inc. (a)		1,058		48,922
Pegasystems, Inc.		698		27,082
Progress Software Corp.		922		25,834
Proofpoint, Inc. (a)		1,060		84,970
PTC, Inc. (a)		2,650		139,311
Qualys, Inc. (a)		554		19,889
Rapid7, Inc. (a)		592		7,382
RealPage, Inc. (a)		1,015		31,059
Red Hat, Inc. (a)		4,136		313,840
Rubicon Project, Inc. (a)		334		2,829
salesforce.com, Inc. (a)		14,662		1,159,764
Sapiens International Corp. NV		864		11,543
ServiceNow, Inc. (a)		3,620		328,044
Silver Spring Networks, Inc. (a)		531		6,786
Splunk, Inc. (a)		2,970		171,844
SS&C Technologies Holdings, Inc.		3,780		121,451
Symantec Corp.		13,949		384,295
Synchronoss Technologies, Inc. (a)		1,052		40,523
Synopsys, Inc. (a)		3,366		211,688
Tableau Software, Inc., Class A (a)		1,412		67,550
Take-Two Interactive Software, Inc. (a)		1,912		102,579
Tangoe, Inc. (a)		115		837
TeleNav, Inc. (a)		760		6,764
Tyler Technologies, Inc. (a)		761		111,121
Ultimate Software Group, Inc. (a)		625		121,038
VASCO Data Security International, Inc. (a)		429		6,521
Verint Systems, Inc. (a)		1,559		58,229
VMware, Inc., Class A (a)(c)		1,843		161,336
Workday, Inc., Class A (a)		2,618		217,530
Workiva, Inc. (a)		612		7,711
Zendesk, Inc. (a)		2,142		51,258
Zix Corp. (a)		998		4,760
Zynga, Inc., Class A (a)		19,153		48,266
				24,227,705
Specialty Retail — 2.3%
Aaron’s, Inc.		1,567		48,483
Abercrombie & Fitch Co., Class A		2,579		29,942
Advance Auto Parts, Inc.		1,590		261,141
America’s Car-Mart, Inc. (a)		281		11,788
American Eagle Outfitters, Inc.		4,172		63,039
Asbury Automotive Group, Inc. (a)		377		24,731
Ascena Retail Group, Inc. (a)		4,289		20,630
AutoNation, Inc. (a)		1,518		80,636
AutoZone, Inc. (a)		659		477,762

Common Stocks	Shares		Value
Specialty Retail (continued)
Barnes & Noble Education, Inc. (a)		774	$	7,779
Barnes & Noble, Inc.		1,024		10,445
Bed Bath & Beyond, Inc.		3,253		131,258
Best Buy Co., Inc.		6,244		277,983
Big 5 Sporting Goods Corp.		293		4,512
BMC Stock Holdings, Inc. (a)		1,098		20,533
Boot Barn Holdings, Inc. (a)		235		2,550
Buckle, Inc.		543		11,484
Build-A-Bear Workshop, Inc., Class A (a)		292		3,504
Cabela’s, Inc. (a)		1,126		62,932
Caleres, Inc.		786		24,169
CarMax, Inc. (a)		4,370		291,523
Cato Corp., Class A		507		12,873
Chico’s FAS, Inc.		3,622		48,861
Children’s Place, Inc.		492		47,724
Citi Trends, Inc.		277		4,446
Conn’s, Inc. (a)		389		4,104
CST Brands, Inc.		1,700		81,906
Dick’s Sporting Goods, Inc.		1,914		98,762
DSW, Inc., Class A		2,120		44,859
Express, Inc. (a)		2,627		27,925
Finish Line, Inc., Class A		792		13,622
Five Below, Inc. (a)		1,336		53,240
Foot Locker, Inc.		3,044		208,636
Francesca’s Holdings Corp. (a)		821		14,318
GameStop Corp., Class A		2,382		58,335
Gap, Inc.		5,086		117,130
Genesco, Inc. (a)		391		23,538
GNC Holdings, Inc., Class A		1,064		9,438
Group 1 Automotive, Inc.		539		43,546
Guess?, Inc.		1,146		14,634
Haverty Furniture Cos., Inc.		502		10,944
Hibbett Sports, Inc. (a)		427		14,091
Home Depot, Inc.		28,462		3,915,802
Kirkland’s, Inc. (a)		341		4,733
L Brands, Inc.		5,570		335,370
Lithia Motors, Inc., Class A		589		60,738
Lowe’s Cos., Inc.		20,440		1,493,755
Lumber Liquidators Holdings, Inc. (a)		647		10,132
MarineMax, Inc. (a)		1,644		35,264
Michaels Cos., Inc. (a)		2,246		44,179
Monro Muffler Brake, Inc.		803		48,100
O’Reilly Automotive, Inc. (a)		2,127		557,848
Office Depot, Inc.		16,469		73,287
Party City Holdco, Inc. (a)		508		7,341
Penske Automotive Group, Inc.		919		49,957
Pier 1 Imports, Inc.		1,225		8,906
Rent-A-Center, Inc.		723		6,478
RH (a)(c)		1,173		31,694
Ross Stores, Inc.		8,966		592,742
Sally Beauty Holdings, Inc. (a)		3,488		83,014
Select Comfort Corp. (a)		898		18,122
Shoe Carnival, Inc.		372		9,512
Signet Jewelers Ltd.		1,609		124,971
Sonic Automotive, Inc., Class A		412		9,641
Sportsman’s Warehouse Holdings, Inc. (a)		414		3,080
Staples, Inc.		14,549		133,851
Tailored Brands, Inc.		944		20,060
Tiffany & Co.		2,489		195,934
Tile Shop Holdings, Inc. (a)		579		11,059
TJX Cos., Inc.		15,154		1,135,338
Tractor Supply Co.		3,013		221,968
Ulta Salon Cosmetics & Fragrance, Inc. (a)		1,310		356,687
Urban Outfitters, Inc. (a)		2,003		53,160
Vitamin Shoppe, Inc. (a)		484		10,479
West Marine, Inc. (a)		309		2,864
Williams-Sonoma, Inc.		2,071		99,843

See Notes to Financial Statements.

90 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Total Stock Market Index Fund

Common Stocks	Shares		Value
Specialty Retail (continued)
Winmark Corp.		34	$	3,765
Zumiez, Inc. (a)		536		10,747
				12,600,177
Technology Hardware, Storage & Peripherals — 3.2%
3D Systems Corp. (a)		2,820		46,502
Apple, Inc.		125,283		15,203,092
Avid Technology, Inc. (a)		592		3,167
Cray, Inc. (a)		772		13,240
Diebold Nixdorf, Inc.		1,775		48,280
Eastman Kodak Co. (a)		340		4,556
Electronics for Imaging, Inc. (a)		1,193		53,613
Hewlett Packard Enterprise Co.		39,123		887,310
HP, Inc.		39,268		590,983
Immersion Corp. (a)		1,186		12,204
NCR Corp. (a)		2,758		118,649
NetApp, Inc.		6,491		248,735
Nimble Storage, Inc. (a)		1,259		10,790
Pure Storage, Inc., Class A (a)		1,036		11,779
Stratasys Ltd. (a)		1,943		38,316
Super Micro Computer, Inc. (a)		825		21,821
Synaptics, Inc. (a)		891		50,235
USA Technologies, Inc. (a)		901		3,784
Western Digital Corp.		6,394		509,794
				17,876,850
Textiles, Apparel & Luxury Goods — 0.7%
Carter’s, Inc.		1,135		95,056
Coach, Inc.		6,270		234,184
Columbia Sportswear Co.		520		28,272
Crocs, Inc. (a)		930		6,789
Culp, Inc.		170		5,474
Deckers Outdoor Corp. (a)		826		47,578
Fossil Group, Inc. (a)		815		20,839
G-III Apparel Group Ltd. (a)		811		21,297
Hanesbrands, Inc.		8,568		203,147
Iconix Brand Group, Inc. (a)		1,306		13,439
Kate Spade & Co. (a)		3,103		57,436
lululemon athletica, Inc. (a)		2,166		146,227
Michael Kors Holdings Ltd. (a)		3,563		152,532
Movado Group, Inc.		450		12,217
NIKE, Inc., Class B		30,334		1,604,669
Oxford Industries, Inc.		289		15,901
Perry Ellis International, Inc. (a)		255		6,015
PVH Corp.		1,844		172,986
Ralph Lauren Corp.		1,372		121,326
Sequential Brands Group, Inc. (a)		363		1,681
Skechers U.S.A., Inc., Class A (a)		2,842		71,391
Steven Madden Ltd. (a)		1,543		54,314
Under Armour, Inc., Class A (a)(c)		4,165		89,506
Under Armour, Inc., Class C (a)		4,022		77,303
Unifi, Inc. (a)		322		8,659
Vera Bradley, Inc. (a)		696		7,976
VF Corp.		7,694		396,087
Wolverine World Wide, Inc.		2,373		55,742
				3,728,043
Thrifts & Mortgage Finance — 0.3%
Astoria Financial Corp.		2,728		51,587
Banc of California, Inc.		902		14,252
BankFinancial Corp.		603		8,122
Beneficial Bancorp, Inc.		1,762		31,452
Berkshire Hills Bancorp, Inc.		2,063		73,030
BofI Holding, Inc. (a)		1,490		43,955
Brookline Bancorp, Inc.		1,313		20,680
Capitol Federal Financial, Inc.		2,270		35,072
Charter Financial Corp.		722		12,404

Common Stocks	Shares		Value
Thrifts & Mortgage Finance (continued)
Dime Community Bancshares, Inc.		548	$	11,727
Essent Group Ltd. (a)		3,104		107,305
EverBank Financial Corp.		2,410		46,826
Federal Agricultural Mortgage Corp., Class C		139		7,737
First Defiance Financial Corp.		305		14,780
Flagstar Bancorp, Inc. (a)		446		11,493
Flushing Financial Corp.		429		11,669
Greene County Bancorp, Inc.		392		8,624
Hingham Institution for Savings		79		15,278
HomeStreet, Inc. (a)		371		9,720
Impac Mortgage Holdings, Inc. (a)		232		3,206
Kearny Financial Corp.		2,282		34,801
Ladder Capital Corp.		570		7,729
LendingTree, Inc. (a)		124		13,876
Meridian Bancorp, Inc.		1,376		25,938
Meta Financial Group, Inc.		159		13,968
MGIC Investment Corp. (a)		9,142		97,362
Nationstar Mortgage Holdings, Inc. (a)		547		9,923
New York Community Bancorp, Inc.		10,194		154,847
NMI Holdings, Inc., Class A (a)		743		8,024
Northfield Bancorp, Inc.		1,190		21,480
Northwest Bancshares, Inc.		2,104		35,915
OceanFirst Financial Corp.		487		13,836
Ocwen Financial Corp. (a)		1,730		9,117
Oritani Financial Corp.		1,043		18,096
People’s United Financial, Inc.		6,187		116,006
Provident Bancorp, Inc. (a)		433		8,530
Provident Financial Services, Inc.		1,941		51,378
Radian Group, Inc.		5,168		95,091
Territorial Bancorp, Inc.		536		16,975
TFS Financial Corp.		1,417		24,783
TrustCo Bank Corp. NY		1,531		12,860
United Community Financial Corp.		695		5,915
United Financial Bancorp, Inc.		771		13,917
Walker & Dunlop, Inc. (a)		523		16,428
Washington Federal, Inc.		2,051		67,375
Waterstone Financial, Inc.		804		14,552
WSFS Financial Corp.		534		24,190
				1,471,831
Tobacco — 1.4%
Alliance One International, Inc. (a)		257		4,279
Altria Group, Inc.		44,605		3,174,984
Philip Morris International, Inc.		35,462		3,408,962
Reynolds American, Inc.		18,777		1,129,061
Turning Point Brands, Inc. (a)		273		3,625
Universal Corp.		669		45,492
Vector Group Ltd.		2,264		49,944
				7,816,347
Trading Companies & Distributors — 0.4%
Aceto Corp.		578		11,034
Air Lease Corp.		2,558		93,060
Aircastle Ltd.		781		17,416
Applied Industrial Technologies, Inc.		871		52,652
Beacon Roofing Supply, Inc. (a)		1,964		85,964
CAI International, Inc. (a)		191		3,083
DXP Enterprises, Inc. (a)		333		12,594
Fastenal Co.		6,497		322,771
GATX Corp.		972		56,201
H&E Equipment Services, Inc.		611		15,800
HD Supply Holdings, Inc. (a)		4,446		188,066
Herc Holdings, Inc. (a)		427		21,209
Kaman Corp.		435		21,981
Lawson Products, Inc. (a)		478		12,356
MRC Global, Inc. (a)		2,394		49,197
MSC Industrial Direct Co., Inc., Class A		939		95,919

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 91

Schedule of Investments (continued) BlackRock Total Stock Market Index Fund

Common Stocks	Shares		Value
Trading Companies & Distributors (continued)
NOW, Inc. (a)		2,824	$	60,038
Rush Enterprises, Inc., Class A (a)		415		13,591
Rush Enterprises, Inc., Class B (a)		266		8,180
SiteOne Landscape Supply, Inc. (a)		207		7,953
Textainer Group Holdings Ltd.		1,756		25,286
Titan Machinery, Inc. (a)		378		5,220
Triton International, Ltd.		728		17,720
United Rentals, Inc. (a)		2,004		253,526
Univar, Inc. (a)		820		24,452
Veritiv Corp. (a)		176		9,865
W.W. Grainger, Inc.		1,231		310,914
Watsco, Inc.		588		89,811
WESCO International, Inc. (a)		1,340		94,738
				1,980,597
Transportation Infrastructure — 0.0%
Macquarie Infrastructure Corp.		1,661		124,558
Wesco Aircraft Holdings, Inc. (a)		1,006		15,241
				139,799
Water Utilities — 0.1%
American States Water Co.		671		29,376
American Water Works Co., Inc.		3,710		272,462
Aqua America, Inc.		4,238		128,878
Artesian Resources Corp., Class A		169		5,244
California Water Service Group		1,529		52,751
Connecticut Water Service, Inc.		261		14,104
Middlesex Water Co.		276		10,436
SJW Corp.		313		15,681
York Water Co.		487		17,435
				546,367
Wireless Telecommunication Services — 0.1%
Boingo Wireless, Inc. (a)		1,078		12,613
NII Holdings, Inc. (a)		714		2,017
RingCentral, Inc., Class A (a)		1,099		25,662

Common Stocks	Shares		Value
Wireless Telecommunication Services (continued)
Shenandoah Telecommunications Co.		866	$	23,599
Spok Holdings, Inc.		353		7,254
Sprint Corp. (a)		16,730		154,418
T-Mobile U.S., Inc. (a)		6,571		409,176
Telephone & Data Systems, Inc.		2,328		71,353
United States Cellular Corp. (a)		194		8,650
				714,742
Total Common Stocks — 97.4%				543,272,620
Rights
Biotechnology — 0.0%
Dyax Corp. (a)		119		272
Total Rights — 0.0%				272
Total Long-Term Investments (Cost — $509,427,150) — 97.4%				543,272,892
Short-Term Securities
BlackRock Liquidity Funds, T-Fund, Institutional Class, 0.40% (b)(d)		50,173,788		50,173,788
SL Liquidity Series, LLC, Money Market Series, 0.94% (b)(d)(e)		448,997		449,087
Total Short-Term Securities (Cost — $50,622,812) — 9.1%				50,622,875
Total Investments (Cost — $560,049,962) — 106.5%				593,895,767
Liabilities in Excess of Other Assets — (6.5)%				(36,504,271	)
Net Assets — 100.0%			$	557,391,496

Notes to Schedule of Investments

(a) Non-income producing security.

(b) During the six months ended January 31, 2017, 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 July 31, 2016		Shares Purchased			Shares Sold			Shares Held at January 31, 2017		Value at January 31, 2017		Income			Net Realized Gain1		Change in Unrealized Appreciation
BlackRock, Inc.		1,619		1,233			—			2,852	$	1,066,591	$	8,771			—	$	6,879
BlackRock Liquidity Funds, T-Fund, Institutional Class		—		50,173,788	2		—			50,173,788		50,173,788		18,497		$	258		—
BlackRock Premier Government Institutional Fund		20,471,120		—			(20,471,120	)3		—		—		5,327			—		—
PennyMac Mortgage Investment Trust		716		540			—			1,256		21,289		927			—		858
PNC Financial Services Group, Inc.		6,410		4,922			—			11,332		1,365,053		9,592			—		289,914
SL Liquidity Series, LLC, Money Market Series		431,687		17,310			—			448,997		449,087		22,078	4		43		64
Total											$	53,075,808	$	65,192		$	301	$	297,715
1   Includes net capital gain distributions.
2   Represents net shares purchased.
3   Represents net shares sold.
4   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.

See Notes to Financial Statements.

92 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Total Stock Market Index Fund

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

(d) Current yield as of period end.

(e) Security was purchased with the cash collateral from loaned 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 rating 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
Contracts Long		Issue	Expiration	Notional Value		Unrealized Depreciation
	22	Russell 2000 Mini Index	March 2017	$	1,495,450	$	(7,218	)
	84	S&P 500 E-Mini Index	March 2017	$	9,552,900		(38,540	)
	Total					$	(45,758	)

Derivative Financial Instruments Outstanding as of Period End

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

Liabilities — Derivative Financial Instruments		Commodity Contracts		Credit Contracts		Equity Contracts			Foreign Currency Exchange Contracts		Interest Rate Contracts		Other Contracts		Total
Futures contracts	Net unrealized depreciation		—		—	$	45,758			—		—		—	$	45,758
For  the six month ended January 31, 2017, the effect of derivative financial instruments in the Statements of Operations were as follows:
Net Realized Gain (Loss) from:
Futures contracts			—		—	$	582,260			—		—		—	$	582,260
Net Change in Unrealized Appreciation (Depreciation) on:
Futures contracts			—		—	$	(67,776	)		—		—		—	$	(67,776	)

Average Quarterly Balances of Outstanding Derivative Financial Instruments

Futures contracts:
Average notional value of contracts — long	$	7,782,593

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

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 93

Schedule of Investments (concluded) BlackRock Total Stock Market Index 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 Investments1:
Common Stocks	$	543,272,620			—		—	$	543,272,620
Rights		—			—	$	272		272
Short-Term Securities		50,173,788			—		—		50,173,788
Subtotal	$	593,446,408			—	$	272	$	593,446,680
Investments valued at NAV2									449,087
Total								$	593,895,767
Derivative Financial Instruments3
Liabilities:
Equity contracts	$	(45,758	)		—		—	$	(45,758	)
1   See above Schedule of Investments for values in each sector.
2   As of January 31, 2017, certain of the Fund’s investments were fair valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.
3   Derivative financial instruments are futures contracts, which are valued at the unrealized appreciation (depreciation) on the instrument.

During the six months ended January 31, 2017, there were no transfers between levels.

See Notes to Financial Statements.

94 BLACKROCK FUNDS JANUARY 31, 2017

Statements of Assets and Liabilities

January 31, 2017 (Unaudited)	BlackRock Midcap Index Fund			BlackRock MSCI Asia ex Japan Index Fund			BlackRock MSCI World Index Fund			BlackRock Small/Mid Cap Index Fund			BlackRock Total Stock Market Index Fund
Assets
Investments at value — unaffiliated1,2	$	2,627,586,335		$	52,670,362		$	434,313,155		$	71,563,143		$	540,819,959
Investments at value — affiliated3		108,283,712			702,741			13,315,842			4,003,967			53,075,808
Cash pledged for futures contracts		5,178,650			36,000			779,980			175,000			344,000
Foreign currency at value4		—			111,230			3,947,851			—			—
Receivables:
Capital shares sold		12,292,516			133,040			3,355,588			153,444			3,223,210
Dividends — unaffiliated		1,486,604			116,645			407,588			33,590			399,298
Variation margin on futures contracts		208,333			1,005			—			18,586			17,839
Dividends — affiliated		26,078			268			6,542			918			14,353
Securities lending income — affiliated		22,626			—			467			2,466			3,266
Investments sold		—			—			11,906			33,762			229,509
Prepaid expenses		44,442			15,674			22,219			23,495			24,472
Total assets		2,755,129,296			53,786,965			456,161,138			76,008,371			598,151,714
Liabilities
Cash collateral on securities loaned at value		1,310,001			—			73,349			283,237			448,980
Bank overdraft		47			—			39			11,107			11,595
Payables:
Investments purchased		68,614,432			68,130			10,478,323			2,959,108			39,941,875
Capital shares redeemed		6,948,171			10,224			1,547,469			13,059			307,266
Investment advisory fees		144,135			7,065			23,683			9,129			19,331
Officer’s and Trustees’ fees		12,022			3,483			3,365			3,410			1,620
Service fees		3,288			—			—			3,295			7,566
Variation margin on futures contracts		—			—			44,185			—			—
Other accrued expenses		907,760			67,267			233,810			33,053			21,985
Total liabilities		77,939,856			156,169			12,404,223			3,315,398			40,760,218
Net Assets	$	2,677,189,440		$	53,630,796		$	443,756,915		$	72,692,973		$	557,391,496
Net Assets Consist of
Paid-in capital	$	2,375,596,238		$	54,770,660		$	403,592,212		$	67,306,922		$	523,053,388
Undistributed net investment income (loss)		363,116			(30,722	)		83,916			(19,033	)		413,139
Undistributed net realized gain (accumulated net realized loss)		(1,961,468	)		(132,025	)		(1,368,538	)		160,576			124,922
Net unrealized appreciation (depreciation)		303,191,554			(977,117	)		41,449,325			5,244,508			33,800,047
Net Assets	$	2,677,189,440		$	53,630,796		$	443,756,915		$	72,692,973		$	557,391,496
1    Investments at cost — unaffiliated	$	2,324,399,424		$	53,662,381		$	393,127,079		$	66,319,895		$	507,262,714
2    Securities loaned at value	$	1,207,277			—		$	72,308		$	269,188		$	419,474
3    Investments at cost — affiliated	$	108,283,541		$	702,741		$	13,087,229		$	4,003,126		$	52,787,248
4    Foreign currency at cost		—		$	111,004		$	3,924,641			—			—

See Notes to Financial Statements.
	BLACKROCK FUNDS	JANUARY 31, 2017	95

Statements of Assets and Liabilities (concluded)

January 31, 2017 (Unaudited)	BlackRock Midcap Index Fund		BlackRock MSCI Asia ex Japan Index Fund		BlackRock MSCI World Index Fund		BlackRock Small/Mid Cap Index Fund		BlackRock Total Stock Market Index Fund
Net Assets Value
Institutional:
Net assets	$	289,986,338	$	14,180,675	$	7,878,167	$	577,913	$	17,704,788
Shares outstanding		27,207,811		1,516,543		777,409		52,382		1,607,933
Net asset value	$	10.66	$	9.35	$	10.13	$	11.03	$	11.01
Shares authorized		Unlimited		Unlimited		Unlimited		Unlimited		Unlimited
Par value	$	0.001	$	0.001	$	0.001	$	0.001	$	0.001
Investor A:
Net assets	$	15,454,347		—		—	$	16,326,175	$	40,409,195
Shares outstanding		1,452,758		—		—		1,481,678		3,673,187
Net asset value	$	10.64		—		—	$	11.02	$	11.00
Shares authorized		Unlimited		—		—		Unlimited		Unlimited
Par value	$	0.001		—		—	$	0.001	$	0.001
Class K:
Net assets	$	2,371,748,755	$	39,450,121	$	435,878,748	$	55,788,885	$	499,277,513
Shares outstanding		222,290,732		4,217,865		42,954,727		5,056,957		45,345,936
Net asset value	$	10.67	$	9.35	$	10.15	$	11.03	$	11.01
Shares authorized		Unlimited		Unlimited		Unlimited		Unlimited		Unlimited
Par value	$	0.001	$	0.001	$	0.001	$	0.001	$	0.001

See Notes to Financial Statements.
96	BLACKROCK FUNDS	JANUARY 31, 2017

Statements of Operations

Six Months Ended January 31, 2017 (Unaudited)	BlackRock Midcap Index Fund			BlackRock MSCI Asia ex Japan Index Fund				BlackRock MSCI World Index Fund			BlackRock Small/Mid Cap Index Fund			BlackRock Total Stock Market Index Fund
Investment Income
Dividends — unaffiliated	$	24,476,462		$	284,239			$	3,743,519		$	409,251		$	3,845,456
Securities lending — affiliated — net		136,976			101				5,886			10,300			22,078
Dividends — affiliated		73,870			1,497				22,220			3,972			43,114
Foreign taxes withheld		(4,587	)		(42,247	)			(95,983	)		(172	)		(768	)
Total Investment Income		24,682,721			243,590				3,675,642			423,351			3,909,880
Expenses
Transfer agent — class specific		698,523			44				160,867			738			1,308
Registration		339,765			15,222				38,601			23,324			42,141
Investment advisory		245,269			46,602				90,409			7,332			19,624
Recoupment of past waived fees		91,305			—				6,074			—			—
Custodian		51,957			6,303				50,880			8,600			8,788
Officer and Trustees		40,834			5,346				9,941			5,546			9,554
Offering		40,175			29,929				49,604			3,516			3,822
Professional		34,181			32,985				32,190			23,326			23,326
Printing		18,479			3,677				4,359			5,071			6,049
Service and distribution — class specific		15,297			—				—			14,461			28,383
Recoupment of past waived fees — class specific		12,593			—				282			1			32
Miscellaneous		20,686			4,765				6,179			4,846			5,873
Total expenses		1,609,064			144,873				449,386			96,761			148,900
Less:
Fees waived by the Manager		(113,074	)		(33,923	)			(38,598	)		(8,943	)		(18,290	)
Other expenses reimbursed by the Manager		(11,915	)		(26,974	)			(5,070	)		(54,794	)		(42,259	)
Transfer agent fees waived and/or reimbursed — class specific		(591,161	)		(44	)			(142,339	)		(448	)		(427	)
Total expenses after fees waived and/or reimbursed		892,914			83,932				263,379			32,576			87,924
Net investment income		23,789,807			159,658				3,412,263			390,775			3,821,956
Realized and Unrealized Gain (Loss)
Net realized gain (loss) from:
Investments — unaffiliated		3,368,074			(34,519	)			120,972			33,232			(186,172	)
Investments — affiliated		920			—				4			10			43
Futures contracts		5,530,284			181,886				551,279			194,522			582,260
Foreign currency transactions		—			(10,254	)	��		(113,720	)		—			—
Capital gain distributions from investment companies — affiliated		353			2				39			11			258
		8,899,631			137,115				558,574			227,775			396,389
Net change in unrealized appreciation (depreciation) on:
Investments — unaffiliated		108,866,168			193,998				15,881,595			3,730,375			21,423,852
Investments — affiliated		171			—				200,787			762			297,715
Futures contracts		(2,520,492	)		8,069				(35,236	)		(2,629	)		(67,776	)
Foreign currency translations		—			4,107				41,976			—			—
		106,345,847			206,174				16,089,122			3,728,508			21,653,791
Net realized and unrealized gain		115,245,478			343,289				16,647,696			3,956,283			22,050,180
Net Increase in Net Assets Resulting from Operations	$	139,035,285		$	502,947			$	20,059,959		$	4,347,058		$	25,872,136

See Notes to Financial Statements.
	BLACKROCK FUNDS	JANUARY 31, 2017	97

Statements of Changes in Net Assets

	BlackRock Midcap Index Fund						BlackRock MSCI Asia ex Japan Index Fund
Increase (Decrease) in Net Assets:	Six Months Ended January 31, 2017 (Unaudited)			Year Ended July 31, 2016			Six Months Ended January 31, 2017 (Unaudited)			Year Ended July 31, 2016
Operations
Net investment income	$	23,789,807		$	30,039,411		$	159,658		$	308,396
Net realized gain (loss)		8,899,631			(502,673	)		137,115			(258,218	)
Net change in unrealized appreciation (depreciation)		106,345,847			196,879,884			206,174			(51,456	)
Net increase (decrease) in net assets resulting from operations		139,035,285			226,416,622			502,947			(1,278	)
Distributions to Shareholders1
From net investment income:
Institutional		(2,391,758	)		(11,088,076	)		(73,902	)		(285,599	)
Investor A		(123,330	)		(26,107	)		—			—
Class K		(22,285,206	)		(17,674,276	)		(180,106	)		(27,517	)
From net realized gain:
Institutional		(868,058	)		(2,280,751	)		—			(13,319	)
Investor A		(45,796	)		(112	)		—			—
Class K		(7,124,451	)		(54,402	)		—			(87	)
Decrease in net assets resulting from distributions to shareholders		(32,838,599	)		(31,123,724	)		(254,008	)		(326,522	)
Capital Share Transactions
Net increase in net assets derived from capital share transactions		198,890,061			2,173,779,816			37,207,320			2,540,689
Net Assets
Total increase in net assets		305,086,747			2,369,072,714			37,456,259			2,212,889
Beginning of period		2,372,102,693			3,029,979			16,174,537			13,961,648
End of period	$	2,677,189,440		$	2,372,102,693		$	53,630,796		$	16,174,537
Undistributed net investment income, end of period	$	363,116		$	1,373,603		$	(30,722	)	$	63,628
1    Distributions for annual periods determined in accordance with federal income tax regulations.

See Notes to Financial Statements.
98	BLACKROCK FUNDS	JANUARY 31, 2017

Statements of Changes in Net Assets

	BlackRock MSCI World Index Fund						BlackRock Small/Mid Cap Index Fund
Increase (Decrease) in Net Assets:	Six Months Ended January 31, 2017 (Unaudited)			Year Ended July 31, 2016			Six Months Ended January 31, 2017 (Unaudited)			Period August 13, 20151 to July 31, 2016
Operations
Net investment income	$	3,412,263		$	3,988,948		$	390,775		$	226,566
Net realized gain (loss)		558,574			(1,193,151	)		227,775			29,422
Net change in unrealized appreciation (depreciation)		16,089,122			25,488,495			3,728,508			1,516,000
Net increase in net assets resulting from operations		20,059,959			28,284,292			4,347,058			1,771,988
Distributions to Shareholders2
From net investment income:
Institutional		(27,471	)		(376,176	)		(2,033	)		(325	)
Investor A		—			—			(88,441	)		(9,972	)
Class K		(3,547,566	)		(3,304,090	)		(339,530	)		(196,073	)
From net realized gain:
Institutional		(5,166	)		(152,889	)		(483	)		(10	)
Investor A		—			—			(18,557	)		(14	)
Class K		(695,764	)		(269	)		(70,921	)		(6,636	)
Decrease in net assets resulting from distributions to shareholders		(4,275,967	)		(3,833,424	)		(519,965	)		(213,030	)
Capital Share Transactions
Net increase in net assets derived from capital share transactions		101,945,958			286,677,627			35,964,843			31,342,079
Net Assets
Total increase in net assets		117,729,950			311,128,495			39,791,936			32,901,037
Beginning of period		326,026,965			14,898,470			32,901,037			—
End of period	$	443,756,915		$	326,026,965		$	72,692,973		$	32,901,037
Undistributed net investment income, end of period	$	83,916		$	246,690		$	(19,033	)	$	20,196
1    Commencement of operations.
2    Distributions for annual periods determined in accordance with federal income tax regulations.

See Notes to Financial Statements.
	BLACKROCK FUNDS	JANUARY 31, 2017	99

Statements of Changes in Net Assets

	BlackRock Total Stock Market Index Fund
Increase (Decrease) in Net Assets:	Six Months Ended January 31, 2017 (Unaudited)			Period August 13, 20151 to July 31, 2016
Operations
Net investment income	$	3,821,956		$	977,539
Net realized gain		396,389			274,040
Net change in unrealized appreciation (depreciation)		21,653,791			12,146,256
Net increase in net assets resulting from operations		25,872,136			13,397,835
Distributions to Shareholders2
From net investment income:
Institutional		(29,347	)		(18,472	)
Investor A		(186,439	)		(13,246	)
Class K		(3,484,272	)		(654,580	)
From net realized gain:
Institutional		(4,494	)		(44	)
Investor A		(29,567	)		(1	)
Class K		(511,066	)		(335	)
Decrease in net assets resulting from distributions to shareholders		(4,245,185	)		(686,678	)
Capital Share Transactions
Net increase in net assets derived from capital share transactions		234,083,767			288,969,621
Net Assets
Total increase in net assets		255,710,718			301,680,778
Beginning of period		301,680,778			—
End of period	$	557,391,496		$	301,680,778
Undistributed net investment income, end of period	$	413,139		$	291,241
1    Commencement of operations.
2    Distributions for annual periods determined in accordance with federal income tax regulations.

See Notes to Financial Statements.
100	BLACKROCK FUNDS	JANUARY 31, 2017

Financial Highlights BlackRock Midcap Index Fund

	Institutional									Investor A
	Six Months Ended January 31, 2017 (Unaudited)			Year Ended July 31, 2016			Period May 13, 20151 to July 31, 2015			Six Months Ended January 31, 2017 (Unaudited)			Period November 30, 20151 to July 31, 2016
Per Share Operating Performance
Net asset value, beginning of period	$	10.22		$	9.94		$	10.00		$	10.20		$	9.66
Net investment income2		0.10			0.18			0.03			0.09			0.07
Net realized and unrealized gain (loss)		0.47			0.24			(0.07	)		0.47			0.60
Net increase (decrease) from investment operations		0.57			0.42			(0.04	)		0.56			0.67
Distributions:3
From net investment income		(0.10	)		(0.13	)		(0.02	)		(0.09	)		(0.12	)
From net realized gain		(0.03	)		(0.01	)		—			(0.03	)		(0.01	)
Total distributions		(0.13	)		(0.14	)		(0.02	)		(0.12	)		(0.13	)
Net asset value, end of period	$	10.66		$	10.22		$	9.94		$	10.64		$	10.20
Total Return4
Based on net asset value		5.67%	5		4.35%			(0.37)%	5		5.60%	5		7.07%	5
Ratios to Average Net Assets
Total expenses		0.37%	6,8		0.13%	7		9.27%	6,8		0.33%	6,8		0.34%	6,7,8
Total expenses excluding recoupment of past fees waived		0.36%	6,8		0.13%	7		9.27%	6,8		0.33%	6,8		0.34%	6,7,8
Total expenses after fees waived and/or reimbursed and/or paid indirectly		0.11%	6		0.06%	7		0.12%	6		0.32%	6		0.33%	6,7
Net investment income		1.87%	6		1.87%	7		1.38%	6		1.67%	6		1.06%	6,7
Supplemental Data
Net assets, end of period (000)	$	289,986		$	191,337		$	2,985		$	15,454		$	6,669
Portfolio turnover rate		2%			24%			8%			2%			24%

¹ Commencement of operations.

² Based on average shares outstanding.

³ Distributions for annual periods determined in accordance with federal income tax regulations.

⁴ Where applicable, assumes the reinvestment of distributions.

⁵ Aggregate total return.

⁶ Annualized.

⁷ Excludes 0.01% of expenses incurred indirectly as a result of investments in underlying funds.

⁸ Offering costs were not annualized in the calculation of the expense ratios. If these expenses were annualized for Institutional Shares, the total expenses would have been 0.37% for the six months ended January 31, 2017 and 13.78% for the period ended July 31, 2015. If these expenses were annualized for Investor A Shares, the total expenses would have been 0.34% for the six months ended January 31, 2017 and the period ended July 31, 2016.

See Notes to Financial Statements.
	BLACKROCK FUNDS	JANUARY 31, 2017	101

Financial Highlights (concluded) BlackRock Midcap Index Fund

	Class K
	Six Months Ended January 31, 2017 (Unaudited)			Year Ended July 31, 2016			Period May 13, 20151 to July 31, 2015
Per Share Operating Performance
Net asset value, beginning of period	$	10.23		$	9.94		$	10.00
Net investment income2		0.10			0.17			0.03
Net realized and unrealized gain (loss)		0.47			0.26			(0.07	)
Net increase (decrease) from investment operations		0.57			0.43			(0.04	)
Distributions:3
From net investment income		(0.10	)		(0.13	)		(0.02	)
From net realized gain		(0.03	)		(0.01	)		—
Total distributions		(0.13	)		(0.14	)		(0.02	)
Net asset value, end of period	$	10.67		$	10.23		$	9.94
Total Return4
Based on net asset value		5.69%	5		4.46%			(0.37)%	5
Ratios to Average Net Assets
Total expenses		0.10%	6,8		0.09%	7		9.42%	6,9
Total expenses excluding recoupment of past fees waived		0.09%	6,8		0.09%	7		9.42%	6,9
Total expenses after fees waived and/or reimbursed and/or paid indirectly		0.07%	6		0.07%	7		0.08%	6
Net investment income		1.95%	6		1.78%	7		1.21%	6
Supplemental Data
Net assets, end of period (000)	$	2,371,749		$	2,174,096		$	45
Portfolio turnover rate		2%			24%			8%

¹ Commencement of operations.

² Based on average shares outstanding.

³ Distributions for annual periods determined in accordance with federal income tax regulations.

⁴ Where applicable, assumes the reinvestment of distributions.

⁵ Aggregate total return.

⁶ Annualized.

⁷ Excludes 0.01% of expenses incurred indirectly as a result of investments in underlying funds.

⁸ Offering costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 0.11% for the six months ended January 31, 2017.

⁹  Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 12.82% for the period ended July 31, 2015.

See Notes to Financial Statements.
102	BLACKROCK FUNDS	JANUARY 31, 2017

Financial Highlights BlackRock MSCI Asia ex Japan Index Fund

	Institutional									Class K
	Six Months Ended January 31, 2017 (Unaudited)			Year Ended July 31,			Period June 9, 20151 to July 31,			Six Months Ended January 31, 2017 (Unaudited)			Period November 30, 20151 to July 31,
				2016			2015						2016
Per Share Operating Performance
Net asset value, beginning of period	$	8.97		$	9.27		$	10.00		$	8.97		$	8.58
Net investment income2		0.05			0.18			0.08			0.03			0.16
Net realized and unrealized gain (loss)		0.38			(0.29	)		(0.77	)		0.40			0.38
Net increase (decrease) from investment operations		0.43			(0.11	)		(0.69	)		0.43			0.54
Distributions:3
From net investment income		(0.05	)		(0.18	)		(0.04	)		(0.05	)		(0.14	)
From net realized gain		—			(0.01	)		—			—			(0.01	)
Total distributions		(0.05	)		(0.19	)		(0.04	)		(0.05	)		(0.15	)
Net asset value, end of period	$	9.35		$	8.97		$	9.27		$	9.35		$	8.97
Total Return4
Based on net asset value		4.80%	5		(1.14)%			(6.96)%	5		4.80%	5		6.37%	5
Ratios to Average Net Assets
Total expenses		0.83%	6,7,8		1.61%			3.80%	6,9		0.62%	6,7,8		1.39%	6,8
Total expenses after fees waived and/or reimbursed and/or paid indirectly		0.45%	6,7		0.47%			0.50%	6		0.45%	6,7		0.45%	6
Net investment income		1.15%	6,7		2.09%			5.69%	6		0.68%	6,7		2.81%	6
Supplemental Data
Net assets, end of period (000)	$	14,181		$	13,505		$	13,962		$	39,450		$	2,669
Portfolio turnover rate		1%			11%			0%			1%			11%

¹ Commencement of operations.

² Based on average shares outstanding.

³ Distributions for annual periods determined in accordance with federal income tax regulations.

⁴ Where applicable, assumes the reinvestment of distributions.

⁵ Aggregate total return.

⁶ Annualized.

⁷ Excludes 0.01% of expenses incurred indirectly as a result of investments in underlying funds.

⁸ Offering costs were not annualized in the calculation of the expense ratios. If these expenses were annualized for Institutional Shares, the total expenses would have been 0.95% for the six months ended January 31, 2017. If these expenses were annualized for Class K Shares, the total expenses would have been 0.67% for the six months ended January 31, 2017 and 1.67% for the period ended July 31, 2016.

⁹  Organization costs were not annualized in the calculation of the expense ratios. If these expenses were annualized for Institutional Shares, the total expenses would have been 4.82% for the period ended July 31, 2015.

See Notes to Financial Statements.
	BLACKROCK FUNDS	JANUARY 31, 2017	103

Financial Highlights BlackRock MSCI World Index Fund

	Institutional									Class K
	Six Months Ended January 31, 2017 (Unaudited)			Year Ended July 31, 2016			Period June 1, 20151 to July  31, 2015			Six Months Ended January 31, 2017 (Unaudited)			Period November 30, 20151 to July 31, 2016
Per Share Operating Performance
Net asset value, beginning of period	$	9.75		$	9.92		$	10.00		$	9.76		$	9.60
Net investment income2		0.09			0.16			0.02			0.09			0.17
Net realized and unrealized gain (loss)		0.41			(0.14	)		(0.09	)		0.42			0.17
Net increase (decrease) from investment operations		0.50			0.02			(0.07	)		0.51			0.34
Distributions:3
From net investment income		(0.10	)		(0.16	)		(0.01	)		(0.10	)		(0.15	)
From net realized gain		(0.02	)		(0.03	)		—			(0.02	)		(0.03	)
Total distributions		(0.12	)		(0.19	)		(0.01	)		(0.12	)		(0.18	)
Net asset value, end of period	$	10.13		$	9.75		$	9.92		$	10.15		$	9.76
Total Return4
Based on net asset value		5.13%	5		0.23%			(0.66)%	5		5.24%	5		3.52%	5
Ratios to Average Net Assets
Total expenses		1.82%	6,8,9		0.41%	7		2.93%	6,10		0.22%	6,8		0.28%	6,7,8,9
Total expenses after fees waived and/or reimbursed and/or paid indirectly		0.18%	6		0.16%	7		0.20%	6		0.15%	6		0.14%	6,7
Net investment income7		1.83%	6		1.75%	7		1.32%	6		1.89%	6		2.69%	6,7
Supplemental Data
Net assets, end of period (000)	$	7,878		$	2,765		$	14,898		$	435,879		$	323,262
Portfolio turnover rate		6%			10%			1%			6%			10%

¹ Commencement of operations.

