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^SM

BlackRock Sustainable Advantage Large Cap Core Fund (Formerly BlackRock Advantage ESG U.S. Equity Fund)

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

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

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

Date of fiscal year end: 05/31/2022

Date of reporting period: 11/30/2021

Item 1 – Report to Stockholders

(a) The Report to Shareholders is attached herewith.

NOVEMBER 30, 2021

2021 Semi-Annual Report

(Unaudited)

BlackRock Funds^SM

·  BlackRock Advantage ESG U.S. Equity Fund

Not FDIC Insured • May Lose Value • No Bank Guarantee

The Markets in Review

Dear Shareholder,

The 12-month reporting period as of November 30, 2021 was a remarkable period of adaptation and recovery, as the global economy dealt with the implications of the coronavirus (or “COVID-19”) pandemic. The United States began the reporting period as the initial reopening-led economic rebound was beginning to slow. Nonetheless, the economy continued to grow at a solid pace for the reporting period, eventually regaining the output lost from the pandemic. However, a rapid rebound in consumer spending pushed up against supply constraints and led to elevated inflation.

Equity prices rose with the broader economy, as the implementation of mass vaccination campaigns and passage of two additional fiscal stimulus packages further boosted stocks, and many equity indices neared or surpassed all-time highs late in the reporting period. In the United States, both large- and small-capitalization stocks posted a strong advance. International equities also gained, as both developed and emerging markets continued to recover from the effects of the pandemic.

The 10-year U.S. Treasury yield (which is inversely related to bond prices) rose during the reporting period as the economy expanded rapidly and inflation reached its highest annualized reading in decades. In the corporate bond market, support from the U.S. Federal Reserve (the “Fed”) assuaged credit concerns and led to solid returns for high-yield corporate bonds, outpacing investment-grade corporate bonds, which declined slightly.

The Fed remained committed to accommodative monetary policy by maintaining near-zero interest rates and by reiterating that inflation could exceed its 2% target for a sustained period without triggering a rate increase. In response to rising inflation late in the period, the Fed changed its market guidance, raising the possibility of higher rates in 2022 and reducing bond purchasing beginning in late 2021.

Looking ahead, we believe that the global expansion will continue to broaden as Europe and other developed market economies gain momentum, although the Delta and Omicron variants of the coronavirus remain a threat, particularly in emerging markets. While we expect inflation to abate somewhat as supply bottlenecks are resolved, we anticipate that inflation will remain higher than the pre-COVID norm. The Fed is poised to raise interest rates next year in response, but the Fed’s policy shift means that tightening is likely to be less aggressive than what we’ve seen in previous cycles.

In this environment, we favor an overweight to equities, as we believe low interest rates and continued economic growth will support further gains, albeit likely more modest than what we saw in 2021. Sectors that are better poised to manage the transition to a lower-carbon world, such as technology and health care, are particularly attractive in the long-term. U.S. and other developed-market equities have room for further growth, while Chinese equities stand to gain from a more accommodative monetary and fiscal environment as the Chinese economy slows. We are underweight long-term credit, but inflation-protected U.S. Treasuries, Asian fixed income, and emerging market local-currency bonds offer potential opportunities. We believe that international diversification and a focus on sustainability can help provide portfolio resilience, and the disruption created by the coronavirus appears to be accelerating the shift toward sustainable investments.

In this environment, our view is that 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 November 30, 2021
	6-Month	12-Month
U.S. large cap equities (S&P 500® Index)	9.38%	27.92%
U.S. small cap equities (Russell 2000® Index)	(2.60)	22.03
International equities (MSCI Europe, Australasia, Far East Index)	(3.84)	10.77
Emerging market equities (MSCI Emerging Markets Index)	(10.81)	2.70
3-month Treasury bills (ICE BofA 3-Month U.S. Treasury Bill Index)	0.01	0.05
U.S. Treasury securities (ICE BofA 10-Year U.S. Treasury Index)	2.38	(3.84)
U.S. investment grade bonds (Bloomberg U.S. Aggregate Bond Index)	1.02	(1.15)
Tax-exempt municipal bonds (S&P Municipal Bond Index)	0.67	2.22
U.S. high yield bonds (Bloomberg U.S. Corporate High Yield 2% Issuer Capped Index)	1.05	5.27
Past performance is not an indication of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.

2 THIS   PAGE   IS   NOT   PART   OF   YOUR   FUND   REPORT

Table of Contents

	Page
The Markets in Review		2
Semi-Annual Report:
Fund Summary		4
About Fund Performance		6
Disclosure of Expenses		6
Derivative Financial Instruments		6
Financial Statements:
Schedule of Investments		7
Statement of Assets and Liabilities		12
Statement of Operations		14
Statements of Changes in Net Assets		15
Financial Highlights		16
Notes to Financial Statements		20
Statement Regarding Liquidity Risk Management Program		28
Additional Information		29
Glossary of Terms Used in this Report		31

3

Fund Summary  as of November 30, 2021  BlackRock Advantage ESG U.S. Equity Fund

Investment Objective

BlackRock Advantage ESG U.S. Equity Fund’s (the “Fund”) investment objective is to seek to provide total return.

On July 27, 2021, the Board approved a proposal to change the name of the Fund from BlackRock Advantage ESG U.S. Equity Fund to BlackRock Sustainable Advantage Large Cap Core Fund and certain changes to the Fund’s investment objective, investment strategies and investment process. These changes were effective on December 1, 2021.

Portfolio Management Commentary

How did the Fund perform?

For the six-month period ended November 30, 2021, all of the Fund’s share classes outperformed its benchmark, the Russell 1000^® Index, with the exception of the Fund’s Investor C Shares which underperformed the benchmark.

What factors influenced performance?

The Fund performed well against a highly changeable backdrop. Initially, investor preference for value styles was driven by a continuation of the strong reflationary market tone from the broad economic reopening in 2021. However, a surprisingly hawkish pivot from the Fed in June 2021 prompted a rotation back toward secular growth positions. This resurrected 2020 performance leadership themes that were further supported by declining bond yields and concerns around the spread of the Delta COVID-19 strain. The pro-growth theme persisted until another sharp rotation in September 2021 to value, which was also instigated by a more hawkish Fed. The announcement of the expected tapering of bond purchases resulted in a spike in bond yields supporting cyclical exposures. This was compounded by the simultaneous sharp rise in commodities prices that put further pressure on inflation. Ultimately, the rotation was short-lived as market leadership went back toward pro-growth areas in October 2021.

Trend-based sentiment measures broadly performed well during the period, capturing the evolving economic backdrop. This was led by strong performance across insights that analyze text from market participants. Specifically, signals that capture trends across both short-term performance and long-term fundamentals from executive commentaries were top performers with gains across industrials and technology stocks. Similarly, higher frequency alternative data measures that capture online search activity and mobile application usage performed well amid supply chain constraints by motivating an overweight to software companies.

Additionally, newer insights developed to capture emerging market themes, such as wage pressures and supply chain challenges, proved additive. Namely, macro thematic measures that evaluate industry wide hiring trends aided performance additive, most notably by driving an overweight to specialty retail names.

Within insights related to environmental, social and governance (“ESG”) factors, select measures that look toward green patent filings and social measures that evaluate company diversity benefited performance. Within industrials, these insights helped motivate an underweight to machinery companies negatively impacted by supply chain disruptions.

Despite overall strength, select measures struggled. Namely, the portfolio’s fundamental measures weighed on performance. Traditional valuation metrics, such as those that evaluate research expenditures across price, lagged amid the changing market style preferences. Additionally, measures with a preference for less-leveraged companies underperformed given the “risk-on” market tone.