² Based on average shares outstanding.

³ Distributions for annual periods determined in accordance with federal income tax regulations.

⁴ Where applicable, assumes the reinvestment of distributions.

⁵ Aggregate total return.

⁶ Annualized.

⁷ Excludes 0.01% of expenses incurred indirectly as a result of investments in underlying funds.

⁸ Offering costs were not annualized in the calculation of the expense ratios. If these expenses were annualized for Institutional Shares, the total expenses would have been 1.83% for the six months ended January 31, 2017. If these expenses were annualized for Class K Shares, the total expenses would have been 0.24% for the six months ended January 31, 2017 and 0.29% for the period ended July 31, 2016.

⁹  Includes recoupment of past waived and/or reimbursed fees with no financial impact to the expense ratios.

¹⁰  Organization costs were not annualized in the calculation of the expense ratios. If these expenses were annualized for Institutional Shares, the total expenses would have been 3.84% for the period ended July 31, 2015.

See Notes to Financial Statements.
104	BLACKROCK FUNDS	JANUARY 31, 2017

Financial Highlights BlackRock Small/Mid Cap Index Fund

	Institutional						Investor A
	Six Months Ended January 31, 2017 (Unaudited)			Period August 13, 20151 to July 31, 2016			Six Months Ended January 31, 2017 (Unaudited)			Period August 13, 20151 to July 31, 2016
Per Share Operating Performance
Net asset value, beginning of period	$	10.22		$	10.00		$	10.21		$	10.00
Net investment income2		0.09			0.14			0.08			0.08
Net realized and unrealized gain		0.83			0.19			0.83			0.23
Net increase from investment operations		0.92			0.33			0.91			0.31
Distributions:3
From net investment income		(0.09	)		(0.11	)		(0.08	)		(0.10	)
From net realized gain		(0.02	)		(0.00	)4		(0.02	)		(0.00	)4
Total distributions		(0.11	)		(0.11	)		(0.10	)		(0.10	)
Net asset value, end of period	$	11.03		$	10.22		$	11.02		$	10.21
Total Return5,6
Based on net asset value		8.99%			3.44%			8.90%			3.24%
Ratios to Average Net Assets
Total expenses		0.34%	7,8,9		1.60%	7,8,10		0.58%	7,8,9		1.17%	7,8,10
Total expenses after fees waived and/or reimbursed and/or paid indirectly		0.10%	7,8		0.12%	7,8		0.33%	7,8		0.35%	7,8
Net investment income		1.65%	7,8		1.50%	7,8		1.42%	7,8		0.79%	7,8
Supplemental Data
Net assets, end of period (000)	$	578		$	78		$	16,326		$	5,713
Portfolio turnover rate		2%			17%			2%			17%

¹ Commencement of operations.

² Based on average shares outstanding.

³ Distributions for annual periods determined in accordance with federal income tax regulations.

⁴ Amount is greater than $(0.005) per share.

⁵ Where applicable, assumes the reinvestment of distributions.

⁶ Aggregate total return.

⁷ Annualized.

⁸ Excludes 0.01% of expenses incurred indirectly as a result of investments in underlying funds.

⁹ Offering costs were not annualized in the calculation of the expense ratio. If these expenses were annualized for Institutional Shares, the total expenses would have been 0.34% for the six months ended January 31, 2017. If these expenses were annualized for Investor A Shares, the total expenses would have been 0.59% for the six months ended January 31, 2017.

¹⁰  Audit, offering and organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized for Institutional Shares, the total expenses would have been 1.63% for the period ended July 31, 2016. If these expenses were annualized for Investor A Shares, the total expenses would have been 1.18% for the period ended July 31, 2016.

See Notes to Financial Statements.
	BLACKROCK FUNDS	JANUARY 31, 2017	105

Financial Highlights (concluded) BlackRock Small/Mid Cap Index Fund

	Class K
	Six Months Ended January 31, 2017 (Unaudited)			Period August 13, 20151 to July 31, 2016
Per Share Operating Performance
Net asset value, beginning of period	$	10.22		$	10.00
Net investment income2		0.09			0.14
Net realized and unrealized gain		0.82			0.19
Net increase (decrease) from investment operations		0.91			0.33
Distributions:3
From net investment income		(0.09	)		(0.11	)
From net realized gain		(0.01	)		(0.00	)4
Total distributions		(0.10	)		(0.11	)
Net asset value, end of period	$	11.03		$	10.22
Total Return5,6
Based on net asset value		9.00%			3.48%
Ratios to Average Net Assets
Total expenses		0.33%	7,8,9		1.34%	7,8,10
Total expenses after fees waived and/or reimbursed and/or paid indirectly		0.07%	7,8		0.08%	7,8
Net investment income		1.66%	7,8		1.57%	7,8
Supplemental Data
Net assets, end of period (000)	$	55,789		$	27,109
Portfolio turnover rate		2%			17%

¹  Commencement of operations.

²  Based on average shares outstanding.

³  Distributions for annual periods determined in accordance with federal income tax regulations.

⁴  Amount is greater than $(0.005) per share.

⁵  Where applicable, assumes the reinvestment of distributions.

⁶  Aggregate total return.

⁷  Annualized.

⁸  Excludes 0.01% of expenses incurred indirectly as a result of investments in underlying funds.

⁹  Offering costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 0.34% for the six months ended January 31, 2017.

¹⁰  Audit, offering and organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 1.37% for the period ended July 31, 2016.

See Notes to Financial Statements.
106	BLACKROCK FUNDS	JANUARY 31, 2017

Financial Highlights BlackRock Total Stock Market Index Fund

	Institutional						Investor A
	Six Months Ended January 31, 2017 (Unaudited)			Period August 13, 20151 to July 31, 2016			Six Months Ended January 31, 2017 (Unaudited)			Period August 13, 20151 to July 31, 2016
Per Share Operating Performance
Net asset value, beginning of period	$	10.44		$	10.00		$	10.44		$	10.00
Net investment income2		0.09			0.18			0.09			0.10
Net realized and unrealized gain		0.59			0.39			0.57			0.45
Net increase (decrease) from investment operations		0.68			0.57			0.66			0.55
Distributions:3
From net investment income		(0.10	)		(0.13	)		(0.09	)		(0.11	)
From net realized gain		(0.01	)		(0.00	)4		(0.01	)		(0.00	)4
Total distributions		(0.11	)		(0.13	)		(0.10	)		(0.11	)
Net asset value, end of period	$	11.01		$	10.44		$	11.00		$	10.44
Total Return5,6
Based on net asset value		6.55%			5.75%			6.37%			5.57%
Ratios to Average Net Assets
Total expenses		0.08%	7,8,9		0.77%	7,8,10		0.31%	7,8,9		0.44%	7,8,10
Total expenses after fees waived and/or reimbursed and/or paid indirectly		0.06%	7,8		0.06%	7,8		0.28%	7,8		0.29%	7,8
Net investment income		1.72%	7,8		1.96%	7,8		1.61%	7,8		1.06%	7,8
Supplemental Data
Net assets, end of period (000)	$	17,705		$	2,428		$	40,409		$	8,873
Portfolio turnover rate		4%			4%			4%			4%

¹  Commencement of operations.

²  Based on average shares outstanding.

³  Distributions for annual periods determined in accordance with federal income tax regulations.

⁴  Amount is greater than $(0.005) per share.

⁵  Where applicable, assumes the reinvestment of distributions.

⁶  Aggregate total return.

⁷  Annualized.

⁸  Excludes 0.01% of expenses incurred indirectly as a result of investments in underlying funds.

⁹  Offering costs were not annualized in the calculation of the expense ratio. If these expenses were annualized for Institutional Shares, the total expenses would have been 0.08% for the six months ended January 31, 2017. If these expenses were annualized for Investor A Shares, the total expenses would have been 0.31% for the six months ended January 31, 2017.

¹⁰  Audit, offering and organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized for Institutional Shares, the total expenses would have been 0.79% for the period ended July 31, 2016. If these expenses were annualized for Investor A Shares, the total expenses would have been 0.44% for the period ended July 31, 2016.

See Notes to Financial Statements.
	BLACKROCK FUNDS	JANUARY 31, 2017	107

Financial Highlights (concluded) BlackRock Total Stock Market Index Fund

	Class K
	Six Months Ended January 31, 2017 (Unaudited)			Period August 13, 20151 to July 31, 2016
Per Share Operating Performance
Net asset value, beginning of period	$	10.44		$	10.00
Net investment income2		0.11			0.17
Net realized and unrealized gain		0.57			0.40
Net increase (decrease) from investment operations		0.68			0.57
Distributions:3
From net investment income		(0.10	)		(0.13	)
From net realized gain		(0.01	)		(0.00	)4
Total distributions		(0.11	)		(0.13	)
Net asset value, end of period	$	11.01		$	10.44
Total Return5,6
Based on net asset value		6.57%			5.78%
Ratios to Average Net Assets
Total expenses		0.06%	7,8,9		0.37%	7,8,10
Total expenses after fees waived and/or reimbursed and/or paid indirectly		0.03%	7,8		0.03%	7,8
Net investment income		1.97%	7,8		1.71%	7,8
Supplemental Data
Net assets, end of period (000)	$	499,278		$	290,381
Portfolio turnover rate		4%			4%

¹ Commencement of operations.

² Based on average shares outstanding.

³ Distributions for annual periods determined in accordance with federal income tax regulations.

⁴ Amount is greater than $(0.005) per share.

⁵ Where applicable, assumes the reinvestment of distributions.

⁶ Aggregate total return.

⁷ Annualized.

⁸ Excludes 0.01% of expenses incurred indirectly as a result of investments in underlying funds.

⁹ Offering costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 0.06% for the six months ended January 31, 2017.

¹⁰  Audit, offering and organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 0.38% for the period ended July 31, 2016.

See Notes to Financial Statements.
108	BLACKROCK FUNDS	JANUARY 31, 2017

Notes to Financial Statements (Unaudited)

1. Organization:

BlackRock Funds^SM (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust is organized as a Massachusetts business trust. Each Fund is a series of the Trust. The following are referred to herein collectively as the “Funds” or individually, a “Fund”:

Fund Name	Herein Referred To As		Diversification Classification
BlackRock Midcap Index Fund		Midcap Index		Diversified
BlackRock MSCI Asia ex Japan Index Fund		Asia ex Japan Index		Diversified
BlackRock MSCI World Index Fund		World Index		Diversified
BlackRock Small/Mid Cap Index Fund		Small/Mid Cap Index		Diversified
BlackRock Total Stock Market Index Fund		Total Stock Market Index		Diversified

Each Fund offers multiple classes of shares. All classes of shares have identical voting, dividend, liquidation and other rights and are subject to the same terms and conditions, except that certain classes bear expenses related to the shareholder servicing and distribution of such shares. Institutional and Class K shares are sold without a sales charge and only to certain eligible investors. Investor A Shares are sold without a sales charge and are generally available through financial intermediaries. Each class has exclusive voting rights with respect to matters relating to its shareholder servicing and distribution expenditures.

Share Class	Initial Sales Charge		CDSC		Conversion Privilege
Institutional Shares		No		No		None
Investor A Shares		No		No		None
Class K Shares		No		No		None

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

2. Significant Accounting Policies:

The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. Below is a summary of significant accounting policies:

Foreign Currency: Each Fund’s books and records are maintained in U.S. dollars. Purchases and sales of investments are recorded at the rates of exchange prevailing on the respective dates of such transactions. Generally, when the U.S. dollar rises in value against a foreign currency, the investments denominated in that currency will lose value; the opposite effect occurs if the U.S. dollar falls in relative value.

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

Segregation and Collateralization: In cases where a Fund enters into certain investments (e.g., futures contracts) that would be treated as “senior securities” for 1940 Act purposes, a Fund may segregate or designate on its books and records cash or liquid assets having a market value at least equal to the amount of its future obligations under such investments. Doing so allows the investment to be excluded from treatment as a “senior security.” Furthermore, if required by an exchange or counterparty agreement, the Funds may be required to deliver/deposit cash and/or securities to/with an exchange, or broker-dealer or custodian as collateral for certain investments or obligations.

Investment Transactions and Investment Income: 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 Funds are 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, 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. 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 Funds are recorded on the ex-dividend date. The character and timing of distributions are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP.

BLACKROCK FUNDS JANUARY 31, 2017 109

Notes to Financial Statements (continued)

Organization and Offering Costs: Upon commencement of operations, organization costs associated with the establishment of the Funds were expensed by the Funds and reimbursed by the Manager. The Manager reimbursed the Funds $127,046, which is shown as expenses reimbursed by the Manager in the Statements of Operations. Offering costs are amortized over a 12-month period beginning with the commencement of operations.

Recent Accounting Standard: In April 2015, the Financial Accounting Standards Board issued “Disclosures for Investments in Certain Entities that Calculate Net Asset Value (“NAV”) per Share” which eliminates the requirement to categorize investments within the fair value hierarchy when fair value is based on the NAV per share and no quoted market value is available. As of January 31, 2017, certain investments of the Fund were valued using NAV per share or its equivalent as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

In November 2016, the Financial Accounting Standards Board issued Accounting Standards Update “Restricted Cash” which will require entities to include the total of cash, cash equivalents, restricted cash, and restricted cash equivalents in the beginning and ending cash balances in the Statements of Cash Flows. The guidance will be applied retrospectively and is effective for fiscal years beginning after December 15, 2017, and interim periods within those years. Management is evaluating the impact, if any, of this guidance on the Funds’ presentation in the Statements of Cash Flows.

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

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

Through May 31, 2016, the Funds had an arrangement with their custodian whereby credits were earned on uninvested cash balances, which could be used to reduce custody fees and/or overdraft charges. Credits previously earned may have been utilized until December 31, 2016. Under current arrangements effective June 1, 2016, the Funds no longer earn credits on uninvested cash, and may incur charges on uninvested cash balances and overdrafts, subject to certain conditions.

3. Investment Valuation and Fair Value Measurements:

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

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

• Equity investments traded on a recognized securities exchange are valued at the official closing price each day, if available. For equity investments traded on more than one exchange, the official closing price on the exchange where the stock is primarily traded is used. Equity investments traded on a recognized exchange for which there were no sales on that day may be valued at the last available bid (long positions) or ask (short positions) price. Generally, trading in foreign instruments is substantially completed each day at various times prior to the close of trading on the NYSE. Occasionally, events affecting the values of such instruments may occur between the foreign market close and the close of trading on the NYSE that may not be reflected in the computation of the Funds’ net assets. Each business day, the Funds use a pricing service to assist with the valuation of certain foreign exchange-traded equity securities and foreign exchange-traded and over-the-counter (“OTC”) options (the “Systematic Fair Value Price”). Using current market factors, the Systematic Fair Value Price is designed to value such foreign securities and foreign options at fair value as of the close of trading on the NYSE, which follows the close of the local markets.

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

• The Funds value their investment in SL Liquidity Series, LLC, Money Market Series (the “Money Market Series”) at fair value, which is ordinarily based upon their pro rata ownership in the underlying 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.

110 BLACKROCK FUNDS JANUARY 31, 2017

Notes to Financial Statements (continued)

• 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 NYSE. 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.

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 typically used in determining fair value. When determining the price for Fair Valued Investments, the Global Valuation Committee, or its delegate, seeks to determine the price that each Fund might reasonably expect to receive or pay from the current sale or purchase of that asset or liability in an 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 each Fund’s pricing vendors, regular reviews of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices and large movements in market values and reviews of any market related activity. The pricing of all Fair Valued Investments is subsequently reported to the Board or a committee thereof on a quarterly basis. As a result of the inherent uncertainty in valuation of these investments, the fair values may differ from the values that would have been used had an active market existed.

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

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

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

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

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Investments classified within Level 3 have significant unobservable inputs used by the Global Valuation Committee in determining the price for Fair Valued Investments. Level 3 investments include equity or debt issued by 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 each Fund’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investments and derivative financial instruments and is not necessarily an indication of the risks associated with investing in those securities.

4. Securities and Other Investments:

Securities Lending: The Funds may lend their securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Funds collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received by each Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current market value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Fund and any additional required collateral is delivered to the Fund, or excess collateral returned by the Fund, on the next business day. During the term of the loan, the Funds are entitled to all distributions made on or in respect of the loaned securities, but 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.

BLACKROCK FUNDS JANUARY 31, 2017 111

Notes to Financial Statements (continued)

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

Securities lending transactions are entered into by the Funds under Master Securities Lending Agreements (each, an “MSLA”), which provide the right, in the event of default (including bankruptcy or insolvency), for the non-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, the Funds, as lender, would offset the market value of the collateral received against the market value of the securities loaned. When the value of the collateral is greater than that of the market value of the securities loaned, the lender is left with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, absent an event of default, the borrower can resell or re-pledge the loaned securities, and a 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 Funds’ securities lending agreements by counterparty which are subject to offset under an MSLA:

Midcap Index
Counterparty	Securities Loaned at Value		Cash Collateral Received1			Net Amount2
Citigroup Global Markets, Inc.	$	65,928	$	(65,013	)	$	915
Credit Suisse Securities (USA) LLC		795,577		(795,577	)		—
Deutsche Bank Securities, Inc.		180,666		(180,666	)		—
Merrill Lynch, Pierce, Fenner & Smith, Inc.		165,106		(165,106	)		—
Total	$	1,207,277	$	(1,206,362	)	$	915
World Index
Counterparty	Securities Loaned at Value		Cash Collateral Received1			Net Amount
Citigroup Global Markets, Inc.	$	72,308	$	(72,308	)		—
Small/Mid Cap Index
Counterparty	Securities Loaned at Value		Cash Collateral Received1			Net Amount
BNP Paribas S.A.	$	13,159	$	(13,159	)		—
Citigroup Global Markets, Inc.		78,211		(78,211	)		—
Credit Suisse Securities (USA) LLC		52,388		(52,388	)		—
Deutsche Bank Securities, Inc.		37,014		(37,014	)		—
JPMorgan Securities LLC		36,212		(36,212	)		—
Merrill Lynch, Pierce, Fenner & Smith, Inc.		52,204		(52,204	)		—
Total	$	269,188	$	(269,188	)		—
Total Stock Market Index
Counterparty	Securities Loaned at Value		Cash Collateral Received1			Net Amount
BNP Paribas Prime S.A.	$	9,848	$	(9,848	)		—
Citigroup Global Markets, Inc.		188,302		(188,302	)		—
Credit Suisse Securities (USA) LLC		53,180		(53,180	)		—
Deutsche Bank Securities, Inc.		91,949		(91,949	)		—
JPMorgan Securities LLC		44,274		(44,274	)		—
Merrill Lynch, Pierce, Fenner & Smith, Inc.		31,921		(31,921	)		—
Total	$	419,474	$	(419,474	)		—

¹  Cash collateral received in excess of the value of securities loaned from the individual counterparty is not shown for financial reporting purposes in the tables above. Collateral has been received in connection with securities lending agreements as follows:

Midcap Index	World Index	Small/Mid Cap Index	Total Stock Market Index
$1,310,001	$73,349	$283,237	$448,980

² The market value of the loaned securities is determined as of January 31, 2017. 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.

112 BLACKROCK FUNDS JANUARY 31, 2017

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

Futures Contracts: Certain Funds invest in long and/or short positions in futures and options on futures contracts to gain exposure to, or manage exposure to, changes in interest rates (interest rate risk), changes in the value of equity securities (equity risk) or foreign currencies (foreign currency exchange rate risk).

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

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

The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock, Inc. (“BlackRock”) for 1940 Act purposes.

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

For such services, each Fund pays the Manager a monthly fee, which is determined by calculating a percentage of each Fund’s average daily net assets, based on the following annual rates:

Average Daily Net Assets	Investment Advisory Fees
Midcap Index		0.02%
Asia ex Japan Index		0.25%
World Index		0.05%
Small/Mid Cap Index		0.03%
Total Stock Market Index		0.01%

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

	Institutional		Investor A		Class K
Midcap Index		—		0.25%		—
Small/Mid Cap Index		—		0.25%		—
Total Stock Market Index		—		0.25%		—

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

BLACKROCK FUNDS JANUARY 31, 2017 113

Notes to Financial Statements (continued)

For the six months ended January 31, 2017, the following table shows the class specific service and distribution fees borne directly by each share class of each Fund:

	Institutional		Investor A		Class K		Total
Midcap Index		—	$	15,297		—	$	15,297
Small/Mid Cap Index		—	$	14,461		—	$	14,461
Total Stock Market Index		—	$	28,383		—	$	28,383

Transfer Agent: Pursuant to written agreements, certain financial intermediaries, some of which may be affiliates, provide the Funds with sub-accounting, recordkeeping, sub-transfer agency and other administrative services with respect to sub-accounts they service. For these services, these entities receive an asset-based fee or an annual fee per shareholder account, which will vary depending on share class and/or net assets. For the six months ended January 31, 2017, the Funds paid the following amounts to affiliates of BlackRock in return for these services, which are included in transfer agent— class specific in the Statement of Operations:

	Institutional		Investor A		Class K		Total
Midcap Index	$	4		—		—	$	4

The Manager maintains a call center that is responsible for providing certain shareholder services to the Funds. Shareholder services include responding to inquiries and processing subscriptions and redemptions based upon instructions from shareholders. For the six months ended January 31, 2017, each Fund reimbursed the Manager the following amounts for costs incurred in running the call center, which are included in transfer agent — class specific in the Statements of Operations:

	Institutional		Investor A		Class K		Total
Midcap Index	$	88		—	$	2,811	$	2,899
Asia ex Japan Index		—		—		—		—
World Index		—		—	$	3,021	$	3,021
Small/Mid Cap Index	$	4	$	25	$	34	$	63
Total Stock Market Index	$	7	$	14	$	31	$	52

For the six months ended January 31, 2017, the following table shows the class specific transfer agent fees borne directly by each class of each Fund:

	Institutional		Investor A		Class K		Total
Midcap Index	$	332,705	$	897	$	364,921	$	698,523
Asia ex Japan Index		—		—	$	44	$	44
World Index	$	24,490		—	$	136,377	$	160,867
Small/Mid Cap Index	$	90	$	227	$	421	$	738
Total Stock Market Index	$	555	$	323	$	430	$	1,308

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

	Institutional		Investor A		Class K
Midcap Index		0.12%		0.37%		0.07%
Asia ex Japan Index		0.50%		N/A		0.45%
World Index		0.20%		N/A		0.15%
Small/Mid Cap Index		0.12%		0.37%		0.07%
Total Stock Market Index		0.08%		0.33%		0.03%

Prior to October 5, 2016, the expense limitations as a percentage of average daily net assets for Midcap Index and Small/Mid Cap Index were as follows:

	Institutional		Investor A		Class K
Midcap Index		0.13%		0.38%		0.08%
Small/Mid Cap Index		0.13%		0.38%		0.08%

114 BLACKROCK FUNDS JANUARY 31, 2017

Notes to Financial Statements (continued)

These amounts waived and/or reimbursed are included in fees waived by the Manager, and shown as other expenses reimbursed by the Manager, transfer agent fees waived and/or reimbursed, respectively, in the Statements of Operations. For the six-months ended January 31, 2017, the amounts included in fees waived by the Manager were as follows:

	Fees Waived by the Manager		Other Expenses Reimbursed by the Manager
Midcap Index	$	97,180	$	11,915
Asia ex Japan Index		33,526		26,974
World Index		36,227		5,070
Small/Mid Cap Index		8,224		54,794
Total Stock Market Index		13,158		42,259

For the six months ended January 31, 2017, the amounts shown as transfer agent fees waived and/or reimbursed-class specific were as follows:

	Institutional		Investor A		Class K		Total
Midcap Index	$	275,854	$	7	$	315,300	$	591,161
Asia ex Japan Index		—		—	$	44	$	44
World Index	$	24,127		—	$	118,212	$	142,339
Small/Mid Cap Index	$	28		—	$	420	$	448
Total Stock Market Index	$	1		—	$	426	$	427

The Manager has agreed not to reduce or discontinue these contractual expense limitations prior to December 1, 2017, unless approved by the Board, including a majority of the independent trustees who are not “interested persons” of the Funds, as defined in the 1940 Act (“Independent Trustees”) or by a vote of a majority of the outstanding voting securities of the Funds.

With respect to the Funds, the Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees each Fund pays to the Manager indirectly through its investment in affiliated money market funds (the “affiliated money market fund waiver”). These amounts are included in fees waived by the Manager in the Statements of Operations. The amount of waivers and/or reimbursements of fees and expenses limitation caps, as applicable, will be reduced by the amount of the affiliated money market fund waiver. For the six months ended January 31, 2017, the amounts waived were as follows:

	Amount Waived
Midcap Index	$	15,894
Asia ex Japan Index	$	397
World Index	$	2,351
Small/Mid Cap Index	$	719
Total Stock Market Index	$	5,132

Effective September 1, 2016, the Manager voluntarily agreed to waive its investment advisory fee with respect to any portion of the Funds’ assets invested in affiliated equity or fixed-income mutual funds or affiliated exchange-traded funds that have a contractual management fee. Prior to September 1, 2016, the Manager did not waive such fees. Effective November 28, 2016, the waiver became contractual through November 30, 2017. This contractual agreement may be terminated upon 90 days’ notice by a majority of the non-interested trustees of the Trust or by a vote of a majority of the outstanding voting securities of the Funds. For the six months ended January 31, 2017, the amount waived on World Index was $20.

With respect to the contractual expense caps, if during a 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 expense cap for that share class, the Manager is entitled to be reimbursed by such share class up to the lesser of the following expenses:

(a) The amount of fees waived and/or expenses reimbursed during those prior two fiscal years under the agreement.

(b) The amount by which the expense cap for that share class exceeds the operating expenses of the share class for the current fiscal year, provided that:

• Each Fund, of which the share class is a part, has more than $50 million in assets for the fiscal year; and

• The Manager or an affiliate continues to serve as a Fund’s investment adviser or administrator.

In the event the expense cap for a share class is changed subsequent to a fiscal year in which the Manager becomes entitled to reimbursement for fees waived and/or reimbursed, the amount available to reimburse the Manager shall be calculated by reference to the expense cap for that share class in effect at the time the Manager became entitled to receive such reimbursement, rather than the subsequently changed expense cap for that share class.

BLACKROCK FUNDS JANUARY 31, 2017 115

Notes to Financial Statements (continued)

For the six months ended January 31, 2017, the Manager recouped the following fund level and class specific waivers and/or reimbursements previously recorded by the Funds:

	Midcap Index		World Index		Small/Mid Cap Index		Total Stock Market Index
Fund Level	$	91,305	$	6,074		—		—
Institutional	$	2,326	$	282	$	1	$	1
Class A		—		—		—	$	31
Class K	$	10,267		—		—		—

On January 31, 2017, the Fund level and class specific waivers and/or reimbursements subject to possible future recoupment under the expense limitation agreement are as follows:

	Expiring July 31,
	2017		2018		2019
Midcap Index
Fund level		—	$	15,841	$	109,095
Institutional		—	$	344,216	$	275,854
Investor A		—		—	$	8
Class K		—	$	150,466	$	315,300
Asia ex Japan Index
Fund level	$	79,538	$	162,934	$	60,500
Institutional	$	217	$	488		—
Class K		—	$	23	$	44
World Index
Fund level	$	64,849	$	216,191	$	41,298
Institutional		—	$	10,637	$	24,127
Class K		—	$	36,922	$	118,212
Small/Mid Cap Index
Fund level		—	$	205,994	$	63,018
Institutional		—	$	61	$	27
Investor A		—	$	56		—
Class K		—	$	1,052	$	421
Total Stock Market Index
Fund level		—	$	208,860	$	55,417
Institutional		—		—	$	1
Investor A		—		—		—
Class K		—	$	1,037	$	426

Securities Lending: The U.S. Securities and Exchange Commission has issued an exemptive order which permits BIM, an affiliate of the Manager, to serve as securities lending agent for the Funds, subject to applicable conditions. As securities lending agent, BIM bears all operational costs directly related to securities lending. The Funds are responsible for expenses in connection with the investment of cash collateral received for securities on loan (the “collateral investment expenses”). The cash collateral is invested in a private investment company 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 Funds.

Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment expenses. Each Fund retains a portion of securities lending income and remits a remaining portion to BIM as compensation for its services as securities lending agent. Pursuant to a securities lending agreement, BIM may lend securities only when the difference between the borrower rebate rate and the risk free rate exceeds a certain level (such securities, the “specials only securities”).

Pursuant to such agreement, each Fund retains 80% of securities lending income. In addition, commencing the business day following the date that the aggregate securities lending income earned across certain funds in the Equity-Liquidity Complex in a calendar year exceeds a specified threshold, each Fund, pursuant to the securities lending agreement, will retain for the remainder of the calendar year securities lending income in an amount equal to 85% of securities lending income.

The share of securities lending income earned by each Fund is shown as securities lending — affiliated — net in the Statements of Operations. For the six months ended January 31, 2017, each Fund paid BIM the following amounts for securities lending agent services:

Midcap Index	$	34,244
Asia ex Japan Index	$	25
World Index	$	1,471
Small/Mid Cap Index	$	2,575
Total Stock Market Index	$	5,520

Interfund Lending: In accordance with an exemptive order (the “Order”) from the U.S. Securities and Exchange Commission, each Fund may participate in a joint lending and borrowing facility for temporary purposes (the “Interfund Lending Program”), subject to compliance with the terms and conditions of the

116 BLACKROCK FUNDS JANUARY 31, 2017

Notes to Financial Statements (continued)

Order, and to the extent permitted by each Fund’s investment policies and restrictions. Each Fund is currently permitted to borrow and lend under the Interfund Lending Program.

A 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 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 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 period ended January 31, 2017, the Funds did not participate in the Interfund Lending Program.

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

Other Transactions: The Funds 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 trustees. For the six months ended January 31, 2017, the purchase and sale transactions and any net realized gains (losses) with affiliated funds in compliance with Rule 17a-7 under the 1940 Act were as follows:

	Purchases		Sales		Net Realized Gain
Midcap Index	$	35,802,298	$	2,523,983	$	184,223

7. Purchases and Sales:

For the period ended January 31, 2017, purchases and sales of investments excluding short-term securities were as follows:

	Midcap Index		Asia ex Japan Index		World Index		Small/Mid Cap Index		Total Stock Market Index
Purchases	$	245,394,003	$	36,864,282	$	120,093,972	$	36,973,681	$	243,982,421
Sales	$	53,608,266	$	327,697	$	21,434,881	$	1,195,636	$	15,934,102

8. Income Tax Information:

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

Each Fund files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on Midcap Index’s, World Index’s and Asia ex Japan Index’s U.S. federal tax returns generally remains open for the period ended July 31, 2016 and the period ended July 31, 2015. The statute of limitations on Small/Mid Cap Index’s and Total Stock Market Index’s U.S. federal tax returns generally remains open for the period ended July 31, 2016. The statutes of limitations on each Fund’s state and local tax returns may remain open for an additional year depending upon the jurisdiction.

Management has analyzed tax laws and regulations and their application to the Funds as of January 31, 2017, inclusive of the open tax return years, and does not believe that there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.

As of January 31, 2017, gross unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:

	Midcap Index			Asia ex Japan Index			World Index			Small/Mid Cap Index			Total Stock Market Index
Tax cost	$	2,440,937,030		$	54,444,831		$	407,822,898		$	70,378,700		$	560,299,988
Gross unrealized appreciation	$	383,497,858		$	2,107,770		$	48,860,952		$	6,919,760		$	42,325,758
Gross unrealized depreciation		(88,564,841	)		(3,179,498	)		(9,054,853	)		(1,731,350	)		(8,729,979	)
Net unrealized appreciation (depreciation)	$	294,933,017		$	(1,071,728	)	$	39,806,099		$	5,188,410		$	33,595,779

9. Bank Borrowings:

The Trust, on behalf of the Funds, along with certain other funds managed by the Manager and its affiliates (“Participating Funds”), is a party to a 364-day, $2.1 billion credit agreement with a group of lenders. Under this agreement, the Funds may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Funds, can borrow up to an aggregate commitment amount of $1.6 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 0.12% per annum on unused commitment amounts and interest at a rate equal to the higher of (a) one-month LIBOR (but, in any event,

BLACKROCK FUNDS JANUARY 31, 2017 117

Notes to Financial Statements (continued)

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 2017 unless extended or renewed. Participating Funds paid administration, legal and arrangement fees, which, if applicable, are included in miscellaneous expenses in the Statements of Operations. These fees were allocated among such funds based upon portions of the aggregate commitment available to them and relative net assets of Participating Funds. During the six months ended January 31, 2017, the Funds did not borrow under the credit agreement.

10. Principal Risks:

In the normal course of business, the Funds invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the issuer to meet all its obligations, including the ability to pay principal and interest when due (issuer credit risk). The value of securities held by the Funds may decline in response to certain events, including those directly involving the issuers of securities owned by the Funds. Changes arising from the general economy, the overall market and local, regional or global political and/or social instability, as well as currency, interest rate and price fluctuations, may also affect the securities’ value.

On October 11, 2016, BlackRock implemented certain changes required by amendments to Rule 2a-7 under the 1940 Act, which governs the operations of U.S. money market funds. The Funds may be exposed to additional risks when reinvesting cash collateral in money market funds that do not seek to maintain a stable NAV per share of $1.00 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. A 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 each Fund’s NAV to experience significant increases or decreases over short periods of time. If there is a general decline in the securities and other markets, the NAV of a Fund may lose value, regardless of the individual results of the securities and other instruments in which a Fund invests.

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

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

Concentration Risk: Certain Funds invest a substantial amount of their assets in issuers located in a single country or a limited number of countries. When the Funds concentrate their 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 Schedules of Investments.

Asia ex Japan Index 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.

118 BLACKROCK FUNDS JANUARY 31, 2017

Notes to Financial Statements (continued)

As of period end, the Funds’ investments had the following industry classifications:

Asia ex Japan Index
Industry	Percent of Net Assets
Banks		15%
Internet Software & Services		7
Semiconductors & Semiconductor Equipment		7
Technology, Hardware, Storage & Peripherals		6
Real Estate Management & Development		6
Insurance		5
Other1		54

¹ All other industries held were less than 5% of net assets.

World Index
Industry	Percent of Net Assets
Banks		9%
Oil, Gas & Consumable Fuels		6
Pharmaceuticals		6
Other1		79

¹ All other industries held were less than 5% of net assets.

11. Capital Share Transactions:

Transactions in capital shares for each class were as follows:

	Six Months Ended January 31, 2017						Year Ended July 31, 2016
Midcap Index	Shares			Amount			Shares			Amount
Institutional
Shares sold		8,827,982		$	91,099,287			237,113,373		$	2,216,966,753
Shares issued in reinvestment of distributions		314,708			3,259,248			1,444,234			13,368,058
Shares redeemed		(651,532	)		(6,743,761	)		(220,141,149	)		(1,862,314,020	)
Net increase		8,491,158		$	87,614,774			18,416,458		$	368,020,791
							Period November 30, 20151 to July 31, 2016
Investor A
Shares sold		954,822		$	9,725,724			657,707		$	6,354,693
Shares issued in reinvestment of distributions		16,248			167,658			2,552			25,404
Shares redeemed		(171,841	)		(1,782,426	)		(6,730	)		(65,778	)
Net increase		799,229		$	8,110,956			653,529		$	6,314,319
							Year Ended July 31, 2016
Class K
Shares sold		35,084,483		$	362,584,859			246,629,571		$	2,114,282,753
Shares issued in reinvestment of distributions		2,632,346			27,178,380			1,712,978			16,791,258
Shares redeemed		(27,888,239	)		(286,598,908	)		(35,884,959	)		(331,629,305	)
Net increase		9,828,590		$	103,164,331			212,457,590		$	1,799,444,706
Total Net Increase		19,118,977		$	198,890,061			231,527,577		$	2,173,779,816
							Year Ended July 31, 2016
Asia ex Japan Index							Shares			Amount
Institutional
Shares sold		11,008		$	98,275			285,722		$	2,440,000
Shares issued in reinvestment of distributions		8			72			—			—
Shares redeemed		—			(1	)		(285,722	)		(2,180,061	)
Net increase (decrease)		11,016		$	98,346			—		$	259,939
							��

BLACKROCK FUNDS JANUARY 31, 2017 119

Notes to Financial Statements (continued)

	Six Months Ended January 31, 2017						Period November 30, 20151 to July 31, 2016
Asia ex Japan Index (concluded)	Shares			Amount			Shares			Amount
Class K
Shares sold		3,954,270		$	37,428,729			297,378		$	2,280,061
Shares issued in reinvestment of distributions		18,189			165,519			84			689
Shares redeemed		(52,056	)		(485,274	)		—			—
Net increase		3,920,403		$	37,108,974			297,462		$	2,280,750
Total Net Increase		3,931,419		$	37,207,320			297,462		$	2,540,689
							Year Ended July 31, 2016
World Index							Shares			Amount
Institutional
Shares sold		493,365		$	5,019,010			21,208,634		$	188,624,722
Shares issued in reinvestment of distributions		522			5,174			137			1,271
Shares redeemed		(54	)		(534	)		(22,427,291	)		(196,625,224	)
Net increase (decrease)		493,833		$	5,023,650			(1,218,520	)	$	(7,999,231	)
							Period November 30, 20151 to July 31, 2016
Class K
Shares sold		15,093,175		$	148,764,785			38,543,171		$	344,238,428
Shares issued in reinvestment of distributions		83,304			815,906			32,837			315,857
Shares redeemed		(5,336,343	)		(52,658,383	)		(5,461,417	)		(49,877,427	)
Net increase		9,840,136		$	96,922,308			33,114,591		$	294,676,858
Total Net Increase		10,333,969		$	101,945,958			31,896,071		$	286,677,627
							Period August 13, 20151 to July 31, 2016
Small/Mid Cap Index							Shares			Amount
Institutional
Shares sold		204,344		$	2,161,581			7,655		$	75,034
Shares issued in reinvestment of distributions		213			2,306			—			—
Shares redeemed		(159,840	)		(1,764,662	)		10			105
Net increase		44,717		$	399,225			7,665		$	75,139
Investor A
Shares sold		947,166		$	9,961,761			563,013		$	5,585,233
Shares issued in reinvestment of distributions		10,028			106,805			(4,647	)		(45,447	)
Shares redeemed		(34,852	)		(366,192	)		970			9,775
Net increase		922,342		$	9,702,374			559,336		$	5,549,561
Class K
Shares sold		2,515,766		$	27,061,280			2,695,868		$	26,115,996
Shares issued in reinvestment of distributions		28,345			304,860			(52,699	)		(482,819	)
Shares redeemed		(138,983	)		(1,502,896	)		8,660			84,202
Net increase		2,405,128		$	25,863,244			2,651,829		$	25,717,379
Total Net Increase		3,372,187		$	35,964,843			3,218,830		$	31,342,079

120 BLACKROCK FUNDS JANUARY 31, 2017

Notes to Financial Statements (concluded)

	Six Months Ended January 31, 2017						Period August 13, 20151 to July 31, 2016
Total Stock Market Index	Shares			Amount			Shares			Amount
Institutional
Shares sold		1,397,637		$	15,334,046			287,334		$	2,764,841
Shares issued in reinvestment of distributions		3,142			33,618			1,847			18,263
Shares redeemed		(25,379	)		(268,520	)		(56,648	)		(539,744	)
Net increase		1,375,400		$	15,099,144			232,533		$	2,243,360
Investor A
Shares sold		2,967,658		$	31,817,517			857,708		$	8,734,653
Shares issued in reinvestment of distributions		20,084			214,341			1,219			12,649
Shares redeemed		(164,698	)		(1,750,766	)		(8,784	)		(89,530	)
Net increase		2,823,044		$	30,281,092			850,143		$	8,657,772
Class K
Shares sold		20,406,142		$	219,045,099			28,212,416		$	282,128,652
Shares issued in reinvestment of distributions		373,842			3,995,339			50,987			526,701
Shares redeemed		(3,242,721	)		(34,336,907	)		(454,730	)		(4,586,864	)
Net increase		17,537,263		$	188,703,531			27,808,673		$	278,068,489
Total Net Increase		21,735,707		$	234,083,767			28,891,349		$	288,969,621

¹ Commencement of operations

At January 31, 2017, shares owned by BlackRock HoldCo 2, Inc., an affiliate of the Funds, were as follows:

	Institutional		Investor A		Class K
Midcap Index		—		10,414		—
Asia ex Japan Index		1,505,527		—		11,739
World Index		12,595		—		—
Small/Mid Cap Index		2,000		2,000		996,000
Total Stock Market Index		—		—		—

12. Subsequent Events:

Management’s evaluation of the impact of all subsequent events on the Funds’ financial statements was completed through the date the financial statements were issued and the following items were noted:

On February 24, 2017, the Board approved name changes for each Fund. The change is expected to be effective during the second quarter of 2017.

Current Fund Name	New Fund Name
BlackRock Midcap Index Fund	iShares Russell Mid-Cap Index Fund
BlackRock MSCI Asia ex Japan Index Fund	iShares MSCI Asia ex Japan Index Fund
BlackRock MSCI World Index Fund	iShares MSCI Developed World Index Fund
BlackRock Small/Mid Cap Index Fund	iShares Russell Small/Mid-Cap Index Fund
BlackRock Total Stock Market Index Fund	iShares Total U.S. Stock Market Index Fund

BLACKROCK FUNDS JANUARY 31, 2017 121

Officers and Trustees

Rodney D. Johnson, Chair of the Board and Trustee

Susan J. Carter, Trustee

Collette Chilton, Trustee

Neil A. Cotty, Trustee

Cynthia A. Montgomery, Trustee

Joseph P. Platt, Trustee

Robert C. Robb, Jr., Trustee

Mark Stalnecker, Trustee

Kenneth L. Urish, Trustee

Claire A. Walton, Trustee

Frederick W. Winter, Trustee

Barbara G. Novick, Trustee

John M. Perlowski, Trustee, President and Chief Executive Officer

Thomas Callahan, Vice President

Jennifer McGovern, Vice President

Neal J. Andrews, Chief Financial Officer

Jay M. Fife, Treasurer

Charles Park, Chief Compliance Officer

Fernanda Piedra, Anti-Money Laundering Compliance Officer

Benjamin Archibald, Secretary

Effective December 31, 2016, David O. Beim and Dr. Matina S. Horner resigned as Trustees of the Trust.

Investment Adviser BlackRock Advisors, LLC Wilmington, DE 19809	Accounting Agent and Custodian State Street Bank and Trust Company Boston, MA 02110	Distributor BlackRock Investments, LLC New York, NY 10022	Legal Counsel Sidley Austin LLP New York, NY 10019
	Transfer Agent BNY Mellon Investment Servicing (US) Inc. Wilmington, DE 19809	Independent Registered Public Accounting Firm PricewaterhouseCoopers LLP Philadelphia, PA 19103	Address of the Trust 100 Bellevue Parkway Wilmington, DE 19809

Additional Information

General Information

Householding

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

Availability of Quarterly Schedule of Investments

The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ 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 or how to access documents on the SEC’s website without charge may be obtained by calling (800) SEC-0330. The Funds’ Forms N-Q may also be obtained upon request and without charge by calling (800) 441-7762.

122 BLACKROCK FUNDS JANUARY 31, 2017

Additional Information (concluded)

General Information (concluded)

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) 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 Funds voted proxies relating to securities held in the Funds’ 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) 441-7762 and (2) on the SEC’s website at http://www.sec.gov.

BlackRock’s Mutual Fund Family

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

Automatic Investment Plans

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

Systematic Withdrawal Plans

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

Retirement Plans

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

BlackRock Privacy Principles

BlackRock is committed to maintaining the privacy of its current and former fund investors and individual clients (collectively, “Clients”) and to safeguarding their non-public personal information. The following information is provided to help you understand what personal information BlackRock collects, how we protect that information and why in certain cases we share such information with select parties.

If you are located in a jurisdiction where specific laws, rules or regulations require BlackRock to provide you with additional or different privacy-related rights beyond what is set forth below, then BlackRock will comply with those specific laws, rules or regulations.

BlackRock obtains or verifies personal non-public information from and about you from different sources, including the following: (i) information we receive from you or, if applicable, your financial intermediary, on applications, forms or other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our websites.

BlackRock does not sell or disclose to non-affiliated third parties any non-public personal information about its Clients, except as permitted by law or as is necessary to respond to regulatory requests or to service Client accounts. These non-affiliated third parties are required to protect the confidentiality and security of this information and to use it only for its intended purpose.

We may share information with our affiliates to service your account or to provide you with information about other BlackRock products or services that may be of interest to you. In addition, BlackRock restricts access to non-public personal information about its Clients to those BlackRock employees with a legitimate business need for the information. BlackRock maintains physical, electronic and procedural safeguards that are designed to protect the non-public personal information of its Clients, including procedures relating to the proper storage and disposal of such information.

BLACKROCK FUNDS JANUARY 31, 2017 123

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

Index5-1/17-SAR

JANUARY 31, 2017

  SEMI-ANNUAL REPORT (UNAUDITED)  

BlackRock Funds^SM

^Ø   BlackRock Min Vol EAFE Index Fund

^Ø   BlackRock Min Vol USA Index Fund

^Ø   BlackRock Multifactor International Index Fund

^Ø   BlackRock Multifactor USA Index Fund

Not FDIC Insured • May Lose Value • No Bank Guarantee

The Markets in Review

Dear Shareholder,

The 12 months ended January 31, 2017 was an exceptionally strong period for risk assets (such as stocks and high yield bonds), while higher-quality assets generated muted returns after struggling in the latter part of 2016. As the period began, worries about slowing growth in China and the instability of oil prices had global equity prices sliding. However, the broad market momentum shifted in the second half of 2016 as reflationary expectations in the United States helped drive a pick-up in global growth.

Markets were remarkably resilient during the period. Big surprises such as the United Kingdom’s vote to leave the European Union and the outcome of the U.S. presidential election brought spikes in equity market volatility, but they were ultimately short-lived. Instead, investors used the sell-offs to seize upon buying opportunities, allowing markets to quickly rebound. We believe this reinforces the case for taking the long view rather than reacting to short-term market noise.

The global reflationary theme — rising nominal growth, wages and inflation — was the dominant driver of asset returns during the period, outweighing significant political upheavals and uncertainty. This trend accelerated after the U.S. election and continued into the beginning of 2017, stoked by expectations for an extra boost to U.S. growth via fiscal policy.

Although economic momentum is gaining traction, the capacity for rapid global growth is restrained by structural factors including an aging population, low productivity growth and excess savings. A tempered economic growth trend and high valuations across most assets have set the stage for muted investment returns going forward.

Equity markets still have room to move, although the disparity between winners and losers is widening, making stock selection increasingly important. Fixed income investors are also facing challenges as bond markets recalibrate to accommodate rising rates and higher inflation expectations. And in a world where political risk and policy uncertainty abound, there is no lack of potential catalysts for higher 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 visit blackrock.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 January 31, 2017
	6-month			12-month
U.S. large cap equities (S&P 500® Index)		5.96	%		20.04	%
U.S. small cap equities (Russell 2000® Index)		12.43			33.53
International equities (MSCI Europe, Australasia, Far East Index)		3.49			12.03
Emerging market equities (MSCI Emerging Markets Index)		4.92			25.41
3-month Treasury bills (BofA Merrill Lynch 3-Month U.S. Treasury Bill Index)		0.20			0.37
U.S. Treasury securities (BofA Merrill Lynch 10-Year U.S. Treasury Index)		(7.87	)		(3.26	)
U.S. investment grade bonds (Bloomberg Barclays U.S. Aggregate Bond Index)		(2.95	)		1.45
Tax-exempt municipal bonds (S&P Municipal Bond Index)		(2.94	)		0.24
U.S. high yield bonds (Bloomberg Barclays U.S. Corporate High Yield 2% Issuer Capped Index)		6.09			20.77
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.

2 THIS PAGE NOT PART OF YOUR FUND REPORT

Table of Contents

	Page
The Markets in Review		2
Semi-Annual Report:
Fund Summaries		4
About Fund Performance		14
Disclosure of Expenses		14
Derivative Financial Instruments		14
Financial Statements:
Schedule of Investments		15
Statements of Assets and Liabilities		31
Statements of Operations		32
Statement of Changes in Net Assets		33
Financial Highlights		35
Notes to Financial Statements		43
Officers and Trustees		52
Additional Information		53

BLACKROCK FUNDS JANUARY 31, 2017 3

Fund Summary as of January 31, 2017 BlackRock Min Vol EAFE Index Fund

Investment Objective

BlackRock Min Vol EAFE Index Fund’s (the “Fund”) investment objective is to seek to track the investment results of an index composed of developed markets equities that, in the aggregate, have lower volatility characteristics relative to the broader developed equity markets, excluding the United States and Canada.

On February 24, 2017, the Board of Trustees of BlackRock Funds approved a name change from “BlackRock Min Vol EAFE Index Fund” to “iShares Edge MSCI Min Vol EAFE Index Fund.” The change is expected to be effective during the second quarter of 2017.

Portfolio Management Commentary

How did the Fund perform?

• For the six-month period ended January 31, 2017, the Fund’s Institutional Shares returned (4.91)% and Class K Shares returned (4.89)%. The benchmark MSCI EAFE Minimum Volatility (USD) Index returned (4.63)% for the same period.

• Returns for the Fund’s respective share classes differ from the benchmark index based on individual share-class expenses.

Describe the market environment.

• Markets had a strong start to the period as expectations of a near-term Fed rate hike diminished, Japan announced another round of fiscal stimulus, and the earnings season had a strong start.

• Despite multiple terrorist attacks in France and Germany and a failed coup in Turkey, markets continued to rally in August on the back of a strong earnings season and monetary stimulus from the Bank of England.

• Positive performance sustained in September as the Fed kept rates unchanged, the Bank of Japan announced additional monetary stimulus, and OPEC decided to limit output. This was all despite inaction from the European Central Bank (“ECB”), the crisis in Syria, and concerns around Wells Fargo and Deutsche Bank. However, weak macro data out of China, a terrorist attack in Thailand, flooding in Louisiana, and a more hawkish tone from Fed officials hindered some performance for the quarter.

• Developed markets rallied later in the period as global investors embraced the results of the U.S. election and strong macro data, although a stronger U.S. dollar subdued gains for U.S. investors.

• Global equity market performance was mixed in October as Asia and Europe outperformed the United States (in local currency terms) on improving economic data and supportive commentary from the Bank of England and ECB. Asian stocks continued to perform well in November as global investors absorbed the unexpected results of the U.S. election and the Bank of Japan’s first intervention after introducing target yield curve control in September. Europe lagged in anticipation of the Italian referendum, while energy stocks rallied as OPEC and Russia agreed on a production cut at the end of the month.

• Global equities rallied as strong global economic data and continued optimism around President Trump’s reflationary policies outweighed the effects of the ECB’s decision to reduce the pace of its asset purchases and diplomatic tensions between the United States and other major powers.

Describe recent portfolio activity.

• During the period, as changes were made to the composition of the MSCI EAFE Minimum Volatility (USD) 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.

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

4 BLACKROCK FUNDS JANUARY 31, 2017

BlackRock Min Vol EAFE Index Fund

Total Return Based on a $10,000 Investment

¹  Assuming transaction costs and other operating expenses, including investment advisory fees, if any.

²  The Fund generally invests at least 80% of its assets, plus the amount of any borrowing for investment purposes, in securities of the MSCI EAFE Minimum Volatility (USD) Index.

³  An index that aims to reflect the performance characteristics of a minimum variance strategy applied to the large- and mid-cap equity universe across developed markets around the world excluding the United States and Canada. The index is calculated by optimizing the MSCI EAFE Index, its parent index, in USD for the lowest absolute risk (within a given set of constraints).

⁴  Commencement of operations.

Performance Summary for the Period Ended January 31, 2017

				Aggregate Total  Returns5
	6-Month Total Returns			Since Inception6
Institutional		(4.91	)%		(3.77	)%
Class K		(4.89	)		(3.75	)
MSCI EAFE Minimum Volatility (USD) Index		(4.63	)		(3.10	)

⁵  See “About Fund Performance” on page 14 for a detailed description of share classes, including any related fees.

⁶  The Fund commenced operations on July 13, 2016.

Past performance is not indicative of future results.

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

Expense Example

	Actual						Hypothetical2
	Beginning Account Value August 1, 2016		Ending Account Value January 31, 2017		Expenses Paid During the Period1		Beginning Account Value August 1, 2016		Ending Account Value January 31, 2017		Expenses Paid During the Period1		Annualized Expense Ratio
Institutional	$	1,000.00	$	950.90	$	1.13	$	1,000.00	$	1,024.05	$	1.17		0.23	%
Class K	$	1,000.00	$	951.10	$	0.89	$	1,000.00	$	1,024.30	$	0.92		0.18	%

¹  For each class of the Fund, expenses are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period shown).

²  Hypothetical 5% return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365.

See “Disclosure of Expenses” on page 14 for further information on how expenses were calculated.

BLACKROCK FUNDS JANUARY 31, 2017 5

BlackRock Min Vol EAFE Index Fund

Portfolio Information as of January 31, 2017

Ten Largest Holdings	Percent of Net Assets
Nestle SA, Registered Shares		1	%
Novartis AG, Registered Shares		1
Roche Holding AG		1
Danske Bank A/S		1
Swiss Re AG		1
CLP Holdings Ltd.		1
Hang Seng Bank Ltd.		1
Nippon Telegraph & Telephone Corp.		1
Reckitt Benckiser Group PLC		1
Otsuka Holdings Co. Ltd.		1

Geographic Allocation	Percent of Net Assets
Japan		29	%
United Kingdom		15
Switzerland		13
Hong Kong		8
France		5
Denmark		5
Australia		4
Germany		4
Singapore		4
Israel		2
Belgium		2
Sweden		2
Finland		1
Ireland		1
New Zealand		1	1
Other		2
Other Assets Less Liabilities		2
Short-Term Securities		—	2

¹  Other includes a less than 1% investment in each of the following countries: Italy, Luxembourg, Netherlands, Norway, Mexico and Spain.

²  Represents less than 1%.

6 BLACKROCK FUNDS JANUARY 31, 2017

Fund Summary as of January 31, 2017 BlackRock Min Vol USA Index Fund

Investment Objective

BlackRock Min Vol USA Index Fund’s (the “Fund”) investment objective is to seek to track the investment results of an index composed of U.S. equities that, in the aggregate, have lower volatility characteristics relative to the broader U.S. equity market.

On February 24, 2017, the Board of Trustees of BlackRock Funds approved a name change from “BlackRock Min Vol USA Index Fund” to “iShares Edge MSCI Min Vol USA Index Fund.” The change is expected to be effective during the second quarter of 2017.

Portfolio Management Commentary

How did the Fund perform?

• For the six-month period ended January 31, 2017, the Fund’s Institutional Shares returned (1.25)% and Class K Shares returned (1.23)%. The benchmark MSCI USA Minimum Volatility (USD) Index returned (1.15)% for the same period.

• Returns for the Fund’s respective share classes differ from the benchmark index based on individual share-class expenses.

Describe the market environment.

• Most of the major U.S. equity indexes saw gains at the beginning of the period, largely driven by a dovish Fed that kept rates unchanged and stronger-than-expected earnings releases versus analyst expectations.

• Investors’ focus on the September Fed meeting dominated market performance in the last month of the third quarter. While the Fed kept rates unchanged, several Fed officials expressed support of a rate hike later in the year.

• The U.S. presidential election and the Fed were front and center in 2016, especially in the fourth quarter. The fourth quarter started with a slight

increase in volatility as investors prepared for a possible Fed rate increase, and weighed probable outcomes of the presidential election. While many people were shocked by the Trump win, markets did not experience the same type of volatility seen after the Brexit vote, with major U.S. indexes posting solid gains in November.

• The performance of U.S. equities post-election suggests market participants are optimistic about President Trump’s pro-growth policies including lower taxes, deregulation and infrastructure spending.

Describe recent portfolio activity.

• During the period, as changes were made to the composition of the MSCI USA Minimum Volatility (USD) 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.

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

Ten Largest Holdings	Percent of Net Assets
AT&T, Inc.		2	%
Automatic Data Processing, Inc.		2
PepsiCo, Inc.		1
Becton Dickinson & Co.		1
Johnson & Johnson		1
Verizon Communications, Inc.		1
McDonald’s Corp.		1
Procter & Gamble Co.		1
Stryker Corp.		1
Visa, Inc.		1

Sector Allocation	Percent of Net Assets
Health Care		19	%
Information Technology		16
Consumer Staples		14
Financials		10
Utilities		8
Real Estate		8
Industrials		8
Consumer Discretionary		8
Telecommunication Services		3
Energy		2
Materials		2
Short-Term Securities		2

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, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

BLACKROCK FUNDS JANUARY 31, 2017 7

BlackRock Min Vol USA Index Fund

Total Return Based on a $10,000 Investment

¹  Assuming transaction costs and other operating expenses, including investment advisory fees, if any.

²  The Fund generally invests at least 80% of its assets, plus the amount of any borrowing for investment purposes, in securities of the MSCI USA Minimum Volatility (USD) Index.

³  An index that aims to reflect the performance characteristics of a minimum variance strategy applied to the large- and mid-capitalization U.S. equity universe. The index is calculated by optimizing the MSCI USA Index, its parent index, in USD for the lowest absolute risk (within a given set of constraints).

⁴  Commencement of operations.

Performance Summary for the Period Ended January 31, 2017

				Aggregate Total  Returns5
	6-Month Total Returns			Since Inception6
Institutional		(1.25	)%		(1.25	)%
Class K		(1.23	)		(1.23	)
MSCI USA Minimum Volatility (USD) Index		(1.15	)		(1.18	)

⁵  See “About Fund Performance” on page 14 for a detailed description of share classes, including any related fees.

⁶  The Fund commenced operations on July 13, 2016.

Past performance is not indicative of future results.

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

Expense Example

	Actual						Hypothetical2
	Beginning Account Value August 1, 2016		Ending Account Value January 31, 2017		Expenses Paid During the Period1		Beginning Account Value August 1, 2016		Ending Account Value January 31, 2017		Expenses Paid During the Period1		Annualized Expense Ratio
Institutional	$	1,000.00	$	987.50	$	0.85	$	1,000.00	$	1,024.35	$	0.87		0.18	%
Class K	$	1,000.00	$	987.70	$	0.65	$	1,000.00	$	1,024.55	$	0.66		0.13	%

¹  For each class of the Fund, expenses are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period shown).

²  Hypothetical 5% return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365.

See “Disclosure of Expenses” on page 14 for further information on how expenses were calculated.

8 BLACKROCK FUNDS JANUARY 31, 2017

Fund Summary as of January 31, 2017 BlackRock Multifactor International Index Fund

Investment Objective

BlackRock Multifactor International Index Fund’s (the “Fund”) investment objective is to seek to track the investment results of an index composed of global developed market large- and mid-capitalization stocks, excluding the United States, that have favorable exposure to target style factors subject to constraints.

On February 24, 2017, the Board of Trustees of BlackRock Funds approved a name change from “BlackRock Multifactor International Index Fund” to “iShares Edge MSCI Multifactor Intl Index Fund.” The change is expected to be effective during the second quarter of 2017.

Portfolio Management Commentary

How did the Fund perform?

• For the six-month period ended January 31, 2017, the Fund’s Institutional Shares returned 3.77% and Class K Shares returned 3.79%. The benchmark MSCI World ex USA Diversified Multiple-Factor Index returned 3.66% for the same period.

• Returns for the Fund’s respective share classes differ from the benchmark index based on individual share-class expenses.

Describe the market environment.

• Markets had a strong start to the period as expectations of a near-term Fed rate hike diminished, Japan announced another round of fiscal stimulus, and the earnings season had a strong start.

• Despite multiple terrorist attacks in France and Germany and a failed coup in Turkey, markets continued to rally in August on the back of a strong earnings season and monetary stimulus from the Bank of England.

• Positive performance sustained in September as the Fed kept rates unchanged, the Bank of Japan announced additional monetary stimulus, and OPEC decided to limit output. This was all despite inaction from the European Central Bank (“ECB”), the crisis in Syria, and concerns around Wells Fargo and Deutsche Bank. However, weak macro data out of China, a terrorist attack in Thailand, flooding in Louisiana, and a more hawkish tone from Fed officials hindered some performance for the quarter.

• Developed markets rallied later in the period as global investors embraced the results of the U.S. election and strong macro data, although a stronger U.S. dollar subdued gains for U.S. investors.

• Global equity market performance was mixed in October as Asia and Europe outperformed the United States (in local currency terms) on improving economic data and supportive commentary from the Bank of England and ECB. Asian stocks continued to perform well in November as global investors absorbed the unexpected results of the U.S. election and the Bank of Japan’s first intervention after introducing target yield curve control in September. Europe lagged in anticipation of the Italian referendum, while energy stocks rallied as OPEC and Russia agreed on a production cut at the end of the month.

• Global equities rallied as strong global economic data and continued optimism around President Trump’s reflationary policies outweighed the effects of the ECB’s decision to reduce the pace of its asset purchases and diplomatic tensions between the United States and other major powers.

Describe recent portfolio activity.

• During the period, as changes were made to the composition of the MSCI World ex USA Diversified Multiple-Factor 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.

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.

BLACKROCK FUNDS JANUARY 31, 2017 9

BlackRock Multifactor International Index Fund

Total Return Based on a $10,000 Investment

¹  Assuming transaction costs and other operating expenses, including investment advisory fees, if any.

²  The Fund generally invests at least 80% of its assets, plus the amount of any borrowing for investment purposes, in securities of the MSCI World ex USA Diversified Multiple-Factor Index.

³  An index that is based on the MSCI World ex USA Index, its parent index, which includes large- and mid-capitalization stocks across 22 of 23 developed markets, excluding the United States. The index aims to maximize exposure to four factors — value, momentum, quality and low size — while maintaining a risk profile similar to that of the underlying parent index.

⁴  Commencement of operations.

Performance Summary for the Period Ended January 31, 2017

				Aggregate Total  Returns5
	6-Month Total Returns			Since Inception6
Institutional		3.77	%		6.36	%
Class K		3.79			6.38
MSCI World ex USA Diversified Multiple-Factor Index		3.66			6.87

⁵  See “About Fund Performance” on page 14 for a detailed description of share classes, including any related fees.

⁶  The Fund commenced operations on July 13, 2016.

Past performance is not indicative of future results.

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

Expense Example

	Actual						Hypothetical2
	Beginning Account Value August 1, 2016		Ending Account Value January 31, 2017		Expenses Paid During the Period1		Beginning Account Value August 1, 2016		Ending Account Value January 31, 2017		Expenses Paid During the Period1		Annualized Expense Ratio
Institutional	$	1,000.00	$	1,037.70	$	2.31	$	1,000.00	$	1,022.94	$	2.29		0.45	%
Class K	$	1,000.00	$	1,037.90	$	2.05	$	1,000.00	$	1,023.19	$	2.04		0.40	%

¹  For each class of the Fund, expenses are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period shown).

²  Hypothetical 5% return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365.

See “Disclosure of Expenses” on page 14 for further information on how expenses were calculated.

10 BLACKROCK FUNDS JANUARY 31, 2017

BlackRock Multifactor International Index Fund

Portfolio Information as of January 31, 2017

Ten Largest Holdings	Percent of Net Assets
Nippon Telegraph & Telephone Corp.		2	%
adidas AG		2
Swiss Re AG		2
Koninklijke Ahold Delhaize NV		2
Actelion Ltd., Registered Shares		2
Fuji Heavy Industries Ltd.		2
BAE Systems PLC		2
ITOCHU Corp.		1
Infineon Technologies AG		1
Cie Generale des Etablissements Michelin		1

Geographic Allocation	Percent of Net Assets
Japan		22	%
United Kingdom		18
Switzerland		12
France		9
Germany		8
Australia		6
Canada		5
Netherlands		4
Hong Kong		3
Finland		2
Sweden		2
Denmark		2
Spain		1
Belgium		1
Israel		1
Singapore		1
Ireland		1
Other		—	1
Other Assets Less Liabilities		2
Short-Term Securities		—	2

¹  Other includes a less than 1% investment in each of the following countries: Luxembourg and Italy.

²  Represents less than 1%.

BLACKROCK FUNDS JANUARY 31, 2017 11

Fund Summary as of January 31, 2017 BlackRock Multifactor USA Index Fund

Investment Objective

BlackRock Multifactor USA Index Fund’s (the “Fund”) investment objective is to seek to track the investment results of an index composed of U.S. large- and mid-capitalization stocks that have favorable exposure to target style factors subject to constraints.

On February 24, 2017, the Board of Trustees of BlackRock Funds approved a name change from “BlackRock Multifactor USA Index Fund” to “iShares Edge MSCI Multifactor Intl Index Fund.” The change is expected to be effective during the second quarter of 2017.

Portfolio Management Commentary

How did the Fund perform?

• For the six-month period ended January 31, 2017, the Fund’s Institutional Shares returned 9.47% and Class K Shares returned 9.50%. The benchmark MSCI USA Diversified Multiple-Factor Index returned 9.84% for the same period.

• Returns for the Fund’s respective share classes differ from the benchmark index based on individual share-class expenses.

Describe the market environment.

• Most of the major U.S. equity indexes saw gains at the beginning of the period, largely driven by a dovish Fed that kept rates unchanged and stronger-than-expected earnings releases versus analyst expectations.

• Investors’ focus on the September Fed meeting dominated market performance in the last month of the third quarter. While the Fed kept rates unchanged, several Fed officials expressed support of a rate hike later in the year.

• The U.S. presidential election and the Fed were front and center in 2016, especially in the fourth quarter. The fourth quarter started with a slight increase in volatility as investors prepared for a possible Fed rate increase, and weighed probable outcomes of the presidential election. While many people were shocked by the Trump win, markets did not experience the same type of volatility seen after the Brexit vote, with major U.S. indexes posting solid gains in November.

• The performance of U.S. equities post-election suggests market participants are optimistic about President Trump’s pro-growth policies including lower taxes, deregulation and infrastructure spending.

Describe recent portfolio activity.

• During the period, as changes were made to the composition of the MSCI USA Diversified Multiple-Factor 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.

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

Ten Largest Holdings	Percent of Net Assets
AT&T, Inc.		3	%
NVIDIA Corp.		2
General Motors Co.		2
Accenture PLC		2
Kimberly-Clark Corp.		2
Gilead Sciences, Inc.		2
Aetna, Inc.		2
Anthem, Inc.		2
Hewlett Packard Enterprise Co.		2
Phillips 66		2

Sector Allocation	Percent of Net Assets
Information Technology		19	%
Health Care		14
Financials		12
Consumer Discretionary		8
Consumer Staples		8
Utilities		8
Industrials		7
Real Estate		7
Materials		6
Energy		5
Telecommunication Services		4
Short-Term Securities		2

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, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

12 BLACKROCK FUNDS JANUARY 31, 2017

BlackRock Multifactor USA Index Fund

Total Return Based on a $10,000 Investment

¹  Assuming transaction costs and other operating expenses, including investment advisory fees, if any.

²  The Fund generally invests at least 80% of its assets, plus the amount of any borrowing for investment purposes, in securities of the MSCI USA Diversified Multiple-Factor Index.

³  An index that is based on a traditional market cap weighted parent index, the MSCI USA Index, which includes U.S. large- and mid-capitalization stocks. The index aims to maximize exposure to four factors — value, momentum, quality and low size — while maintaining a risk profile similar to that of the underlying parent index.

⁴  Commencement of operations.

Performance Summary for the Period Ended January 31, 2017

				Aggregate Total  Returns5
	6-Month Total Returns			Since Inception6
Institutional		9.47	%		10.79	%
Class K		9.50			10.81
MSCI USA Diversified Multiple-Factor Index		9.84			11.12

⁵  See “About Fund Performance” on page 14 for a detailed description of share classes, including any related fees.

⁶  The Fund commenced operations on July 13, 2016.

Past performance is not indicative of future results.

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

Expense Example

	Actual						Hypothetical2
	Beginning Account Value August 1, 2016		Ending Account Value January 31, 2017		Expenses Paid During the Period1		Beginning Account Value August 1, 2016		Ending Account Value January 31, 2017		Expenses Paid During the Period1		Annualized Expense Ratio
Institutional	$	1,000.00	$	1,094.70	$	1.85	$	1,000.00	$	1,023.44	$	1.79		0.35	%
Class K	$	1,000.00	$	1,095.00	$	1.58	$	1,000.00	$	1,023.69	$	1.53		0.30	%

¹  For each class of the Fund, expenses are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period shown).

²  Hypothetical 5% return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365.

See “Disclosure of Expenses” on page 14 for further information on how expenses were calculated.

BLACKROCK FUNDS JANUARY 31, 2017 13

About Fund Performance

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

Performance information reflects past performance and does not guarantee future results. Current performance may be lower or higher than performance data quoted. Refer to www.blackrock.com/funds to obtain the performance data current to the most recent month end. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Figures shown in the performance tables on the previous pages assume reinvestment of all distributions, if any, at net asset value (“NAV”) on the ex-dividend date. Investment return and principal value of shares will fluctuate so that

shares, when redeemed, may be worth more or less than their original cost. Distributions paid to each class of shares will vary because of the different levels of service, distribution and transfer agency fees applicable to each class, which are deducted from the income available to be paid to shareholders.

BlackRock Advisors, LLC (the “Manager”), the Funds’ investment adviser, has contractually agreed to waive and/or reimburse a portion of each Fund’s expenses. Without such waiver and/or reimbursement, each Fund’s performance would have been lower. The Manager is under no obligation to continue waiving and/or reimbursing its fees after the applicable termination date of such agreement. See Note 5 of the Notes to Financial Statements for additional information on waivers and/or reimbursements.

Disclosure of Expenses

Shareholders of the Funds may incur the following charges: (a) transactional expenses, such as sales charges; and (b) operating expenses, including investment advisory fees, service and distribution fees, including 12b-1 fees, acquired fund fees and expenses and other fund expenses. The expense examples shown on previous pages, which are based on a hypothetical investment of $1,000 invested on August 1, 2016 and held through January 31, 2017, are intended to assist shareholders both in calculating expenses based on an investment in each Fund and in comparing these expenses with similar costs of investing in other mutual funds.

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

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

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

Derivative Financial Instruments

The Funds may invest in various derivative financial instruments. These instruments are used to obtain exposure to a security, commodity, index, market, and/or other asset without owning or taking physical custody of securities, commodities and/or other referenced assets or to manage market, equity, credit, interest rate, foreign currency exchange rate, commodity and/or other risks. Derivative financial instruments may give rise to a form of economic leverage and involve risks, including the imperfect correlation between the value of a derivative financial instrument and the underlying asset, possible default of the counterparty to the

transaction or illiquidity of the instrument. The Funds’ successful use of a derivative financial instrument depends on the investment adviser’s ability to predict pertinent market movements accurately, which cannot be assured. The use of these instruments may result in losses greater than if they had not been used, may limit the amount of appreciation a Fund can realize on an investment and/or may result in lower distributions paid to shareholders. The Funds’ investments in these instruments, if any, are discussed in detail in the Notes to Financial Statements.

14 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments January 31, 2017 (Unaudited) BlackRock Min Vol EAFE Index Fund (Percentages shown are based on Net Assets)

Common Stocks	Shares		Value
Australia — 4.2%
AGL Energy Ltd.		27,724	$	475,400
Commonwealth Bank of Australia		2,351		145,668
CSL Ltd.		1,629		138,872
Newcrest Mining Ltd.		8,563		140,426
Scentre Group		52,724		175,935
Sonic Healthcare Ltd.		22,266		351,164
Stockland		23,151		76,397
Telstra Corp. Ltd.		265,674		1,007,978
Transurban Group (a)		35,546		275,058
Vicinity Centres		77,863		168,951
Wesfarmers Ltd.		20,581		628,733
Westfield Corp.		32,105		214,024
				3,798,606
Belgium — 2.0%
Ageas		2,459		105,288
Colruyt SA		9,143		447,469
Groupe Bruxelles Lambert SA		2,822		240,498
KBC Group NV		866		56,244
Proximus		19,762		567,558
UCB SA		5,229		361,168
				1,778,225
Denmark — 4.6%
Chr Hansen Holding A/S		6,807		415,526
Coloplast A/S, Class B		5,097		365,482
Danske Bank A/S		38,442		1,282,213
DONG Energy A/S (b)(c)		12,023		455,908
DSV A/S		9,264		450,504
ISS A/S		11,487		409,033
TDC A/S (b)		38,495		202,834
Tryg A/S		13,911		266,162
William Demant Holding A/S (b)		17,122		320,593
				4,168,255
Finland — 1.3%
Elisa OYJ		8,574		288,923
Neste Oil OYJ		3,946		137,294
Orion OYJ, Class B		4,890		227,623
Sampo OYJ, Class A		11,948		553,294
				1,207,134
France — 4.8%
Aeroports de Paris		3,849		427,113
Air Liquide SA		1,988		214,632
AtoS SE		1,014		107,884
Danone SA		4,915		308,115
Dassault Systemes SA		4,857		375,995
Essilor International SA		1,195		140,193
Hermes International		388		168,620
Iliad SA		685		146,488
L’Oreal SA		2,764		502,542
Sanofi		4,990		401,079
SCOR SE		7,222		244,421
SEB SA		1,008		126,762
SES SA		8,030		156,141
Sodexo SA		3,213		355,301
Thales SA		4,834		453,500
Vivendi SA		7,863		144,176
				4,272,962

Common Stocks	Shares		Value
Germany — 4.0%
adidas AG		288	$	45,448
Beiersdorf AG		4,451		394,887
Fresenius Medical Care AG & Co. KGaA		6,715		548,110
Fresenius SE & Co. KGaA		2,505		198,257
Henkel AG & Co. KGaA		4,021		424,305
MAN SE		5,040		522,507
Merck KGaA		2,219		244,826
Muenchener Rueckversicherungs AG, Registered Shares		2,640		497,128
SAP SE		2,956		270,327
Symrise AG		720		43,353
TUI AG		27,747		406,651
				3,595,799
Hong Kong — 8.2%
Cheung Kong Infrastructure Holdings Ltd.		90,000		723,753
CLP Holdings Ltd.		126,500		1,234,714
Hang Seng Bank Ltd.		60,300		1,229,093
HK Electric Investments & HK Electric Investments Ltd. (a)(c)		379,000		316,355
HKT Trust & HKT Ltd. (a)		377,000		526,637
Hong Kong & China Gas Co. Ltd.		316,000		594,965
Link REIT		39,500		269,926
MTR Corp. Ltd.		189,500		962,689
PCCW Ltd.		422,000		256,139
Power Assets Holdings Ltd.		93,000		891,113
Yue Yuen Industrial Holdings Ltd.		93,500		342,239
				7,347,623
Ireland — 1.2%
Kerry Group PLC, Class A		8,285		582,232
Paddy Power Betfair PLC		807		84,328
Ryanair Holdings PLC — ADR (b)		4,415		369,359
				1,035,919
Israel — 2.1%
Azrieli Group Ltd.		4,684		213,801
Bank Hapoalim BM		121,251		732,619
Bank Leumi Le-Israel BM (b)		115,528		477,837
Bezeq The Israeli Telecommunication Corp. Ltd.		95,643		167,082
Mizrahi Tefahot Bank Ltd.		19,902		306,547
				1,897,886
Italy — 0.5%
Snam SpA		112,153		426,867
Japan — 29.0%
ABC-Mart, Inc.		3,500		203,767
Ajinomoto Co., Inc.		11,500		226,982
ANA Holdings, Inc.		157,000		466,336
Aozora Bank Ltd.		22,000		80,123
Asahi Group Holdings Ltd.		3,000		105,569
Astellas Pharma, Inc.		46,100		618,744
Benesse Holdings, Inc.		9,500		276,504
Bridgestone Corp.		4,600		168,709
Canon, Inc.		32,100		949,723
Chugai Pharmaceutical Co. Ltd.		2,900		85,227
Daiichi Sankyo Co. Ltd.		16,400		366,918
Daito Trust Construction Co. Ltd.		600		83,880
Daiwa House REIT Investment Corp.		50		125,904
East Japan Railway Co.		5,500		498,064
Eisai Co. Ltd.		3,600		198,434
FamilyMart UNY Holdings Co. Ltd.		6,800		430,843

Portfolio Abbreviations

ADR	American  Depositary Receipts
REIT	Real  Estate Investment Trust

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 15

Schedule of Investments (continued) BlackRock Min Vol EAFE Index Fund

Common Stocks	Shares		Value
Japan (continued)
Hankyu Hanshin Holdings, Inc.		1,700	$	57,681
Japan Airlines Co. Ltd.		17,100		544,518
Japan Prime Realty Investment Corp.		102		409,327
Japan Real Estate Investment Corp.		57		323,897
Japan Retail Fund Investment Corp.		242		517,416
Kajima Corp.		51,000		355,461
Kao Corp.		6,400		316,702
KDDI Corp.		12,700		341,228
Keikyu Corp.		49,000		574,620
Keyence Corp.		200		77,673
Kirin Holdings Co. Ltd.		13,900		227,762
Kyowa Hakko Kirin Co. Ltd.		2,600		35,208
Lawson, Inc.		9,300		678,834
LINE Corp. (b)		4,100		131,306
McDonald’s Holdings Co. Japan Ltd.		9,500		249,762
Meiji Holdings Co. Ltd.		4,300		333,063
Miraca Holdings, Inc.		4,600		209,648
Mitsubishi Tanabe Pharma Corp.		32,100		643,834
Mizuho Financial Group, Inc.		259,400		481,339
Nagoya Railroad Co. Ltd.		57,000		280,594
NH Foods Ltd.		14,600		397,350
Nippon Building Fund, Inc.		39		223,975
Nippon Prologis REIT, Inc.		212		443,002
Nippon Telegraph & Telephone Corp.		27,800		1,227,990
Nissin Foods Holdings Co. Ltd.		7,900		416,908
Nitori Holdings Co. Ltd.		2,500		280,179
Nomura Real Estate Master Fund, Inc.		450		701,129
Nomura Research Institute Ltd.		5,860		200,227
NTT Data Corp.		2,500		125,993
NTT Docomo, Inc.		32,000		765,122
Obayashi Corp.		22,600		215,292
Oracle Corp. Japan		5,200		291,360
Oriental Land Co. Ltd.		3,600		197,278
Osaka Gas Co. Ltd.		60,000		224,905
Otsuka Corp.		3,300		169,831
Otsuka Holdings Co. Ltd.		24,200		1,114,845
Park24 Co. Ltd.		7,400		204,245
Recruit Holdings Co. Ltd.		20,600		901,778
Sankyo Co. Ltd.		6,400		213,688
Santen Pharmaceutical Co. Ltd.		10,500		131,942
Secom Co. Ltd.		5,400		390,515
Seven & i Holdings Co. Ltd.		1,025		40,927
Shimamura Co. Ltd.		1,000		131,068
Shionogi & Co. Ltd.		3,600		173,384
Suntory Beverage & Food Ltd.		15,300		650,978
Taisei Corp.		23,000		163,382
Taisho Pharmaceutical Holdings Co. Ltd.		4,300		363,460
Takeda Pharmaceutical Co. Ltd.		16,200		678,547
Terumo Corp.		7,100		262,656
Tobu Railway Co. Ltd.		37,000		187,783
Toho Gas Co. Ltd.		7,000		52,365
Tokyo Gas Co. Ltd.		11,000		48,816
TonenGeneral Sekiyu KK		10,000		117,601
Toray Industries, Inc.		51,000		441,605
Toyo Suisan Kaisha Ltd.		12,700		453,154
Toyota Motor Corp.		3,100		180,274
Tsuruha Holdings, Inc.		1,000		94,002
United Urban Investment Corp.		349		556,658
USS Co. Ltd.		2,600		45,633
West Japan Railway Co.		3,600		234,550
Yamada Denki Co. Ltd.		43,900		241,863
Yamaguchi Financial Group, Inc.		14,000		152,532
Yamato Holdings Co. Ltd.		14,600		294,239
				26,078,631
Luxembourg — 0.5%
RTL Group SA (b)		5,534		422,783

Common Stocks	Shares		Value
Mexico — 0.1%
Fresnillo PLC		3,322	$	60,980
Netherlands — 0.2%
Koninklijke Ahold Delhaize NV		2,875		61,248
NN Group NV		4,261		150,907
				212,155
New Zealand — 0.6%
Auckland International Airport Ltd.		9,136		45,825
Contact Energy Ltd.		36,969		129,549
Mercury NZ Ltd.		22,216		50,064
Meridian Energy Ltd.		50,291		97,166
Ryman Healthcare Ltd.		18,946		121,099
Spark New Zealand Ltd.		28,947		74,587
				518,290
Norway — 0.2%
Gjensidige Forsikring ASA		8,599		147,979
Singapore — 3.8%
DBS Group Holdings Ltd.		60,900		823,366
Oversea-Chinese Banking Corp. Ltd.		114,100		761,002
SATS, Ltd.		19,400		72,680
Singapore Airlines Ltd.		80,900		569,781
Singapore Press Holdings Ltd.		1,900		4,659
Singapore Telecommunications Ltd.		259,200		712,643
StarHub Ltd.		68,300		143,802
United Overseas Bank Ltd.		23,550		350,235
				3,438,168
Spain — 0.0%
Endesa SA		1,937		39,946
Sweden — 1.6%
Hennes & Mauritz AB, Class B		4,390		125,607
ICA Gruppen AB		4,540		148,361
L E Lundbergforetagen AB, B Shares		4,105		264,126
Skandinaviska Enskilda Banken AB, Class A		5,835		65,544
Svenska Handelsbanken AB, Class A		11,502		171,710
Swedbank AB, Class A		5,804		146,754
Swedish Match AB		5,003		162,881
TeliaSonera AB		93,108		377,687
				1,462,670
Switzerland — 13.5%
Baloise Holding AG, Registered Shares		3,226		415,389
Barry Callebaut AG, Registered Shares (b)		154		190,556
Givaudan SA, Registered Shares		225		405,639
Kuehne & Nagel International AG, Registered Shares		6,378		872,689
Lindt & Spruengli AG		82		455,131
Lindt & Spruengli AG, Registered Shares		5		324,293
Nestle SA, Registered Shares		18,341		1,343,744
Novartis AG, Registered Shares		17,633		1,301,801
Partners Group Holding AG		735		371,445
Roche Holding AG		5,473		1,296,818
Schindler Holding AG, Registered Shares		382		71,960
Sonova Holding AG, Registered Shares		6,034		798,933
Swiss Life Holding AG, Registered Shares (b)		1,472		446,881
Swiss Prime Site AG, Registered Shares (b)		7,826		651,931
Swiss Re AG		13,689		1,279,218
Swisscom AG, Registered Shares		2,228		982,873
Syngenta AG, Registered Shares		704		299,209
Zurich Insurance Group AG (b)		2,165		623,463
				12,131,973
United Kingdom — 15.2%
Admiral Group PLC		5,755		128,936
AstraZeneca PLC		13,287		705,128
British American Tobacco PLC		8,980		554,316
BT Group PLC		56,315		215,969

See Notes to Financial Statements.