Select ESG measures struggled. Environmental transition insights, which tend to have a pro-growth tilt, lagged against both the shift toward value and the strong increase in commodities prices. Insights designed to track investor positioning into ESG-related holdings were leading detractors. Additionally, an insight that identifies company green bond issuance, another transition measure, detracted as interest rates moved higher.

Describe recent portfolio activity.

Over the course of the period, the portfolio maintained a balanced allocation of risk across all major return drivers. There were, however, several new signals added within the stock selection group of insights. The Fund built upon its alternative data capabilities by adding an insight that captures brand sentiment around retail names. Additionally, given the dynamism of the current environment, the Fund has instituted enhanced signal constructs to best identify emerging trends, such as sentiment around supply chain disruptions and wage inflation.

Describe portfolio positioning at period end.

The Fund remained largely sector neutral relative to the Russell 1000^® Index. At period end, the Fund had slight overweight positions to utilities and information technology and slight underweights to health care and consumer discretionary.

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

4 2 0 2 1   BLACK ROCK   SEMI - ANNUAL   REPORT   TO   SHAREHOLDERS

Fund Summary  as of November 30, 2021 (continued) BlackRock Advantage ESG U.S. Equity Fund

Performance

				Average Annual Total Returns(a)(b)
				1 Year						5 Years						Since Inception(c)
	6-Month Total Returns			Without Sales Charge			With Sales Charge			Without Sales Charge			With Sales Charge			Without Sales Charge			With Sales Charge
Institutional		8.81	%		29.06	%		N/A			18.53	%		N/A			17.19	%		N/A
Investor A		8.67			28.70			21.95	%		18.22			16.95	%		16.89			15.87	%
Investor C		8.26			27.72			26.72			17.34			17.34			16.03			16.03
Class K		8.88			29.15			N/A			18.60			N/A			17.24			N/A
Russell 1000® Index(d)		8.37			26.67			N/A			17.93			N/A			16.66			N/A

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

(b) Under normal circumstances, the Fund seeks to invest at least 80% of its net assets plus any borrowings for investment purposes in U.S. equity securities, which include common stock, preferred stock and convertible securities.

(c) The Fund commenced operations on October 5, 2015.

(d) An index that measures the performance of the large-cap segment of the U.S. equity universe. It is a subset of the Russell 3000 Index and includes approximately 1,000 of the largest securities based on a combination of their market capitalization and current index membership. The index represents approximately 93% of the U.S. market.

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

Past performance is not an indication of future results.

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

Expense Example

	Actual							Hypothetical(a)
	Beginning Account Value		Ending Account Value		Expenses Paid During			Beginning Account Value		Ending Account Value		Expenses Paid During			Annualized Expense
		(06/01/21)		(11/30/21)		the Period	(b)		(06/01/21)		(11/30/21)		the Period	(b)		Ratio
Institutional	$	1,000.00	$	1,088.10	$	2.51		$	1,000.00	$	1,022.66	$	2.43			0.48	%
Investor A		1,000.00		1,086.70		3.82			1,000.00		1,021.41		3.70			0.73
Investor C		1,000.00		1,082.60		7.73			1,000.00		1,017.65		7.49			1.48
Class K		1,000.00		1,088.80		2.25			1,000.00		1,022.91		2.18			0.43

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

(b) For each class of the Fund, expenses are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period shown).

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

Portfolio Information

TEN LARGEST HOLDINGS

Security(a)	Percent of Net Assets
Apple, Inc.		5	%
Microsoft Corp.		5
Amazon.com, Inc.		3
Alphabet, Inc., Class A		2
NVIDIA Corp.		2
Tesla, Inc.		2
Alphabet, Inc., Class C		2
Adobe, Inc.		2
Home Depot, Inc.		2
Visa, Inc., Class A		2

SECTOR ALLOCATION

Sector(b)	Percent of Net Assets
Information Technology		30	%
Financials		12
Consumer Discretionary		12
Health Care		11
Industrials		9
Communication Services		9
Consumer Staples		5
Utilities		3
Real Estate		3
Energy		3
Materials		2
Short-Term Securities		1
Other Assets Less Liabilities		—	(c)

(a) Excludes short-term securities.

(b) 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.

(c) Rounds to less than 1% of net assets.

FUND   SUMMARY 5

About Fund Performance BlackRock Advantage ESG U.S. Equity Fund

Institutional and Class K Shares are not subject to any sales charge. These shares bear no ongoing distribution or service fees and are available only to certain eligible investors. Class K Shares performance shown prior to the Class K Shares inception date of March 28, 2016 is that of Institutional Shares. The performance of the Fund’s Class K Shares would be substantially similar to Institutional Shares because Class K Shares and Institutional Shares invest in the same portfolio of securities and performance would only differ to the extent that Class K Shares and Institutional Shares have different expenses. The actual returns of Class K Shares would have been higher than those of the Institutional Shares because Class K Shares have lower expenses than the Institutional Shares.

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

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

Past performance is not an indication of future results. Financial markets have experienced extreme volatility and trading in many instruments has been disrupted. These circumstances may continue for an extended period of time and may continue to affect adversely the value and liquidity of the Fund’s investments. As a result, current performance may be lower or higher than the performance data quoted. Refer to blackrock.com to obtain performance data current to the most recent month-end. Performance results do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Figures shown in the performance table(s) assume reinvestment of all distributions, if any, at net asset value (“NAV”) on the ex-dividend date or payable date, as applicable. Investment return and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Distributions paid to each class of shares will vary because of the different levels of service, distribution and transfer agency fees applicable to each class, which are deducted from the income available to be paid to shareholders.

BlackRock Advisors, LLC (the “Manager”), the Fund’s investment adviser, has contractually and/or voluntarily agreed to waive and/or reimburse a portion of the Fund’s expenses. Without such waiver(s) and/or reimbursement(s), the Fund’s performance would have been lower. With respect to the Fund’s voluntary waiver(s), if any, the Manager is under no obligation to waive and/or reimburse or to continue waiving and/or reimbursing its fees and such voluntary waiver(s) may be reduced or discontinued at any time. With respect to the Fund’s contractual waiver(s), if any, the Manager is under no obligation to continue waiving and/or reimbursing its fees after the applicable termination date of such agreement. See the Notes to Financial Statements for additional information on waivers and/or reimbursements.

Disclosure of Expenses

Shareholders of the 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 example shown (which is based on a hypothetical investment of $1,000 invested at the beginning of the period (or from the commencement of operations if less than 6 months) and held through the end of the period) is intended to assist shareholders both in calculating expenses based on an investment in the Fund and in comparing these expenses with similar costs of investing in other mutual funds.

The expense example provides information about actual account values and actual expenses. Annualized expense ratios reflect contractual and voluntary fee waivers, if any. In order to estimate the expenses a shareholder paid during the period covered by this report, shareholders can divide their account value by $1,000 and then multiply the result by the number corresponding to their share class under the heading entitled “Expenses Paid During the Period.”