16 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Min Vol EAFE Index Fund

Common Stocks	Shares		Value
United Kingdom (continued)
Compass Group PLC		58,459	$	1,040,397
Diageo PLC		24,893		691,474
Direct Line Insurance Group PLC		86,885		389,228
GlaxoSmithKline PLC		47,740		922,574
HSBC Holdings PLC		124,943		1,065,878
Imperial Brands PLC		11,105		514,468
Kingfisher PLC		127,131		539,390
Merlin Entertainments PLC (c)		20,908		125,702
National Grid PLC		86,996		1,019,000
Randgold Resources Ltd.		7,305		621,810
Reckitt Benckiser Group PLC		13,546		1,162,322
RELX PLC		41,512		745,144
Royal Mail PLC		110,010		571,321
Severn Trent PLC		1,648		47,237
Smith & Nephew PLC		28,402		424,884
SSE PLC		37,339		701,921
Tate & Lyle PLC		36,635		309,652
Unilever PLC		16,949		686,533

Common Stocks	Shares		Value
United Kingdom (continued)
United Utilities Group PLC		4,116	$	47,666
Vodafone Group PLC		181,957		445,709
				13,676,659
Total Long-Term Investments (Cost — $87,923,657) — 97.6%				87,719,510
Short-Term Securities
BlackRock Liquidity Funds, T-Fund, Institutional Class, 0.40% (d)(e)		335,074		335,074
Total Short-Term Securities (Cost — $335,074) — 0.4%				335,074
Total Investments (Cost — $88,258,731) — 98.0%				88,054,584
Other Assets Less Liabilities — 2.0%				1,813,451
Net Assets — 100.0%			$	89,868,035

Notes to Schedule of Investments

(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) Current yield as of period end.

(e) During the six months ended January 31, 2017, 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 July 31, 2016		Net Activity		Shares Held at January 31, 2017		Value at January 31, 2017		Income		Net Realized Gain (Loss)	Change in Unrealized Appreciation (Depreciation)
BlackRock Liquidity Funds, T-Fund, Institutional Class		—		335,074		335,074	$	335,074	$	284	—	—
BlackRock Premier Government Institutional Fund		—		—		—		—		3	—	—
									$	287	—	—

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts
Contracts Long		Issue	Expiration	Notional Value		Unrealized Depreciation
	9	FTSE 100 Index	March 2017	$	797,691	$	(8,600	)
	7	Nikkei 225 Index	March 2017	$	588,655		(1,573	)
	5	SPI 200 Index	March 2017	$	526,614		(6,725	)
	Total					$	(16,898	)

Derivative Financial Instruments Categorized by Risk Exposure

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

Liabilities — Derivative Financial Instruments			Commodity Contracts	Credit Contracts	Equity Contracts		Foreign Currency Exchange Contracts	Interest Rate Contracts	Other Contracts	Total
Futures contracts	Net unrealized depreciation	1	—	—	$	16,898	—	—	—	$	16,898
1   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 Statements of Assets and Liabilities.

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 17

Schedule of Investments (concluded) BlackRock Min Vol EAFE Index Fund

For the six months ended January 31, 2017, the effect of derivative financial instruments in the Statements of Operations was as follows:

Net Realized Gain (Loss) from:	Commodity Contracts	Credit Contracts	Equity Contracts			Foreign Currency Exchange Contracts	Interest Rate Contracts	Other Contracts	Total
Futures contracts	—	—	$	(27,140	)	—		—	$	(27,140	)
Net Change in Unrealized Appreciation (Depreciation) on:
Futures contracts	—	—	$	(18,833	)	—	—	—	$	(18,833	)

Average Quarterly Balances of Outstanding Derivative Financial Instruments

Futures contracts:
Average notional value of contracts — long	$	998,885

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:
Common Stocks:
Australia		—		$	3,798,606	—	$	3,798,606
Belgium		—			1,778,225	—		1,778,225
Denmark		—			4,168,255	—		4,168,255
Finland		—			1,207,134	—		1,207,134
France		—			4,272,962	—		4,272,962
Germany		—			3,595,799	—		3,595,799
Hong Kong	$	342,239			7,005,384	—		7,347,623
Ireland		1,035,919			—	—		1,035,919
Israel		—			1,897,886	—		1,897,886
Italy		—			426,867	—		426,867
Japan		—			26,078,631	—		26,078,631
Luxembourg		—			422,783	—		422,783
Mexico		—			60,980	—		60,980
Netherlands		—			212,155	—		212,155
New Zealand		—			518,290	—		518,290
Norway		—			147,979	—		147,979
Singapore		72,680			3,365,488	—		3,438,168
Spain		—			39,946	—		39,946
Sweden		—			1,462,670	—		1,462,670
Switzerland		—			12,131,973	—		12,131,973
United Kingdom		—			13,676,659	—		13,676,659
Short-Term Securities		335,074			—	—		335,074
Total	$	1,785,912		$	86,268,672	—	$	88,054,584
Derivative Financial Instruments1
Liabilities:
Equity contracts	$	(16,898	)		—	—	$	(16,898	)
1    Derivative financial instruments are futures contracts which are valued at the unrealized appreciation (depreciation) on the instrument.

During the six months ended January 31, 2017, there were no transfers between levels.

See Notes to Financial Statements.

18 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments January 31, 2017 (Unaudited) BlackRock Min Vol USA Index Fund (Percentages shown are based on Net Assets)

Common Stocks	Shares		Value
Aerospace & Defense — 1.7%
General Dynamics Corp.		178	$	32,232
Lockheed Martin Corp.		157		39,459
Northrop Grumman Corp.		146		33,446
Raytheon Co.		418		60,259
				165,396
Air Freight & Logistics — 2.1%
C.H. Robinson Worldwide, Inc.		523		39,779
Expeditors International of Washington, Inc.		862		44,893
United Parcel Service, Inc., Class B		1,151		125,609
				210,281
Banks — 0.4%
US Bancorp		506		26,641
Wells Fargo & Co.		181		10,196
				36,837
Beverages — 3.5%
Coca-Cola Co.		2,588		107,583
Constellation Brands, Inc., Class A		239		35,793
Dr. Pepper Snapple Group, Inc.		713		65,025
PepsiCo, Inc.		1,327		137,716
				346,117
Capital Markets — 0.3%
CME Group, Inc.		250		30,270
Chemicals — 1.2%
E.I. du Pont de Nemours & Co.		210		15,855
Ecolab, Inc.		262		31,474
Monsanto Co.		198		21,445
Praxair, Inc.		247		29,255
Sherwin-Williams Co.		43		13,064
Valspar Corp.		68		7,525
				118,618
Commercial Services & Supplies — 3.1%
Cintas Corp.		505		58,635
Republic Services, Inc.		1,981		113,670
Waste Connections, Inc.		136		10,921
Waste Management, Inc.		1,680		116,760
				299,986
Communications Equipment — 1.2%
Cisco Systems, Inc.		2,281		70,073
Motorola Solutions, Inc.		568		45,843
				115,916
Distributors — 0.1%
Genuine Parts Co.		148		14,328
Diversified Financial Services — 1.2%
Berkshire Hathaway, Inc., Class B (a)		727		119,330
Diversified Telecommunication Services — 3.3%
AT&T, Inc.		3,708		156,329
SBA Communications Corp. (a)		145		15,263
Verizon Communications, Inc.		2,756		135,072
Zayo Group Holdings, Inc. (a)		488		15,596
				322,260
Electric Utilities — 4.7%
American Electric Power Co., Inc.		276		17,680
Duke Energy Corp.		1,548		121,580
Eversource Energy		321		17,758
NextEra Energy, Inc.		521		64,458
Southern Co.		2,452		121,202
Westar Energy, Inc.		562		30,736
Xcel Energy, Inc.	��	2,171		89,706
				463,120

Common Stocks	Shares		Value
Electronic Equipment, Instruments & Components — 0.1%
Amphenol Corp., Class A		210	$	14,173
Energy Equipment & Services — 0.2%
Schlumberger Ltd.		260		21,765
Food & Staples Retailing — 1.2%
Costco Wholesale Corp.		204		33,446
CVS Health Corp.		147		11,585
Sysco Corp.		558		29,272
Wal-Mart Stores, Inc.		697		46,518
				120,821
Food Products — 3.7%
Campbell Soup Co.		900		56,007
Conagra Brands, Inc.		467		18,255
General Mills, Inc.		1,826		114,089
Hershey Co.		102		10,758
Hormel Foods Corp.		521		18,912
J.M. Smucker Co.		51		6,928
Kellogg Co.		989		71,910
McCormick & Co., Inc.		633		60,483
				357,342
Health Care Equipment & Supplies — 8.4%
Abbott Laboratories		1,295		54,092
Baxter International, Inc.		1,121		53,707
Becton Dickinson & Co.		772		136,868
Boston Scientific Corp. (a)		1,586		38,159
C.R. Bard, Inc.		423		100,391
Cooper Cos., Inc.		138		25,476
Hologic, Inc. (a)		425		17,225
Intuitive Surgical, Inc. (a)		144		99,748
Medtronic PLC		1,146		87,119
ResMed, Inc.		234		15,804
Stryker Corp.		1,026		126,741
Varex Imaging Corp. (a)		1		17
Varian Medical Systems, Inc. (a)		689		53,501
Zimmer Biomet Holdings, Inc.		128		15,146
				823,994
Health Care Providers & Services — 4.3%
Aetna, Inc.		478		56,696
Anthem, Inc.		175		26,975
Cigna Corp.		280		40,942
Express Scripts Holding Co. (a)		196		13,500
Henry Schein, Inc. (a)		234		37,407
Humana, Inc.		164		32,554
Laboratory Corp. of America Holdings (a)		343		46,034
Patterson Cos., Inc.		353		14,688
Quest Diagnostics, Inc.		265		24,359
UnitedHealth Group, Inc.		745		120,764
Universal Health Services, Inc., Class B		101		11,376
				425,295
Hotels, Restaurants & Leisure — 2.3%
Aramark		663		22,436
Chipotle Mexican Grill, Inc. (a)		12		5,057
Darden Restaurants, Inc.		305		22,351
McDonald’s Corp.		1,083		132,743
Starbucks Corp.		822		45,391
				227,978
Household Products — 4.1%
Church & Dwight Co., Inc.		1,446		65,388
Clorox Co.		617		74,040
Colgate-Palmolive Co.		1,123		72,523
Kimberly-Clark Corp.		490		59,354
Procter & Gamble Co.		1,466		128,422
				399,727

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 19

Schedule of Investments (continued) BlackRock Min Vol USA Index Fund

Common Stocks	Shares		Value
Industrial Conglomerates — 1.3%
3M Co.		314	$	54,894
Danaher Corp.		860		72,171
				127,065
Insurance — 6.9%
Alleghany Corp. (a)		37		22,628
Allstate Corp.		742		55,806
Aon PLC		213		24,005
Arch Capital Group Ltd. (a)		1,134		100,189
Axis Capital Holdings Ltd.		852		54,536
Chubb Ltd.		764		100,458
Cincinnati Financial Corp.		246		17,363
Everest Re Group Ltd.		294		64,659
FNF Group		400		14,144
Markel Corp. (a)		69		63,825
Marsh & McLennan Cos., Inc.		834		56,729
Progressive Corp.		142		5,316
Travelers Cos., Inc.		424		49,939
W.R. Berkley Corp.		608		40,864
				670,461
Internet Software & Services — 1.5%
Alphabet, Inc., Class A (a)		56		45,931
eBay, Inc. (a)		1,063		33,835
Facebook, Inc., Class A (a)		487		63,466
				143,232
IT Services — 9.4%
Accenture PLC, Class A		943		107,379
Automatic Data Processing, Inc.		1,476		149,061
Broadridge Financial Solutions, Inc.		754		50,164
Fidelity National Information Services, Inc.		742		58,930
Fiserv, Inc. (a)		933		100,232
Gartner, Inc. (a)		528		52,462
International Business Machines Corp.		463		80,803
Mastercard, Inc., Class A		609		64,755
Paychex, Inc.		1,979		119,314
Vantiv, Inc., Class A (a)		182		11,328
Visa, Inc., Class A		1,522		125,884
				920,312
Life Sciences Tools & Services — 0.7%
Quintiles IMS Holdings, Inc. (a)		95		7,457
Thermo Fisher Scientific, Inc.		237		36,116
Waters Corp. (a)		148		20,964
				64,537
Media — 1.6%
Charter Communications, Inc., Class A (a)		175		56,691
Comcast Corp., Class A		842		63,504
Omnicom Group, Inc.		170		14,560
Walt Disney Co.		181		20,028
				154,783
Metals & Mining — 0.8%
Newmont Mining Corp.		2,225		80,723
Multi-Utilities — 3.2%
Consolidated Edison, Inc.		1,602		119,109
Dominion Resources, Inc.		995		75,899
PG&E Corp.		959		59,352
WEC Energy Group, Inc.		930		54,916
				309,276
Multiline Retail — 0.4%
Target Corp.		658		42,428

Common Stocks	Shares		Value
Oil, Gas & Consumable Fuels — 1.8%
Chevron Corp.		156	$	17,370
Exxon Mobil Corp.		1,457		122,228
Occidental Petroleum Corp.		571		38,697
				178,295
Pharmaceuticals — 4.5%
Allergan PLC (a)		27		5,910
Eli Lilly & Co.		1,097		84,502
Johnson & Johnson		1,207		136,693
Merck & Co., Inc.		1,561		96,766
Pfizer, Inc.		3,534		112,134
				436,005
Professional Services — 0.3%
Equifax, Inc.		64		7,506
Verisk Analytics, Inc. (a)		252		20,825
				28,331
Real Estate Investment Trusts (REITs) — 9.5%
AGNC Investment Corp.		3,110		58,064
American Tower Corp.		110		11,385
Annaly Capital Management, Inc.		9,354		95,598
AvalonBay Communities, Inc.		664		115,078
Boston Properties, Inc.		54		7,069
Camden Property Trust		82		6,853
Crown Castle International Corp.		856		75,182
Digital Realty Trust, Inc.		219		23,571
Equity Residential		908		55,179
Essex Property Trust, Inc.		155		34,767
Extra Space Storage, Inc.		95		6,845
Federal Realty Investment Trust		373		52,380
Macerich Co.		470		32,284
National Retail Properties, Inc.		112		4,883
Public Storage		414		89,010
Realty Income Corp.		1,056		62,969
Regency Centers Corp.		340		23,708
Simon Property Group, Inc.		352		64,687
UDR, Inc.		1,396		48,790
Ventas, Inc.		401		24,730
Welltower, Inc.		560		37,128
				930,160
Semiconductors & Semiconductor Equipment — 0.5%
Intel Corp.		1,041		38,330
Linear Technology Corp.		158		9,974
				48,304
Software — 3.3%
Adobe Systems, Inc. (a)		435		49,320
ANSYS, Inc. (a)		518		48,309
Cadence Design Systems, Inc. (a)		882		22,959
Intuit, Inc.		92		10,909
Microsoft Corp.		955		61,741
Oracle Corp.		1,047		41,995
Synopsys, Inc. (a)		1,315		82,700
VMware, Inc., Class A (a)		82		7,178
				325,111
Specialty Retail — 3.2%
AutoZone, Inc. (a)		112		81,198
Foot Locker, Inc.		101		6,923
Home Depot, Inc.		499		68,652
Lowe’s Cos., Inc.		360		26,309
O’Reilly Automotive, Inc. (a)		65		17,048
Ross Stores, Inc.		267		17,651
TJX Cos., Inc.		1,210		90,653
				308,434

See Notes to Financial Statements.

20 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Min Vol USA Index Fund

Common Stocks	Shares		Value
Technology Hardware, Storage & Peripherals — 0.1%
Apple, Inc.		42	$	5,097
Tobacco — 1.6%
Altria Group, Inc.		1,428		101,645
Philip Morris International, Inc.		403		38,740
Reynolds American, Inc.		237		14,251
				154,636
Water Utilities — 0.2%
American Water Works Co., Inc.		324		23,795
Total Long-Term Investments (Cost — $9,713,056) — 97.9%				9,584,539

Short-Term Securities	Shares		Value
BlackRock Liquidity Funds, T-Fund, Institutional Class, 0.40% (b)(c)		161,472	$	161,472
Total Short-Term Securities (Cost — $161,472) — 1.6%				161,472
Total Investments (Cost — $9,874,528) — 99.5%				9,746,011
Other Assets Less Liabilities — 0.5%				44,764
Net Assets — 100.0%			$	9,790,775

Notes to Schedule of Investments

(a) Non-income producing security.

(b) During the period ended January 31, 2017, 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 July 31, 2016		Net Activity			Shares Held at January 31, 2017		Value at January 31, 2017		Income		Net Realized Gain1		Change in Unrealized Appreciation (Depreciation)
BlackRock Liquidity Funds, T-Fund, Institutional Class		—		161,472			161,472	$	161,472	$	118	$	1	—
BlackRock Premier Government Institutional Fund		111,089		(111,089	)		—		—		74		—	—
Total								$	161,472	$	192	$	1	—
1    Includes net capital gain distributions.

(c) Current yield as of period end.

• For Fund compliance purposes, the 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 such sector sub-classifications for reporting ease.

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts
Contracts Long		Issue	Expiration	Notional Value		Unrealized Appreciation
	1	S&P 500 E-Mini Index	March 2017	$	113,725	$	2,150

Derivative Financial Instruments Categorized by Risk Exposure

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

Assets — Derivative Financial Instruments		Commodity Contracts	Credit Contracts	Equity Contracts		Foreign Currency Exchange Contracts	Interest Rate Contracts	Other Contracts	Total
Futures contracts	Net unrealized appreciation1	—	—	$	2,150	—	—	—	$	2,150
1   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 Statements of Assets and Liabilities.

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 21

Schedule of Investments (concluded) BlackRock Min Vol USA Index Fund

For the six months ended January 31, 2017, the effect of derivative financial instruments in the Statements of Operations was as follows:

Net Realized Gain (Loss) from:	Commodity Contracts	Credit Contracts		Equity Contracts		Foreign Currency Exchange Contracts		Interest Rate Contracts		Other Contracts		Total
Futures contracts	—		—	$	3,898		—				—	$	3,898
Net Change in Unrealized Appreciation (Depreciation) on:
Futures contracts	—		—	$	1,018		—		—		—	$	1,018

Average Quarterly Balances of Outstanding Derivative Financial Instruments

Futures contracts:
Average notional value of contracts — long	$	56,863

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:
Common Stocks1	$	9,584,539		—		—	$	9,584,539
Short-Term Securities		161,472		—		—		161,472
Total	$	9,746,011		—		—	$	9,746,011
Derivative Financial Instruments2
Assets:
Equity contracts	$	2,150		—		—	$	2,150
1    See above Schedule of Investments for values in each sector.
2    Derivative financial instruments are futures contracts which are valued at the unrealized appreciation (depreciation) on the instrument.

During the six months ended January 31, 2017, there were no transfers between levels.

See Notes to Financial Statements.

22 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments January 31, 2017 (Unaudited) BlackRock Multifactor International Index Fund (Percentages shown are based on Net Assets)

Common Stocks	Shares		Value
Australia — 5.9%
Aristocrat Leisure Ltd.		4,070	$	47,199
Bendigo & Adelaide Bank Ltd.		3,485		33,189
Cochlear Ltd.		438		41,608
Dexus Property Group		6,928		47,195
Domino’s Pizza Enterprises Ltd.		469		21,158
Flight Centre Travel Group Ltd.		425		9,663
Fortescue Metals Group Ltd.		11,700		59,205
Goodman Group		13,445		70,604
GPT Group		13,735		48,776
Harvey Norman Holdings Ltd.		4,248		16,112
Lend Lease Group (a)		4,221		45,136
Mirvac Group		27,843		42,889
Qantas Airways Ltd.		3,941		10,187
REA Group Ltd.		403		16,089
Vocus Group Ltd.		3,846		11,795
Westfield Corp.		14,836		98,902
				619,707
Belgium — 1.3%
Ageas		1,540		65,939
Colruyt SA		515		25,205
Umicore SA		728		40,778
				131,922
Canada — 5.5%
CAE, Inc.		2,020		28,687
Cameco Corp.		3,026		38,533
CCL Industries, Inc., Class B		213		43,836
Constellation Software, Inc.		146		65,943
Industrial Alliance Insurance & Financial Services, Inc.		784		32,987
Keyera Corp.		1,396		40,982
Linamar Corp.		374		16,443
Magna International, Inc.		2,884		124,757
Metro, Inc.		1,821		55,319
Teck Resources Ltd., Class B		4,261		104,425
Veresen, Inc.		2,346		23,852
				575,764
Denmark — 1.6%
Coloplast A/S, Class B		927		66,471
DSV A/S		1,472		71,582
Tryg A/S		880		16,837
William Demant Holding A/S (b)		936		17,526
				172,416
Finland — 2.4%
Elisa OYJ		1,088		36,663
Kone OYJ, Class B		224		10,127
Neste Oil OYJ		980		34,097
Orion OYJ, Class B		783		36,448
Stora Enso OYJ, Class R		4,211		47,787
UPM-Kymmene OYJ		4,080		92,534
				257,656
France — 9.0%
Arkema SA		510		50,369
AtoS SE		673		71,603
AXA SA		5,968		146,677
Cap Gemini SA		399		32,486
Cie Generale des Etablissements Michelin		1,370		147,182
CNP Assurances		1,312		24,656
Electricite de France SA		1,967		19,391
Renault SA		1,470		132,364
Rexel SA		2,272		39,626
SCOR SE		1,248		42,237
SEB SA		170		21,379
Societe BIC SA		220		28,765

Common Stocks	Shares		Value
France (continued)
Thales SA		807	$	75,709
Valeo SA		1,800		110,015
				942,459
Germany — 8.1%
adidas AG		1,415		223,294
Covestro AG (c)		542		40,788
Deutsche Lufthansa AG, Registered Shares		1,776		23,725
Evonik Industries AG		603		19,574
Fuchs Petrolub SE, Preference Shares		532		24,362
GEA Group AG		1,374		56,934
Hannover Rueck SE		461		50,779
HeidelbergCement AG		1,078		104,139
Infineon Technologies AG		8,253		151,866
Innogy SE (b)(c)		1,044		35,709
K+S AG, Registered Shares		1,461		37,114
Metro AG		1,363		46,643
OSRAM Licht AG		681		39,533
				854,460
Hong Kong — 2.8%
HK Electric Investments & HK Electric Investments Ltd. (a)(c)		20,500		17,112
Hysan Development Co. Ltd.		5,000		22,787
Kerry Properties Ltd.		5,000		14,149
NWS Holdings Ltd.		12,321		22,140
Sino Land Co. Ltd.		24,000		39,656
WH Group Ltd. (c)		61,500		46,712
Wharf Holdings Ltd.		10,000		74,983
Wheelock & Co. Ltd.		6,000		36,468
Yue Yuen Industrial Holdings Ltd.		5,500		20,132
				294,139
Ireland — 0.5%
DCC PLC		677		54,609
Israel — 1.2%
Bank Hapoalim BM		8,105		48,972
Bank Leumi Le-Israel BM (b)		10,683		44,186
Mizrahi Tefahot Bank Ltd.		1,064		16,389
Taro Pharmaceutical Industries Ltd. (b)		115		12,016
				121,563
Italy — 0.1%
UnipolSai SpA		4,275		8,916
Japan — 22.0%
Aeon Mall Co. Ltd.		900		13,044
Air Water, Inc.		1,000		18,516
Alfresa Holdings Corp.		1,400		23,045
Amada Holdings Co. Ltd.		2,600		30,560
Bank of Kyoto Ltd.		2,000		15,635
Brother Industries Ltd.		1,800		33,224
Chiba Bank Ltd.		5,000		32,707
Chugoku Bank Ltd.		1,200		17,652
Concordia Financial Group Ltd.		8,800		46,415
Daicel Corp.		2,200		24,328
Daito Trust Construction Co. Ltd.		500		69,900
Daiwa House Industry Co. Ltd.		4,300		116,453
DeNA Co. Ltd.		800		17,875
Fuji Heavy Industries Ltd.		4,500		180,072
Fukuoka Financial Group, Inc.		6,000		26,486
Hachijuni Bank Ltd.		3,100		18,246
Hiroshima Bank Ltd.		4,000		18,689
Hitachi Chemical Co. Ltd.		800		22,713
Hitachi High-Technologies Corp.		500		21,417
Hitachi Metals Ltd.		1,600		22,181
Idemitsu Kosan Co. Ltd.		700		21,645
Iida Group Holdings Co. Ltd.		1,100		20,587

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 23

Schedule of Investments (continued) BlackRock Multifactor International Index Fund

Common Stocks	Shares		Value
Japan (continued)
ITOCHU Corp.		11,400	$	157,045
Japan Airlines Co. Ltd.		900		28,659
JSR Corp.		1,500		25,709
Kakaku.com, Inc.		1,100		19,913
Kamigumi Co. Ltd.		2,000		19,441
Kaneka Corp.		2,000		17,232
Koito Manufacturing Co. Ltd.		900		47,741
Konami Holdings Corp.		700		27,992
Kuraray Co. Ltd.		2,700		42,795
Kyushu Financial Group, Inc.		2,700		18,603
Lion Corp.		2,000		34,786
Maruichi Steel Tube Ltd.		400		13,413
Mebuki Financial Group, Inc.		7,100		27,266
Medipal Holdings Corp.		1,000		16,207
Miraca Holdings, Inc.		400		18,230
Mitsubishi Chemical Holdings Corp.		10,400		72,539
Mitsubishi Gas Chemical Co., Inc.		1,500		28,771
Mixi, Inc.		400		17,354
Nippon Electric Glass Co. Ltd.		3,000		17,270
Nippon Telegraph & Telephone Corp.		5,100		225,279
Nisshin Seifun Group, Inc.		1,500		22,819
NOK Corp.		700		14,226
Oji Holdings Corp.		5,000		22,131
Oracle Corp. Japan		300		16,809
Osaka Gas Co. Ltd.		14,000		52,478
Park24 Co. Ltd.		800		22,081
Pola Orbis Holdings, Inc.		200		19,001
Stanley Electric Co. Ltd.		1,200		33,807
Start Today Co. Ltd.		1,500		28,253
Sumitomo Dainippon Pharma Co. Ltd.		1,200		20,356
Sumitomo Heavy Industries Ltd.		4,000		27,502
Sumitomo Rubber Industries Ltd.		1,300		20,305
Sundrug Co. Ltd.		300		20,688
Suruga Bank Ltd.		1,300		29,617
Suzuken Co. Ltd.		600		19,809
Taiheiyo Cement Corp.		9,000		31,449
Teijin Ltd.		1,400		29,549
Toho Gas Co. Ltd.		3,000		22,442
Toppan Printing Co. Ltd.		4,000		39,264
Toyo Suisan Kaisha Ltd.		700		24,977
Toyoda Gosei Co. Ltd.		500		12,044
Tsuruha Holdings, Inc.		300		28,200
Yamada Denki Co. Ltd.		4,800		26,445
Yamaguchi Financial Group, Inc.		2,000		21,790
Yokogawa Electric Corp.		1,700		27,166
				2,320,843
Luxembourg — 0.2%
RTL Group SA (b)		291		22,232
Netherlands — 3.8%
Aegon NV		13,838		75,216
Koninklijke Ahold Delhaize NV		9,764		208,010
Koninklijke Boskalis Westminster NV		293		10,840
Koninklijke Vopak NV		538		23,110
NN Group NV		2,252		79,757
				396,933
Singapore — 0.9%
Golden Agri-Resources Ltd.		54,000		16,243
SATS, Ltd.		5,100		19,107
Singapore Exchange Ltd.		6,100		32,086
UOL Group Ltd.		3,700		16,757
Yangzijiang Shipbuilding Holdings Ltd.		14,700		8,407
				92,600

Common Stocks	Shares			Value
Spain — 1.5%
Mapfre SA		8,100		$	24,560
Repsol SA		8,478			125,658
Zardoya Otis SA		1,329			11,218
					161,436
Sweden — 1.7%
Boliden AB		2,087			60,883
L E Lundbergforetagen AB, -B Shares		286			18,402
Securitas AB, Class B		2,394			38,120
Skanska AB, Class B		2,555			62,470
					179,875
Switzerland — 11.9%
Actelion Ltd., Registered Shares (b)		729			190,337
Aryzta AG (b)		667			18,373
Baloise Holding AG, Registered Shares		382			49,187
Coca-Cola HBC AG (b)		1,360			31,087
EMS-Chemie Holding AG, Registered Shares		63			32,521
Geberit AG, Registered Shares		269			114,968
Kuehne & Nagel International AG, Registered Shares		413			56,510
Lonza Group AG, Registered Shares (b)		405			74,406
Pargesa Holding SA, Bearer Shares		261			17,386
Partners Group Holding AG		133			67,214
Schindler Holding AG, Participation Certificates		295			56,232
Schindler Holding AG, Registered Shares		157			29,575
SGS SA, Registered Shares		42			89,115
Sika AG, Bearer Shares		17			89,339
Swiss Life Holding AG, Registered Shares (b)		246			74,682
Swiss Prime Site AG, Registered Shares (b)		532			44,317
Swiss Re AG		2,356			220,165
					1,255,414
United Kingdom — 17.8%
3i Group PLC		7,433			65,661
Aberdeen Asset Management PLC		6,933			22,944
Admiral Group PLC		1,615			36,183
Ashtead Group PLC		3,767			76,373
Babcock International Group PLC		1,900			21,398
BAE Systems PLC		23,158			170,088
Barratt Developments PLC		7,661			46,200
Berkeley Group Holdings PLC		993			35,072
Bunzl PLC		2,562			67,536
Croda International PLC		1,004			42,396
Direct Line Insurance Group PLC		10,510			47,083
Dixons Carphone PLC		7,481			29,841
GKN PLC		13,101			56,803
Hargreaves Lansdown PLC		1,994			34,065
IMI PLC		2,079			30,591
Investec PLC		2,658			18,859
ITV PLC		27,735			71,169
J. Sainsbury PLC		10,293			33,489
Johnson Matthey PLC		1,454			59,640
Meggitt PLC		5,925			31,248
Mondi PLC		2,807	��		62,041
Old Mutual PLC		37,046			97,280
Persimmon PLC		2,351			57,262
Petrofac Ltd.		1,980			22,927
Provident Financial PLC		1,126			38,774
Randgold Resources Ltd.		462			39,326
RELX PLC		8,005			143,690
Sage Group PLC		8,250			63,807
Smith & Nephew PLC		6,735			100,753
Smiths Group PLC		3,020			57,241
Tate & Lyle PLC		3,565			30,133
Taylor Wimpey PLC		24,911			52,592
Travis Perkins PLC		1,899			34,829
William Hill PLC		6,761			22,054

See Notes to Financial Statements.

24 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Multifactor International Index Fund

Common Stocks	Shares		Value
United Kingdom (continued)
WM Morrison Supermarkets PLC		16,956	$	50,551
Wolseley PLC		119		7,370
				1,877,269
Total Long-Term Investments (Cost — $9,683,536) — 98.2%				10,340,213
Short-Term Securities
BlackRock Liquidity Funds, T-Fund, Institutional Class, 0.40% (d)(e)		22,854		22,854
Total Short-Term Securities (Cost — $22,854) — 0.2%				22,854
Total Investments (Cost — $9,706,390) — 98.4%				10,363,067
Other Assets Less Liabilities — 1.6%				166,980
Net Assets — 100.0%			$	10,530,047

Notes to Schedule of Investments

(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) During the six months ended January 31, 2017, 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 July 31, 2016		Net Activity			Shares Held at January 31, 2017		Value at January 31, 2017		Income		Net Realized Gain (Loss)	Change in Unrealized Appreciation (Depreciation)
BlackRock Liquidity Funds, T-Fund, Institutional Class		—		22,854			22,854	$	22,854	$	20	—	—
BlackRock Premier Government Institutional Fund		5,173		(5,173	)		—		—		2	—	—
Total								$	22,854	$	22	—	—

(e) Current yield as of period end.

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

Contracts Long		Issue	Expiration	Notional Value		Unrealized Depreciation
	4	Euro Stoxx 50 Index	March 2017	$	139,644	$	(1,604	)

Derivative Financial Instruments Categorized by Risk Exposure

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

Liabilities — Derivative Financial Instruments		Commodity Contracts	Credit Contracts	Equity Contracts		Foreign Currency Exchange Contracts	Interest Rate Contracts	Other Contracts	Total
Futures contracts	Net unrealized depreciation1	—	—	$	1,604	—	—	—	$	1,604
1   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 Statements of Assets and Liabilities.

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 25

Schedule of Investments (concluded) BlackRock Multifactor International Index Fund

For the six months ended January 31, 2017, the effect of derivative financial instruments in the Statements of Operations was as follows:

Net Realized Gain (Loss) from:	Commodity Contracts	Credit Contracts	Equity Contracts			Foreign Currency Exchange Contracts	Interest Rate Contracts	Other Contracts	Total
Futures contracts	—	—	$	8,985		—		—	$	8,985
Net Change in Unrealized Appreciation (Depreciation) on:
Futures contracts	—	—	$	(4,362	)	—	—	—	$	(4,362	)

Average Quarterly Balances of Outstanding Derivative Financial Instruments

Futures contracts:
Average notional value of contracts — long	$	128,985

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:
Common Stocks:
Australia		—		$	619,707	—	$	619,707
Belgium		—			131,922	—		131,922
Canada	$	575,764			—	—		575,764
Denmark		—			172,416	—		172,416
Finland		—			257,656	—		257,656
France		—			942,459	—		942,459
Germany		35,709			818,751	—		854,460
Hong Kong		20,132			274,007	—		294,139
Ireland		—			54,609	—		54,609
Israel		12,016			109,547	—		121,563
Italy		—			8,916	—		8,916
Japan		—			2,320,843	—		2,320,843
Luxembourg		—			22,232	—		22,232
Netherlands		—			396,933	—		396,933
Singapore		19,107			73,493	—		92,600
Spain		—			161,436	—		161,436
Sweden		—			179,875	—		179,875
Switzerland		—			1,255,414	—		1,255,414
United Kingdom		—			1,877,269	—		1,877,269
Short-Term Securities		22,854			—	—		22,854
Total	$	685,582		$	9,677,485	—	$	10,363,067
Derivative Financial Instruments1
Liabilities:
Equity contracts	$	(1,604	)		—	—	$	(1,604	)
1    Derivative financial instruments are futures contracts, which are valued at the unrealized appreciation (depreciation) on the instrument.

During the six months ended January 31, 2017, there were no transfers between levels.

See Notes to Financial Statements.

26 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments January 31, 2017 (Unaudited) BlackRock Multifactor USA Index Fund (Percentages shown are based on Net Assets)

Common Stocks	Shares		Value
Aerospace & Defense — 3.3%
Autoliv, Inc.		458	$	52,972
Core Laboratories NV		229		26,754
Huntington Ingalls Industries, Inc.		243		47,132
L3 Technologies, Inc.		401		63,635
Northrop Grumman Corp.		738		169,061
				359,554
Airlines — 0.9%
American Airlines Group, Inc.		688		30,444
Southwest Airlines Co.		805		42,110
United Continental Holdings, Inc. (a)		419		29,527
				102,081
Auto Components — 0.9%
Goodyear Tire & Rubber Co.		1,336		43,273
Lear Corp.		372		52,858
				96,131
Automobiles — 2.3%
General Motors Co.		6,951		254,476
Banks — 0.9%
Citizens Financial Group, Inc.		2,683		97,044
Beverages — 0.8%
Dr. Pepper Snapple Group, Inc.		943		86,002
Biotechnology — 2.2%
Gilead Sciences, Inc.		2,901		210,177
United Therapeutics Corp. (a)		223		36,490
				246,667
Building Products — 0.3%
AO Smith Corp.		760		37,050
Capital Markets — 0.7%
Eaton Vance Corp.		585		24,529
Raymond James Financial, Inc.		642		48,105
				72,634
Chemicals — 3.1%
Celanese Corp., Series A		747		63,047
Eastman Chemical Co.		752		58,280
International Flavors & Fragrances, Inc.		414		48,525
LyondellBasell Industries NV, Class A		1,839		171,523
				341,375
Communications Equipment — 0.6%
Harris Corp.		646		66,351
Construction & Engineering — 0.7%
Fluor Corp.		718		39,849
Jacobs Engineering Group, Inc. (a)		625		36,594
				76,443
Containers & Packaging — 1.3%
Avery Dennison Corp.		455		33,224
Packaging Corp. of America		490		45,168
WestRock Co.		1,307		69,742
				148,134
Distributors — 0.7%
Genuine Parts Co.		757		73,285
Diversified Telecommunication Services — 4.0%
AT&T, Inc.		8,666		365,358
CenturyLink, Inc.		2,837		73,365
				438,723
Electric Utilities — 4.0%
Edison International		1,607		117,118
Entergy Corp.		930		66,625
Exelon Corp.		4,796		172,080

Common Stocks	Shares		Value
Electric Utilities (continued)
OGE Energy Corp.		1,038	$	34,815
Pinnacle West Capital Corp.		560		43,473
				434,111
Electrical Equipment — 0.9%
Rockwell Automation, Inc.		661		97,821
Electronic Equipment, Instruments & Components — 3.8%
Arrow Electronics, Inc. (a)		474		34,849
Avnet, Inc.		648		30,093
Corning, Inc.		5,388		142,728
Flex Ltd. (a)		2,839		44,487
FLIR Systems, Inc.		694		24,519
TE Connectivity Ltd.		1,848		137,399
				414,075
Energy Equipment & Services — 0.4%
Helmerich & Payne, Inc.		562		39,992
Food Products — 5.1%
Archer-Daniels-Midland Co.		3,023		133,798
Bunge Ltd.		725		50,177
Campbell Soup Co.		1,024		63,724
Hormel Foods Corp.		1,476		53,579
Ingredion, Inc.		375		48,071
J.M. Smucker Co.		605		82,189
McCormick & Co., Inc.		320		30,576
Tyson Foods, Inc., Class A		1,546		97,073
				559,187
Gas Utilities — 0.8%
Atmos Energy Corp.		540		41,137
UGI Corp.		900		41,733
				82,870
Health Care Equipment & Supplies — 2.4%
Align Technology, Inc. (a)		374		34,292
Edwards Lifesciences Corp. (a)		1,106		106,441
ResMed, Inc.		722		48,764
Teleflex, Inc.		229		38,410
Varex Imaging Corp. (a)		1		23
Varian Medical Systems, Inc. (a)		487		37,816
				265,746
Health Care Providers & Services — 8.0%
Aetna, Inc.		1,768		209,703
Anthem, Inc.		1,326		204,390
Cardinal Health, Inc.		1,643		123,159
Cigna Corp.		1,293		189,062
MEDNAX, Inc. (a)		477		32,603
Quest Diagnostics, Inc.		716		65,815
Universal Health Services, Inc., Class B		453		51,021
				875,753
Household Products — 2.1%
Kimberly-Clark Corp.		1,869		226,392
Insurance — 10.1%
Aflac, Inc.		2,087		146,069
Alleghany Corp. (a)		44		26,909
Arch Capital Group Ltd. (a)		637		56,279
Assurant, Inc.		321		31,179
Axis Capital Holdings Ltd.		471		30,149
Cincinnati Financial Corp.		790		55,758
FNF Group		1,260		44,554
Lincoln National Corp.		1,209		81,619
Loews Corp.		1,459		67,960
Markel Corp. (a)		70		64,750
MetLife, Inc.		3,536		192,394
Principal Financial Group, Inc.		1,467		83,751

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 27

Schedule of Investments (continued) BlackRock Multifactor USA Index Fund

Common Stocks	Shares		Value
Insurance (continued)
Reinsurance Group of America, Inc.		333	$	41,781
Torchmark Corp.		585		43,021
Unum Group		1,218		55,334
W.R. Berkley Corp.		495		33,269
XL Group Ltd.		1,433		53,838
				1,108,614
Internet Software & Services — 0.3%
MercadoLibre, Inc.		207		38,376
IT Services — 4.9%
Accenture PLC, Class A		2,058		234,344
Broadridge Financial Solutions, Inc.		604		40,184
Computer Sciences Corp.		730		45,406
Paychex, Inc.		1,634		98,514
Total System Services, Inc.		835		42,318
Western Union Co.		2,535		49,635
Xerox Corp.		4,390		30,423
				540,824
Life Sciences Tools & Services — 1.8%
Agilent Technologies, Inc.		1,661		81,339
Mettler-Toledo International, Inc. (a)		137		58,448
Waters Corp. (a)		413		58,502
				198,289
Machinery — 1.2%
AGCO Corp.		346		21,729
Cummins, Inc.		717		105,406
				127,135
Media — 1.2%
News Corp., Class A		1,978		24,310
Omnicom Group, Inc.		1,199		102,694
				127,004
Metals & Mining — 1.8%
Newmont Mining Corp.		2,757		100,024
Nucor Corp.		1,603		93,118
				193,142
Multi-Utilities — 3.1%
Ameren Corp.		1,229		64,707
Consolidated Edison, Inc.		1,527		113,532
Public Service Enterprise Group, Inc.		2,629		116,333
SCANA Corp.		687		47,197
				341,769
Oil, Gas & Consumable Fuels — 4.0%
Marathon Petroleum Corp.		707		33,971
Phillips 66		2,385		194,664
Tesoro Corp.		609		49,238
Valero Energy Corp.		2,367		155,654
				433,527
Professional Services — 0.3%
ManpowerGroup, Inc.		356		33,984
Real Estate Investment Trusts (REITs) — 6.5%
HCP, Inc.		2,430		73,678
Liberty Property Trust		763		29,292
Mid-America Apartment Communities, Inc.		590		56,020
National Retail Properties, Inc.		765		33,354
Public Storage		766		164,690
Realty Income Corp.		1,344		80,143
Ventas, Inc.		1,826		112,609
VEREIT, Inc.		5,016		42,786
Weyerhaeuser Co.		3,891		121,905
				714,477

Common Stocks	Shares		Value
Real Estate Management & Development — 0.2%
Jones Lang LaSalle, Inc.		234	$	24,109
Road & Rail — 0.1%
AMERCO, Inc.		35		13,183
Semiconductors & Semiconductor Equipment — 3.2%
Marvell Technology Group Ltd.		2,199		32,699
NVIDIA Corp.		2,478		270,548
Qorvo, Inc. (a)		665		42,700
				345,947
Software — 2.3%
CA, Inc.		1,633		51,064
CDK Global, Inc.		663		41,471
Intuit, Inc.		710		84,192
Microsoft Corp.		443		28,640
Synopsys, Inc. (a)		786		49,431
				254,798
Specialty Retail — 2.7%
Best Buy Co., Inc.		1,474		65,623
Dick’s Sporting Goods, Inc.		458		23,633
Foot Locker, Inc.		686		47,018
Ross Stores, Inc.		2,026		133,939
Staples, Inc.		3,282		30,194
				300,407
Technology Hardware, Storage & Peripherals — 3.9%
Apple, Inc.		934		113,341
Hewlett Packard Enterprise Co.		8,635		195,842
NetApp, Inc.		1,457		55,832
Seagate Technology PLC		1,507		68,041
				433,056
Wireless Telecommunication Services — 0.3%
Sprint Corp. (a)		4,135		38,166
Total Long-Term Investments (Cost — $9,922,869) — 98.1%				10,758,704
Short-Term Securities
BlackRock Liquidity Funds, T-Fund, Institutional Class, 0.40% (b)(c)		164,145		164,145
Total Short-Term Securities (Cost — $164,145) — 1.5%				164,145
Total Investments (Cost — $10,087,014) — 99.6%				10,922,849
Other Assets Less Liabilities — 0.4%				49,086
Net Assets — 100.0%			$	10,971,935

See Notes to Financial Statements.

28 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock Multifactor USA Index Fund

Notes to Schedule of Investments

(a) Non-income producing security.

(b) During the six months ended January 31, 2017, 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 July 31, 2016		Net Activity			Shares Held at January 31, 2017		Value at January 31, 2017		Income		Net Realized Gain1		Change in Unrealized Appreciation (Depreciation)
BlackRock Liquidity Funds, T-Fund, Institutional Class		—		164,145			164,145	$	164,145	$	113	$	1	—
BlackRock Premier Government Institutional Fund		105,026		(105,026	)		—		—		39		—	—
Total								$	164,145	$	152	$	1	—
1    Includes net capital gain distributions.

(c) Current yield as of period end.

• For Fund compliance purposes, the 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 such sector sub-classifications for reporting ease.

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts
Contracts Long		Issue	Expiration	Notional Value		Unrealized Appreciation
	1	S&P 500 E-Mini Index	March 2017	$	113,725	$	2,150

Derivative Financial Instruments Categorized by Risk Exposure

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

Assets — Derivative Financial Instruments		Commodity Contracts	Credit Contracts	Equity Contracts		Foreign Currency Exchange Contracts	Interest Rate Contracts	Other Contracts	Total
Futures contracts	Net unrealized appreciation1	—	—	$	2,150	—	—	—	$	2,150
1   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 Statements of Assets and Liabilities.

For the six months ended January 31, 2017, the effect of derivative financial instruments in the Statements of Operations was as follows:

Net Realized Gain (Loss) from:	Commodity Contracts	Credit Contracts	Equity Contracts		Foreign Currency Exchange Contracts	Interest Rate Contracts	Other Contracts	Total
Futures contracts	—	—	$	6,201	—		—	$	6,201
Net Change in Unrealized Appreciation (Depreciation) on:
Futures contracts	—	—	$	1,018	—	—	—	$	1,018

Average Quarterly Balances of Outstanding Derivative Financial Instruments

Futures contracts:
Average notional value of contracts — long	$	56,863

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

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 29

Schedule of Investments (concluded) BlackRock Multifactor USA Index 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:
Common Stocks1	$	10,758,704		—		—	$	10,758,704
Short-Term Securities		164,145		—		—		164,145
Total	$	10,922,849		—		—	$	10,922,849
Derivative Financial Instruments2
Assets:
Equity contracts	$	2,150		—		—	$	2,150
1    See above Schedule of Investments for values in each sector.
2    Derivative financial instruments are futures contracts, which are valued at the unrealized appreciation (depreciation) on the instrument.

During the six months ended January 31, 2017, there were no transfers between levels.

See Notes to Financial Statements.

30 BLACKROCK FUNDS JANUARY 31, 2017

Statements of Assets and Liabilities

January 31, 2017 (Unaudited)	BlackRock Min Vol EAFE Index Fund			BlackRock Min Vol USA Index Fund			BlackRock Multifactor International Index Fund			BlackRock Multifactor USA Index Fund
Assets
Investments at value — unaffiliated1	$	87,719,510		$	9,584,539		$	10,340,213		$	10,758,704
Investments at value — affiliated2		335,074			161,472			22,854			164,145
Cash		—			—			—			10
Cash pledged for futures contracts		87,241			6,000			9,530			6,000
Foreign currency at value3		2,561,803			—			146,978			—
Receivables:
Investments sold		4,307,901			7,498			71			5,289
Capital shares sold		60,614			—			—			—
Dividends — unaffiliated		35,417			9,881			6,144			8,414
From the Manager		31,879			33,585			34,494			28,588
Dividends — affiliated		272			43			4			47
Deferred offering costs		46,764			46,764			46,764			46,764
Prepaid expenses		7,632			7,632			7,635			7,634
Total assets		95,194,107			9,857,414			10,614,687			11,025,595
Liabilities
Payables:
Investments purchased		5,232,217			—			—			—
Variation margin on futures contracts		15,017			75			791			75
Offering costs		8,601			15,501			12,387			11,351
Officer’s and Trustees’ fees		4,054			4,054			4,046			4,045
Other accrued expenses		66,183			47,009			67,416			38,189
Total liabilities		5,326,072			66,639			84,640			53,660
Net Assets	$	89,868,035		$	9,790,775		$	10,530,047		$	10,971,935
Net Assets Consist of
Paid-in capital	$	90,195,263		$	10,038,009		$	9,999,816		$	10,003,358
Undistributed (distributions in excess of) net investment income		9,355			5,470			(14,048	)		(1,448	)
Accumulated net realized gain (loss)		(133,001	)		(126,337	)		(113,753	)		132,040
Net unrealized appreciation (depreciation)		(203,582	)		(126,367	)		658,032			837,985
Net Assets	$	89,868,035		$	9,790,775		$	10,530,047		$	10,971,935
1    Investments at cost — unaffiliated	$	87,923,657		$	9,713,056		$	9,683,536		$	9,922,869
2    Investments at cost — affiliated	$	335,074		$	161,472		$	22,854		$	164,145
3    Foreign currency at cost	$	2,541,670			—		$	144,304			—
Net Asset Value
Institutional:
Net assets	$	95,202		$	126,290		$	105,299		$	113,461
Shares outstanding		10,000			12,942			10,000			10,345
Net asset value	$	9.52		$	9.76		$	10.53		$	10.97
Shares authorized		Unlimited			Unlimited			Unlimited			Unlimited
Par value	$	0.001		$	0.001		$	0.001		$	0.001
Class K:
Net assets	$	89,772,833		$	9,664,485		$	10,424,748		$	10,858,474
Shares outstanding		9,430,682			990,713			990,000			990,000
Net asset value	$	9.52		$	9.76		$	10.53		$	10.97
Shares authorized		Unlimited			Unlimited			Unlimited			Unlimited
Par value	$	0.001		$	0.001		$	0.001		$	0.001

See Notes to Financial Statements.
	BLACKROCK FUNDS	JANUARY 31, 2017	31

Statements of Operations

Six Months Ended January 31, 2017 (Unaudited)	BlackRock Min Vol EAFE Index Fund			BlackRock Min Vol USA Index Fund			BlackRock Multifactor International Index Fund			BlackRock Multifactor USA Index Fund
Investment Income
Dividends — unaffiliated	$	132,143		$	119,309		$	102,905		$	117,362
Dividends — affiliated		287			192			22			152
Foreign taxes withheld		(7,630	)		—			(8,552	)		(19	)
Total Investment Income		124,800			119,501			94,375			117,495
Expenses
Offering		52,788			52,788			52,788			52,788
Custodian		30,495			13,879			31,059			7,271
Professional		27,033			26,373			27,033			26,373
Registration		7,931			7,931			7,931			7,931
Investment advisory		6,808			1,956			15,539			11,004
Printing		6,177			6,177			6,177			6,177
Officer and Trustees		5,522			5,522			5,522			5,522
Transfer agent — class specific		358			358			358			358
Miscellaneous		2,536			2,533			2,538			2,535
Total expenses		139,648			117,517			148,945			119,959
Less:
Fees waived by the Manager		(6,808	)		(1,956	)		(15,539	)		(11,004	)
Other expenses reimbursed by the Manager		(117,133	)		(108,818	)		(112,296	)		(92,847	)
Transfer agent fees waived and/or reimbursed — class specific		(334	)		(327	)		(333	)		(332	)
Total expenses after fees waived and/or reimbursed		15,373			6,416			20,777			15,776
Net investment income		109,427			113,085			73,598			101,719
Realized and Unrealized Gain (Loss)
Net realized gain (loss) from:
Investments — unaffiliated		(120,073	)		(127,578	)		(104,015	)		126,970
Futures contracts		(27,140	)		3,898			8,985			6,201
Foreign currency transactions		14,607			—			(9,921	)		—
Capital gain distributions from investment companies — affiliated		—			1			—			1
		(132,606	)		(123,679	)		(104,951	)		133,172
Net change in unrealized appreciation (depreciation) on:
Investments — unaffiliated		(318,358	)		(121,273	)		414,205			722,299
Futures contracts		(18,833	)		1,018			(4,362	)		1,018
Foreign currency translations		16,059			—			957			—
		(321,132	)		(120,255	)		410,800			723,317
Net realized and unrealized gain (loss)		(453,738	)		(243,934	)		305,849			856,489
Net Increase (Decrease) in Net Assets Resulting from Operations	$	(344,311	)	$	(130,849	)	$	379,447		$	958,208

See Notes to Financial Statements.
32	BLACKROCK FUNDS	JANUARY 31, 2017

Statements of Changes in Net Assets

	BlackRock Min Vol EAFE Index Fund					BlackRock Min Vol USA Index Fund
Increase (Decrease) in Net Assets:	Six Months Ended January 31, 2017 (Unaudited)			Period from July 13, 20161 to July 31, 2016		Six Months Ended January 31, 2017 (Unaudited)			Period from July 13, 20161 to July 31, 2016
Operations
Net investment income	$	109,427		$	3,678	$	113,085		$	4,318
Net realized gain (loss)		(132,606	)		65		(123,679	)		(29	)
Net change in unrealized appreciation (depreciation)		(321,132	)		117,550		(120,255	)		(6,112	)
Net increase (decrease) in net assets resulting from operations		(344,311	)		121,293		(130,849	)		(1,823	)
Distributions to Shareholders2
From net investment income:
Institutional		(1,015	)		—		(1,414	)		—
Class K		(102,735	)		—		(110,587	)		—
From net realized gain:
Institutional		(5	)		—		(34	)		—
Class K		(538	)		—		(2,595	)		—
Decrease in net assets resulting from distributions to shareholders		(104,293	)		—		(114,630	)		—
Capital Share Transactions
Net increase in net assets derived from capital share transactions		80,195,346			10,000,000		9,776			10,028,301
Net Assets
Total increase (decrease) in net assets		79,746,742			10,121,293		(235,703	)		10,026,478
Beginning of period		10,121,293			—		10,026,478			—
End of period	$	89,868,035		$	10,121,293	$	9,790,775		$	10,026,478
Undistributed net investment income, end of period	$	9,355		$	3,678	$	5,470		$	4,386
1    Commencement of operations.
2    Distributions for annual periods determined in accordance with federal income tax regulations.

See Notes to Financial Statements.
	BLACKROCK FUNDS	JANUARY 31, 2017	33

Statements of Changes in Net Assets

	BlackRock Multifactor International Index Fund						BlackRock Multifactor USA Index Fund
Increase (Decrease) in Net Assets:	Six Months Ended January 31, 2017 (Unaudited)			Period from July 13, 20161 to July 31, 2016			Six Months Ended January 31, 2017 (Unaudited)			Period from July 13, 20161 to July 31, 2016
Operations
Net investment income	$	73,598		$	7,156		$	101,719		$	1,670
Net realized loss		(104,951	)		(4	)		133,172			75
Net change in unrealized appreciation (depreciation)		410,800			247,232			723,317			114,668
Net increase in net assets resulting from operations		379,447			254,384			958,208			116,413
Distributions to Shareholders2
From net investment income:
Institutional		(927	)		—			(1,048	)		—
Class K		(94,075	)		—			(103,953	)		—
From net realized gain:
Institutional		(88	)		—			(12	)		—
Class K		(8,694	)		—			(1,195	)		—
Decrease in net assets resulting from distributions to shareholders		(103,784	)		—			(106,208	)		—
Capital Share Transactions
Net increase in net assets derived from capital share transactions		—			10,000,000			3,522			10,000,000
Net Assets
Total increase in net assets		275,663			10,254,384			855,522			10,116,413
Beginning of period		10,254,384			—			10,116,413			—
End of period	$	10,530,047		$	10,254,384		$	10,971,935		$	10,116,413
Undistributed (distributions in excess of) net investment income, end of period	$	(14,048	)	$	7,356		$	(1,448	)	$	1,834
1    Commencement of operations.
2    Distributions for annual periods determined in accordance with federal income tax regulations.

See Notes to Financial Statements.
34	BLACKROCK FUNDS	JANUARY 31, 2017

Financial Highlights BlackRock Min Vol EAFE Index Fund

	Institutional
	Six Months Ended January 31, 2017 (Unaudited)			Period July 13, 20161 to July 31, 2016
Per Share Operating Performance
Net asset value, beginning of period	$	10.12		$	10.00
Net investment income2		0.09			0.00	3
Net realized and unrealized gain (loss)		(0.59	)		0.12
Net increase (decrease) from investment operations		(0.50	)		0.12
Distributions:4
From net investment income		(0.10	)		—
From net realized gain		(0.00	)5		—
Total distributions		(0.10	)		—
Net asset value, end of period	$	9.52		$	10.12
Total Return6,7
Based on net asset value		(4.91)%			1.20%
Ratios to Average Net Assets
Total expenses8		2.17%	9,10		3.97%	11
Total expenses after fees waived and/or reimbursed8		0.23%	9		0.23%
Net investment income8		1.89%	9		0.70%
Supplemental Data
Net assets, end of period (000)	$	95		$	101
Portfolio turnover rate		47%			—

¹ Commencement of operations.

² Based on average shares outstanding.

³ Amount is less than $0.005 per share.

⁴  Distributions for annual periods determined in accordance with federal income tax regulations.

⁵ Amount is greater than $(0.005) per share.

⁶ Where applicable, assumes the reinvestment of distributions.

⁷ Aggregate total return.

⁸ Annualized.

⁹ Does not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.02%.

¹⁰ Offering costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses would have been 2.66%.

¹¹ Audit, offering and organization costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses would have been 13.44%.

See Notes to Financial Statements.
	BLACKROCK FUNDS	JANUARY 31, 2017	35

Financial Highlights (concluded) BlackRock Min Vol EAFE Index Fund

	Class K
	Six Months Ended January 31, 2017 (Unaudited)			Period July 13, 20161 to July 31, 2016
Per Share Operating Performance
Net asset value, beginning of period	$	10.12		$	10.00
Net investment income2		0.07			0.00	3
Net realized and unrealized gain (loss)		(0.57	)		0.12
Net increase (decrease) from investment operations		(0.50	)		0.12
Distributions:4
From net investment income		(0.10	)		—
From net realized gain		(0.00	)5		—
Total distributions		(0.10	)		—
Net asset value, end of period	$	9.52		$	10.12
Total Return6,7
Based on net asset value		(4.89)%			1.20%
Ratios to Average Net Assets
Total expenses8		1.33%	9,10		3.90%	11
Total expenses after fees waived and/or reimbursed8		0.18%	9		0.18%
Net investment income8		1.28%	9		0.75%
Supplemental Data
Net assets, end of period (000)	$	89,773		$	10,020
Portfolio turnover rate		47%			—

¹ Commencement of operations.

² Based on average shares outstanding.

³ Amount is less than $0.005 per share.

⁴  Distributions for annual periods determined in accordance with federal income tax regulations.

⁵ Amount is greater than $(0.005) per share.

⁶ Where applicable, assumes the reinvestment of distributions.

⁷ Aggregate total return.

⁸ Annualized.

⁹ Does not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.02%.

¹⁰ Offering costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses would have been 1.64%.

¹¹  Audit, offering and organization costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses would have been 13.37%.

See Notes to Financial Statements.
36	BLACKROCK FUNDS	JANUARY 31, 2017

Financial Highlights BlackRock Min Vol USA Index Fund

	Institutional
	Six Months Ended January 31, 2017 (Unaudited)			Period July 13, 20161 to July 31, 2016
Per Share Operating Performance
Net asset value, beginning of period	$	10.00		$	10.00
Net investment income2		0.12			0.00	3
Net realized and unrealized (loss)		(0.25	)		(0.00	)4
Net increase (decrease) from investment operations		(0.13	)		—
Distributions:4
From net investment income		(0.11	)		—
From net realized gain		(0.00	)5		—
Total distributions		(0.11	)		—
Net asset value, end of period	$	9.76		$	10.00
Total Return6,7
Based on net asset value		(1.25)%			0.00%
Ratios to Average Net Assets
Total expenses8		1.89%	9		2.81%	10,11
Total expenses after fees waived and/or reimbursed8		0.18%			0.18%	10
Net investment income8		2.38%			0.85%	10
Supplemental Data
Net assets, end of period (000)	$	126		$	128
Portfolio turnover rate		11%			1%

¹ Commencement of operations.

² Based on average shares outstanding.

³ Amount is less than $0.005 per share.

⁴  Distributions for annual periods determined in accordance with federal income tax regulations.

⁵ Amount is greater than $(0.005) per share.

⁶ Where applicable, assumes the reinvestment of distributions.

⁷ Aggregate total return.

⁸ Annualized.

⁹ Offering costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses would have been 2.42%.

¹⁰ Does not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.02%.

¹¹ Audit, offering and organization costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses would have been 11.78%.

See Notes to Financial Statements.
	BLACKROCK FUNDS	JANUARY 31, 2017	37

Financial Highlights (concluded) BlackRock Min Vol USA Index Fund

	Class K
	Six Months Ended January 31, 2017 (Unaudited)			Period July 13, 20161 to July 31, 2016
Per Share Operating Performance
Net asset value, beginning of period	$	10.00		$	10.00
Net investment income2		0.11			0.00	3
Net realized and unrealized (loss)		(0.24	)		(0.00	)4
Net increase (decrease) from investment operations		(0.13	)		—
Distributions:4
From net investment income		(0.11	)		—
From net realized gain		(0.00	)5		—
Total distributions		(0.11	)		—
Net asset value, end of period	$	9.76		$	10.00
Total Return6,7
Based on net asset value		(1.23)%			0.00%
Ratios to Average Net Assets
Total expenses8		1.87%	9		2.75%	10,11
Total expenses after fees waived and/or reimbursed8		0.13%			0.13%	10
Net investment income8		2.31%			0.87%	10
Supplemental Data
Net assets, end of period (000)	$	9,664		$	9,898
Portfolio turnover rate		11%			1%

¹ Commencement of operations.

² Based on average shares outstanding.

³ Amount is less than $0.005 per share.

⁴  Distributions for annual periods determined in accordance with federal income tax regulations.

⁵ Amount is greater than $(0.005) per share.

⁶ Where applicable, assumes the reinvestment of distributions.

⁷ Aggregate total return.

⁸ Annualized.

⁹ Offering costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses would have been 2.40%.

¹⁰ Does not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.02%.

¹¹ Audit, offering and organization costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses would have been 11.99%.

See Notes to Financial Statements.
38	BLACKROCK FUNDS	JANUARY 31, 2017

Financial Highlights BlackRock Multifactor International Index Fund

	Institutional
	Six Months Ended January 31, 2017 (Unaudited)			Period July 13, 20161 to July 31, 2016
Per Share Operating Performance
Net asset value, beginning of period	$	10.25		$	10.00
Net investment income2		0.07			0.01
Net realized and unrealized gain		0.31			0.24
Net increase from investment operations		0.38			0.25
Distributions:3
From net investment income		(0.09	)		—
From net realized gain		(0.01	)		—
Total distributions		(0.10	)		—
Net asset value, end of period	$	10.53		$	10.25
Total Return4,5
Based on net asset value		3.77%			2.50%
Ratios to Average Net Assets
Total expenses6		2.43%	7		4.20%	8
Total expenses after fees waived and/or reimbursed6		0.45%			0.45%
Net investment income6		1.37%			1.39%
Supplemental Data
Net assets, end of period (000)	$	105		$	103
Portfolio turnover rate		21%			—

¹ Commencement of operations.

² Based on average shares outstanding.

³  Distributions for annual periods determined in accordance with federal income tax regulations.

⁴ Where applicable, assumes the reinvestment of distributions.

⁵ Aggregate total return.

⁶ Annualized.

⁷ Offering costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses would have been 2.94%.

⁸ Audit, offering and organization costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses would have been 13.62%.

See Notes to Financial Statements.
	BLACKROCK FUNDS	JANUARY 31, 2017	39

Financial Highlights (concluded) BlackRock Multifactor International Index Fund

	Class K
	Six Months Ended January 31, 2017 (Unaudited)			Period July 13, 20161 to July 31, 2016
Per Share Operating Performance
Net asset value, beginning of period	$	10.25		$	10.00
Net investment income2		0.07			0.01
Net realized and unrealized gain		0.32			0.24
Net increase from investment operations		0.39			0.25
Distributions:3
From net investment income		(0.10	)		—
From net realized gain		(0.01	)		—
Total distributions		(0.11	)		—
Net asset value, end of period	$	10.53		$	10.25
Total Return4,5
Based on net asset value		3.79%			2.50%
Ratios to Average Net Assets
Total expenses6		2.37%	7		4.13%	8
Total expenses after fees waived and/or reimbursed6		0.40%			0.40%
Net investment income6		1.42%			1.44%
Supplemental Data
Net assets, end of period (000)	$	10,425		$	10,152
Portfolio turnover rate		21%			—

¹ Commencement of operations.

² Based on average shares outstanding.

³  Distributions for annual periods determined in accordance with federal income tax regulations.

⁴ Where applicable, assumes the reinvestment of distributions.

⁵ Aggregate total return.

⁶ Annualized.

⁷ Offering costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses would have been 2.87%.

⁸ Audit, offering and organization costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses would have been 13.55%.

See Notes to Financial Statements.
40	BLACKROCK FUNDS	JANUARY 31, 2017

Financial Highlights BlackRock Multifactor USA Index Fund

	Institutional
	Six Months Ended January 31, 2017 (Unaudited)			Period July 13, 20161 to July  31, 2016
Per Share Operating Performance
Net asset value, beginning of period	$	10.12		$	10.00
Net investment income2		0.10			0.00	3
Net realized and unrealized gain		0.85			0.12
Net increase from investment operations		0.95			0.12
Distributions:4
From net investment income		(0.10	)		—
From net realized gain		(0.00	)5		—
Total distributions		(0.10	)		—
Net asset value, end of period	$	10.97		$	10.12
Total Return6,7
Based on net asset value		9.47%			1.20%
Ratios to Average Net Assets
Total expenses8		1.85%	9		2.54%	10,11
Total expenses after fees waived and/or reimbursed8		0.35%			0.35%	10
Net investment income8		1.89%			0.29%	10
Supplemental Data
Net assets, end of period (000)	$	113		$	101
Portfolio turnover rate		21%			—	12

¹ Commencement of operations.

² Based on average shares outstanding.

³ Amount is less than $0.005 per share.

⁴  Distributions for annual periods determined in accordance with federal income tax regulations.

⁵ Amount is greater than $(0.005) per share.

⁶ Where applicable, assumes the reinvestment of distributions.

⁷ Aggregate total return.

⁸ Annualized.

⁹ Offering costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses would have been 2.35%.

¹⁰ Does not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.02%.

¹¹ Audit, offering and organization costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses would have been 11.73%.

¹² Amount is less than 0.50%

See Notes to Financial Statements.
	BLACKROCK FUNDS	JANUARY 31, 2017	41

Financial Highlights (concluded) BlackRock Multifactor USA Index Fund

	Class K
	Six Months Ended January 31, 2017 (Unaudited)			Period July 13, 20161 to July 31, 2016
Per Share Operating Performance
Net asset value, beginning of period	$	10.12		$	10.00
Net investment income2		0.10			0.00	3
Net realized and unrealized gain		0.86			0.12
Net increase from investment operations		0.96			0.12
Distributions:4
From net investment income		(0.11	)		—
From net realized gain		(0.00	)5		—
Total distributions		(0.11	)		—
Net asset value, end of period	$	10.97		$	10.12
Total Return6,7
Based on net asset value		9.50%			1.20%
Ratios to Average Net Assets
Total expenses8		1.79%	9		2.47%	10,11
Total expenses after fees waived and/or reimbursed8		0.30%			0.30%	10
Net investment income8		1.94%			0.34%	10
Supplemental Data
Net assets, end of period (000)	$	10,858		$	10,015
Portfolio turnover rate		21%			—	12

¹ Commencement of operations.

² Based on average shares outstanding.

³ Amount is less than $0.005 per share.

⁴  Distribution for annual periods determined in accordance with federal income tax regulations.

⁵ Amount is greater than $(0.005) per share.

⁶ Where applicable, assumes the reinvestment of distributions.

⁷ Aggregate total return.

⁸ Annualized.

⁹ Offering costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses would have been 2.29%.

¹⁰ Does not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.02%.

¹¹ Audit, offering and organization costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses would have been 11.67%.

¹² Amount is less than 0.50%

See Notes to Financial Statements.
42	BLACKROCK FUNDS	JANUARY 31, 2017

Notes to Financial Statements (Unaudited)

1. Organization:

BlackRock Funds^SM (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust is organized as a Massachusetts business trust. The following are referred to herein collectively as the “Funds” or individually, a “Fund”:

Fund Name	Herein Referred To As	Diversification Classification
BlackRock Min Vol EAFE Index Fund	Min Vol EAFE		Diversified
BlackRock Min Vol USA Index Fund	Min Vol USA		Diversified
BlackRock Multifactor International Index Fund	MF International		Non-diversified
BlackRock Multifactor USA Index Fund	MF USA		Non-diversified

Each Fund offers multiple classes of shares. All classes of shares have identical voting, dividend, liquidation and other rights and are subject to the same terms and conditions. Institutional and Class K shares are sold without a sales charge and only to certain eligible investors.

Share Class	Initial Sales Charge	CDSC		Conversion Privilege
Institutional Shares	No		No		None
Class K Shares	No		No		None

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

2. Significant Accounting Policies:

The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. Below is a summary of significant accounting policies:

Foreign Currency: Each Fund’s books and records are maintained in U.S. dollars. Purchases and sales of investments are recorded at the rates of exchange prevailing on the respective dates of such transactions. Generally, when the U.S. dollar rises in value against a foreign currency, the investments denominated in that currency will lose value; the opposite effect occurs if the U.S. dollar falls in relative value.

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

Segregation and Collateralization: In cases where a Fund enters into certain investments (e.g., futures contracts) that would be treated as “senior securities” for 1940 Act purposes, a Fund may segregate or designate on its books and records cash or liquid assets having a market value at least equal to the amount of its future obligations under such investments. Doing so allows the investment to be excluded from treatment as a “senior security.” Furthermore, if required by an exchange or counterparty agreement, the Funds may be required to deliver/deposit cash and/or securities to/with an exchange, or broker-dealer or custodian as collateral for certain investments or obligations.

Investment Transactions and Investment Income: 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 Funds are 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, 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. 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 Funds are recorded on the ex-dividend date. The character and timing of distributions are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP.

Offering Costs: Offering costs are amortized over a 12-month period beginning with the commencement of operations.

Recent Accounting Standard: In November 2016, the Financial Accounting Standards Board issued Accounting Standards Update “Restricted Cash” which will require entities to include the total of cash, cash equivalents, restricted cash, and restricted cash equivalents in the beginning and ending cash

BLACKROCK FUNDS JANUARY 31, 2017 43

Notes to Financial Statements (continued)

balances in the Statements of Cash Flows. The guidance will be applied retrospectively and is effective for fiscal years beginning after December 15, 2017, and interim periods within those years. Management is evaluating the impact, if any, of this guidance on the Funds’ presentation in the Statements of Cash Flows.

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

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

The Funds may incur charges on uninvested cash balances and overdrafts, subject to certain conditions.

3. Investment Valuation and Fair Value Measurements:

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

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

• Equity investments traded on a recognized securities exchange are valued at the official closing price each day, if available. For equity investments traded on more than one exchange, the official closing price on the exchange where the stock is primarily traded is used. Equity investments traded on a recognized exchange for which there were no sales on that day may be valued at the last available bid (long positions) or ask (short positions) price. Generally, trading in foreign instruments is substantially completed each day at various times prior to the close of trading on the NYSE. Occasionally, events affecting the values of such instruments may occur between the foreign market close and the close of trading on the NYSE that may not be reflected in the computation of the Funds’ net assets. Each business day, the Funds use a pricing service to assist with the valuation of certain foreign exchange-traded equity securities and foreign exchange-traded and over-the-counter (“OTC”) options (the “Systematic Fair Value Price”). Using current market factors, the Systematic Fair Value Price is designed to value such foreign securities and foreign options at fair value as of the close of trading on the NYSE, which follows the close of the local markets.

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

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

• 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 NYSE. 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

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 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 a 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.

44 BLACKROCK FUNDS JANUARY 31, 2017

Notes to Financial Statements (continued)

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

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

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

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

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Investments classified within Level 3 have significant unobservable inputs used by the Global Valuation Committee in determining the price for Fair Valued Investments. Level 3 investments include equity or debt issued by private companies. There may not be a secondary market, and/or there are a limited number of investors. Level 3 investments may also be adjusted to reflect illiquidity and/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 each Fund’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investments and derivative financial instruments and is not necessarily an indication of the risks associated with investing in those securities.

4. Derivative Financial Instruments:

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

Futures Contracts: Certain Funds invest in long and/or short positions in futures and options on futures contracts to gain exposure to, or manage exposure to changes in interest rates (interest rate risk), changes in the value of equity securities (equity risk) or foreign currencies (foreign currency exchange rate risk).

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

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

The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock, Inc. (“BlackRock”) for 1940 Act purposes.

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

BLACKROCK FUNDS JANUARY 31, 2017 45

Notes to Financial Statements (continued)

For such services, each Fund pays the Manager a monthly fee, which is determined by calculating a percentage of each Fund’s average daily net assets, based on the following annual rates:

Average Daily Net Assets	Investment Advisory Fees
Min Vol EAFE		0.08%
Min Vol USA		0.04%
MF International		0.30%
MF USA		0.21%

Service and Distribution Fees: The Trust, on behalf of the Funds, entered into a Distribution Agreement and a Distribution and Service Plan with BlackRock Investments, LLC (“BRIL”), an affiliate of the Manager.

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

Transfer Agent: Pursuant to written agreements, certain financial intermediaries, some of which may be affiliates, provide the Funds with sub-accounting, recordkeeping, sub-transfer agency and other administrative services with respect to sub-accounts they service. For these services, these entities receive an asset-based fee or an annual fee per shareholder account, which will vary depending on share class and/or net assets.

For the six months ended January 31, 2017, the following table shows the class specific transfer agent fees borne directly by each class of each Fund:

	Institutional		Class K		Total
Min Vol EAFE	$	26	$	322	$	358
Min Vol USA	$	26	$	322	$	358
MF International	$	26	$	322	$	358
MF USA	$	26	$	322	$	358

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

	Institutional		Class K
Min Vol EAFE		0.23%		0.18%
Min Vol USA		0.18%		0.13%
MF International		0.45%		0.40%
MF USA		0.35%		0.30%

The Manager has agreed not to reduce or discontinue this contractual expense limitation prior to November 30, 2017, unless approved by the Board, including a majority of the Independent Trustees who are not “interested persons” of the Funds, as defined in the 1940 Act (“Independent Trustees”) or by a vote of a majority of the outstanding voting securities of the Funds.

These amounts waived and/or reimbursed are included in fees waived by the Manager, and shown as other expenses reimbursed by the Manager, and transfer agent fees waived and/or reimbursed — class specific, respectively, in the Statements of Operations. For the six-months ended January 31, 2017, the amounts included in fees waived by the Manager and shown as other expenses reimbursed by the Manager were as follows:

	Fees Waived by the Manager		Other Expenses Reimbursed by the Manager
Min Vol EAFE	$	6,687	$	117,133
Min Vol USA	$	1,910	$	108,818
MF International	$	15,535	$	112,296
MF USA	$	10,971	$	92,847

For the period ended January 31, 2017, class specific expense waivers and/or reimbursements were as follows:

Transfer Agent Fees Waived and/or Reimbursed

	Institutional		Class K		Total
Min Vol EAFE	$	12	$	322	$	334
Min Vol USA	$	5	$	322	$	327
MF International	$	11	$	322	$	333
MF USA	$	10	$	322	$	332

46 BLACKROCK FUNDS JANUARY 31, 2017

Notes to Financial Statements (continued)

With respect to the Funds, the Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees each Fund pays to the Manager indirectly through its investment in affiliated money market funds (the “affiliated money market fund waiver”). These amounts are included in fees waived by the Manager in the Statements of Operations. The amount of waivers and/or reimbursements of fees and expenses made pursuant to the expense limitation caps, as applicable, will be reduced by the amount of the affiliated money market fund waiver. These amounts are included in fees waived by the Manager in the Statements of Operations. For the six months ended January 31, 2017, the amounts waived were as follows:

	Amount Waived
Min Vol EAFE	$	50
Min Vol USA	$	46
MF International	$	4
MF USA	$	33

Effective September 1, 2016, the Manager voluntarily agreed to waive its investment advisory fee with respect to any portion of a Fund’s assets invested in affiliated equity or fixed-income mutual funds or affiliated exchange-traded funds that have a contractual management fee. Prior to September 1, 2016, the Manager did not waive such fees. Effective November 28, 2016, the waiver became contractual through November 30, 2017. This contractual agreement may be terminated upon 90 days’ notice by a majority of Independent Trustees or by a vote of a majority of the Independent Trustees or by a vote of a majority of the outstanding voting securities of the Funds. This amount is included in fees waived by the Manager in the Statements of Operations. For the six months ended January 31, 2017, the amount included in fees waived the Manager for Min Vol EAFE was $71.

With respect to the contractual expense caps, if during a 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 expense cap for that share class, the Manager is entitled to be reimbursed by such share class up to the lesser of the following expenses:

(a) The amount of fees waived and/or expenses reimbursed during those prior two fiscal years under the agreement.

(b) The amount by which the expense cap for that share class exceeds the operating expenses of the share class for the current fiscal year, provided that:

_• Each Fund, of which the share class is a part, has more than $50 million in assets for the fiscal year; and

_• The Manager or an affiliate continues to serve as the Fund’s investment adviser or administrator.

In the event the expense cap for a share class is changed subsequent to a fiscal year in which the Manager becomes entitled to reimbursement for fees waived and/or reimbursed, the amount available to reimburse the Manager shall be calculated by reference to the expense cap for that share class in effect at the time the Manager became entitled to receive such reimbursement, rather than the subsequently changed expense cap for that share class.

On January 31, 2017, the fund level and class specific waivers and/or reimbursements subject to possible future recoupment under the expense limitation agreement are as follows:

	Expiring 2018								Expiring 2019
	Min Vol EAFE		Min Vol USA		MF International		MF USA		Min Vol EAFE		Min Vol USA		MF International		MF USA
Fund Level	$	54,983	$	48,547	$	55,142	$	46,403	$	123,820	$	110,728	$	127,831	$	103,818
Institutional	$	1	$	1	$	1	$	1	$	12	$	5	$	11	$	10
Class K	$	49	$	48	$	49	$	49	$	322	$	322	$	322	$	322

Interfund Lending: In accordance with an exemptive order (the “Order”) from the U.S. Securities and Exchange Commission, each Fund may participate in a joint lending and borrowing facility for temporary purposes (the “Interfund Lending Program”), subject to compliance with the terms and conditions of the Order, and to the extent permitted by each Fund’s investment policies and restrictions. Each Fund is currently permitted to borrow and lend under the Interfund Lending Program.

A 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 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 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 establishted by the Board.

During the period ended January 31, 2017, the Funds did not participate in the Interfund Lending Program.

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

BLACKROCK FUNDS JANUARY 31, 2017 47

Notes to Financial Statements (continued)

6. Purchases and Sales:

For the period ended January 31, 2017, purchases and sales of investments excluding short-term securities were as follows:

	Min Vol EAFE		Min Vol USA		MF International		MF USA
Purchases	$	87,918,010	$	1,035,654	$	2,072,712	$	2,133,347
Sales	$	9,655,270	$	1,105,263	$	2,077,917	$	2,228,512

7. Income Tax Information:

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

Each Fund files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on each Fund’s U.S. federal tax returns generally remains open for the period ended July 31, 2016.

Management has analyzed tax laws and regulations and their application to the Funds as of January 31, 2017, inclusive of the open tax return years, and does not believe that there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.

As of January 31, 2017, gross unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:

	Min Vol EAFE			Min Vol USA			MF International			MF USA
Tax cost	$	88,267,860		$	9,874,528		$	9,716,694		$	10,087,014
Gross unrealized appreciation	$	1,004,357		$	307,501		$	968,759		$	1,031,469
Gross unrealized depreciation		(1,217,633	)		(436,018	)		(322,386	)		(195,634	)
Net unrealized appreciation (depreciation)	$	(213,276	)	$	(128,517	)	$	646,373		$	835,835

8. Bank Borrowings:

The Trust, on behalf of the Funds, along with certain other funds managed by the Manager and its affiliates (“Participating Funds”), is a party to a 364-day, $2.1 billion credit agreement with a group of lenders. Under this agreement, the Funds may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Funds, can borrow up to an aggregate commitment amount of $1.6 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 0.12% 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 2017 unless extended or renewed. Participating Funds paid administration, legal and arrangement fees, which, if applicable, are included in miscellaneous expenses in the Statements of Operations. These fees were allocated among such funds based upon portions of the aggregate commitment available to them and relative net assets of Participating Funds. During the six months ended January 31, 2017, the Funds did not borrow under the credit agreement.

9. Principal Risks:

In the normal course of business, the Funds invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the issuer to meet all its obligations, including the ability to pay principal and interest when due (issuer credit risk). The value of securities held by the Funds may decline in response to certain events, including those directly involving the issuers of securities owned by the Funds. Changes arising from the general economy, the overall market and local, regional or global political and/or social instability, as well as currency, interest rate and price fluctuations, may also affect the securities’ value.

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

Counterparty Credit Risk: Similar to issuer credit risk, the Funds may be exposed to counterparty credit risk, or the risk that an entity may fail to or be unable to perform on its commitments related to unsettled or open transactions. The Funds manage counterparty credit risk by entering into transactions only with counterparties that the Manager believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Funds to market, issuer and counterparty credit risks, consist principally of financial instruments and

48 BLACKROCK FUNDS JANUARY 31, 2017

Notes to Financial Statements (continued)

receivables due from counterparties. The extent of the Funds’ exposure to market, issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Statements of Assets and Liabilities, less any collateral held by the Funds.

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

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

Concentration Risk: Certain Funds invest a substantial amount of their assets in issuers located in a single country or a limited number of countries. When the Funds concentrate their 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 Schedules of Investments.

Certain Funds invest a significant portion of their assets in securities of issuers located in Asia or with significant exposure to Asian issuers or countries. The Asian financial markets have recently experienced volatility and adverse trends due to concerns in several Asian countries regarding monetary policy, government intervention in the markets, rising government debt levels or economic downturns. These events may spread to other countries in Asia and may affect the value and liquidity of certain of the Funds’ investments.

Certain Funds invest a significant portion of their assets in securities of issuers located in Europe or with significant exposure to European issuers or countries. The European financial markets have recently experienced volatility and adverse trends due to concerns about economic downturns in, or rising government debt levels of, several European countries. These events may spread to other countries in Europe and may affect the value and liquidity of certain of the Funds’ investments.

The United Kingdom voted on June 23, 2016 to withdraw from the European Union, which may introduce significant new uncertainties and instability in the financial markets across Europe.

10. Capital Share Transactions:

Transactions in capital shares for each class were as follows:

	Six Months Ended January 31, 2017						Period July 13, 20161 to July 31, 2016
Min Vol EAFE	Shares			Amount			Shares		Amount
Institutional
Shares sold		—			—			10,000	$	100,000
Shares issued in reinvestment of distributions		—			—			—		—
Shares redeemed		—			—			—		—
Net increase		—			—			10,000	$	100,000
Class K
Shares sold		8,463,828		$	80,413,720			990,000	$	9,900,000
Shares issued in reinvestment of distributions		—			—			—		—
Shares redeemed		(23,146	)		(218,374	)		—		—
Net increase		8,440,682		$	80,195,346			990,000	$	9,900,000
Total Net Increase		8,440,682		$	80,195,346			1,000,000	$	10,000,000

BLACKROCK FUNDS JANUARY 31, 2017 49

Notes to Financial Statements (continued)

	Six Months Ended January 31, 2017						Period July 13, 20161 to July 31, 2016
Min Vol USA	Shares			Amount			Shares		Amount
Institutional
Shares sold		25,057		$	249,307			12,830	$	128,301
Shares issued in reinvestment of distributions		34			327			—		—
Shares redeemed		(24,979	)		(246,792	)		—		—
Net increase		112		$	2,842			12,830	$	128,301
Class K
Shares sold		713		$	6,934			990,000	$	9,900,000
Shares issued in reinvestment of distributions		—			—			—		—
Net increase		713		$	6,934			990,000	$	9,900,000
Total Net Increase		825		$	9,776			1,002,830	$	10,028,301
	Six Months Ended January 31, 2017						Period July 13, 20161 to July 31, 2016
MF International	Shares			Amount			Shares		Amount
Institutional
Shares sold		—			—			10,000	$	100,000
Shares issued in reinvestment of distributions		—			—			—		—
Shares redeemed		—			—			—		—
Net increase		—			—			10,000	$	100,000
Class K
Shares sold		—			—			990,000	$	9,900,000
Shares issued in reinvestment of distributions		—			—			—		—
Net increase		—			—			990,000	$	9,900,000
Total Net Increase		—			—			1,000,000	$	10,000,000
	Six Months Ended January 31, 2017						Period July 13, 20161 to July 31, 2016
MF USA	Shares			Amount			Shares		Amount
Institutional
Shares sold		343		$	3,500			10,000	$	100,000
Shares issued in reinvestment of distributions		2			22			—		—
Shares redeemed		—			—			—		—
Net increase		345		$	3,522			10,000	$	100,000
Class K
Shares sold		—			—			990,000	$	9,900,000
Shares issued in reinvestment of distributions		—			—			—		—
Net increase		—			—			990,000	$	9,900,000
Total Net Increase		345		$	3,522			1,000,000	$	10,000,000

¹ Commencement of operations.