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

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

Derivative Financial Instruments

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

6 2 0 2 1   BLACK ROCK   SEMI - ANNUAL   REPORT   TO   SHAREHOLDERS

Schedule of Investments (unaudited) November 30, 2021 BlackRock Advantage ESG U.S. Equity Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Common Stocks
Aerospace & Defense — 0.1%
Axon Enterprise, Inc.(a)		710	$	119,841
Curtiss-Wright Corp.		198		24,912
HEICO Corp.		267		36,985
HEICO Corp., Class A		995		123,579
Hexcel Corp.(a)		404		20,758
Mercury Systems, Inc.(a)		261		12,776
				338,851
Air Freight & Logistics — 1.5%
C.H. Robinson Worldwide, Inc.		40,548		3,855,709
Expeditors International of Washington, Inc.		48,118		5,852,111
				9,707,820
Airlines — 0.4%
Alaska Air Group, Inc.(a)		48,569		2,358,996
Auto Components — 0.4%
BorgWarner, Inc.		62,554		2,707,337
Automobiles(a) — 2.1%
Rivian Automotive, Inc., Class A		8,061		965,385
Tesla, Inc.		10,809		12,373,711
				13,339,096
Banks — 3.1%
Citigroup, Inc.		77,129		4,913,117
Credicorp Ltd.		1,306		154,108
First Republic Bank		13,786		2,890,373
Huntington Bancshares, Inc.		306,879		4,554,084
JPMorgan Chase & Co.		8,390		1,332,584
PNC Financial Services Group, Inc.		1,226		241,522
Regions Financial Corp.		255,436		5,811,169
				19,896,957
Beverages — 0.8%
Coca-Cola Co.		61,628		3,232,389
Coca-Cola European Partners PLC		36,785		1,816,075
				5,048,464
Biotechnology — 2.1%
Amgen, Inc.		34,479		6,857,184
Biogen, Inc.(a)		1,126		265,443
Gilead Sciences, Inc.		89,066		6,139,319
				13,261,946
Building Products — 1.6%
Builders FirstSource, Inc.(a)		6,875		477,400
Fortune Brands Home & Security, Inc.		1,635		164,366
Johnson Controls International PLC		31,310		2,340,736
Masco Corp.		2,929		193,021
Owens Corning		7,040		597,274
Trane Technologies PLC		33,439		6,241,389
				10,014,186
Capital Markets — 3.3%
Bank of New York Mellon Corp.		15,875		869,791
CME Group, Inc.		11,915		2,627,496
FactSet Research Systems, Inc.		579		271,302
Goldman Sachs Group, Inc.		11,165		4,253,753
Intercontinental Exchange, Inc.		38,100		4,980,432
Morgan Stanley		32,980		3,127,164
T. Rowe Price Group, Inc.		22,878		4,574,456
				20,704,394

Security	Shares		Value
Chemicals — 1.1%
Ecolab, Inc.		28,901	$	6,400,705
International Flavors & Fragrances, Inc.		5,647		802,834
Mosaic Co.		1,574		53,862
				7,257,401
Commercial Services & Supplies — 0.3%
IAA, Inc.(a)		41,346		1,997,012
Communications Equipment — 0.3%
Cisco Systems, Inc.		31,029		1,701,630
Construction & Engineering — 0.4%
EMCOR Group, Inc.		6,420		766,163
Quanta Services, Inc.		13,080		1,488,242
				2,254,405
Consumer Finance — 2.0%
Ally Financial, Inc.		94,592		4,335,151
American Express Co.		39,940		6,082,862
Capital One Financial Corp.		1,286		180,722
Synchrony Financial		52,539		2,353,222
				12,951,957
Containers & Packaging — 0.8%
AptarGroup, Inc.		585		69,960
Ball Corp.		57,205		5,345,807
				5,415,767
Distributors — 0.1%
Pool Corp.		1,358		752,495
Diversified Consumer Services — 0.4%
H&R Block, Inc.		19,232		455,414
Service Corp. International		5,484		362,821
Terminix Global Holdings, Inc.(a)		43,275		1,615,023
				2,433,258
Diversified Financial Services — 0.6%
Berkshire Hathaway, Inc., Class B(a)		6,602		1,826,707
Voya Financial, Inc.		36,950		2,296,073
				4,122,780
Diversified Telecommunication Services — 1.1%
Bandwidth, Inc., Class A(a)		2,795		200,289
Verizon Communications, Inc.		134,577		6,765,186
				6,965,475
Electric Utilities — 2.2%
Avangrid, Inc.		30,857		1,561,981
Eversource Energy		47,171		3,880,758
Exelon Corp.		54,901		2,894,930
NextEra Energy, Inc.		66,930		5,808,186
				14,145,855
Electronic Equipment, Instruments & Components(a) — 1.0%
Flex Ltd.		98,520		1,684,692
Keysight Technologies, Inc.		13,644		2,653,485
Zebra Technologies Corp., Class A		3,007		1,770,462
				6,108,639
Energy Equipment & Services — 0.9%
Schlumberger NV		184,593		5,294,127
TechnipFMC PLC(a)		29,422		166,823
				5,460,950

SCHEDULE   OF   INVESTMENTS 7

Schedule of Investments (unaudited) (continued) November 30, 2021 BlackRock Advantage ESG U.S. Equity Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Entertainment(a) — 1.2%
Roku, Inc.		1,290	$	293,617
Walt Disney Co.		50,427		7,306,872
				7,600,489
Equity Real Estate Investment Trusts (REITs) — 1.8%
Crown Castle International Corp.		17,266		3,136,369
Equinix, Inc.		4,237		3,441,291
Prologis, Inc.		33,078		4,986,509
				11,564,169
Food & Staples Retailing — 1.2%
Costco Wholesale Corp.		14,575		7,861,464
Food Products — 0.9%
Campbell Soup Co.		10,697		431,410
Conagra Brands, Inc.		71,435		2,182,339
Kellogg Co.		49,379		3,021,007
				5,634,756
Gas Utilities — 0.0%
UGI Corp.		5,448		224,730
Health Care Equipment & Supplies(a) — 2.2%
Align Technology, Inc.		3,063		1,873,116
DexCom, Inc.		4,298		2,418,012
Hologic, Inc.		23,554		1,760,191
IDEXX Laboratories, Inc.		10,174		6,186,504
Insulet Corp.		6,259		1,805,346
				14,043,169
Health Care Providers & Services — 1.2%
Anthem, Inc.		6,572		2,669,744
Cigna Corp.		1,543		296,102
Humana, Inc.		510		214,052
LHC Group, Inc.(a)		5,159		591,840
McKesson Corp.		16,719		3,624,010
Molina Healthcare, Inc.(a)		518		147,723
UnitedHealth Group, Inc.		745		330,944
				7,874,415
Health Care Technology — 0.6%
Cerner Corp.		55,299		3,895,814
Teladoc Health, Inc.(a)		2,343		237,229
				4,133,043
Hotels, Restaurants & Leisure — 0.5%
Booking Holdings, Inc.(a)		880		1,849,628
McDonald’s Corp.		3,372		824,791
Travel + Leisure Co.		5,642		277,699
				2,952,118
Household Durables — 0.0%
Meritage Homes Corp.(a)		2,138		241,295
Household Products — 1.4%
Clorox Co.		14,833		2,415,554
Colgate-Palmolive Co.		87,595		6,571,377
				8,986,931
Independent Power and Renewable Electricity Producers — 0.1%
Sunnova Energy International, Inc.(a)		10,566		390,625
Industrial Conglomerates — 0.4%
3M Co.		14,494		2,464,560
General Electric Co.		3,209		304,823
Roper Technologies, Inc.		201		93,294
				2,862,677