At January 31, 2017, shares owned by BlackRock HoldCo 2, Inc., an affiliate of the Funds, were as follows:

	Institutional		Class K
Min Vol EAFE		10,000		990,000
Min Vol USA		10,000		990,000
MF International		10,000		990,000
MF USA		10,000		990,000

50 BLACKROCK FUNDS JANUARY 31, 2017

Notes to Financial Statements (concluded)

11. Subsequent Events:

Management’s evaluation of the impact of all subsequent events on the Funds’ financial statements was completed through the date the financial statements were issued and the following items were noted:

On February 24, 2017, the Board of Trustees of BlackRock Funds approved a name change from “BlackRock Min Vol EAFE Index Fund,” “BlackRock Min Vol USA Index Fund,” “BlackRock Multifactor International Index Fund” and “BlackRock Multifactor USA Index Fund” to “iShares Edge MSCI Min Vol EAFE Index Fund,” “iShares Edge MSCI Min Vol USA Index Fund,” “iShares Edge MSCI Multifactor Intl Index Fund” and “iShares Edge MSCI Multifactor Intl Index Fund,” respectively. The change is expected to be effective during the second quarter of 2017.

BLACKROCK FUNDS JANUARY 31, 2017 51

Officers and Trustees

Rodney D. Johnson, Chair of the Board and Trustee

Susan J. Carter, Trustee

Collette Chilton, Trustee

Neil A. Cotty, Trustee

Cynthia A. Montgomery, Trustee

Joseph P. Platt, Trustee

Robert C. Robb, Jr., Trustee

Mark Stalnecker, Trustee

Kenneth L. Urish, Trustee

Claire A. Walton, Trustee

Frederick W. Winter, Trustee

Barbara G. Novick, Trustee

John M. Perlowski, Trustee, President and Chief Executive Officer

Thomas Callahan, Vice President

Jennifer McGovern, Vice President

Neal J. Andrews, Chief Financial Officer

Jay M. Fife, Treasurer

Charles Park, Chief Compliance Officer

Fernanda Piedra, Anti-Money Laundering Compliance Officer

Benjamin Archibald, Secretary

Effective December 31, 2016, David O. Beim and Dr. Matina S. Horner resigned as Trustees of the Trust.

Investment Adviser and Administrator BlackRock Advisors, LLC Wilmington, DE 19809 Accounting Agent and Custodian State Street Bank and Trust Company Boston, MA 02110   Transfer Agent BNY Mellon Investment Servicing (US) Inc. Wilmington, DE 19809 Distributor BlackRock Investments, LLC New York, NY 10022   Independent Registered Public Accounting Firm PricewaterhouseCoopers LLP Philadelphia, PA 19103 Legal Counsel Sidley Austin LLP New York, NY 10019   Address of the Trust 100 Bellevue Parkway Wilmington, DE 19809

52 BLACKROCK FUNDS JANUARY 31, 2017

Additional Information

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) 537-4942.

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 Form N-Q. The Funds’ 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 or how to access documents on the SEC’s website without charge may be obtained by calling (800) SEC-0330. The Funds’ Forms N-Q may also be obtained upon request and without charge by calling (800) 537-4942.

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) 537-4942; (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 Funds voted proxies relating to securities held in the Funds’ portfolios during the most recent 12-month period ended June 30 is available upon request and without charge (1) at http://www.blackrock.com or by calling (800) 537-4942 and (2) on the SEC’s website at http://www.sec.gov.

BlackRock’s Mutual Fund Family

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

BLACKROCK FUNDS JANUARY 31, 2017 53

Additional Information (concluded)

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We may share information with our affiliates to service your account or to provide you with information about other BlackRock products or services that may be of interest to you. In addition, BlackRock restricts access to non-public personal information about its Clients to those BlackRock employees with a legitimate business need for the information. BlackRock maintains physical, electronic and procedural safeguards that are designed to protect the non-public personal information of its Clients, including procedures relating to the proper storage and disposal of such information.

54 BLACKROCK FUNDS JANUARY 31, 2017

This report is intended for current holders. It is not authorized for use as an offer of sale or a solicitation of an offer to buy shares of a Fund unless preceded or accompanied by the Funds’ current prospectus. Past performance results shown in this report should not be considered a representation of future performance. Investment returns and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Statements and other information herein are as dated and are subject to change.

MFMV-1/17-SAR

JANUARY 31, 2017

  SEMI-ANNUAL REPORT (UNAUDITED)  

BlackRock Funds^SM

^Ø   BlackRock USA Momentum Factor Index Fund

^Ø   BlackRock USA Quality Factor Index Fund

^Ø   BlackRock USA Size Factor Index Fund

^Ø   BlackRock USA Value Factor Index Fund

Not FDIC Insured • May Lose Value • No Bank Guarantee

The Markets in Review

Dear Shareholder,

The 12 months ended January 31, 2017 was an exceptionally strong period for risk assets (such as stocks and high yield bonds), while higher-quality assets generated muted returns after struggling in the latter part of 2016. As the period began, worries about slowing growth in China and the instability of oil prices had global equity prices sliding. However, the broad market momentum shifted in the second half of 2016 as reflationary expectations in the United States helped drive a pick-up in global growth.

Markets were remarkably resilient during the period. Big surprises such as the United Kingdom’s vote to leave the European Union and the outcome of the U.S. presidential election brought spikes in equity market volatility, but they were ultimately short-lived. Instead, investors used the sell-offs to seize upon buying opportunities, allowing markets to quickly rebound. We believe this reinforces the case for taking the long view rather than reacting to short-term market noise.

The global reflationary theme — rising nominal growth, wages and inflation — was the dominant driver of asset returns during the period, outweighing significant political upheavals and uncertainty. This trend accelerated after the U.S. election and continued into the beginning of 2017, stoked by expectations for an extra boost to U.S. growth via fiscal policy.

Although economic momentum is gaining traction, the capacity for rapid global growth is restrained by structural factors including an aging population, low productivity growth and excess savings. A tempered economic growth trend and high valuations across most assets have set the stage for muted investment returns going forward.

Equity markets still have room to move, although the disparity between winners and losers is widening, making stock selection increasingly important. Fixed income investors are also facing challenges as bond markets recalibrate to accommodate rising rates and higher inflation expectations. And in a world where political risk and policy uncertainty abound, there is no lack of potential catalysts for higher 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 visit blackrock.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 January 31, 2017
	6-month			12-month
U.S. large cap equities (S&P 500® Index)		5.96	%		20.04	%
U.S. small cap equities (Russell 2000® Index)		12.43			33.53
International equities (MSCI Europe, Australasia, Far East Index)		3.49			12.03
Emerging market equities (MSCI Emerging Markets Index)		4.92			25.41
3-month Treasury bills (BofA Merrill Lynch 3-Month U.S. Treasury Bill Index)		0.20			0.37
U.S. Treasury securities (BofA Merrill Lynch 10-Year U.S. Treasury Index)		(7.87	)		(3.26	)
U.S. investment grade bonds (Bloomberg Barclays U.S. Aggregate Bond Index)		(2.95	)		1.45
Tax-exempt municipal bonds (S&P Municipal Bond Index)		(2.94	)		0.24
U.S. high yield bonds (Bloomberg Barclays U.S. Corporate High Yield 2% Issuer Capped Index)		6.09			20.77
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.

2 THIS PAGE NOT PART OF YOUR FUND REPORT

Table of Contents

	Page
The Markets in Review		2
Semi-Annual Report:
Fund Summaries		4
About Fund Performance		8
Disclosure of Expenses		8
Financial Statements:
Schedule of Investments		9
Statements of Assets and Liabilities		25
Statements of Operations		26
Statement of Changes in Net Assets		27
Financial Highlights		29
Notes to Financial Statements		33
Disclosure of Investment Advisory Agreement		40
Officers and Trustees		43
Additional Information		44

BLACKROCK FUNDS JANUARY 31, 2017 3

Fund Summary as of January 31, 2017 BlackRock USA Momentum Factor Index Fund

Investment Objective

BlackRock USA Momentum Factor Index Fund’s (the “Fund”) investment objective is to seek to track the investment results of an index that measures the performance of U.S. large- and mid-capitalization stocks exhibiting relatively higher momentum characteristics.

On February 24, 2017, the Board of Trustees of BlackRock Funds approved a name change from “BlackRock USA Momentum Factor Index Fund” to “iShares Edge MSCI USA Momentum Factor Index Fund.” The change is expected to be effective during the second quarter of 2017.

Portfolio Information

Ten Largest Holdings	Percent of Net Assets
Facebook, Inc., Class A		5	%
Amazon.com, Inc.		5
Procter & Gamble Co.		5
Microsoft Corp.		5
Johnson & Johnson		5
UnitedHealth Group, Inc.		4
NVIDIA Corp.		3
Alphabet, Inc.		3
Texas Instruments, Inc.		2
QUALCOMM, Inc.		2

Sector Allocation	Percent of Net Assets
Information Technology		39	%
Health Care		14
Consumer Staples		10
Consumer Discretionary		9
Industrials		8
Utilities		7
Real Estate		4
Financials		4
Energy		2
Materials		2
Telecommunication Services		1

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, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

Expense Example

	Actual						Hypothetical3
	Beginning Account Value December 20, 20161		Ending Account Value January 31, 2017		Expenses Paid During the Period2		Beginning Account Value December 20, 20161		Ending Account Value January 31, 2017		Expenses Paid During the Period2		Annualized Expense Ratio
Institutional	$	1,000.00	$	1,020.40	$	0.23	$	1,000.00	$	1,005.52	$	0.23		0.20	%
Class K	$	1,000.00	$	1,020.40	$	0.17	$	1,000.00	$	1,005.58	$	0.17		0.15	%

¹  Commencement of operations.

²  For each class of the Fund, expenses are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 43/365 (to reflect the period from December 20, 2016, the commencement of operations, to January 31, 2017).

³  Hypothetical 5% return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365.

See “Disclosure of Expenses” on page 8 for further information on how expenses were calculated.

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

4 BLACKROCK FUNDS JANUARY 31, 2017

Fund Summary as of January 31, 2017 BlackRock USA Quality Factor Index Fund

Investment Objective

BlackRock USA Quality Factor Index Fund’s (the “Fund”) investment objective is to seek to track the investment results of an index that measures the performance of U.S. large- and mid-capitalization stocks as identified through three fundamental variables: return on equity, earnings variability and debt-to-equity.

On February 24, 2017, the Board of Trustees of BlackRock Funds approved a name change from “BlackRock USA Quality Factor Index Fund” to “iShares Edge MSCI USA Quality Factor Index Fund.” The change is expected to be effective during the second quarter of 2017.

Portfolio Information

Ten Largest Holdings	Percent of Net Assets
Apple, Inc.		5	%
Microsoft Corp.		5
Johnson & Johnson		5
International Business Machines Corp.		3
Home Depot, Inc.		3
Walt Disney Co.		3
Intel Corp.		3
Mastercard, Inc.		3
Visa, Inc.		3
PepsiCo, Inc.		3

Sector Allocation	Percent of Net Assets
Information Technology		37	%
Consumer Discretionary		22
Industrials		16
Health Care		12
Consumer Staples		8
Materials		2
Financials		2
Real Estate		1

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, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

Expense Example

	Actual						Hypothetical3
	Beginning Account Value December 20, 20161		Ending Account Value January 31, 2017		Expenses Paid During the Period2		Beginning Account Value December 20, 20161		Ending Account Value January 31, 2017		Expenses Paid During the Period2		Annualized Expense Ratio
Institutional	$	1,000.00	$	1,001.10	$	0.23	$	1,000.00	$	1,005.52	$	0.23		0.20	%
Class K	$	1,000.00	$	1,001.10	$	0.17	$	1,000.00	$	1,005.58	$	0.17		0.15	%

¹  Commencement of operations.

²  For each class of the Fund, expenses are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 43/365 (to reflect the period from December 20, 2016, the commencement of operations, to January 31, 2017).

³  Hypothetical 5% return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365.

See “Disclosure of Expenses” on page 8 for further information on how expenses were calculated.

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.

BLACKROCK FUNDS JANUARY 31, 2017 5

Fund Summary as of January 31, 2017 BlackRock USA Size Factor Index Fund

Investment Objective

BlackRock USA Size Factor Index Fund’s (the “Fund”) investment objective is to seek to seek to track the investment results of an index composed of U.S. large- and mid-capitalization stocks with relatively smaller average market capitalization.

On February 24, 2017, the Board of Trustees of BlackRock Funds approved a name change from “BlackRock USA Size Factor Index Fund” to “iShares Edge MSCI USA Size Factor Index Fund.” The change is expected to be effective during the second quarter of 2017.

Portfolio Information

Ten Largest Holdings*	Percent of Net Assets
Arch Capital Group Ltd.		1	%
Mid-America Apartment Communities, Inc.		1
Clorox Co.		1

* Fund does not hold any other positions in excess of 1% of Net Assets.

Sector Allocation	Percent of Net Assets
Financials		17	%
Consumer Discretionary		13
Industrials		13
Information Technology		11
Health Care		11
Consumer Staples		10
Real Estate		8
Utilities		8
Materials		5
Energy		3
Telecommunication Services		1

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, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

Expense Example

	Actual						Hypothetical3
	Beginning Account Value December 20, 20161		Ending Account Value January 31, 2017		Expenses Paid During the Period2		Beginning Account Value December 20, 20161		Ending Account Value January 31, 2017		Expenses Paid During the Period1		Annualized Expense Ratio
Institutional	$	1,000.00	$	1,007.90	$	0.23	$	1,000.00	$	1,005.52	$	0.23		0.20	%
Class K	$	1,000.00	$	1,007.90	$	0.17	$	1,000.00	$	1,005.58	$	0.17		0.15	%

¹  Commencement of operations.

²  For each class of the Fund, expenses are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 43/365 (to reflect the period from December 20, 2016, the commencement of operations, to January 31, 2017).

³  Hypothetical 5% return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365.

See “Disclosure of Expenses” on page 8 for further information on how expenses were calculated.

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.

6 BLACKROCK FUNDS JANUARY 31, 2017

Fund Summary as of January 31, 2017 BlackRock USA Value Factor Index Fund

Investment Objective

BlackRock USA Value Factor Index Fund’s (the “Fund”) investment objective is to seek to seek to track the investment results of an index that measures the performance of U.S. large- and mid-capitalization stocks with value characteristics and relatively lower valuations.

On February 24, 2017, the Board of Trustees of BlackRock Funds approved a name change from “BlackRock USA Value Factor Index Fund” to “iShares Edge MSCI USA Value Factor Index Fund.” The change is expected to be effective during the second quarter of 2017.

Portfolio Information

Ten Largest Holdings	Percent of Net Assets
Apple, Inc.		8	%
Intel Corp.		4
Chevron Corp.		4
General Motors Co.		3
Cosco Systems, Inc.		3
Pfizer, Inc.		3
Wal-Mart Stores, Inc.		3
Bank of America Corp.		3
Gilead Sciences, Inc.		3
AT&T, Inc.		3

Sector Allocation	Percent of Net Assets
Information Technology		22	%
Financials		14
Health Care		14
Consumer Discretionary		12
Industrials		10
Consumer Staples		9
Energy		7
Utilities		3
Materials		3
Real Estate		3
Telecommunication Services		3

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, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

Expense Example

	Actual						Hypothetical3
	Beginning Account Value December 20, 20161		Ending Account Value January 31, 2017		Expenses Paid During the Period2		Beginning Account Value December 20, 20161		Ending Account Value January 31, 2017		Expenses Paid During the Period2		Annualized Expense Ratio
Institutional	$	1,000.00	$	995.30	$	0.23	$	1,000.00	$	1,005.52	$	0.23		0.20	%
Class K	$	1,000.00	$	995.40	$	0.17	$	1,000.00	$	1,005.58	$	0.17		0.15	%

¹  Commencement of operations.

²  For each class of the Fund, expenses are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 43/365 (to reflect the period from December 20, 2016, the commencement of operations, to January 31, 2017).

³  Hypothetical 5% return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365.

See “Disclosure of Expenses” on page 8 for further information on how expenses were calculated.

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.

BLACKROCK FUNDS JANUARY 31, 2017 7

About Fund Performance

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

Performance information reflects past performance and does not guarantee future results. Current performance may be lower or higher than the performance data quoted. Refer to www.blackrock.com/funds to obtain performance data current to the most recent month end. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Investment return and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost.

Distributions paid to each class of shares will vary because of the different levels of service, distribution and transfer agency fees applicable to each class, which are deducted from the income available to be paid to shareholders.

BlackRock Fund Advisors (the “Manager”), the Funds’ investment adviser, has contractually agreed to waive and/or reimburse a portion of each Fund’s expenses. Without such waiver and/or reimbursement, each Fund’s performance would have been lower. The Manager is under no obligation to continue waiving and/or reimbursing its fees after the applicable termination date of such agreement. See Note 4 of the Notes to Financial Statements for additional information on waivers and/or reimbursements.

Disclosure of Expenses

Shareholders of the Funds may incur the following charges: (a) transactional expenses, such as sales charges; and (b) operating expenses, including investment advisory fees, service and distribution fees, including 12b-1 fees, acquired fund fees and expenses and other fund expenses. The expense examples shown on previous pages, which are based on a hypothetical investment of $1,000 invested on December 20, 2016 (commencement of operations) and held through January 31, 2017, are intended to assist shareholders both in calculating expenses based on an investment in each Fund and in comparing these expenses with similar costs of investing in other mutual funds.

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

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

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

8 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments January 31, 2017 (Unaudited) BlackRock USA Momentum Factor Index Fund (Percentages shown are based on Net Assets)

Common Stocks	Shares		Value
Aerospace & Defense — 4.4%
B/E Aerospace, Inc.		273	$	16,781
Huntington Ingalls Industries, Inc.		130		25,215
Lockheed Martin Corp.		544		136,723
Northrop Grumman Corp.		498		114,082
Raytheon Co.		693		99,903
TransDigm Group, Inc.		255		55,182
				447,886
Banks — 0.5%
Fifth Third Bancorp		2,037		53,166
Beverages — 1.0%
Constellation Brands, Inc., Class A		425		63,648
Molson Coors Brewing Co., Class B		396		38,222
				101,870
Biotechnology — 0.1%
Seattle Genetics, Inc. (a)		256		15,421
Building Products — 0.2%
AO Smith Corp.		369		17,989
Chemicals — 0.4%
Albemarle Corp.		413		38,260
Commercial Services & Supplies — 2.3%
Cintas Corp.		266		30,885
Republic Services, Inc.		854		49,003
Waste Connections, Inc.		609		48,903
Waste Management, Inc.		1,487		103,346
				232,137
Communications Equipment — 0.3%
F5 Networks, Inc. (a)		219		29,353
Construction & Engineering — 0.2%
Jacobs Engineering Group, Inc. (a)		310		18,150
Construction Materials — 0.6%
Martin Marietta Materials, Inc.		116		26,634
Vulcan Materials Co.		250		32,082
				58,716
Containers & Packaging — 0.2%
Packaging Corp. of America		279		25,718
Diversified Financial Services — 1.1%
MSCI, Inc.		193		15,971
S&P Global, Inc.		812		97,586
				113,557
Diversified Telecommunication Services — 0.1%
Zayo Group Holdings, Inc. (a)		405		12,944
Electric Utilities — 4.2%
Edison International		761		55,462
NextEra Energy, Inc.		1,402		173,455
Pinnacle West Capital Corp.		273		21,193
Southern Co.		2,004		99,058
Westar Energy, Inc.		583		31,884
Xcel Energy, Inc.		1,133		46,816
				427,868
Electronic Equipment, Instruments & Components — 1.7%
Amphenol Corp., Class A		987		66,613
Corning, Inc.		3,105		82,251
Flex Ltd. (a)		1,753		27,470
				176,334

Common Stocks	Shares		Value
Food & Staples Retailing — 0.6%
Sysco Corp.		1,154	$	60,539
Food Products — 1.6%
Conagra Brands, Inc.		972		37,995
Ingredion, Inc.		267		34,227
Tyson Foods, Inc., Class A		982		61,660
WhiteWave Foods Co. (a)		629		34,633
				168,515
Gas Utilities — 0.4%
Atmos Energy Corp.		229		17,445
UGI Corp.		587		27,219
				44,664
Health Care Equipment & Supplies — 3.9%
Align Technology, Inc. (a)		188		17,238
Baxter International, Inc.		1,389		66,547
Becton Dickinson & Co.		469		83,149
IDEXX Laboratories, Inc. (a)		367		44,895
Intuitive Surgical, Inc. (a)		94		65,113
Stryker Corp.		840		103,765
Varian Medical Systems, Inc. (a)		260		20,189
				400,896
Health Care Providers & Services — 3.6%
UnitedHealth Group, Inc.		2,286		370,561
Hotels, Restaurants & Leisure — 1.0%
Domino’s Pizza, Inc.		249		43,460
Las Vegas Sands Corp.		1,126		59,205
				102,665
Household Durables — 0.1%
Garmin Ltd.		304		14,680
Household Products — 5.5%
Church & Dwight Co., Inc.		562		25,414
Procter & Gamble Co.		5,958		521,921
Spectrum Brands Holdings, Inc.		114		15,206
				562,541
Industrial Conglomerates — 1.0%
Danaher Corp.		1,199		100,620
Insurance — 2.1%
Aon PLC		657		74,044
Cincinnati Financial Corp.		405		28,585
Loews Corp.		763		35,541
Principal Financial Group, Inc.		848		48,412
Reinsurance Group of America, Inc.		200		25,094
				211,676
Internet & Direct Marketing Retail — 5.1%
Amazon.com, Inc. (a)		638		525,380
Internet Software & Services — 11.1%
Akamai Technologies, Inc. (a)		470		32,237
Alphabet, Inc., Class A (a)		318		260,821
Alphabet, Inc., Class C (a)		315		250,989
Facebook, Inc., Class A (a)		4,151		540,958
MercadoLibre, Inc.		147		27,252
Zillow Group, Inc., Class C (a)		423		14,966
				1,127,223
IT Services — 0.6%
Computer Sciences Corp.		695		43,229
Vantiv, Inc., Class A (a)		321		19,979
				63,208

Portfolio Abbreviations

REIT Real Estate Investment Trust

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 9

Schedule of Investments (continued) BlackRock USA Momentum Factor Index Fund

Common Stocks	Shares		Value
Life Sciences Tools & Services — 0.4%
Mettler-Toledo International, Inc. (a)		86	$	36,690
Machinery — 1.4%
Illinois Tool Works, Inc.		870		110,664
Xylem, Inc.		573		28,255
				138,919
Media — 1.9%
Charter Communications, Inc., Class A (a)		525		170,073
Liberty Broadband Corp., Class C (a)		317		27,053
				197,126
Metals & Mining — 0.6%
Newmont Mining Corp.		1,597		57,939
Multi-Utilities — 2.2%
Alliant Energy Corp.		656		24,699
Ameren Corp.		459		24,166
CenterPoint Energy, Inc.		982		25,738
CMS Energy Corp.		592		25,219
DTE Energy Co.		452		44,585
NiSource, Inc.		677		15,145
SCANA Corp.		373		25,625
WEC Energy Group, Inc.		619		36,552
				221,729
Oil, Gas & Consumable Fuels — 1.9%
Continental Resources, Inc. (a)		222		10,780
ONEOK, Inc.		604		33,286
Parsley Energy, Inc., Class A (a)		807		28,423
Spectra Energy Corp.		2,943		122,576
				195,065
Pharmaceuticals — 4.7%
Johnson & Johnson		4,235		479,614
Professional Services — 0.3%
Equifax, Inc.		247		28,968
Real Estate Investment Trusts (REITs) — 4.2%
Alexandria Real Estate Equities, Inc.		249		27,594
American Tower Corp.		1,081		111,883
Digital Realty Trust, Inc.		416		44,774
Duke Realty Corp.		1,232		29,975
Equinix, Inc.		164		63,137
Liberty Property Trust		418		16,047
Prologis, Inc.		1,596		77,965
Ventas, Inc.		911		56,181
				427,556
Semiconductors & Semiconductor Equipment — 14.2%
Applied Materials, Inc.		5,388		184,539
Broadcom Ltd.		1,012		201,894
Lam Research Corp.		506		58,119
Linear Technology Corp.		962		60,731
Marvell Technology Group Ltd.		1,775		26,394

Common Stocks	Shares		Value
Semiconductors & Semiconductor Equipment (continued)
Microchip Technology, Inc.		676	$	45,529
Micron Technology, Inc. (a)		2,827		68,159
NVIDIA Corp.		2,671		291,620
QUALCOMM, Inc.		4,749		253,739
Texas Instruments, Inc.		3,365		254,192
				1,444,916
Software — 9.0%
Activision Blizzard, Inc.		1,685		67,754
Adobe Systems, Inc. (a)		1,252		141,952
Autodesk, Inc. (a)		524		42,622
Microsoft Corp.		8,049		520,368
Symantec Corp.		3,081		84,882
Synopsys, Inc. (a)		580		36,476
VMware, Inc., Class A (a)		275		24,073
				918,127
Specialty Retail — 0.6%
Dick’s Sporting Goods, Inc.		251		12,951
Ulta Salon Cosmetics & Fragrance, Inc. (a)		163		44,382
				57,333
Technology Hardware, Storage & Peripherals — 2.2%
Hewlett Packard Enterprise Co.		7,077		160,506
NetApp, Inc.		780		29,890
Seagate Technology PLC		744		33,592
				223,988
Tobacco — 1.1%
Reynolds American, Inc.		1,895		113,946
Water Utilities — 0.4%
American Water Works Co., Inc.		497		36,500
Wireless Telecommunication Services — 0.8%
Sprint Corp. (a)		2,565		23,675
T-Mobile U.S., Inc. (a)		910		56,666
				80,341
Total Long-Term Investments (Cost — $9,988,678) — 99.8%				10,181,294
Short-Term Securities
BlackRock Liquidity Funds, T-Fund, Institutional Class, 0.40% (b)(c)		8,869		8,869
Total Short-Term Securities (Cost — $8,869) — 0.1%				8,869
Total Investments (Cost — $9,997,547) — 99.9%				10,190,163
Other Assets Less Liabilities — 0.1%				8,548
Net Assets — 100.0%			$	10,198,711

Notes to Schedule of Investments

(a) Non-income producing security.

(b) During the period ended January 31, 2017, 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	Net Activity			Shares Held at January 31, 2017		Value at January 31, 2017		Income		Net Realized Gain (Loss)	Change in Unrealized Appreciation (Depreciation)
BlackRock Liquidity Funds, T-Fund, Institutional Class		8,869	1		8,869	$	8,869	$	7	—	—
1    Represents net shares purchased for the period December 20, 2016, the commencement of operations, to January 31, 2017.

See Notes to Financial Statements.

10 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (concluded) BlackRock USA Momentum Factor Index Fund

(c) Current yield as of period end.

• 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 such sector subclassifications 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:
Common Stocks1	$	10,181,294	—	—	$	10,181,294
Short-Term Securities		8,869	—	—		8,869
Total	$	10,190,163	—	—	$	10,190,163
1   See above Schedule of Investments for values in each sector.

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 11

Schedule of Investments January 31, 2017 (Unaudited) BlackRock USA Quality Factor Index Fund (Percentages shown are based on Net Assets)

Common Stocks	Shares		Value
Aerospace & Defense — 5.3%
Boeing Co.		1,443	$	235,815
Core Laboratories NV		136		15,889
General Dynamics Corp.		493		89,273
Huntington Ingalls Industries, Inc.		82		15,905
Northrop Grumman Corp.		329		75,367
Raytheon Co.		521		75,107
Rockwell Collins, Inc.		250		22,690
				530,046
Air Freight & Logistics — 0.4%
C.H. Robinson Worldwide, Inc.		301		22,894
Expeditors International of Washington, Inc.		361		18,801
				41,695
Airlines — 0.2%
Southwest Airlines Co.		303		15,850
Auto Components — 0.4%
Delphi Automotive PLC		575		40,284
Beverages — 3.4%
Brown-Forman Corp., Class B		503		22,937
Dr. Pepper Snapple Group, Inc.		351		32,011
Monster Beverage Corp. (a)		705		30,033
PepsiCo, Inc.		2,509		260,384
				345,365
Biotechnology — 3.5%
Biogen, Inc. (a)		438		121,431
Gilead Sciences, Inc.		2,856		206,917
United Therapeutics Corp. (a)		111		18,163
				346,511
Building Products — 0.1%
AO Smith Corp.		277		13,504
Capital Markets — 1.0%
Eaton Vance Corp.		209		8,763
Franklin Resources, Inc.		630		25,036
SEI Investments Co.		272		13,195
T. Rowe Price Group, Inc.		484		32,641
TD Ameritrade Holding Corp.		456		21,045
				100,680
Chemicals — 2.0%
International Flavors & Fragrances, Inc.		143		16,761
LyondellBasell Industries NV, Class A		905		84,409
PPG Industries, Inc.		473		47,305
Sherwin-Williams Co.		175		53,167
				201,642
Commercial Services & Supplies — 0.2%
Cintas Corp.		149		17,300
Communications Equipment — 0.2%
F5 Networks, Inc. (a)		133		17,826
Containers & Packaging — 0.1%
Avery Dennison Corp.		159		11,610
Distributors — 0.3%
Genuine Parts Co.		282		27,300
Diversified Financial Services — 0.1%
MSCI, Inc.		174		14,399
Electrical Equipment — 1.2%
Acuity Brands, Inc.		77		15,957
Emerson Electric Co.		1,082		63,470
Rockwell Automation, Inc.		268		39,661
				119,088
Electronic Equipment, Instruments & Components — 0.8%
Amphenol Corp., Class A		525		35,432

Common Stocks	Shares		Value
Electronic Equipment, Instruments & Components (continued)
TE Connectivity Ltd.		667	$	49,592
				85,024
Food & Staples Retailing — 1.4%
Costco Wholesale Corp.		769		126,078
Whole Foods Market, Inc.		555		16,772
				142,850
Food Products — 1.6%
Campbell Soup Co.		376		23,398
General Mills, Inc.		1,081		67,541
Hershey Co.		316		33,329
Hormel Foods Corp.		547		19,856
McCormick & Co., Inc.		207		19,779
				163,903
Health Care Equipment & Supplies — 0.8%
Align Technology, Inc. (a)		132		12,103
Edwards Lifesciences Corp. (a)		401		38,592
ResMed, Inc.		242		16,345
Varex Imaging Corp. (a)		—		12
Varian Medical Systems, Inc. (a)		176		13,666
				80,718
Health Care Providers & Services — 0.8%
Henry Schein, Inc. (a)		146		23,339
McKesson Corp.		398		55,382
				78,721
Hotels, Restaurants & Leisure — 4.2%
Chipotle Mexican Grill, Inc. (a)		51		21,494
McDonald’s Corp.		1,609		197,215
Starbucks Corp.		3,609		199,289
				417,998
Household Durables — 0.1%
Leggett & Platt, Inc.		253		12,073
Household Products — 1.6%
Church & Dwight Co., Inc.		467		21,118
Kimberly-Clark Corp.		1,129		136,756
				157,874
Industrial Conglomerates — 3.8%
3M Co.		1,299		227,091
Honeywell International, Inc.		1,310		154,999
				382,090
Insurance — 0.6%
Marsh & McLennan Cos., Inc.		950		64,619
Internet & Direct Marketing Retail — 1.5%
Priceline Group, Inc. (a)		94		148,062
Internet Software & Services — 5.2%
Alphabet, Inc., Class A (a)		307		251,798
Alphabet, Inc., Class C (a)		322		256,566
MercadoLibre, Inc.		86		15,944
				524,308
IT Services — 13.1%
Accenture PLC, Class A		1,685		191,871
Automatic Data Processing, Inc.		958		96,748
Broadridge Financial Solutions, Inc.		218		14,504
Fiserv, Inc. (a)		386		41,468
International Business Machines Corp.		1,874		327,051
Mastercard, Inc., Class A		2,701		287,197
Paychex, Inc.		770		46,423
Visa, Inc., Class A		3,409		281,958
Western Union Co.		1,082		21,186
				1,308,406

See Notes to Financial Statements.

12 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock USA Quality Factor Index Fund

Common Stocks	Shares		Value
Leisure Products — 0.3%
Hasbro, Inc.		201	$	16,584
Polaris Industries, Inc.		137		11,518
				28,102
Life Sciences Tools & Services — 0.5%
Mettler-Toledo International, Inc. (a)		70		29,864
Waters Corp. (a)		140		19,831
				49,695
Machinery — 2.0%
Cummins, Inc.		290		42,633
Fortive Corp.		744		41,150
Illinois Tool Works, Inc.		599		76,193
Snap-on, Inc.		105		19,061
WABCO Holdings, Inc. (a)		93		10,140
Wabtec Corp.		163		14,122
				203,299
Media — 4.0%
CBS Corp., Class B		751		48,432
Omnicom Group, Inc.		479		41,027
Walt Disney Co.		2,808		310,705
				400,164
Multiline Retail — 0.4%
Dollar General Corp.		508		37,501
Personal Products — 0.4%
Estee Lauder Cos., Inc., Class A		450		36,544
Pharmaceuticals — 6.2%
Bristol-Myers Squibb Co.		2,941		144,580
Johnson & Johnson		4,194		474,970
				619,550
Professional Services — 0.4%
Equifax, Inc.		206		24,160
Robert Half International, Inc.		293		13,788
				37,948
Real Estate Investment Trusts (REITs) — 0.6%
Public Storage		287		61,705
Real Estate Management & Development — 0.1%
Jones Lang LaSalle, Inc.		78		8,036
Road & Rail — 1.7%
JB Hunt Transport Services, Inc.		177		17,537
Union Pacific Corp.		1,429		152,303
				169,840
Semiconductors & Semiconductor Equipment — 6.7%
Intel Corp.		8,082		297,579
Linear Technology Corp.		501		31,628
QUALCOMM, Inc.		2,471		132,026
Skyworks Solutions, Inc.		375		34,402
Texas Instruments, Inc.		2,023		152,817
Xilinx, Inc.		438		25,492
				673,944

Common Stocks	Shares		Value
Software — 6.1%
CDK Global, Inc.		240	$	15,012
Intuit, Inc.		630		74,705
Microsoft Corp.		8,050		520,433
				610,150
Specialty Retail — 8.2%
Advance Auto Parts, Inc.		123		20,202
Bed Bath & Beyond, Inc.		304		12,266
Dick’s Sporting Goods, Inc.		162		8,359
Foot Locker, Inc.		257		17,615
Gap, Inc.		436		10,041
Home Depot, Inc.		2,351		323,451
Lowe’s Cos., Inc.		1,655		120,947
O’Reilly Automotive, Inc. (a)		249		65,305
Ross Stores, Inc.		949		62,738
TJX Cos., Inc.		1,681		125,941
Tractor Supply Co.		279		20,554
Ulta Salon Cosmetics & Fragrance, Inc. (a)		121		32,946
				820,365
Technology Hardware, Storage & Peripherals — 5.4%
Apple, Inc.		4,414		535,639
Textiles, Apparel & Luxury Goods — 2.3%
Hanesbrands, Inc.		695		16,478
lululemon athletica, Inc. (a)		211		14,245
Michael Kors Holdings Ltd. (a)		389		16,653
NIKE, Inc., Class B		2,897		153,251
VF Corp.		662		34,080
				234,707
Trading Companies & Distributors — 0.6%
Fastenal Co.		589		29,262
W.W. Grainger, Inc.		111		28,035
				57,297
Total Long-Term Investments (Cost — $9,992,156) — 99.8%				9,994,232
Short-Term Securities
BlackRock Liquidity Funds, T-Fund, Institutional Class, 0.40% (b)(c)		6,389		6,389
Total Short-Term Securities (Cost — 6,389) — 0.1%				6,389
Total Investments (Cost — $9,998,545) — 99.9%				10,000,621
Other Assets Less Liabilities — 0.1%				6,259
Net Assets — 100.0%			$	10,006,880

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 13

Schedule of Investments (concluded) BlackRock USA Quality Factor Index Fund

Notes to Schedule of Investments

(a) Non-income producing security.

(b) During the period ended January 31, 2017, 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	Net Activity			Shares Held at January 31, 2017		Value at January 31, 2017		Income		Net Realized Gain (Loss)		Change in Unrealized Appreciation (Depreciation)
BlackRock Liquidity Funds, T-Fund, Institutional Class		6,389	1	$	6,389	$	6,389	$	3		—		—
1    Represents net shares purchased for the period December 20, 2016, the commencement of operations, to January 31, 2017.

(c) Current yield as of period end.

• 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 such sector subclassifications 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:
Common Stocks1	$	9,994,232	—	—	$	9,994,232
Short-Term Securities		6,389	—	—		6,389
Total	$	10,000,621	—	—	$	10,000,621
1   See above Schedule of Investments for values in each sector.

See Notes to Financial Statements.