Security	Shares		Value
Insurance — 2.8%
American International Group, Inc.		10,670	$	561,242
Marsh & McLennan Cos., Inc.		35,986		5,902,424
MetLife, Inc.		104,279		6,117,006
Travelers Cos., Inc.		35,963		5,284,763
Willis Towers Watson PLC		1,036		233,970
				18,099,405
Interactive Media & Services(a) — 5.3%
Alphabet, Inc., Class A		5,589		15,861,303
Alphabet, Inc., Class C		4,085		11,638,328
Meta Platforms, Inc., Class A		17,550		5,694,273
ZoomInfo Technologies, Inc.		14,012		864,540
				34,058,444
Internet & Direct Marketing Retail — 3.6%
Amazon.com, Inc.(a)		5,922		20,768,869
DoorDash, Inc., Class A(a)		403		72,044
eBay, Inc.		16,026		1,081,114
Etsy, Inc.(a)		2,187		600,507
MercadoLibre, Inc.(a)		130		154,493
				22,677,027
IT Services — 4.4%
Automatic Data Processing, Inc.		31,081		7,176,292
Mastercard, Inc., Class A		17,644		5,556,448
Okta, Inc.(a)		10,427		2,244,203
PayPal Holdings, Inc.(a)		11,897		2,199,636
Snowflake, Inc., Class A(a)		1,761		599,004
Toast, Inc., Class A(a)		3,538		141,485
Twilio, Inc., Class A(a)		1,140		326,211
Visa, Inc., Class A		50,910		9,864,831
Wix.com Ltd.(a)		442		67,538
				28,175,648
Leisure Products — 0.1%
Hasbro, Inc.		7,525		729,248
Life Sciences Tools & Services — 3.2%
Agilent Technologies, Inc.		42,008		6,339,007
Illumina, Inc.(a)		4,187		1,529,637
Mettler-Toledo International, Inc.(a)		2,009		3,041,887
Waters Corp.(a)		12,028		3,946,026
West Pharmaceutical Services, Inc.		11,804		5,225,159
				20,081,716
Machinery — 1.2%
Illinois Tool Works, Inc.		28,421		6,597,935
Woodward, Inc.		10,637		1,125,395
				7,723,330
Media — 1.0%
Discovery, Inc., Class C(a)		4,315		97,994
Fox Corp., Class A		19,297		689,096
Fox Corp., Class B		2,071		69,585
Sirius XM Holdings, Inc.(b)		547,334		3,338,737
TEGNA, Inc.		78,965		1,559,559
ViacomCBS, Inc., Class B		11,325		350,509
				6,105,480
Metals & Mining — 0.3%
Reliance Steel & Aluminum Co.		12,967		1,927,285
Multi-line Retail — 1.3%
Nordstrom, Inc.(a)		37,655		797,156
Target Corp.		30,416		7,416,638
				8,213,794

8 2 0 2 1   BLACK ROCK   SEMI - ANNUAL   REPORT   TO   SHAREHOLDERS

Schedule of Investments (unaudited) (continued) November 30, 2021 BlackRock Advantage ESG U.S. Equity Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Multi-Utilities — 1.0%
Consolidated Edison, Inc.		78,339	$	6,082,240
Oil, Gas & Consumable Fuels — 1.7%
Chevron Corp.		8,870		1,001,157
EOG Resources, Inc.		35,994		3,131,478
EQT Corp.(a)		27,396		532,304
Hess Corp.		47,610		3,547,897
Kinder Morgan, Inc.		44,608		689,640
ONEOK, Inc.		16,808		1,005,791
Valero Energy Corp.		1,001		67,007
Williams Cos., Inc.		28,486		763,140
				10,738,414
Personal Products — 0.6%
Estee Lauder Cos., Inc., Class A		11,949		3,967,904
Pharmaceuticals — 2.1%
Bristol-Myers Squibb Co.		31,314		1,679,370
Eli Lilly & Co.		5,399		1,339,168
Jazz Pharmaceuticals PLC(a)		1,432		171,654
Johnson & Johnson		2,653		413,682
Merck & Co., Inc.		2,189		163,978
Pfizer, Inc.		44,665		2,399,851
Zoetis, Inc.		32,855		7,295,124
				13,462,827
Professional Services — 0.9%
Equifax, Inc.		8,208		2,287,159
IHS Markit Ltd.		5,432		694,319
Robert Half International, Inc.		24,801		2,757,127
				5,738,605
Real Estate Management & Development — 0.8%
CBRE Group, Inc., Class A(a)		51,981		4,967,824
Road & Rail — 1.5%
Landstar System, Inc.		28,566		4,814,800
Ryder System, Inc.		50,878		4,226,944
Uber Technologies, Inc.(a)		8,024		304,912
				9,346,656
Semiconductors & Semiconductor Equipment — 6.6%
Advanced Micro Devices, Inc.(a)		38,261		6,059,395
Applied Materials, Inc.		43,723		6,435,588
Cirrus Logic, Inc.(a)		1,917		153,705
Intel Corp.		105,304		5,180,957
Lam Research Corp.		2,301		1,564,335
NVIDIA Corp.		47,366		15,477,314
Texas Instruments, Inc.		33,293		6,404,574
Xilinx, Inc.		3,578		817,394
				42,093,262
Software — 11.6%
ACI Worldwide, Inc.(a)		10,962		319,433
Adobe, Inc.(a)		15,396		10,313,011
ANSYS, Inc.(a)		192		75,164
Autodesk, Inc.(a)		1,615		410,517
Cadence Design Systems, Inc.(a)		13,557		2,405,825
HubSpot, Inc.(a)		2,932		2,365,860
Intuit, Inc.		12,066		7,870,652
Microsoft Corp.		92,552		30,596,766
RingCentral, Inc., Class A(a)		4,137		893,509

Security	Shares		Value
Software (continued)
salesforce.com, Inc.(a)		19,186	$	5,467,242
ServiceNow, Inc.(a)		11,489		7,441,425
VMware, Inc., Class A		9,318		1,087,783
Workday, Inc., Class A(a)		14,346		3,934,104
Workiva, Inc.(a)		4,061		566,388
				73,747,679
Specialty Retail — 2.9%
Best Buy Co., Inc.		3,898		416,540
Foot Locker, Inc.		4,803		219,209
Gap, Inc.		92,251		1,524,909
Home Depot, Inc.		25,646		10,274,044
Lowe’s Cos., Inc.		12,153		2,972,502
Tractor Supply Co.		3,853		868,197
Ulta Beauty, Inc.(a)		4,464		1,713,953
Williams-Sonoma, Inc.		3,656		712,335
				18,701,689
Technology Hardware, Storage & Peripherals — 6.3%
Apple, Inc.		208,162		34,409,179
Dell Technologies, Inc., Class C(a)		36,400		2,055,508
Hewlett Packard Enterprise Co.		264,007		3,788,500
				40,253,187
Textiles, Apparel & Luxury Goods — 0.4%
Lululemon Athletica, Inc.(a)		2,060		936,085
Tapestry, Inc.		36,960		1,482,835
				2,418,920
Trading Companies & Distributors — 1.1%
SiteOne Landscape Supply, Inc.(a)		5,232		1,257,564
W.W. Grainger, Inc.		11,893		5,725,409
				6,982,973
Wireless Telecommunication Services — 0.1%
United States Cellular Corp.(a)		13,763		400,641
Total Long-Term Investments — 98.9% (Cost: $547,167,166)				630,009,750
Short-Term Securities
Money Market Funds — 1.0%
BlackRock Liquidity Funds, T-Fund, Institutional Class, 0.00%(c)(d)		5,685,919		5,685,919
SL Liquidity Series, LLC, Money Market Series, 0.14%(c)(d)(e)		873,425		873,600
Total Short-Term Securities — 1.0% (Cost: $6,559,519)				6,559,519
Total Investments — 99.9% (Cost: $553,726,685)				636,569,269
Other Assets Less Liabilities — 0.1%				333,777
Net Assets — 100.0%			$	636,903,046

^(a) Non-income producing security.

^(b) All or a portion of this security is on loan.

^(c) Affiliate of the Fund.

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

^(e) All or a portion of this 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.

SCHEDULE   OF   INVESTMENTS 9

Schedule of Investments (unaudited) (continued) November 30, 2021 BlackRock Advantage ESG U.S. Equity Fund

Affiliates

Investments in issuers considered to be affiliate(s) of the Fund during the six months ended November 30, 2021 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

Affiliated Issuer	Value at 05/31/21		Purchases at Cost		Proceeds from Sales			Net Realized Gain (Loss)			Change in Unrealized Appreciation (Depreciation)		Value at 11/30/21		Shares Held at 11/30/21		Income			Capital Gain Distributions from Underlying Funds
BlackRock Liquidity Funds, T-Fund, Institutional Class	$	6,572,797	$	—	$	(886,878	)(a)	$	—		$	—	$	5,685,919		5,685,919	$	164		$	—
SL Liquidity Series, LLC, Money Market Series		2,031,432		—		(1,157,701	)(a)		(131	)		—		873,600		873,425		7,723	(b)		—
								$	(131	)	$	—	$	6,559,519			$	7,887		$	—

^(a) Represents net amount purchased (sold).

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

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

Description	Number of Contracts		Expiration Date		Notional Amount (000)		Value/ Unrealized Appreciation (Depreciation)
Long Contracts
S&P 500 E-Mini Index		19		12/17/21	$	4,338	$	(103,477	)

Derivative Financial Instruments Categorized by Risk Exposure

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

	Commodity Contracts		Credit Contracts		Equity Contracts		Foreign Currency Exchange Contracts		Interest Rate Contracts		Other Contracts		Total
Liabilities — Derivative Financial Instruments
Futures contracts
Unrealized depreciation on futures contracts(a)	$	—	$	—	$	103,477	$	—	$	—	$	—	$	103,477

^(a) Net cumulative unrealized appreciation (depreciation) on futures contracts and centrally cleared swaps, if any, are reported in the Schedule of Investments. In the Statement of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss).

For the period ended November 30, 2021, the effect of derivative financial instruments in the Statement of Operations was as follows:

	Commodity Contracts		Credit Contracts		Equity Contracts			Foreign Currency Exchange Contracts		Interest Rate Contracts		Other Contracts		Total
Net Realized Gain (Loss) from:
Futures contracts	$	—	$	—	$	294,084		$	—	$	—	$	—	$	294,084
Net Change in Unrealized Appreciation (Depreciation) on:
Futures contracts	$	—	$	—	$	(107,056	)	$	—	$	—	$	—	$	(107,056	)

Average Quarterly Balances of Outstanding Derivative Financial Instruments

Futures contracts:
Average notional value of contracts — long	$	3,751,144

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

10 2 0 2 1   BLACK ROCK   SEMI - ANNUAL   REPORT   TO   SHAREHOLDERS

Schedule of Investments (unaudited) (continued) November 30, 2021 BlackRock Advantage ESG U.S. Equity Fund

Fair Value Hierarchy as of Period End

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

The following table summarizes the Fund’s financial instruments categorized in the fair value hierarchy. The breakdown of the Fund’s financial instruments into major categories is disclosed in the Schedule of Investments above.

	Level 1			Level 2		Level 3		Total
Assets
Investments
Long-Term Investments
Common Stocks	$	630,009,750		$	—	$	—	$	630,009,750
Short-Term Securities
Money Market Funds		5,685,919			—		—		5,685,919
	$	635,695,669		$	—	$	—		635,695,669
Investments Valued at NAV(a)									873,600
								$	636,569,269
Derivative Financial Instruments(b)
Liabilities
Equity Contracts	$	(103,477	)	$	—	$	—	$	(103,477	)

(a) Certain investments of the Fund were fair valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

(b) Derivative financial instruments are futures contracts. Futures contracts are valued at the unrealized appreciation (depreciation) on the instrument.

See notes to financial statements.

SCHEDULE   OF   INVESTMENTS 11

Statement of Assets and Liabilities (unaudited)

November 30, 2021

	BlackRock Advantage ESG U.S. Equity Fund
ASSETS
Investments, at value — unaffiliated(a)(b)	$	630,009,750
Investments, at value — affiliated(c)		6,559,519
Cash pledged for futures contracts		198,000
Receivables:
Investments sold		4,736,834
Securities lending income — affiliated		923
Capital shares sold		3,797,825
Dividends — unaffiliated		743,248
Dividends — affiliated		47
Prepaid expenses		63,739
Total assets		646,109,885
LIABILITIES
Collateral on securities loaned, at value		873,600
Payables:
Investments purchased		6,985,178
Accounting services fees		9,505
Administration fees		21,314
Capital shares redeemed		922,740
Custodian fees		11,570
Investment advisory fees		150,516
Trustees’ and Officer’s fees		3,322
Other accrued expenses		26,087
Professional fees		19,602
Service and distribution fees		41,381
Transfer agent fees		64,494
Variation margin on futures contracts		77,530
Total liabilities		9,206,839
NET ASSETS	$	636,903,046
NET ASSETS CONSIST OF
Paid-in capital	$	544,843,803
Accumulated earnings		92,059,243
NET ASSETS	$	636,903,046
(a)   Investments, at cost — unaffiliated	$	547,167,166
(b)   Securities loaned, at value	$	819,840
(c)   Investments, at cost — affiliated	$	6,559,519

12 2 0 2 1   BLACK ROCK   SEMI - ANNUAL   REPORT   TO   SHAREHOLDERS

Statement of Assets and Liabilities (unaudited) (continued)

November 30, 2021

	BlackRock Advantage ESG U.S. Equity Fund
NET ASSET VALUE
Institutional
Net assets	$	454,142,624
Shares outstanding		22,698,650
Net asset value	$	20.01
Shares authorized		Unlimited
Par value	$	0.001
Investor A
Net assets	$	103,810,511
Shares outstanding		5,216,146
Net asset value	$	19.90
Shares authorized		Unlimited
Par value	$	0.001
Investor C
Net assets	$	23,431,682
Shares outstanding		1,195,881
Net asset value	$	19.59
Shares authorized		Unlimited
Par value	$	0.001
Class K
Net assets	$	55,518,229
Shares outstanding		2,772,355
Net asset value	$	20.03
Shares authorized		Unlimited
Par value	$	0.001

See notes to financial statements.

FINANCIAL  STATEMENTS 13

Statement of Operations (unaudited)

Six Months Ended November 30, 2021

BlackRock Advantage ESG U.S. Equity Fund
INVESTMENT INCOME
Dividends — unaffiliated	$	2,976,819
Dividends — affiliated		164
Securities lending income — affiliated — net		7,723
Total investment income		2,984,706
EXPENSES
Investment advisory		954,005
Transfer agent — class specific		237,896
Service and distribution — class specific		209,763
Administration		101,055
Registration		65,143
Professional		61,139
Administration — class specific		47,700
Accounting services		33,013
Custodian		16,209
Trustees and Officer		3,294
Miscellaneous		30,657
Total expenses		1,759,874
Less:
Administration fees waived - class specific		(47,700	)
Fees waived and/or reimbursed by the Manager		(238,790	)
Transfer agent fees waived and/or reimbursed — class specific		(129,961	)
Total expenses after fees waived and/or reimbursed		1,343,423
Net investment income		1,641,283
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — unaffiliated		9,770,441
Investments — affiliated		(131	)
Futures contracts		294,084
		10,064,394
Net change in unrealized appreciation (depreciation) on:
Investments — unaffiliated		23,756,304
Futures contracts		(107,056	)
		23,649,248
Net realized and unrealized gain		33,713,642
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	35,354,925

See notes to financial statements.

14 2 0 2 1   BLACK ROCK   SEMI - ANNUAL   REPORT   TO   SHAREHOLDERS

Statements of Changes in Net Assets

	BlackRock Advantage ESG U.S. Equity Fund
	Six Months Ended 11/30/21 (unaudited)				Year Ended 05/31/21
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income		$	1,641,283		$	1,562,280
Net realized gain			10,064,394			27,284,733
Net change in unrealized appreciation (depreciation)			23,649,248			40,093,027
Net increase in net assets resulting from operations			35,354,925			68,940,040
DISTRIBUTIONS TO SHAREHOLDERS(a)
Institutional			(12,059,087	)		(3,989,260	)
Investor A			(3,607,093	)		(1,259,676	)
Investor C			(796,830	)		(269,656	)
Class K			(1,818,799	)		(590,452	)
Decrease in net assets resulting from distributions to shareholders			(18,281,809	)		(6,109,044	)
CAPITAL SHARE TRANSACTIONS
Net increase in net assets derived from capital share transactions			279,661,927			148,118,260
NET ASSETS
Total increase in net assets			296,735,043			210,949,256
Beginning of period			340,168,003			129,218,747
End of period		$	636,903,046		$	340,168,003

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

See notes to financial statements.