14 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments January 31, 2017 (Unaudited) BlackRock USA Size Factor Index Fund (Percentages shown are based on Net Assets)

Common Stocks	Shares		Value
Aerospace & Defense — 2.5%
Arconic, Inc.		246	$	5,606
Autoliv, Inc.		148		17,118
B/E Aerospace, Inc.		158		9,712
Boeing Co.		99		16,178
Core Laboratories NV		82		9,580
General Dynamics Corp.		135		24,446
Huntington Ingalls Industries, Inc.		60		11,638
L3 Technologies, Inc.		113		17,932
Lockheed Martin Corp.		97		24,379
Northrop Grumman Corp.		93		21,304
Raytheon Co.		149		21,480
Rockwell Collins, Inc.		243		22,055
Textron, Inc.		195		9,237
TransDigm Group, Inc.		84		18,178
United Technologies Corp.		183		20,070
				248,913
Air Freight & Logistics — 0.9%
C.H. Robinson Worldwide, Inc.		243		18,482
Expeditors International of Washington, Inc.		479		24,946
FedEx Corp.		89		16,831
United Parcel Service, Inc., Class B		282		30,775
				91,034
Airlines — 0.2%
American Airlines Group, Inc.		85		3,761
Delta Air Lines, Inc.		162		7,653
Southwest Airlines Co.		156		8,160
United Continental Holdings, Inc. (a)		76		5,356
				24,930
Auto Components — 0.6%
BorgWarner, Inc.		241		9,840
Delphi Automotive PLC		152		10,649
Goodyear Tire & Rubber Co.		230		7,450
Johnson Controls International PLC		372		16,360
Lear Corp.		110		15,630
				59,929
Automobiles — 0.4%
Ford Motor Co.		1,178		14,560
General Motors Co.		358		13,106
Harley-Davidson, Inc.		137		7,814
Tesla Motors, Inc. (a)		21		5,291
				40,771
Banks — 2.8%
Bank of America Corp.		479		10,845
BB&T Corp.		448		20,693
CIT Group, Inc.		292		12,027
Citigroup, Inc.		209		11,668
Citizens Financial Group, Inc.		347		12,551
Comerica, Inc.		167		11,278
Fifth Third Bancorp		448		11,693
First Republic Bank		181		17,074
Huntington Bancshares, Inc.		1,011		13,679
JPMorgan Chase & Co.		211		17,857
KeyCorp		689		12,381
M&T Bank Corp.		144		23,410
PNC Financial Services Group, Inc.		179		21,562
Regions Financial Corp.		698		10,058
Signature Bank (a)		72		11,341
SunTrust Banks, Inc.		291		16,535
U.S. Bancorp		523		27,536
Wells Fargo & Co.		375		21,124
				283,312

Common Stocks	Shares		Value
Beverages — 1.7%
Brown-Forman Corp., Class B		523	$	23,849
Coca-Cola Co.		817		33,963
Constellation Brands, Inc., Class A		110		16,473
Dr. Pepper Snapple Group, Inc.		333		30,369
Molson Coors Brewing Co., Class B		138		13,320
Monster Beverage Corp. (a)		135		5,751
PepsiCo, Inc.		429		44,522
				168,247
Biotechnology — 0.8%
AbbVie, Inc.		145		8,861
Alexion Pharmaceuticals, Inc. (a)		44		5,750
Alkermes PLC (a)		58		3,138
Amgen, Inc.		84		13,161
Biogen, Inc. (a)		20		5,545
BioMarin Pharmaceutical, Inc. (a)		49		4,294
Celgene Corp. (a)		64		7,434
Gilead Sciences, Inc.		136		9,853
Incyte Corp. (a)		30		3,636
Regeneron Pharmaceuticals, Inc. (a)		15		5,389
Seattle Genetics, Inc. (a)		42		2,530
United Therapeutics Corp. (a)		38		6,218
Vertex Pharmaceuticals, Inc. (a)		32		2,748
				78,557
Building Products — 0.4%
AO Smith Corp.		307		14,966
Fortune Brands Home & Security, Inc.		238		13,121
Masco Corp.		386		12,719
				40,806
Capital Markets — 2.1%
Affiliated Managers Group, Inc. (a)		68		10,361
Ameriprise Financial, Inc.		83		9,318
Bank of New York Mellon Corp.		357		15,969
BlackRock, Inc.		44		16,455
Charles Schwab Corp.		206		8,495
E*Trade Financial Corp. (a)		201		7,527
Eaton Vance Corp.		275		11,531
Franklin Resources, Inc.		328		13,035
Goldman Sachs Group, Inc.		71		16,282
Invesco Ltd.		375		10,845
Morgan Stanley		230		9,773
Northern Trust Corp.		197		16,343
Raymond James Financial, Inc.		166		12,438
SEI Investments Co.		285		13,825
State Street Corp.		161		12,268
T. Rowe Price Group, Inc.		279		18,816
TD Ameritrade Holding Corp.		238		10,984
				214,265
Chemicals — 3.2%
Air Products & Chemicals, Inc.		130		18,169
Albemarle Corp.		98		9,079
Ashland Global Holdings, Inc.		216		25,710
Axalta Coating Systems Ltd. (a)		370		10,730
Celanese Corp., Series A		142		11,985
CF Industries Holdings, Inc.		149		5,258
Dow Chemical Co.		248		14,788
E.I. du Pont de Nemours & Co.		174		13,137
Eastman Chemical Co.		170		13,175
Ecolab, Inc.		220		26,429
FMC Corp.		190		11,430
International Flavors & Fragrances, Inc.		186		21,801
LyondellBasell Industries NV, Class A		106		9,887
Monsanto Co.		185		20,037
Mosaic Co.		282		8,846
PPG Industries, Inc.		199		19,902

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 15

Schedule of Investments (continued) BlackRock USA Size Factor Index Fund

Common Stocks	Shares		Value
Chemicals (continued)
Praxair, Inc.		242	$	28,663
Sherwin-Williams Co.		72		21,874
Valspar Corp.		167		18,482
WR Grace & Co.		237		16,434
				325,816
Commercial Services & Supplies — 1.5%
Cintas Corp.		223		25,893
Iron Mountain, Inc.		315		11,277
Republic Services, Inc.		749		42,978
Stericycle, Inc. (a)		149		11,494
Waste Connections, Inc.		344		27,623
Waste Management, Inc.		507		35,236
				154,501
Communications Equipment — 0.7%
Cisco Systems, Inc.		488		14,991
F5 Networks, Inc. (a)		75		10,052
Harris Corp.		150		15,407
Juniper Networks, Inc.		345		9,239
Motorola Solutions, Inc.		222		17,918
Palo Alto Networks, Inc. (a)		29		4,279
				71,886
Construction & Engineering — 0.2%
Fluor Corp.		196		10,878
Jacobs Engineering Group, Inc. (a)		163		9,544
				20,422
Construction Materials — 0.2%
Martin Marietta Materials, Inc.		34		7,806
Vulcan Materials Co.		103		13,218
				21,024
Consumer Finance — 0.8%
Ally Financial, Inc.		613		12,947
American Express Co.		231		17,644
Capital One Financial Corp.		175		15,293
Discover Financial Services		251		17,389
Navient Corp.		338		5,084
Synchrony Financial		343		12,286
				80,643
Containers & Packaging — 0.9%
Avery Dennison Corp.		269		19,642
Ball Corp.		253		19,294
Crown Holdings, Inc. (a)		340		18,418
Packaging Corp. of America		124		11,430
Sealed Air Corp.		287		13,920
WestRock Co.		176		9,391
				92,095
Distributors — 0.3%
Genuine Parts Co.		220		21,298
LKQ Corp. (a)		350		11,169
				32,467
Diversified Consumer Services — 0.1%
H&R Block, Inc.		401		8,605
Diversified Financial Services — 1.7%
Berkshire Hathaway, Inc., Class B (a)		260		42,677
CME Group, Inc.		152		18,404
Intercontinental Exchange, Inc.		318		18,559
Leucadia National Corp.		612		14,596
Moody’s Corp.		145		15,032
MSCI, Inc.		220		18,205
Nasdaq, Inc.		295		20,809
S&P Global, Inc.		133		15,984

Common Stocks	Shares		Value
Diversified Financial Services (continued)
Voya Financial, Inc.		283	$	11,382
				175,648
Diversified Telecommunication Services — 1.2%
AT&T, Inc.		884		37,269
CenturyLink, Inc.		409		10,577
Frontier Communications Corp.		1,214		4,237
Level 3 Communications, Inc. (a)		169		10,049
SBA Communications Corp. (a)		154		16,210
Verizon Communications, Inc.		646		31,660
Zayo Group Holdings, Inc. (a)		184		5,881
				115,883
Electric Utilities — 3.8%
American Electric Power Co., Inc.		453		29,019
Duke Energy Corp.		406		31,887
Edison International		397		28,933
Entergy Corp.		365		26,149
Eversource Energy		527		29,154
Exelon Corp.		446		16,002
FirstEnergy Corp.		510		15,463
NextEra Energy, Inc.		248		30,683
OGE Energy Corp.		615		20,627
Pinnacle West Capital Corp.		369		28,645
PPL Corp.		697		24,284
Southern Co.		747		36,924
Westar Energy, Inc.		453		24,775
Xcel Energy, Inc.		854		35,287
				377,832
Electrical Equipment — 0.8%
Acuity Brands, Inc.		30		6,217
AMETEK, Inc.		395		20,184
Eaton Corp. PLC		159		11,254
Emerson Electric Co.		250		14,665
Rockwell Automation, Inc.		104		15,391
Sensata Technologies Holding NV (a)		403		16,906
				84,617
Electronic Equipment, Instruments & Components — 1.3%
Amphenol Corp., Class A		325		21,934
Arrow Electronics, Inc. (a)		186		13,675
Avnet, Inc.		340		15,790
CDW Corp.		248		12,774
Corning, Inc.		602		15,947
Flex Ltd. (a)		1,127		17,660
FLIR Systems, Inc.		293		10,352
TE Connectivity Ltd.		253		18,811
Trimble, Inc. (a)		207		6,131
				133,074
Energy Equipment & Services — 0.6%
Baker Hughes, Inc.		117		7,380
Halliburton Co.		155		8,768
Helmerich & Payne, Inc.		64		4,554
National Oilwell Varco, Inc.		161		6,088
Schlumberger Ltd.		163		13,645
TechnipFMC PLC (a)		401		13,482
Weatherford International PLC (a)		392		2,042
				55,959
Equity Real Estate Investment Trusts (REITs) — 0.4%
Colony NorthStar, Inc., Class A		2,514		34,995
Food & Staples Retailing — 1.5%
Costco Wholesale Corp.		200		32,790
CVS Health Corp.		337		26,559
Kroger Co.		496		16,844
Rite Aid Corp. (a)		548		3,080

See Notes to Financial Statements.

16 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock USA Size Factor Index Fund

Common Stocks	Shares		Value
Food & Staples Retailing (continued)
Sysco Corp.		477	$	25,024
Wal-Mart Stores, Inc.		360		24,026
Walgreens Boots Alliance, Inc.		163		13,356
Whole Foods Market, Inc.		249		7,525
				149,204
Food Products — 3.1%
Archer-Daniels-Midland Co.		267		11,817
Bunge Ltd.		238		16,472
Campbell Soup Co.		410		25,514
Conagra Brands, Inc.		506		19,780
General Mills, Inc.		541		33,802
Hershey Co.		216		22,782
Hormel Foods Corp.		541		19,638
Ingredion, Inc.		155		19,870
J.M. Smucker Co.		176		23,910
Kellogg Co.		461		33,519
Kraft Heinz Co.		87		7,768
McCormick & Co., Inc.		278		26,563
Mead Johnson Nutrition Co.		256		18,038
Mondelez International, Inc., Class A		379		16,782
Tyson Foods, Inc., Class A		170		10,674
WhiteWave Foods Co. (a)		173		9,525
				316,454
Gas Utilities — 0.6%
Atmos Energy Corp.		392		29,863
UGI Corp.		563		26,106
				55,969
Health Care Equipment & Supplies — 3.5%
Abbott Laboratories		622		25,981
Align Technology, Inc. (a)		84		7,702
Baxter International, Inc.		530		25,392
Becton Dickinson & Co.		156		27,657
Boston Scientific Corp. (a)		593		14,268
C.R. Bard, Inc.		115		27,293
Cooper Cos., Inc.		98		18,092
Dentsply Sirona, Inc.		320		18,144
DexCom, Inc. (a)		59		4,670
Edwards Lifesciences Corp. (a)		94		9,047
Hologic, Inc. (a)		398		16,131
IDEXX Laboratories, Inc. (a)		91		11,132
Intuitive Surgical, Inc. (a)		16		11,083
Medtronic PLC		296		22,502
ResMed, Inc.		231		15,602
Stryker Corp.		240		29,647
Teleflex, Inc.		149		24,992
Varex Imaging Corp. (a)		1		17
Varian Medical Systems, Inc. (a)		314		24,382
Zimmer Biomet Holdings, Inc.		156		18,459
				352,193
Health Care Providers & Services — 3.2%
Aetna, Inc.		115		13,640
AmerisourceBergen Corp.		200		17,456
Anthem, Inc.		116		17,880
Cardinal Health, Inc.		270		20,239
Centene Corp. (a)		116		7,339
Cigna Corp.		90		13,160
DaVita, Inc. (a)		353		22,504
Envision Healthcare Corp. (a)		196		13,328
Express Scripts Holding Co. (a)		235		16,187
HCA Holdings, Inc. (a)		171		13,728
Henry Schein, Inc. (a)		182		29,095
Humana, Inc.		45		8,933
Laboratory Corp. of America Holdings (a)		160		21,474
McKesson Corp.		79		10,993

Common Stocks	Shares		Value
Health Care Providers & Services (continued)
MEDNAX, Inc. (a)		266	$	18,181
Patterson Cos., Inc.		504		20,971
Quest Diagnostics, Inc.		237		21,785
UnitedHealth Group, Inc.		144		23,342
Universal Health Services, Inc., Class B		110		12,389
				322,624
Health Care Technology — 0.1%
Cerner Corp. (a)		253		13,589
Hotels, Restaurants & Leisure — 2.1%
Aramark		212		7,174
Carnival Corp.		283		15,673
Chipotle Mexican Grill, Inc. (a)		19		8,007
Darden Restaurants, Inc.		271		19,859
Domino’s Pizza, Inc.		80		13,963
Hilton Worldwide Holdings, Inc.		89		5,124
Las Vegas Sands Corp.		121		6,362
Marriott International, Inc., Class A		193		16,328
McDonald’s Corp.		275		33,707
MGM Resorts International (a)		254		7,315
Norwegian Cruise Line Holdings Ltd. (a)		220		10,340
Royal Caribbean Cruises Ltd.		85		7,959
Starbucks Corp.		353		19,493
Wyndham Worldwide Corp.		227		17,947
Wynn Resorts Ltd.		43		4,361
Yum! Brands, Inc.		250		16,382
				209,994
Household Durables — 1.3%
D.R. Horton, Inc.		334		9,990
Garmin Ltd.		186		8,982
Harman International Industries, Inc.		42		4,669
Leggett & Platt, Inc.		471		22,476
Lennar Corp., Class A		271		12,100
Mohawk Industries, Inc. (a)		93		20,073
Newell Brands, Inc.		383		18,128
PulteGroup, Inc.		608		13,078
Toll Brothers, Inc. (a)		425		13,328
Whirlpool Corp.		61		10,668
				133,492
Household Products — 2.3%
Church & Dwight Co., Inc.		883		39,929
Clorox Co.		383		45,960
Colgate-Palmolive Co.		668		43,140
Kimberly-Clark Corp.		307		37,187
Procter & Gamble Co.		499		43,712
Spectrum Brands Holdings, Inc.		159		21,209
				231,137
Independent Power and Renewable Electricity Producers — 0.2%
AES Corp.		872		9,975
Calpine Corp. (a)		556		6,561
				16,536
Industrial Conglomerates — 1.3%
3M Co.		161		28,146
Danaher Corp.		384		32,225
General Electric Co.		582		17,285
Honeywell International, Inc.		206		24,374
Roper Technologies, Inc.		129		24,749
				126,779
Insurance — 8.2%
Aflac, Inc.		420		29,396
Alleghany Corp. (a)		17		10,397
Allstate Corp.		561		42,193
American International Group, Inc.		367		23,583

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 17

Schedule of Investments (continued) BlackRock USA Size Factor Index Fund

Common Stocks	Shares		Value
Insurance (continued)
Aon PLC		236	$	26,597
Arch Capital Group Ltd. (a)		563		49,741
Arthur J. Gallagher & Co.		654		35,205
Assurant, Inc.		245		23,797
Axis Capital Holdings Ltd.		678		43,399
Chubb Ltd.		343		45,101
Cincinnati Financial Corp.		504		35,572
FNF Group		713		25,212
Hartford Financial Services Group, Inc.		502		24,452
Lincoln National Corp.		152		10,261
Loews Corp.		771		35,913
Markel Corp. (a)		46		42,550
Marsh & McLennan Cos., Inc.		508		34,554
MetLife, Inc.		177		9,631
Principal Financial Group, Inc.		246		14,044
Progressive Corp.		1,007		37,702
Prudential Financial, Inc.		132		13,874
Reinsurance Group of America, Inc.		240		30,113
Torchmark Corp.		463		34,049
Travelers Cos., Inc.		338		39,810
Unum Group		292		13,266
W.R. Berkley Corp.		627		42,141
Willis Towers Watson PLC		203		25,401
XL Group Ltd.		752		28,253
				826,207
Internet & Direct Marketing Retail — 0.4%
Amazon.com, Inc. (a)		10		8,235
Expedia, Inc.		64		7,781
Liberty Interactive Corp. QVC Group, Series A (a)		499		9,571
Netflix, Inc. (a)		21		2,955
Priceline Group, Inc. (a)		6		9,451
TripAdvisor, Inc. (a)		69		3,650
				41,643
Internet Software & Services — 1.0%
Akamai Technologies, Inc. (a)		100		6,859
Alphabet, Inc., Class A (a)		16		13,123
Alphabet, Inc., Class C (a)		8		6,374
CoStar Group, Inc. (a)		46		9,297
eBay, Inc. (a)		391		12,446
Facebook, Inc., Class A (a)		87		11,338
MercadoLibre, Inc.		34		6,303
Twitter, Inc. (a)		104		1,832
VeriSign, Inc. (a)		161		12,914
Yahoo!, Inc. (a)		202		8,902
Zillow Group, Inc., Class C (a)		206		7,288
				96,676
IT Services — 3.6%
Accenture PLC, Class A		170		19,358
Alliance Data Systems Corp.		45		10,277
Automatic Data Processing, Inc.		283		28,580
Broadridge Financial Solutions, Inc.		347		23,086
Cognizant Technology Solutions Corp., Class A (a)		208		10,939
Computer Sciences Corp.		105		6,531
Fidelity National Information Services, Inc.		299		23,747
First Data Corp., Class A (a)		341		5,231
Fiserv, Inc. (a)		244		26,213
FleetCor Technologies, Inc. (a)		65		9,587
Gartner, Inc. (a)		143		14,208
Global Payments, Inc.		221		17,079
International Business Machines Corp.		128		22,339
Mastercard, Inc., Class A		188		19,990
Paychex, Inc.		459		27,673
PayPal Holdings, Inc. (a)		146		5,808
Sabre Corp.		240		5,880

Common Stocks	Shares		Value
IT Services (continued)
Total System Services, Inc.		339	$	17,180
Vantiv, Inc., Class A (a)		292		18,174
Visa, Inc., Class A		282		23,324
Western Union Co.		788		15,429
Xerox Corp.		1,212		8,399
				359,032
Leisure Products — 0.3%
Hasbro, Inc.		187		15,429
Mattel, Inc.		265		6,946
Polaris Industries, Inc.		93		7,818
				30,193
Life Sciences Tools & Services — 1.1%
Agilent Technologies, Inc.		382		18,707
Illumina, Inc. (a)		32		5,123
Mettler-Toledo International, Inc. (a)		55		23,465
Quintiles IMS Holdings, Inc. (a)		211		16,561
Thermo Fisher Scientific, Inc.		149		22,706
Waters Corp. (a)		141		19,973
				106,535
Machinery — 2.6%
AGCO Corp.		234		14,695
Caterpillar, Inc.		126		12,053
Cummins, Inc.		95		13,966
Deere & Co.		185		19,804
Dover Corp.		181		14,073
Flowserve Corp.		174		8,554
Fortive Corp.		129		7,135
Illinois Tool Works, Inc.		179		22,769
Ingersoll-Rand PLC		193		15,315
Middleby Corp. (a)		65		8,722
PACCAR, Inc.		233		15,683
Parker Hannifin Corp.		91		13,389
Pentair PLC		167		9,791
Snap-on, Inc.		109		19,787
Stanley Black & Decker, Inc.		196		24,304
WABCO Holdings, Inc. (a)		106		11,557
Wabtec Corp.		131		11,350
Xylem, Inc.		295		14,546
				257,493
Media — 3.6%
CBS Corp., Class B		223		14,381
Charter Communications, Inc., Class A (a)		61		19,761
Comcast Corp., Class A		284		21,419
Discovery Communications, Inc., Class A (a)		268		7,598
Discovery Communications, Inc., Class C (a)		475		13,162
DISH Network Corp., Class A (a)		183		10,828
IHS Markit Ltd. (a)		547		21,579
Interpublic Group of Cos., Inc.		822		19,342
Liberty Broadband Corp., Class C (a)		146		12,459
Liberty Global PLC, Class A (a)		362		13,206
Liberty Global PLC, Class C (a)		423		14,860
Liberty Global PLC LiLAC, Class C (a)		265		5,915
Liberty Media Corp. — Liberty SiriusXM, Class A (a)		513		18,591
Liberty Media Corp. — Liberty SiriusXM, Class C (a)		266		9,547
News Corp., Class A		937		11,516
Omnicom Group, Inc.		333		28,521
Scripps Networks Interactive, Inc., Class A		173		13,176
Sirius XM Holdings, Inc.		5,135		24,237
TEGNA, Inc.		348		7,973
Time Warner, Inc.		114		11,041
Twenty-First Century Fox, Inc., Class A		482		15,125
Twenty-First Century Fox, Inc., Class B		777		24,095
Viacom, Inc., Class B		148		6,237
Walt Disney Co.		197		21,798
				366,367

See Notes to Financial Statements.

18 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock USA Size Factor Index Fund

Common Stocks	Shares		Value
Metals & Mining — 0.2%
Freeport-McMoRan, Inc. (a)		89	$	1,482
Newmont Mining Corp.		122		4,426
Nucor Corp.		176		10,224
				16,132
Multi-Utilities — 3.3%
Alliant Energy Corp.		695		26,167
Ameren Corp.		471		24,798
CenterPoint Energy, Inc.		975		25,555
CMS Energy Corp.		639		27,221
Consolidated Edison, Inc.		416		30,930
Dominion Resources, Inc.		365		27,842
DTE Energy Co.		307		30,282
NiSource, Inc.		831		18,589
PG&E Corp.		398		24,632
Public Service Enterprise Group, Inc.		479		21,196
SCANA Corp.		365		25,076
Sempra Energy		251		25,700
WEC Energy Group, Inc.		467		27,576
				335,564
Multiline Retail — 0.6%
Dollar General Corp.		151		11,147
Dollar Tree, Inc. (a)		156		12,042
Kohl’s Corp.		127		5,058
Macy’s, Inc.		199		5,878
Nordstrom, Inc.		137		6,058
Target Corp.		243		15,669
				55,852
Oil, Gas & Consumable Fuels — 2.5%
Anadarko Petroleum Corp.		70		4,867
Antero Resources Corp. (a)		238		5,810
Apache Corp.		79		4,726
Cabot Oil & Gas Corp.		350		7,518
Cheniere Energy, Inc. (a)		108		5,146
Chevron Corp.		149		16,591
Cimarex Energy Co.		61		8,248
Concho Resources, Inc. (a)		51		7,111
ConocoPhillips		156		7,606
Continental Resources, Inc. (a)		53		2,574
Devon Energy Corp.		81		3,689
Diamondback Energy, Inc. (a)		66		6,941
EOG Resources, Inc.		103		10,463
EQT Corp.		164		9,943
Exxon Mobil Corp.		275		23,070
Hess Corp.		110		5,960
HollyFrontier Corp.		228		6,605
Kinder Morgan, Inc.		245		5,473
Marathon Oil Corp.		155		2,596
Marathon Petroleum Corp.		123		5,910
Murphy Oil Corp.		102		2,949
Newfield Exploration Co. (a)		91		3,647
Noble Energy, Inc.		160		6,362
Occidental Petroleum Corp.		218		14,774
ONEOK, Inc.		89		4,905
Parsley Energy, Inc., Class A (a)		109		3,839
Phillips 66		135		11,019
Pioneer Natural Resources Co.		47		8,471
Plains GP Holdings LP, Class A		79		2,563
Range Resources Corp.		100		3,234
Southwestern Energy Co. (a)		216		1,946
Spectra Energy Corp.		274		11,412
Targa Resources Corp.		45		2,593
Tesoro Corp.		91		7,357
Valero Energy Corp.		137		9,009
Williams Cos., Inc.		108		3,115
				248,042

Common Stocks	Shares		Value
Paper & Forest Products — 0.2%
International Paper Co.		361	$	20,433
Personal Products — 0.4%
Coty, Inc., Class A		338		6,490
Edgewell Personal Care Co. (a)		185		14,585
Estee Lauder Cos., Inc., Class A		280		22,739
				43,814
Pharmaceuticals — 1.7%
Allergan PLC (a)		44		9,631
Bristol-Myers Squibb Co.		219		10,766
Eli Lilly & Co.		234		18,025
Endo International PLC (a)		100		1,224
Jazz Pharmaceuticals PLC (a)		71		8,656
Johnson & Johnson		348		39,411
Mallinckrodt PLC (a)		57		2,778
Merck & Co., Inc.		365		22,626
Mylan NV (a)		143		5,441
Perrigo Co. PLC		83		6,321
Pfizer, Inc.		690		21,894
Zoetis, Inc.		410		22,525
				169,298
Professional Services — 1.0%
Dun & Bradstreet Corp.		121		14,837
Equifax, Inc.		200		23,456
ManpowerGroup, Inc.		134		12,792
Nielsen Holdings PLC		386		15,791
Robert Half International, Inc.		255		12,000
Verisk Analytics, Inc. (a)		280		23,139
				102,015
Real Estate Investment Trusts (REITs) — 8.3%
AGNC Investment Corp.		1,856		34,651
Alexandria Real Estate Equities, Inc.		219		24,270
American Tower Corp.		225		23,287
Annaly Capital Management, Inc.		3,293		33,654
AvalonBay Communities, Inc.		175		30,329
Boston Properties, Inc.		216		28,274
Brixmor Property Group, Inc.		853		20,583
Camden Property Trust		321		26,826
Crown Castle International Corp.		292		25,646
Digital Realty Trust, Inc.		222		23,894
Duke Realty Corp.		878		21,362
Equinix, Inc.		54		20,789
Equity Residential		447		27,164
Essex Property Trust, Inc.		116		26,019
Extra Space Storage, Inc.		241		17,364
Federal Realty Investment Trust		247		34,686
GGP, Inc.		731		18,158
HCP, Inc.		349		10,582
Host Hotels & Resorts, Inc.		756		13,661
Kimco Realty Corp.		847		21,082
Liberty Property Trust		538		20,654
Macerich Co.		243		16,692
Mid-America Apartment Communities, Inc.		517		49,089
National Retail Properties, Inc.		492		21,451
Prologis, Inc.		421		20,566
Public Storage		116		24,940
Realty Income Corp.		312		18,605
Regency Centers Corp.		404		28,171
Simon Property Group, Inc.		155		28,484
SL Green Realty Corp.		170		18,525
UDR, Inc.		728		25,444
Ventas, Inc.		259		15,972
VEREIT, Inc.		1,029		8,777
Vornado Realty Trust		235		24,983
Welltower, Inc.		242		16,045

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 19

Schedule of Investments (continued) BlackRock USA Size Factor Index Fund

Common Stocks	Shares		Value
Real Estate Investment Trusts (REITs) (continued)
Weyerhaeuser Co.		421	$	13,190
				833,869
Real Estate Management & Development — 0.2%
CBRE Group, Inc., Class A (a)		384		11,658
Jones Lang LaSalle, Inc.		90		9,273
				20,931
Road & Rail — 0.8%
AMERCO, Inc.		42		15,820
CSX Corp.		311		14,427
JB Hunt Transport Services, Inc.		192		19,024
Kansas City Southern		101		8,677
Norfolk Southern Corp.		109		12,803
Union Pacific Corp.		129		13,749
				84,500
Semiconductors & Semiconductor Equipment — 1.7%
Analog Devices, Inc.		191		14,314
Applied Materials, Inc.		279		9,556
Broadcom Ltd.		37		7,381
Intel Corp.		372		13,697
KLA-Tencor Corp.		133		11,320
Lam Research Corp.		106		12,175
Linear Technology Corp.		206		13,005
Marvell Technology Group Ltd.		659		9,799
Maxim Integrated Products, Inc.		255		11,342
Microchip Technology, Inc.		196		13,201
Micron Technology, Inc. (a)		183		4,412
NVIDIA Corp.		53		5,787
Qorvo, Inc. (a)		49		3,146
QUALCOMM, Inc.		157		8,388
Skyworks Solutions, Inc.		65		5,963
Texas Instruments, Inc.		200		15,108
Xilinx, Inc.		213		12,397
				170,991
Software — 2.7%
Activision Blizzard, Inc.		240		9,650
Adobe Systems, Inc. (a)		135		15,306
ANSYS, Inc. (a)		226		21,077
Autodesk, Inc. (a)		95		7,727
CA, Inc.		638		19,950
Cadence Design Systems, Inc. (a)		707		18,403
CDK Global, Inc.		119		7,444
Citrix Systems, Inc. (a)		158		14,408
Dell Technologies, Inc., Class V (a)		120		7,559
Electronic Arts, Inc. (a)		98		8,176
Fortinet, Inc. (a)		213		7,084
Intuit, Inc.		161		19,091
Microsoft Corp.		223		14,417
Nuance Communications, Inc. (a)		373		5,916
Oracle Corp.		439		17,608
Red Hat, Inc. (a)		130		9,864
salesforce.com, Inc. (a)		118		9,334
ServiceNow, Inc. (a)		62		5,619
Splunk, Inc. (a)		45		2,604
Symantec Corp.		485		13,362
Synopsys, Inc. (a)		422		26,540
VMware, Inc., Class A (a)		122		10,680
Workday, Inc., Class A (a)		53		4,404
				276,223
Specialty Retail — 2.5%
Advance Auto Parts, Inc.		74		12,154
AutoNation, Inc. (a)		255		13,546
AutoZone, Inc. (a)		40		28,999
Bed Bath & Beyond, Inc.		326		13,154

Common Stocks	Shares		Value
Specialty Retail (continued)
Best Buy Co., Inc.		105	$	4,675
CarMax, Inc. (a)		140		9,339
Dick’s Sporting Goods, Inc.		192		9,907
Foot Locker, Inc.		180		12,337
Gap, Inc.		245		5,642
Home Depot, Inc.		188		25,865
L Brands, Inc.		161		9,694
Lowe’s Cos., Inc.		287		20,974
O’Reilly Automotive, Inc. (a)		59		15,474
Ross Stores, Inc.		217		14,346
Signet Jewelers Ltd.		85		6,602
Staples, Inc.		589		5,419
Tiffany & Co.		142		11,178
TJX Cos., Inc.		257		19,254
Tractor Supply Co.		124		9,135
Ulta Salon Cosmetics & Fragrance, Inc. (a)		31		8,441
				256,135
Technology Hardware, Storage & Peripherals — 0.5%
Apple, Inc.		94		11,407
Hewlett Packard Enterprise Co.		272		6,169
HP, Inc.		560		8,428
NetApp, Inc.		206		7,894
Seagate Technology PLC		96		4,334
Western Digital Corp.		86		6,857
				45,089
Textiles, Apparel & Luxury Goods — 0.8%
Coach, Inc.		276		10,308
Hanesbrands, Inc.		391		9,271
lululemon athletica, Inc. (a)		90		6,076
Michael Kors Holdings Ltd. (a)		105		4,495
NIKE, Inc., Class B		330		17,457
PVH Corp.		88		8,255
Ralph Lauren Corp.		69		6,102
Under Armour, Inc., Class A (a)		183		3,933
Under Armour, Inc., Class C (a)		250		4,805
VF Corp.		267		13,745
				84,447
Thrifts & Mortgage Finance — 0.5%
New York Community Bancorp, Inc.		1,433		21,767
People’s United Financial, Inc.		1,398		26,213
				47,980
Tobacco — 0.8%
Altria Group, Inc.		445		31,675
Philip Morris International, Inc.		310		29,800
Reynolds American, Inc.		328		19,723
				81,198
Trading Companies & Distributors — 0.4%
Fastenal Co.		343		17,040
United Rentals, Inc. (a)		42		5,314
W.W. Grainger, Inc.		86		21,721
				44,075
Transportation Infrastructure — 0.2%
Macquarie Infrastructure Corp.		223		16,723
Water Utilities — 0.3%
American Water Works Co., Inc.		445		32,681
Wireless Telecommunication Services — 0.1%
Sprint Corp. (a)		298		2,750
T-Mobile U.S., Inc. (a)		184		11,458
				14,208
Total Long-Term Investments (Cost — $9,989,148) — 99.8%				10,048,548

See Notes to Financial Statements.

20 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (concluded) BlackRock USA Size Factor Index Fund

Short-Term Securities	Shares		Value
BlackRock Liquidity Funds, T-Fund, Institutional Class, 0.40% (b)(c)		9,619	$	9,619
Total Short-Term Securities (Cost — 9,619) — 0.1%				9,619
Total Investments (Cost — $9,998,767) — 99.9%				10,058,167
Other Assets Less Liabilities — 0.1%				9,135
Net Assets — 100.0%			$	10,067,302

Notes to Schedule of Investments

(a) Non-income producing security.

(b) During the period ended January 31, 2017, 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	Net Activity			Shares Held at January 31, 2017		Value at January 31, 2017		Income		Net Realized Gain (Loss)		Change in Unrealized Appreciation (Depreciation)
BlackRock Liquidity Funds, T-Fund, Institutional Class		9,619	1	$	9,619	$	9,619	$	8		—		—
1    Represents net shares purchased for the period December 20, 2016, the commencement of operations, to January 31, 2017.

(c) Current yield as of period end.

• 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 such sector subclassifications 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:
Common Stocks1	$	10,048,548	—	—	$	10,048,548
Short-Term Securities		9,619	—	—		9,619
Total	$	10,058,167	—	—	$	10,058,167
1   See above Schedule of Investments for values in each sector.

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 21

Schedule of Investments January 31, 2017 (Unaudited) BlackRock USA Value Factor Index Fund (Percentages shown are based on Net Assets)

Common Stocks	Shares		Value
Aerospace & Defense — 1.2%
Arconic, Inc.		1,215	$	27,690
L3 Technologies, Inc.		590		93,627
				121,317
Airlines — 3.3%
American Airlines Group, Inc.		1,446		63,985
Delta Air Lines, Inc.		2,449		115,691
Southwest Airlines Co.		1,528		79,930
United Continental Holdings, Inc. (a)		1,035		72,936
				332,542
Auto Components — 0.9%
BorgWarner, Inc.		391		15,965
Goodyear Tire & Rubber Co.		1,075		34,819
Lear Corp.		255		36,233
				87,017
Automobiles — 5.7%
Ford Motor Co.		18,804		232,417
General Motors Co.		9,221		337,581
				569,998
Banks — 8.6%
Bank of America Corp.		13,024		294,863
CIT Group, Inc.		255		10,503
Citigroup, Inc.		4,019		224,381
Citizens Financial Group, Inc.		601		21,738
JPMorgan Chase & Co.		2,887		244,327
KeyCorp		820		14,735
Regions Financial Corp.		1,349		19,439
SunTrust Banks, Inc.		403		22,899
				852,885
Biotechnology — 2.9%
Gilead Sciences, Inc.		3,842		278,353
United Therapeutics Corp. (a)		73		11,945
				290,298
Capital Markets — 1.4%
Goldman Sachs Group, Inc.		349		80,032
Morgan Stanley		1,379		58,594
				138,626
Chemicals — 2.0%
Celanese Corp., Series A		172		14,517
CF Industries Holdings, Inc.		336		11,857
Dow Chemical Co.		860		51,282
Eastman Chemical Co.		250		19,375
LyondellBasell Industries NV, Class A		758		70,699
Mosaic Co.		845		26,507
				194,237
Commercial Services & Supplies — 0.3%
Iron Mountain, Inc.		949		33,974
Communications Equipment — 3.6%
Cisco Systems, Inc.		10,978		337,244
Juniper Networks, Inc.		660		17,675
				354,919
Construction & Engineering — 1.0%
Fluor Corp.		601		33,356
Jacobs Engineering Group, Inc. (a)		1,206		70,611
				103,967
Consumer Finance — 0.7%
Ally Financial, Inc.		728		15,375
Capital One Financial Corp.		609		53,221
Navient Corp.		379		5,700
				74,296

Common Stocks	Shares		Value
Containers & Packaging — 0.2%
WestRock Co.		441	$	23,532
Diversified Financial Services — 0.1%
Voya Financial, Inc.		350		14,077
Diversified Telecommunication Services — 2.7%
AT&T, Inc.		5,863		247,184
CenturyLink, Inc.		816		21,102
				268,286
Electric Utilities — 2.4%
Entergy Corp.		648		46,423
Exelon Corp.		4,146		148,758
FirstEnergy Corp.		1,384		41,963
				237,144
Electronic Equipment, Instruments & Components — 1.4%
Arrow Electronics, Inc. (a)		273		20,071
Avnet, Inc.		340		15,790
Corning, Inc.		3,033		80,344
Flex Ltd. (a)		1,384		21,687
				137,892
Energy Equipment & Services — 0.4%
Helmerich & Payne, Inc.		223		15,869
National Oilwell Varco, Inc.		636		24,047
				39,916
Food & Staples Retailing — 5.4%
CVS Health Corp.		1,209		95,281
Kroger Co.		2,838		96,379
Wal-Mart Stores, Inc.		4,756		317,415
Whole Foods Market, Inc.		785		23,723
				532,798
Food Products — 3.4%
Archer-Daniels-Midland Co.		3,586		158,716
Bunge Ltd.		750		51,908
Ingredion, Inc.		102		13,075
J.M. Smucker Co.		246		33,419
Tyson Foods, Inc., Class A		1,279		80,309
				337,427
Health Care Providers & Services — 5.2%
Aetna, Inc.		742		88,009
AmerisourceBergen Corp.		371		32,381
Anthem, Inc.		688		106,048
Cardinal Health, Inc.		593		44,451
Centene Corp. (a)		354		22,397
Cigna Corp.		436		63,752
Express Scripts Holding Co. (a)		1,203		82,863
McKesson Corp.		271		37,710
Quest Diagnostics, Inc.		226		20,774
Universal Health Services, Inc., Class B		131		14,754
				513,139
Hotels, Restaurants & Leisure — 0.7%
Carnival Corp.		1,220		67,564
Household Durables — 0.6%
Toll Brothers, Inc. (a)		366		11,478
Whirlpool Corp.		253		44,247
				55,725
Independent Power and Renewable Electricity Producers — 0.1%
AES Corp.		1,205		13,785
Insurance — 3.3%
Aflac, Inc.		291		20,367
American International Group, Inc.		1,245		80,004
Assurant, Inc.		43		4,177

See Notes to Financial Statements.

22 BLACKROCK FUNDS JANUARY 31, 2017

Schedule of Investments (continued) BlackRock USA Value Factor Index Fund

Common Stocks	Shares		Value
Insurance (continued)
Axis Capital Holdings Ltd.		72	$	4,609
Hartford Financial Services Group, Inc.		356		17,341
Lincoln National Corp.		363		24,506
Loews Corp.		268		12,483
MetLife, Inc.		1,411		76,772
Prudential Financial, Inc.		636		66,850
Unum Group		266		12,084
XL Group Ltd.		296		11,121
				330,314
IT Services — 0.2%
Xerox Corp.		2,883		19,979
Machinery — 1.4%
AGCO Corp.		810		50,868
Cummins, Inc.		631		92,763
				143,631
Media — 0.7%
Liberty Global PLC LiLAC, Class C (a)		127		2,835
News Corp., Class A		2,234		27,456
TEGNA, Inc.		538		12,326
Viacom, Inc., Class B		632		26,632
				69,249
Metals & Mining — 0.6%
Newmont Mining Corp.		914		33,160
Nucor Corp.		407		23,643
				56,803
Multi-Utilities — 0.6%
Public Service Enterprise Group, Inc.		1,441		63,764
Multiline Retail — 1.8%
Kohl’s Corp.		831		33,099
Macy’s, Inc.		1,065		31,460
Nordstrom, Inc.		300		13,266
Target Corp.		1,504		96,978
				174,803
Oil, Gas & Consumable Fuels — 6.6%
Chevron Corp.		3,156		351,421
Devon Energy Corp.		760		34,611
HollyFrontier Corp.		405		11,733
Marathon Oil Corp.		1,799		30,133
Marathon Petroleum Corp.		821		39,449
Murphy Oil Corp.		401		11,593
Phillips 66		715		58,358
Plains GP Holdings LP, Class A		112		3,634
Southwestern Energy Co. (a)		889		8,010
Tesoro Corp.		195		15,766
Valero Energy Corp.		1,370		90,091
				654,799
Paper & Forest Products — 0.3%
International Paper Co.		573		32,432
Pharmaceuticals — 5.5%
Allergan PLC (a)		596		130,458
Endo International PLC (a)		693		8,482
Mallinckrodt PLC (a)		324		15,789
Mylan NV (a)		1,124		42,768
Perrigo Co. PLC		230		17,515
Pfizer, Inc.		10,419		330,595
				545,607
Professional Services — 0.1%
ManpowerGroup, Inc.		92		8,782
Real Estate Investment Trusts (REITs) — 2.6%
AGNC Investment Corp.		395		7,375

Common Stocks	Shares		Value
Real Estate Investment Trusts (REITs) (continued)
Annaly Capital Management, Inc.		1,165	$	11,906
Host Hotels & Resorts, Inc.		4,974		89,880
Liberty Property Trust		508		19,502
VEREIT, Inc.		4,375		37,319
Weyerhaeuser Co.		3,083		96,590
				262,572
Real Estate Management & Development — 0.2%
Jones Lang LaSalle, Inc.		153		15,764
Road & Rail — 2.1%
AMERCO, Inc.		10		3,767
Norfolk Southern Corp.		1,721		202,148
				205,915
Semiconductors & Semiconductor Equipment — 4.9%
Intel Corp.		9,841		362,346
Lam Research Corp.		160		18,378
Marvell Technology Group Ltd.		1,023		15,212
Micron Technology, Inc. (a)		3,246		78,261
Qorvo, Inc. (a)		268		17,208
				491,405
Software — 0.5%
CA, Inc.		615		19,231
Nuance Communications, Inc. (a)		283		4,488
Symantec Corp.		1,079		29,727
				53,446
Specialty Retail — 1.7%
Bed Bath & Beyond, Inc.		566		22,838
Best Buy Co., Inc.		1,449		64,509
Dick’s Sporting Goods, Inc.		220		11,352
Foot Locker, Inc.		330		22,618
Gap, Inc.		870		20,036
Staples, Inc.		3,483		32,044
				173,397
Technology Hardware, Storage & Peripherals — 11.1%
Apple, Inc.		6,879		834,766
Hewlett Packard Enterprise Co.		3,510		79,607
HP, Inc.		4,334		65,227
NetApp, Inc.		870		33,338
Seagate Technology PLC		832		37,565
Western Digital Corp.		656		52,303
				1,102,806
Textiles, Apparel & Luxury Goods — 0.3%
Michael Kors Holdings Ltd. (a)		196		8,391
PVH Corp.		197		18,480
				26,871
Trading Companies & Distributors — 1.0%
United Rentals, Inc. (a)		754		95,389
Total Long-Term Investments (Cost — $9,985,696) — 99.7%				9,923,089
Short-Term Securities
BlackRock Liquidity Funds, T-Fund, Institutional Class, 0.40% (b)(c)		18,887		18,887
Total Short-Term Securities (Cost — 18,887) — 0.2%				18,887
Total Investments (Cost — $10,004,583) — 99.9%				9,941,976
Other Assets Less Liabilities — 0.1%				6,688
Net Assets — 100.0%			$	9,948,664

See Notes to Financial Statements.

BLACKROCK FUNDS JANUARY 31, 2017 23

Schedule of Investments (concluded) BlackRock USA Value Factor Index Fund

Notes to Schedule of Investments

(a) Non-income producing security.

(b) During the period ended January 31, 2017, 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	Net Activity			Shares Held at January 31, 2017		Value at January 31, 2017		Income		Net Realized Gain (Loss)	Change in Unrealized Appreciation (Depreciation)
BlackRock Liquidity Funds, T-Fund, Institutional Class		18,887	1		18,887	$	18,887	$	4	—		—
1    Represents net shares purchased for the period December 20, 2016, the commencement of operations, to January 31, 2017.

(c) Current yield as of period end.

• 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 such sector subclassifications 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:
Common Stocks1	$	9,923,089	—	—	$	9,923,089
Short-Term Securities		18,887	—	—		18,887
Total	$	9,941,976	—	—	$	9,941,976
1   See above Schedule of Investments for values in each sector.

See Notes to Financial Statements.