FINANCIAL  STATEMENTS 15

Financial Highlights

(For a share outstanding throughout each period)

	BlackRock Advantage ESG U.S. Equity Fund
	Institutional
	Six Months Ended 11/30/21				Year Ended May 31,
	(unaudited)					2021			2020			2019			2018			2017
Net asset value, beginning of period		$	19.27			$	13.75		$	12.64		$	13.33		$	12.07		$	10.49
Net investment income(a)			0.08				0.16			0.18			0.18			0.17			0.15
Net realized and unrealized gain			1.57				6.00			1.35			0.13			1.79			1.74
Net increase from investment operations			1.65				6.16			1.53			0.31			1.96			1.89
Distributions(b)
From net investment income			(0.04	)			(0.16	)		(0.16	)		(0.17	)		(0.16	)		(0.17	)
From net realized gain			(0.87	)			(0.48	)		(0.26	)		(0.83	)		(0.54	)		(0.14	)
Total distributions			(0.91	)			(0.64	)		(0.42	)		(1.00	)		(0.70	)		(0.31	)
Net asset value, end of period		$	20.01			$	19.27		$	13.75		$	12.64		$	13.33		$	12.07
Total Return(c)
Based on net asset value			8.81	%(d)			45.64	%		12.16	%		2.36	%		16.74	%		18.35	%
Ratios to Average Net Assets
Total expenses			0.67	%(e)			0.73	%(f)		0.79	%		0.95	%		1.10	%		1.63	%
Total expenses after fees waived and/or reimbursed			0.48	%(e)			0.50	%(f)		0.55	%		0.55	%		0.54	%		0.57	%
Net investment income			0.78	%(e)			0.93	%(f)		1.31	%		1.41	%		1.32	%		1.37	%
Supplemental Data
Net assets, end of period (000)		$	454,143			$	227,993		$	102,475		$	59,344		$	49,872		$	30,844
Portfolio turnover rate			44	%			160	%		159	%		149	%		118	%		82	%

^(a) Based on average shares outstanding.

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

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

^(d) Aggregate total return.

^(e) Annualized.

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

See notes to financial statements.

16 2 0 2 1   BLACK ROCK   SEMI - ANNUAL   REPORT   TO   SHAREHOLDERS

Financial Highlights (continued)

(For a share outstanding throughout each period)

	BlackRock Advantage ESG U.S. Equity Fund (continued)
	Investor A
	Six Months Ended
	11/30/21				Year Ended May 31,
	(unaudited)					2021			2020			2019			2018			2017
Net asset value, beginning of period		$	19.18			$	13.70		$	12.60		$	13.29		$	12.05		$	10.48
Net investment income(a)			0.05				0.11			0.14			0.15			0.14			0.14
Net realized and unrealized gain			1.57				5.98			1.35			0.13			1.77			1.72
Net increase from investment operations			1.62				6.09			1.49			0.28			1.91			1.86
Distributions(b)
From net investment income			(0.03	)			(0.13	)		(0.13	)		(0.14	)		(0.13	)		(0.15	)
From net realized gain			(0.87	)			(0.48	)		(0.26	)		(0.83	)		(0.54	)		(0.14	)
Total distributions			(0.90	)			(0.61	)		(0.39	)		(0.97	)		(0.67	)		(0.29	)
Net asset value, end of period		$	19.90			$	19.18		$	13.70		$	12.60		$	13.29		$	12.05
Total Return(c)
Based on net asset value.			8.67	%(d)			45.25	%		11.89	%		2.13	%		16.38	%		18.04	%
Ratios to Average Net Assets
Total expenses			0.88	%(e)			0.98	%(f)		1.08	%		1.23	%		1.42	%		1.84	%
Total expenses after fees waived and/or reimbursed			0.73	%(e)			0.74	%(f)		0.80	%		0.80	%		0.80	%		0.82	%
Net investment income			0.52	%(e)			0.68	%(f)		1.06	%		1.17	%		1.06	%		1.22	%
Supplemental Data
Net assets, end of period (000)		$	103,811			$	62,539		$	19,030		$	11,052		$	5,881		$	3,194
Portfolio turnover rate			44	%			160	%		159	%		149	%		118	%		82	%

^(a) Based on average shares outstanding.

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

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

^(d) Aggregate total return.

^(e) Annualized.

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

See notes to financial statements.

FINANCIAL  HIGHLIGHTS 17

Financial Highlights (continued)

(For a share outstanding throughout each period)

	BlackRock Advantage ESG U.S. Equity Fund (continued)
	Investor C
	Six Months Ended 11/30/21				Year Ended May 31,
	(unaudited)					2021			2020			2019			2018			2017
Net asset value, beginning of period		$	18.92			$	13.54		$	12.46		$	13.17		$	11.98		$	10.45
Net investment income (loss)(a)			(0.02	)			(0.01	)		0.04			0.05			0.04			0.06
Net realized and unrealized gain			1.54				5.90			1.34			0.13			1.76			1.71
Net increase from investment operations			1.52				5.89			1.38			0.18			1.80			1.77
Distributions(b)
From net investment income			—				(0.03	)		(0.04	)		(0.06	)		(0.07	)		(0.10	)
From net realized gain			(0.85	)			(0.48	)		(0.26	)		(0.83	)		(0.54	)		(0.14	)
Total distributions			(0.85	)			(0.51	)		(0.30	)		(0.89	)		(0.61	)		(0.24	)
Net asset value, end of period		$	19.59			$	18.92		$	13.54		$	12.46		$	13.17		$	11.98
Total Return(c)
Based on net asset value			8.26	%(d)			44.13	%		11.11	%		1.38	%		15.45	%		17.24	%
Ratios to Average Net Assets
Total expenses			1.62	%(e)			1.72	%(f)		1.83	%		2.01	%		2.25	%		2.46	%
Total expenses after fees waived and/or reimbursed			1.48	%(e)			1.50	%(f)		1.55	%		1.55	%		1.55	%		1.54	%
Net investment income (loss)			(0.23	)%(e)			(0.08	)%(f)		0.30	%		0.42	%		0.30	%		0.53	%
Supplemental Data
Net assets, end of period (000)		$	23,432			$	15,926		$	6,082		$	3,453		$	1,722		$	756
Portfolio turnover rate			44	%			160	%		159	%		149	%		118	%		82	%

^(a) Based on average shares outstanding.

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

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

(d) Aggregate total return.

(e) Annualized.

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

See notes to financial statements.