24 BLACKROCK FUNDS JANUARY 31, 2017

Statements of Assets and Liabilities

January 31, 2017 (Unaudited)	BlackRock USA Momentum Factor Index Fund		BlackRock USA Quality Factor Index Fund		BlackRock USA Size Factor Index Fund			BlackRock USA Value Factor Index Fund
Assets
Investments at value — unaffiliated1	$	10,181,294	$	9,994,232	$	10,048,548		$	9,923,089
Investments at value — affiliated2		8,869		6,389		9,619			18,887
Receivables:
Investment adviser		17,847		17,859		19,956			17,995
Dividends — unaffiliated		7,399		6,027		7,402			8,353
Investments sold		2,835		1,909		3,409			—
Dividends — affiliated		5		2		6			4
Deferred offering costs		62,742		62,742		62,742			62,742
Total assets		10,280,991		10,089,160		10,151,682			10,031,070
Liabilities
Payables:
Offering costs		70,900		70,900		70,900			70,900
Officer’s and Trustees’ fees		1,083		1,083		1,083			1,083
Other accrued expenses		10,297		10,297		12,397			10,423
Total liabilities		82,280		82,280		84,380			82,406
Net Assets	$	10,198,711	$	10,006,880	$	10,067,302		$	9,948,664
Net Assets Consist of
Paid-in capital	$	10,000,000	$	10,000,000	$	10,000,000		$	10,000,000
Undistributed net investment income		5,973		4,694		7,909			11,680
Accumulated net realized gain (loss)		122		110		(7	)		(409	)
Net unrealized appreciation (depreciation)		192,616		2,076		59,400			(62,607	)
Net Assets	$	10,198,711	$	10,006,880	$	10,067,302		$	9,948,664
1    Investments at cost — unaffiliated	$	9,988,678	$	9,992,156	$	9,989,148		$	9,985,696
2    Investments at cost — affiliated	$	8,869	$	6,389	$	9,619		$	18,887
Net Assets
Institutional:
Net assets	$	101,983	$	100,065	$	100,669		$	99,482
Shares outstanding		10,000		10,000		10,000			10,000
Net asset value	$	10.20	$	10.01	$	10.07		$	9.95
Shares authorized		Unlimited		Unlimited		Unlimited			Unlimited
Par value	$	0.001	$	0.001	$	0.001		$	0.001
Class K:
Net assets	$	10,096,728	$	9,906,815	$	9,966,633		$	9,849,182
Shares outstanding		990,000		990,000		990,000			990,000
Net asset value	$	10.20	$	10.01	$	10.07		$	9.95
Shares authorized		Unlimited		Unlimited		Unlimited			Unlimited
Par value	$	0.001	$	0.001	$	0.001		$	0.001

See Notes to Financial Statements.
	BLACKROCK FUNDS	JANUARY 31, 2017	25

Statements of Operations

Period December 20, 20161 to January 31, 2017 (Unaudited)	BlackRock USA Momentum Factor Index Fund			BlackRock USA Quality Factor Index Fund			BlackRock USA Size Factor Index Fund			BlackRock USA Value Factor Index Fund
Investment Income
Dividends — unaffiliated	$	11,818		$	7,433		$	18,140		$	17,022
Dividends — affiliated		7			3			8			4
Foreign taxes withheld		—			(11	)		(7	)		—
Total Investment Income		11,825			7,425			18,141			17,026
Expenses
Organization and offering		18,159			18,159			18,159			18,159
Professional		6,888			6,888			6,888			6,888
Printing		1,470			1,470			1,470			1,470
Officer and Trustees		1,134			1,134			1,134			1,134
Custodian		1,050			1,050			3,150			1,176
Investment advisory		926			919			921			915
Registration		210			210			210			210
Transfer agent — class specific		122			122			122			122
Miscellaneous		670			671			668			670
Total expenses		30,629			30,623			32,722			30,744
Less:
Fees waived by the Manager		(926	)		(919	)		(921	)		(915	)
Other expenses reimbursed by the Manager		(27,846	)		(27,859	)		(29,955	)		(27,994	)
Transfer agent fees waived and/or reimbursed — class specific		(115	)		(115	)		(115	)		(115	)
Total expenses after fees waived and/or reimbursed		1,742			1,730			1,731			1,720
Net investment income		10,083			5,695			16,410			15,306
Realized and Unrealized Gain (Loss)
Net realized gain from (loss) investments — unaffiliated		122			110			(7	)		(409	)
Net change in unrealized appreciation (depreciation) on investments — unaffiliated		192,616			2,076			59,400			(62,607	)
Net realized and unrealized gain (loss)		192,738			2,186			59,393			(63,016	)
Net Increase (Decrease) in Net Assets Resulting from Operations	$	202,821		$	7,881		$	75,803		$	(47,710	)
1    Commencement of operations.

See Notes to Financial Statements.
26	BLACKROCK FUNDS	JANUARY 31, 2017

Statement of Changes in Net Assets

	BlackRock USA Momentum Factor Index Fund			BlackRock USA Quality Factor Index Fund
Increase (Decrease) in Net Assets:	Period December 20, 20161 to January 31, 2017 (Unaudited)			Period December 20, 20161 to January 31, 2017 (Unaudited)
Operations
Net investment income	$	10,083		$	5,695
Net realized gain		122			110
Net change in unrealized appreciation (depreciation)		192,616			2,076
Net increase in net assets resulting from operations		202,821			7,881
Distributions to Shareholders2
From net investment income:
Institutional		(40	)		(9	)
Class K		(4,070	)		(992	)
Decrease in net assets resulting from distributions to shareholders		(4,110	)		(1,001	)
Capital Share Transactions
Net increase in net assets derived from capital share transactions		10,000,000			10,000,000
Net Assets
Total increase in net assets		10,198,711			10,006,880
Beginning of period		—			—
End of period	$	10,198,711		$	10,006,880
Undistributed net investment income, end of period	$	5,973		$	4,694
1   Commencement of operations.
2   Distributions for annual periods determined in accordance with federal income tax regulations.

See Notes to Financial Statements.
	BLACKROCK FUNDS	JANUARY 31, 2017	27

Statement of Changes in Net Assets

	BlackRock USA Size Factor Index Fund			BlackRock USA Value Factor Index Fund
Increase (Decrease) in Net Assets:	Period December 20, 20161 to January 31, 2017 (Unaudited)			Period December 20, 20161 to January 31, 2017 (Unaudited)
Operations
Net investment income	$	16,410		$	15,306
Net realized loss		(7	)		(409	)
Net change in unrealized appreciation (depreciation)		59,400			(62,607	)
Net increase (decrease) in net assets resulting from operations		75,803			(47,710	)
Distributions to Shareholders2
From net investment income:
Institutional		(84	)		(35	)
Class K		(8,417	)		(3,591	)
Decrease in net assets resulting from distributions to shareholders		(8,501	)		(3,626	)
Capital Share Transactions
Net increase in net assets derived from capital share transactions		10,000,000			10,000,000
Net Assets
Total increase in net assets		10,067,302			9,948,664
Beginning of period		—			—
End of period	$	10,067,302		$	9,948,664
Undistributed net investment income, end of period	$	7,909		$	11,680
1   Commencement of operations.
2   Distributions for annual periods determined in accordance with federal income tax regulations.

See Notes to Financial Statements.
28	BLACKROCK FUNDS	JANUARY 31, 2017

Financial Highlights BlackRock USA Momentum Factor Index Fund

	Period December 20, 20161 to January 31, 2017 (Unaudited)
	Institutional			Class K
Per Share Operating Performance
Net asset value, beginning of period	$	10.00		$	10.00
Net investment income2		0.01			0.01
Net realized and unrealized gain		0.19			0.19
Net increase from investment operations		0.20			0.20
Distributions from net investment income3		(0.00	)4		(0.00	)4
Net asset value, end of period	$	10.20		$	10.20
Total Return5,6
Based on net asset value		2.04%			2.04%
Ratios to Average Net Assets
Total expenses7,8		0.82%			0.76%
Total expenses after fees waived and/or reimbursed7		0.20%			0.15%
Net investment income7		0.82%			0.87%
Supplemental Data
Net assets, end of period (000)	$	102		$	10,097
Portfolio turnover rate		0%	9		0%	9

¹ Commencement of operations.

² Based on average shares outstanding.

³ Distributions for annual periods determined in accordance with federal income tax regulations.

⁴ Amount is greater than $(0.005) per share.

⁵ Where applicable, assumes the reinvestment of distributions.

⁶ Aggregate total return.

⁷ Annualized.

⁸ Audit, offering and organization costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses for Institutional and Class K Shares would have been 2.70% and 2.65%, respectively.

⁹ Amount is less than 0.50%.

See Notes to Financial Statements.
	BLACKROCK FUNDS	JANUARY 31, 2017	29

Financial Highlights BlackRock USA Quality Factor Index Fund

	Period December 20, 20161 to January 31, 2017 (Unaudited)
	Institutional			Class K
Per Share Operating Performance
Net asset value, beginning of period	$	10.00		$	10.00
Net investment income2		0.01			0.01
Net realized and unrealized gain		0.00	3		0.00	3
Net increase from investment operations		0.01			0.01
Distributions from net investment income4		(0.00	)5		(0.00	)5
Net asset value, end of period	$	10.01		$	10.01
Total Return6,7
Based on net asset value		0.11%			0.11%
Ratios to Average Net Assets
Total expenses8,9		0.83%			0.77%
Total expenses after fees waived and/or reimbursed8		0.20%			0.15%
Net investment income8		0.44%			0.50%
Supplemental Data
Net assets, end of period (000)	$	100		$	9,907
Portfolio turnover rate		0%	10		0%	10

¹ Commencement of operations.

² Based on average shares outstanding.

³  Amount is less than $0.005 per share.

⁴ Distributions for annual periods determined in accordance with federal income tax regulations.

⁵ Amount is greater than $(0.005) per share.

⁶ Where applicable, assumes the reinvestment of distributions.

⁷ Aggregate total return.

⁸ Annualized.

⁹ Audit, offering and organization costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses for Institutional and Class K Shares would have been 2.72% and 2.67%, respectively.

¹⁰ Amount is less than 0.50%.

See Notes to Financial Statements.
30	BLACKROCK FUNDS	JANUARY 31, 2017

Financial Highlights BlackRock USA Size Factor Index Fund

	Period December 20, 20161 to January 31, 2017 (Unaudited)
	Institutional			Class K
Per Share Operating Performance
Net asset value, beginning of period	$	10.00		$	10.00
Net investment income2		0.02			0.02
Net realized and unrealized gain		0.06			0.06
Net increase from investment operations		0.08			0.08
Distributions from net investment income3		(0.01	)		(0.01	)
Net asset value, end of period	$	10.07		$	10.07
Total Return4,5
Based on net asset value		0.79%			0.79%
Ratios to Average Net Assets
Total expenses6.7		1.00%			0.95%
Total expenses after fees waived and/or reimbursed6		0.20%			0.15%
Net investment income6		1.38%			1.43%
Supplemental Data
Net assets, end of period (000)	$	101		$	9,967
Portfolio turnover rate		1%			1%

¹ Commencement of operations.

² Based on average shares outstanding.

³ Distributions for annual periods determined in accordance with federal income tax regulations.

⁴ Where applicable, assumes the reinvestment of distributions.

⁵ Aggregate total return.

⁶ Annualized.

⁷ Audit, offering and organization costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses for Institutional and Class K Shares would have been 2.90% and 2.85%, respectively.

See Notes to Financial Statements.
	BLACKROCK FUNDS	JANUARY 31, 2017	31

Financial Highlights BlackRock USA Value Factor Index Fund

	Period December 20, 20161 to January 31, 2017 (Unaudited)
	Institutional			Class K
Per Share Operating Performance
Net asset value, beginning of period	$	10.00		$	10.00
Net investment income2		0.02			0.02
Net realized and unrealized loss		(0.07	)		(0.07	)
Net decrease from investment operations		(0.05	)		(0.05	)
Distributions from net investment income3		(0.00	)4		(0.00	)4
Net asset value, end of period	$	9.95		$	9.95
Total Return5,6
Based on net asset value		(0.47)%			(0.46)%
Ratios to Average Net Assets
Total expenses7.8		0.84%			0.78%
Total expenses after fees waived and/or reimbursed7		0.20%			0.15%
Net investment income7		1.28%			1.34%
Supplemental Data
Net assets, end of period (000)	$	99		$	9,849
Portfolio turnover rate		0%	9		0%	9

¹ Commencement of operations.

² Based on average shares outstanding.

³ Distributions for annual periods determined in accordance with federal income tax regulations.

⁴ Amount is greater than $(0.005) per share.

⁵ Where applicable, assumes the reinvestment of distributions.

⁶ Aggregate total return.

⁷ Annualized.

⁸ Audit, offering and organization costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses for Institutional and Class K Shares would have been 2.75% and 2.69%, respectively.

⁹ Amount is less than 0.50%.

See Notes to Financial Statements.
32	BLACKROCK FUNDS	JANUARY 31, 2017

Notes to Financial Statements (Unaudited)

1. Organization:

BlackRock Funds^SM (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust is organized as a Massachusetts business trust. The following are referred to herein collectively as the “Funds” or individually, a “Fund”:

Fund Name	Herein Referred To As	Diversification Classification
BlackRock USA Momentum Factor Index Fund	Momentum Factor Index Fund	Diversified
BlackRock USA Quality Factor Index Fund	Quality Factor Index Fund	Non-diversified
BlackRock USA Size Factor Index Fund	Size Factor Index Fund	Diversified
BlackRock USA Value Factor Index Fund	Value Factor Index Fund	Diversified

Each Fund offers multiple classes of shares. All classes of shares have identical voting, dividend, liquidation and other rights and are subject to the same terms and conditions. Institutional and Class K shares are sold without a sales charge and only to certain eligible investors.

Share Class	Initial Sales Charge		CDSC		Conversion Privilege
Institutional Shares		No		No		None
Class K Shares		No		No		None

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

2. Significant Accounting Policies:

The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. Below is a summary of significant accounting policies:

Investment Transactions and Investment Income: 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. 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. 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 Funds are recorded on the ex-dividend date. The character and timing of distributions are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP.

Organization and Offering Costs: Upon commencement of operations, organization costs associated with the establishment of the Funds were expensed by the Funds and reimbursed by the Manager. The Manager reimbursed the Funds $10,000, which is included in expenses reimbursed by the Manager in the Statements of Operations. Offering costs are amortized over a 12-month period beginning with the commencement of operations.

Recent Accounting Standard: In November 2016, the Financial Accounting Standards Board issued Accounting Standards Update “Restricted Cash” which will require entities to include the total of cash, cash equivalents, restricted cash, and restricted cash equivalents in the beginning and ending cash balances in the Statements of Cash Flows. The guidance will be applied retrospectively and is effective for fiscal years beginning after December 15, 2017, and interim periods within those years. Management is evaluating the impact, if any, of this guidance on the Funds’ presentation in the Statements of Cash Flows.

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

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

The Funds may incur charges on uninvested cash balances and overdrafts, subject to certain conditions.

3. Investment Valuation and Fair Value Measurements:

Investment Valuation Policies: The Funds’ investments are valued at fair value (also referred to as “market value” within the financial statements) as of the close of trading on the New York Stock Exchange (“NYSE”). U.S. GAAP defines fair value as the price the Funds would receive to sell an asset or pay to

BLACKROCK FUNDS JANUARY 31, 2017 33

Notes to Financial Statements (continued)

transfer a liability in an orderly transaction between market participants at the measurement date. The Funds determine the fair values of their financial instruments using various independent dealers or pricing services under policies approved by the Board of Trustees of the Trust (the “Board”). The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) is the committee formed by management to develop global pricing policies and procedures and to oversee the pricing function for all financial instruments.

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

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

• Investments in open-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 typically used in determining fair value. When determining the price for Fair Valued Investments, the Global Valuation Committee, or its delegate, seeks to determine the price that each Fund might reasonably expect to receive or pay from the current sale or purchase of that asset or liability in an 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. These inputs to valuation techniques are categorized into a fair value hierarchy consisting of three broad levels for financial statement purposes as follows:

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

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

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

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/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 each Fund’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments is based on the pricing transparency of the investments and is not necessarily an indication of the risks associated with investing in those securities.

4. Investment Advisory Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock, Inc. (“BlackRock”) for 1940 Act purposes.

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

For such services, each Fund pays the Manager a monthly fee at an annual rate equal to 0.08%, respectively, of the average daily value of each Fund’s net assets.

34 BLACKROCK FUNDS JANUARY 31, 2017

Notes to Financial Statements (continued)

Service and Distribution Fees: The Trust, on behalf of the Funds, entered into a Distribution Agreement and a Distribution and Service Plan with BlackRock Investments, LLC (“BRIL”), an affiliate of the Manager.

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

Transfer Agent: Pursuant to written agreements, certain financial intermediaries, some of which may be affiliates, provide the Funds with sub-accounting, recordkeeping, sub-transfer agency and other administrative services with respect to sub-accounts they service. For these services, these entities receive an asset-based fee or an annual fee per shareholder account, which will vary depending on share class and/or net assets.

For the six months ended January 31, 2017, the following table shows the class specific transfer agent fees borne directly by each class of each Fund:

	Institutional		Class K		Total
Momentum Factor Index Fund	$	8	$	114	$	122
Quality Factor Index Fund	$	8	$	114	$	122
Size Factor Index Fund	$	8	$	114	$	122
Value Factor Index Fund	$	8	$	114	$	122

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

	Institutional		Class K
Momentum Factor Index Fund		0.20%		0.15%
Quality Factor Index Fund		0.20%		0.15%
Size Factor Index Fund		0.20%		0.15%
Value Factor Index Fund		0.20%		0.15%

The Manager has agreed not to reduce or discontinue these contractual expense limitations prior to November 30, 2027, unless approved by the Board, including a majority of the Independent Trustees who are not “interested persons” of the Trust, as defined in the 1940 Act (“Independent Trustees”) or by a vote of a majority of the outstanding voting securities of the Funds.

These amounts waived and/or reimbursed are included in fees waived by the Manager and other expenses reimbursed by the Manager, and shown as transfer agent fees waived and/or reimbursed — class specific, respectively, in the Statements of Operations. For the period ended January 31, 2017, the amounts included in fees waived by the Manager and shown as other expenses reimbursed by the Manager were as follows:

	Fees Waived by the Manager		Other Expenses Reimbursed by the Manager
Momentum Factor Index Fund	$	925	$	17,846
Quality Factor Index Fund	$	919	$	17,859
Size Factor Index Fund	$	920	$	19,955
Value Factor Index Fund	$	914	$	17,994

For the period ended January 31, 2017, class specific expense waivers and/or reimbursements were as follows:

Transfer agent fees waived and/or reimbursed

	Institutional		Class K		Total
Momentum Factor Index Fund	$	2	$	113	$	115
Quality Factor Index Fund	$	2	$	113	$	115
Size Factor Index Fund	$	2	$	113	$	115
Value Factor Index Fund	$	2	$	113	$	115

With respect to the Funds, the Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees each Fund pays to the Manager indirectly through its investment in affiliated money market funds (the “affiliated money market fund waiver”). These amounts are included in fees waived by the Manager in the Statements of Operations. The amount of waivers and/or reimbursements of fees and expenses made pursuant to the expense limitation caps, as applicable, will be reduced by the amount of the affiliated money market fund waiver included in fees waived by the Manager in the Statements of Operations. For the period ended January 31, 2017, the amounts waived were as follows.

	Amount Waived
Momentum Factor Index Fund	$	1
Quality Factor Index Fund		—
Size Factor Index Fund	$	1
Value Factor Index Fund	$	1

BLACKROCK FUNDS JANUARY 31, 2017 35

Notes to Financial Statements (continued)

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 or fixed-income mutual funds or affiliated exchange-traded funds that have a contractual management fee, through November 30, 2018. The contractual agreement may be terminated upon 90 days’ notice by a majority of the non-interested trustees of the Trust or by a vote of a majority of the outstanding voting securities of the Funds.

With respect to the contractual expense caps, if during a 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 expense cap for that share class, the Manager is entitled to be reimbursed by such share class up to the lesser of the following expenses:

(a) The amount of fees waived and/or expenses reimbursed during those prior two fiscal years under the agreement.

(b) The amount by which the expense cap for that share class exceeds the operating expenses of the share class for the current fiscal year, provided that:

_• Each Fund, of which the share class is a part, has more than $50 million in assets for the fiscal year; and

_• The Manager or an affiliate continues to serve as a Fund’s investment adviser or administrator.

In the event the expense cap for a share class is changed subsequent to a fiscal year in which the Manager becomes entitled to reimbursement for fees waived and/or reimbursed, the amount available to reimburse the Manager shall be calculated by reference to the expense cap for that share class in effect at the time the Manager became entitled to receive such reimbursement, rather than the subsequently changed expense cap for that share class.

On January 31, 2017, the fund level and class specific waivers and/or reimbursements subject to possible future recoupment under the expense limitation agreement are as follows:

	Momentum Factor Index Fund		Quality Factor Index Fund		Size Factor Index Fund		Value Factor Index Fund
Fund Level	$	18,771	$	18,778	$	20,875	$	18,908
Institutional	$	2	$	2	$	2	$	2
Class K	$	113	$	113	$	113	$	113

Interfund Lending: In accordance with an exemptive order (the “Order”) from the U.S. Securities and Exchange Commission, each Fund may participate in a joint lending and borrowing facility for temporary purposes (the “Interfund Lending Program”), subject to compliance with the terms and conditions of the Order, and to the extent permitted by each Fund’s investment policies and restrictions. Each Fund is currently permitted to borrow and lend under the Interfund Lending Program.

A 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 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 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 period ended January 31, 2017, the Funds did not participate in the Interfund Lending Program.

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

5. Purchases and Sales:

For the six months ended January 31, 2017, purchases and sales of investments excluding short-term securities, were as follows:

	Momentum Factor Index Fund		Quality Factor Index Fund		Size Factor Index Fund		Value Factor Index Fund
Purchases	$	10,006,032	$	9,993,955	$	10,060,467	$	9,997,761
Sales	$	17,476	$	1,909	$	64,066	$	11,656

6. Income Tax Information:

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

Each Fund files U.S. federal and various state and local tax returns. No income tax returns are currently under examination.

36 BLACKROCK FUNDS JANUARY 31, 2017

Notes to Financial Statements (continued)

Management has analyzed tax laws and regulations and their application to the Funds as of January 31, 2017, inclusive of the open tax return years, and does not believe that there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.

As of January 31, 2017, gross unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:

	Momentum Factor Index Fund				Quality Factor Index Fund			Size Factor Index Fund			Value Factor Index Fund
Tax cost		$	9,997,547		$	9,998,545		$	9,998,767		$	10,004,583
Gross unrealized appreciation			337,421			176,197			225,729			200,348
Gross unrealized depreciation			(144,805	)		(174,121	)		(166,329	)		(262,955	)
Net unrealized appreciation (depreciation)		$	192,616		$	2,076		$	59,400		$	(62,607	)

7. Bank Borrowings:

The Trust, on behalf of the Funds, along with certain other funds managed by the Manager and its affiliates (“Participating Funds”), is a party to a 364-day, $2.1 billion credit agreement with a group of lenders. Under this agreement, the Funds may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Funds, can borrow up to an aggregate commitment amount of $1.6 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 0.12% 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 2017 unless extended or renewed. Participating Funds paid administration, legal and arrangement fees, which, if applicable, are included in miscellaneous expenses in the Statements of Operations. These fees were allocated among such funds based upon portions of the aggregate commitment available to them and relative net assets of Participating Funds. During the period ended January 31, 2017, the Funds did not borrow under the credit agreement.

8. Principal Risks:

In the normal course of business, the Funds invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the issuer to meet all its obligations, including the ability to pay principal and interest when due (issuer credit risk). The value of securities held by the Funds may decline in response to certain events, including those directly involving the issuers of securities owned by the Funds. Changes arising from the general economy, the overall market and local, regional or global political and/or social instability, as well as currency, interest rate and price fluctuations, may also affect the securities’ value.

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

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

Concentration Risk: As of period end, Momentum Factor Index Fund and Quality Factor Index Fund invested a significant portion of their assets in securities in the Information Technology sector. Changes in economic conditions affecting such sector would have a greater impact on the Funds and could affect the value, income and/or liquidity of positions in such securities.

BLACKROCK FUNDS JANUARY 31, 2017 37

Notes to Financial Statements (continued)

9. Capital Share Transactions:

Transactions in capital shares for each class were as follows:

	Period December 20, 20161 to January 31, 2017
Momentum Factor Index Fund	Shares		Amount
Institutional
Shares sold		10,000	$	100,000
Shares issued in reinvestment of distributions		—		—
Shares redeemed		—		—
Net increase		10,000	$	100,000
Class K
Shares sold		990,000	$	9,900,000
Shares issued in reinvestment of distributions		—		—
Shares redeemed		—		—
Net increase		990,000	$	9,900,000
Total Increase		1,000,000	$	10,000,000
	Period December 20, 20161 to January 31, 2017
Quality Factor Index Fund	Shares		Amount
Institutional
Shares sold		10,000	$	100,000
Shares issued in reinvestment of distributions		—		—
Shares redeemed		—		—
Net increase		10,000	$	100,000
Class K
Shares sold		990,000	$	9,900,000
Shares issued in reinvestment of distributions		—		—
Shares redeemed		—		—
Net increase		990,000	$	9,900,000
Total Increase		1,000,000	$	10,000,000
	Period December 20, 20161 to January 31, 2017
Size Factor Index Fund	Shares		Amount
Institutional
Shares sold		10,000	$	100,000
Shares issued in reinvestment of distributions		—		—
Shares redeemed		—		—
Net increase		10,000	$	100,000
Class K
Shares sold		990,000	$	9,900,000
Shares issued in reinvestment of distributions		—		—
Shares redeemed		—		—
Net increase		990,000	$	9,900,000
Total Increase		1,000,000	$	10,000,000

38 BLACKROCK FUNDS JANUARY 31, 2017

Notes to Financial Statements (concluded)

.	Period December 20, 20161 to January 31, 2017
Value Factor Index Fund	Shares		Amount
Institutional
Shares sold		10,000	$	100,000
Shares issued in reinvestment of distributions		—		—
Shares redeemed		—		—
Net increase		10,000	$	100,000
Class K
Shares sold		990,000	$	9,900,000
Shares issued in reinvestment of distributions		—		—
Shares redeemed		—		—
Net increase		990,000	$	9,900,000
Total Increase		1,000,000	$	10,000,000

¹  Commencement of operations.

At January 31, 2017, shares owned by BlackRock HoldCo 2, Inc., an affiliate of the Funds, were as follows:

	Institutional		Class K
Momentum Factor Index Fund		10,000		990,000
Quality Factor Index Fund		10,000		990,000
Size Factor Index Fund		10,000		990,000
Value Factor Index Fund		10,000		990,000

10. Subsequent Events:

Management’s evaluation of the impact of all subsequent events on the Funds’ financial statements was completed through the date the financial statements were issued and the following items were noted:

On February 24, 2017, the Board of Trustees of BlackRock Funds approved a name change from “BlackRock USA Momentum Factor Index Fund,” “BlackRock USA Quality Factor Index Fund,” “BlackRock USA Size Factor Index Fund” and “BlackRock USA Value Factor Index Fund” to “iShares Edge MSCI USA Momentum Factor Index Fund,” “iShares Edge MSCI USA Quality Factor Index Fund,” “iShares Edge MSCI USA Size Factor Index Fund” and “iShares Edge MSCI USA Value Factor Index Fund,” respectively. The change is expected to be effective during the second quarter of 2017.

BLACKROCK FUNDS JANUARY 31, 2017 39

Disclosure of Investment Advisory Agreement

The Board of Trustees (the “Board,” and the members of which are referred to as “Board Members”) of BlackRock Funds^SM (the “Trust”) met in person on September 21-23, 2016 (the “September Meeting”) to consider the approval of the Trust’s proposed investment advisory agreement (the “BAL Agreement”) with BlackRock Advisors, LLC (“BAL”), the Trust’s investment advisor, on behalf of BlackRock USA Momentum Factor Index Fund (“Momentum Factor Index Fund”), BlackRock USA Quality Factor Index Fund (“Quality Factor Index Fund”), BlackRock USA Size Factor Index Fund (“Size Factor Index Fund”) and BlackRock USA Value Factor Index Fund (“Value Factor Index Fund”), each a portfolio of the Trust. Momentum Factor Index Fund, Quality Factor Index Fund, Size Factor Index Fund and Value Factor Index Fund are referred to herein individually as a “Fund” or collectively as the “Funds.” The BAL Agreement was the same agreement that had been previously approved by the Board with respect to certain other portfolios of the Trust.

The Board also met in person on November 16-18, 2016 (the “November Meeting,” and together with the September Meeting, the “Meetings”) to consider the approval of the Trust’s proposed investment advisory agreement (the “BFA Agreement”) with BlackRock Fund Advisors (“BFA”) on behalf of each of the Funds, which would replace the BAL Agreement prior to the commencement of operations of the Funds. The Board was informed that the BFA Agreement was substantially the same as the BAL Agreement. The materials reviewed and the factors considered by the Board at the November Meeting in connection with the approval of the BFA Agreement were substantially the same as the materials reviewed and the factors the Board considered at the September meeting with respect to consideration of the approval of the BAL Agreement.

BAL and BFA are referred to herein as “BlackRock.” The BAL Agreement and the BFA Agreement are referred to herein individually as an “Agreement” or collectively as the “Agreements.” Each of the Funds commenced operations in December 2016.

Activities and Composition of the Board

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

The Agreements

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

Board Considerations in Approving the Agreements

The Approval Process: At the September Meeting, the Board reviewed materials relating to its consideration of the BAL Agreement. The Board considered all factors it believed relevant with respect to the Trust and the Funds, 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 cost of the services and profits to be realized by BlackRock and its affiliates from their relationship with the Funds; (d) the sharing of potential economies of scale; (e) fall out benefits to BlackRock and its affiliates from their relationship with the Funds; (f) possible alternatives to the proposed BAL Agreement; (g) the policies and practices of BlackRock with respect to portfolio transactions for the Funds; (h) BlackRock’s portfolio compliance systems and capabilities; and (i) other factors deemed relevant by the Board Members.

In considering approval of the BAL 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 BAL Agreement. The Board received materials in advance of the September Meeting relating to its consideration of the BAL Agreement, including, with respect to each Fund, fees and estimated expense ratios of each class of the Fund, and for a representative class of the Fund, as compared with the fees and expense ratios of a peer group of funds as determined by Broadridge Financial Solutions, Inc. (“Broadridge”)¹. The Board also received (a) information regarding BlackRock’s economic outlook for each Fund and its general investment outlook for the markets; (b) information regarding fees paid to service providers that are affiliates of BlackRock; and (c) information outlining the legal duties of the Board under the 1940 Act with respect to the consideration and approval of the BAL 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 payments made to BlackRock or its affiliates relating to the distribution of Fund shares, securities lending and cash management, services related to the valuation and pricing of Fund portfolio holdings, direct and indirect benefits to BlackRock and its affiliates from their relationship with the Funds and advice from independent legal counsel with respect to the review

¹  Funds are ranked by Broadridge in quartiles, ranging from first to fourth, where first is the most desirable quartile position and fourth is the least desirable.

40 BLACKROCK FUNDS JANUARY 31, 2017

Disclosure of Investment Advisory Agreement (continued)

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: At the September Meeting, 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 the Funds. The Board received information concerning the investment philosophy and investment process to be used by BlackRock in managing the Funds, as well as a description of the capabilities, personnel and services of BlackRock. In connection with this review, the Board considered BlackRock’s in-house research capabilities as well as other resources available to its personnel. The Board considered the scope of the services provided by BlackRock to the Funds 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 BAL 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 the Funds was consistent with each Fund’s operational requirements, including, in addition to seeking to meet its investment objective(s), 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 other non-investment advisory services to be provided by BlackRock and its affiliates to the Funds. The Board evaluated the procedures of BlackRock designed to fulfill its fiduciary duty to the Funds 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 standards of BlackRock with respect to the execution of portfolio transactions.

The Board 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 reviewed 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 BAL Agreement.

In addition to investment advisory services, the Board considered the quality of the administrative and other non-investment advisory services to be provided to the Funds. The Board noted that BlackRock and its affiliates will provide the Funds with certain administrative, shareholder and other services (in addition to any such services provided to the Funds by third parties) and officers and other personnel as are necessary for the operations of the Funds. In particular, BlackRock and its affiliates will provide the Funds with administrative services, including, among others: (i) preparing disclosure documents, such as the prospectus, the summary prospectus, the statement of additional information and periodic shareholder reports; (ii) oversight of daily accounting and pricing; (iii) preparing periodic filings with regulators; (iv) overseeing and coordinating the activities of other service providers; (v) organizing Board meetings and preparing the materials for such Board meetings; (vi) providing legal and compliance support; (vii) furnishing analytical and other support to assist the Board in its consideration of strategic issues such as the merger, consolidation or repurposing of certain open-end funds; and (viii) performing other administrative functions necessary for the operation of the Funds, such as tax reporting, fulfilling regulatory filing requirements and call center 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 the Funds and BlackRock: With respect to the September Meeting, the Board, including the Independent Board Members, previously received and considered information about BlackRock’s investment performance for other funds. The Board, however, did not consider the performance history of the Funds because each Fund was newly organized and had not yet commenced operations as of the date of the Meeting.

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 Funds: At the September Meeting, in connection with the initial approval of the BAL Agreement, the Board, including the Independent Board Members, reviewed each Fund’s contractual management fee rate compared with the other funds in the Fund’s Broadridge category. The contractual management fee rate represents a combination of the advisory fee and any administrative fees, before taking into account any reimbursements or fee waivers. The Board also compared each Fund’s estimated total expense ratio, as well as its estimated actual management fee rate, to those of other funds in its Broadridge category. The total expense ratio represents a fund’s total net operating expenses, including any 12b-1 or non 12b-1 service fees. The total expense ratio gives effect to any expense reimbursements or fee waivers that benefit a fund, and the actual management fee rate gives effect to any management fee reimbursements or waivers that benefit a fund. Additionally, the Board noted information received at prior Board meetings concerning the services provided and the fees charged by BlackRock and its affiliates to other types of clients with similar investment mandates, as applicable, including institutional accounts and sub-advised mutual funds (including mutual funds sponsored by third parties).

BLACKROCK FUNDS JANUARY 31, 2017 41

Disclosure of Investment Advisory Agreement (concluded)

The Board noted that with respect to each of Momentum Factor Index Fund, Quality Factor Index Fund and Size Factor Index Fund, the Fund’s contractual management fee rate and estimated actual management fee rate each ranked in the first quartile, and that the estimated total expense ratio ranked in the second quartile, relative to the Fund’s Expense Peers.

The Board noted that Value Factor Index Fund’s contractual management fee rate ranked in the first quartile, and that the estimated actual management fee rate and the estimated total expense ratio each ranked in the second quartile, relative to the Fund’s Expense Peers.

The Board also noted that, with respect to each Fund, BlackRock has contractually agreed to a cap on the Fund’s total net operating expenses as a percentage of the Fund’s average daily net assets on a class-by-class basis.

Following consideration of this information, as pertinent, the Board, including the independent Board Members, concluded that, with respect to each Fund, the fees to be paid pursuant to the BAL Agreement were fair and reasonable in light of the services provided.

As each Fund had not commenced operations as of the date of the September 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 the Funds increase. The Board also noted the existence of expense caps.

E. Other Factors Deemed Relevant by the Board Members: At the September Meeting, the Board, including a majority of the Independent Board Members, also took into account other ancillary or “fall-out” benefits that BlackRock or its affiliates may derive from their respective relationships with the Funds, 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 the Funds, 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 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 further noted that it had considered the investment by BlackRock’s funds in affiliated ETFs without any offset against the management fees payable by the funds to BlackRock.

The Board, including the Independent Board Members, concluded that these ancillary benefits that BlackRock and its affiliates could receive with regard to providing investment advisory and other services to the Funds were consistent with those generally available to other mutual fund sponsors.

Conclusion

At the September Meeting, the Board, including a majority of the Independent Board Members, approved the BAL Agreement between BAL and the Trust, on behalf of each Fund, for a two-year term beginning on the effective date of the BAL Agreement. At the November Meeting, the Board, including a majority of the Independent Board Members, approved the BFA Agreement between BFA and the Trust, on behalf of each Fund, for a two-year term beginning on the effective date of the BFA Agreement, which replaced the BAL Agreement prior to commencement of operations of the Funds.

Based upon its evaluation of all of the aforementioned factors in their totality, the Board, including a majority of the Independent Board Members, was satisfied that the terms of each respective Agreement were fair and reasonable and in the best interest of each Fund and its shareholders. In arriving at a decision to approve each respective Agreement, the Board did not identify any single factor or group of factors as all-important or controlling, but considered all factors together, and different Board Members may have attributed different weights to the various factors considered. The Independent Board Members were also assisted by the advice of independent legal counsel in making these determinations.

42 BLACKROCK FUNDS JANUARY 31, 2017

Officers and Trustees

Rodney D. Johnson, Chair of the Board and Trustee

Susan J. Carter, Trustee

Collette Chilton, Trustee

Neil A. Cotty, Trustee

Cynthia A. Montgomery, Trustee

Joseph P. Platt, Trustee

Robert C. Robb, Jr., Trustee

Mark Stalnecker, Trustee

Kenneth L. Urish, Trustee

Claire A. Walton, Trustee

Frederick W. Winter, Trustee

Barbara G. Novick, Trustee

John M. Perlowski, Trustee, President and Chief Executive Officer

Thomas Callahan, Vice President

Jennifer McGovern, Vice President

Neal J. Andrews, Chief Financial Officer

Jay M. Fife, Treasurer

Charles Park, Chief Compliance Officer

Fernanda Piedra, Anti-Money Laundering Compliance Officer

Benjamin Archibald, Secretary

Effective December 31, 2016, David O. Beim and Dr. Matina S. Horner resigned as Trustees of the Trust.

Investment Adviser BlackRock Fund Advisors San Francisco, CA 94105 Accounting Agent and Custodian State Street Bank and Trust Company Boston, MA 02110   Transfer Agent BNY Mellon Investment Servicing (US) Inc. Wilmington, DE 19809 Distributor BlackRock Investments, LLC New York, NY 10022   Independent Registered Public Accounting Firm PricewaterhouseCoopers LLP Philadelphia, PA 19103 Legal Counsel Sidley Austin LLP New York, NY 10019   Address of the Trust 100 Bellevue Parkway Wilmington, DE 19809

BLACKROCK FUNDS JANUARY 31, 2017 43

Additional Information

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) 537-4942.

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 Form N-Q. The Funds’ 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 or how to access documents on the SEC’s website without charge may be obtained by calling (800) SEC-0330. The Funds’ Forms N-Q may also be obtained upon request and without charge by calling (800) 537-4942.

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) 537-4942; (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 Funds voted proxies relating to securities held in the Funds’ portfolios during the most recent 12-month period ended June 30 is available upon request and without charge (1) at http://www.blackrock.com or by calling (800) 537-4942 and (2) on the SEC’s website at http://www.sec.gov.

BlackRock’s Mutual Fund Family

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

44 BLACKROCK FUNDS JANUARY 31, 2017

Additional Information (concluded)

Shareholder Privileges

Account Information

Call us at (800) 537-4942 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 at http://www.blackrock.com/funds.

Automatic Investment Plans

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

Systematic Withdrawal Plans

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

Retirement Plans

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

BlackRock Privacy Principles

BlackRock is committed to maintaining the privacy of its current and former fund investors and individual clients (collectively, “Clients”) and to safeguarding their non-public personal information. The following information is provided to help you understand what personal information BlackRock collects, how we protect that information and why in certain cases we share such information with select parties.

If you are located in a jurisdiction where specific laws, rules or regulations require BlackRock to provide you with additional or different privacy-related rights beyond what is set forth below, then BlackRock will comply with those specific laws, rules or regulations.

BlackRock obtains or verifies personal non-public information from and about you from different sources, including the following: (i) information we receive from you or, if applicable, your financial intermediary, on applications, forms or other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our websites.

BlackRock does not sell or disclose to non-affiliated third parties any non-public personal information about its Clients, except as permitted by law or as is necessary to respond to regulatory requests or to service Client accounts. These non-affiliated third parties are required to protect the confidentiality and security of this information and to use it only for its intended purpose.

We may share information with our affiliates to service your account or to provide you with information about other BlackRock products or services that may be of interest to you. In addition, BlackRock restricts access to non-public personal information about its Clients to those BlackRock employees with a legitimate business need for the information. BlackRock maintains physical, electronic and procedural safeguards that are designed to protect the non-public personal information of its Clients, including procedures relating to the proper storage and disposal of such information.

BLACKROCK FUNDS JANUARY 31, 2017 45

This report is intended for current holders. It is not authorized for use as an offer of sale or a solicitation of an offer to buy shares of a Fund unless preceded or accompanied by the Funds’ current prospectus. Past performance results shown in this report should not be considered a representation of future performance. Investment returns and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Statements and other information herein are as dated and are subject to change.

FACTOR-1/17-SAR

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 –There have been no material changes to these procedures.

Item 11 – Controls and Procedures

(a) –   The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 15d-15(b) under the Securities Exchange Act of 1934, as amended.

(b) –   There were no changes in the 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

(a)(1) – Code of Ethics – Not Applicable to this semi-annual report

(a)(2) – Certifications – Attached hereto

(a)(3) – Not Applicable

(b) –    Certifications – Attached hereto

2

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BlackRock Funds

By:	/s/ John M. Perlowski
	John M. Perlowski

Chief Executive Officer (principal executive officer) of

BlackRock Funds

Date: April 5, 2017

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

By:	/s/ John M. Perlowski
	John M. Perlowski

Chief Executive Officer (principal executive officer) of

BlackRock Funds

Date: April 5, 2017

By:	/s/ Neal J. Andrews
	Neal J. Andrews

Chief Financial Officer (principal financial officer) of

BlackRock Funds

Date: April 5, 2017

3