18 2 0 2 1   BLACK ROCK   SEMI - ANNUAL   REPORT   TO   SHAREHOLDERS

Financial Highlights (continued)

(For a share outstanding throughout each period)

	BlackRock Advantage ESG U.S. Equity Fund (continued)
	Class K
	Six Months Ended 11/30/21				Year Ended May 31,
		(unaudited)				2021			2020			2019			2018			2017
Net asset value, beginning of period		$	19.28			$	13.76		$	12.65		$	13.33		$	12.08		$	10.49
Net investment income(a)			0.08				0.17			0.18			0.19			0.17			0.16
Net realized and unrealized gain			1.59				6.00			1.36			0.14			1.78			1.74
Net increase from investment operations			1.67				6.17			1.54			0.33			1.95			1.90
Distributions(b)
From net investment income			(0.05	)			(0.17	)		(0.17	)		(0.18	)		(0.16	)		(0.17	)
From net realized gain			(0.87	)			(0.48	)		(0.26	)		(0.83	)		(0.54	)		(0.14	)
Total distributions			(0.92	)			(0.65	)		(0.43	)		(1.01	)		(0.70	)		(0.31	)
Net asset value, end of period		$	20.03			$	19.28		$	13.76		$	12.65		$	13.33		$	12.08
Total Return(c)
Based on net asset value			8.88	%(d)			45.68	%		12.20	%		2.48	%		16.67	%		18.47	%
Ratios to Average Net Assets
Total expenses			0.55	%(e)			0.64	%(f)		0.74	%		0.93	%		1.09	%		1.68	%
Total expenses after fees waived and/or reimbursed			0.43	%(e)			0.43	%(f)		0.50	%		0.50	%		0.50	%		0.55	%
Net investment income			0.81	%(e)			0.97	%(f)		1.38	%		1.46	%		1.36	%		1.39	%
Supplemental Data
Net assets, end of period (000)		$	55,518			$	33,710		$	1,632		$	338		$	264		$	239
Portfolio turnover rate			44	%			160	%		159	%		149	%		118	%		82	%

(a) Based on average shares outstanding.

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

(c) Where applicable, assumes the reinvestment of distributions.

(d) Aggregate total return.

(e) Annualized.

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

See notes to financial statements.

FINANCIAL  HIGHLIGHTS 19

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. BlackRock Advantage ESG U.S. Equity Fund (the “Fund”) is a series of the Trust. The Fund is classified as diversified.

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

Share Class	Initial Sales Charge		CDSC			Conversion Privilege
Institutional and Class K Shares		No		No			None
Investor A Shares		Yes		No	(a)		None
Investor C Shares		No		Yes	(b)		To Investor A Shares after approximately 8 years

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

^(b) A CDSC of 1.00% is assessed on certain redemptions of Investor C Shares made within one year after purchase.

The Fund, together with certain other registered investment companies advised by BlackRock Advisors, LLC (the “Manager”)or its affiliates,is included in a complex of open-end equity, multi-asset, index and money market funds referred to as the BlackRock Multi-Asset Complex.

2. SIGNIFICANT ACCOUNTING POLICIES

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

Investment Transactions and Income Recognition: For financial reporting purposes, investment transactions are recorded on the dates the transactions are executed. Realized gains and losses on investment transactions are determined using the specific identification method. Dividend income and capital gain distributions, if any, are recorded on the ex-dividend dates. Non-cash dividends, if any, are recorded on the ex-dividend dates at fair value. Upon notification from issuers, a portion of the dividend income received from a real estate investment trust may be redesignated as a reduction of cost of the related investment and/or realized gain. Income, expenses and realized and unrealized gains and losses are allocated daily to each class based on its relative net assets.

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

Distributions: Distributions paid by the Fund are recorded on the ex-dividend dates. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP.

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

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

3. INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS

Investment Valuation Policies: The Fund’s investments are valued at fair value (also referred to as “market value” within the financial statements) each day that the Fund is open for business and, for financial reporting purposes, as of the report date. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Fund determines the fair values of its financial instruments using various independent dealers or pricing services under policies approved by the Board of Trustees of the Trust (the “Board”). If a security’s market price is not readily available or does not otherwise accurately represent the fair value of the security, the security will be valued in accordance with a policy approved by the Board as reflecting fair value. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) is the committee formed by management to develop global pricing policies and procedures and to oversee the pricing function for all financial instruments.

20 2 0 2 1   BLACK ROCK   SEMI - ANNUAL   REPORT   TO   SHAREHOLDERS

Notes to Financial Statements (unaudited) (continued)

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

• Equity investments traded on a recognized securities exchange are valued at that day’s official closing price, as applicable, on the exchange where the stock is primarily traded. Equity investments traded on a recognized exchange for which there were no sales on that day may be valued at the last available bid (long positions) or ask (short positions) price.

• Investments in open-end U.S. mutual funds (including money market funds) are valued at that day’s published net asset value (“NAV”).

• The Fund values its investment in SL Liquidity Series, LLC, Money Market Series (the “Money Market Series”) at fair value, which is ordinarily based upon its pro rata ownership in the underlying fund’s net assets.

• Futures contracts are valued based on that day’s last reported settlement or trade price on the exchange where the contract is traded.

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

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

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

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

• Level 3 – Unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Global Valuation Committee’s assumptions used in determining the fair value of financial instruments).

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Investments classified within Level 3 have significant unobservable inputs used by the Global Valuation Committee in determining the price for Fair Valued Investments. Level 3 investments include equity or debt issued by privately held companies or funds that may not have a secondary market and/or may have a limited number of investors. The categorization of a value determined for financial instruments is based on the pricing transparency of the financial instruments and is not necessarily an indication of the risks associated with investing in those securities.

As of November 30, 2021, certain investments of the Fund were fair valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

4. SECURITIES AND OTHER INVESTMENTS

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

As of period end, any securities on loan were collateralized by cash and/or U.S. Government obligations. Cash collateral invested by the securities lending agent, BlackRock Investment Management, LLC (“BIM”), if any, is disclosed in the Schedule of Investments. Any non-cash collateral received cannot be sold, re-invested or pledged by the Fund, except in the event of borrower default. The securities on loan, if any, are disclosed in the Fund’s Schedule of Investments. The market value of any securities on loan and the value of any related collateral are shown separately in the Statement of Assets and Liabilities as a component of investments at value – unaffiliated and collateral on securities loaned at value, respectively.

NOTES  TO  FINANCIAL  STATEMENTS 21

Notes to Financial Statements (unaudited) (continued)

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

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

		Securities	Cash Collateral				Net
Counterparty	Loaned at Value			Received	(a)	Amount
National Financial Services LLC		$            819,840		$          (819,840)			$       —

(a) Collateral received in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by the Fund is disclosed in the Fund’s Statement of Assets and Liabilities.

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

5. DERIVATIVE FINANCIAL INSTRUMENTS

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

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

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

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

6. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

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

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

Average Daily Net Assets	Investment Advisory Fees
First $1 billion		0.40	%
$1 billion — $3 billion		0.38
$3 billion — $5 billion		0.36
$5 billion — $10 billion		0.35
Greater than $10 billion		0.34

22 2 0 2 1   BLACK ROCK   SEMI - ANNUAL   REPORT   TO   SHAREHOLDERS

Notes to Financial Statements (unaudited) (continued)

Service and Distribution Fees: The Trust, on behalf of the Fund, 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, the Fund pays BRIL ongoing service and distribution fees. The fees are accrued daily and paid monthly at annual rates based upon the average daily net assets of the relevant share class of the Fund as follows:

Share Class	Service Fees			Distribution Fees
Investor A		0.25	%		N/A
Investor C		0.25			0.75	%

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

For the six months ended November 30, 2021, the following table shows the class specific service and distribution fees borne directly by each share class of the Fund:

	Investor A		Investor C		Total
Service and distribution fees — class specific	$	108,691	$	101,072	$	209,763

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

Average Daily Net Assets	Administration Fees
First $500 million		0.0425	%
$500 million — $1 billion		0.0400
$1 billion — $2 billion		0.0375
$2 billion — $4 billion		0.0350
$4 billion — $13 billion		0.0325
Greater than $13 billion		0.0300

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

For the six months ended November 30, 2021, the following table shows the class specific administration fees borne directly by each share class of the Fund:

	Institutional		Investor A		Investor C		Class K		Total
Administration fees	$	32,457	$	8,695	$	2,021	$	4,527	$	47,700

Transfer Agent: Pursuant to written agreements, certain financial intermediaries, some of which may be affiliates, provide the Fund with sub-accounting, recordkeeping, sub-transfer agency and other administrative services with respect to servicing of underlying investor accounts. For these services, these entities receive an asset-based fee or an annual fee per shareholder account, which will vary depending on share class and/or net assets. For the six months ended November 30, 2021, the Fund did not pay any amounts to affiliates in return for these services.

The Manager maintains a call center that is responsible for providing certain shareholder services to the Fund. Shareholder services include responding to inquiries and processing purchases and sales based upon instructions from shareholders. For the six months ended November 30, 2021, the 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 Statement of Operations:

	Institutional		Investor A		Investor C		Class K		Total
Reimbursed amounts	$	159	$	332	$	98	$	1	$	590

For the six months ended November 30, 2021, the following table shows the class specific transfer agent fees borne directly by each share class of the Fund:

	Institutional		Investor A		Investor C		Class K		Total
Transfer agent fees — class specific	$	196,302	$	33,773	$	7,486	$	335	$	237,896

Other Fees: For the six months ended November 30, 2021, affiliates earned underwriting discounts, direct commissions and dealer concessions on sales of the Fund’s Investor A Shares for a total of $18,165.

For the six months ended November 30, 2021, affiliates received CDSCs as follows:

Fund Name	Investor A		Investor C
BlackRock Advantage ESG U.S. Equity Fund	$	552	$	371

Expense Limitations, Waivers, Reimbursements, and Recoupments: The Manager contractually agreed to waive its investment advisory fees by the amount of investment advisory fees the Fund pays to the Manager indirectly through its investment in affiliated money market funds (the “affiliated money market fund waiver”) through June 30, 2023. The contractual agreement may be terminated upon 90 days’ notice by a majority of the trustees who are not “interested persons” of the Fund, as defined in the 1940 Act (“Independent Trustees”), or by a vote of a majority of the outstanding voting securities of the Fund. The amount of waivers and/or reimbursements of fees and expenses made pursuant to the expense limitation described below will be reduced by the amount of the affiliated money market fund waiver. This amount is included in fees waived and/or reimbursed by the Manager in the Statement of Operations. For the six months ended November 30, 2021, the amount waived was $818.

NOTES  TO  FINANCIAL  STATEMENTS 23

Notes to Financial Statements (unaudited) (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 and fixed-income mutual funds and affiliated exchange-traded funds that have a contractual management fee through June 30, 2023. The contractual agreement may be terminated upon 90 days’ notice by a majority of the Independent Trustees, or by a vote of a majority of the outstanding voting securities of the Fund. For the six months ended November 30, 2021, there were no fees waived and/or reimbursed by the Manager pursuant to this arrangement.

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

Share Class	Expense Limitation
Institutional		0.48	%
Investor A		0.73
Investor C		1.48
Class K		0.43

The Manager has agreed not to reduce or discontinue the contractual expense limitations through June 30, 2023, unless approved by the Board, including a majority of the Independent Trustees, or by a vote of a majority of the outstanding voting securities of the Fund. For the six months ended November 30, 2021, the Manager waived and/or reimbursed investment advisory fees of $237,972 which is included in fees waived and/or reimbursed by the Manager in the Statement of Operations.

In addition, these amounts waived and/or reimbursed by the Manager are included in administration fees waived — class specific and transfer agent fees waived and/or reimbursed — class specific, respectively, in the Statement of Operations. For the six months ended November 30, 2021, class specific expense waivers and/or reimbursements are as follows:

	Institutional		Investor A		Investor C		Class K		Total
Administration fees waived — class specific	$	32,457	$	8,695	$	2,021	$	4,527	$	47,700
	Institutional		Investor A		Investor C		Class K		Total
Transfer agent fees waived and/or reimbursed — class specific	$	115,160	$	12,035	$	2,431	$	335	$	129,961

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

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

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

This repayment applies only to the contractual expense limitation on net expenses and does not apply to the contractual investment advisory fee waiver described above or any voluntary waivers that may be in effect from time to time. Effective October 5, 2022, the repayment arrangement between the Fund and the Manager pursuant to which such Fund may be required to repay amounts waived and/or reimbursed under the Fund’s contractual caps on net expenses will be terminated.

As of November 30, 2021, the fund level and class specific waivers and/or reimbursements subject to possible future recoupment under the expense limitation agreement are as follows:

	Expiring
Fund Name/Fund Level/Share Class	May 31, 2022		October 05, 2022
BlackRock Advantage ESG U.S. Equity Fund
Fund Level	$	228,833	$	580,109
Institutional		16,607		215,978
Investor A		8,792		37,784
Investor C		2,337		8,146
Class K		343		8,164

Securities Lending: The U.S. Securities and Exchange Commission (“SEC”) has issued an exemptive order which permits BIM, an affiliate of the Manager, to serve as securities lending agent for the Fund, subject to applicable conditions. As securities lending agent, BIM bears all operational costs directly related to securities lending. The Fund is responsible for expenses in connection with the investment of cash collateral received for securities on loan (the “collateral investment expenses”). The cash collateral is invested in a private investment company, Money Market Series, managed by the Manager or its affiliates. However, BIM has agreed to cap the collateral investment expenses of the Money Market Series to an annual rate of 0.04% . The investment adviser to the Money Market Series will not charge any advisory fees with respect to shares purchased by the Fund. The Money Market Series may, under certain circumstances, impose a liquidity fee of up to 2% of the value withdrawn or temporarily restrict withdrawals for up to 10 business days during a 90 day period, in the event that the private investment company’s weekly liquid assets fall below certain thresholds. The Money Market Series seeks current income consistent with maintaining liquidity and preserving capital. Although the Money Market Series is not registered under the 1940 Act, its investments may follow the parameters of investments by a money market fund that is subject to Rule 2a-7 under the 1940 Act.

24 2 0 2 1   BLACK ROCK   SEMI - ANNUAL   REPORT   TO   SHAREHOLDERS

Notes to Financial Statements (unaudited) (continued)

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

Pursuant to the current securities lending agreement, the Fund retains 77% of securities lending income (which excludes collateral investment expenses), and this amount retained can never be less than 70% of the total of securities lending income plus the collateral investment expenses.

In addition, commencing the business day following the date that the aggregate securities lending income earned across the BlackRock Multi-Asset Complex in a calendar year exceeds a specified threshold, the Fund, pursuant to the securities lending agreement, will retain for the remainder of that calendar year securities lending income in an amount equal to 81% of securities lending income (which excludes collateral investment expenses), and this amount retained can never be less than 70% of the total of securities lending income plus the collateral investment expenses.

The share of securities lending income earned by the Fund is shown as securities lending income — affiliated — net in the Statement of Operations. For the six months ended November 30, 2021, the Fund paid BIM $2,173 for securities lending agent services.

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

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

During the period ended November 30, 2021, the Fund did not participate in the Interfund Lending Program.

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

7. PURCHASES AND SALES

For the six months ended November 30, 2021, purchases and sales of investments, excluding short-term investments, were $470,381,489 and $208,120,876, respectively.

8. INCOME TAX INFORMATION

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

The Fund files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on the Fund’s U.S. federal tax returns generally remains open for a period of three fiscal years after they are filed. The statutes of limitations on the Fund’s state and local tax returns may remain open for an additional year depending upon the jurisdiction.

Management has analyzed tax laws and regulations and their application to the Fund as of November 30, 2021, inclusive of the open tax return years, and does not believe that there are any uncertain tax positions that require recognition of a tax liability in the Fund’s financial statements.

As of November 30, 2021, gross unrealized appreciation and depreciation based on cost of investments (including short positions and derivatives, if any) for U.S. federal income tax purposes were as follows:

Fund Name	Tax Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation			Net Unrealized Appreciation (Depreciation)
BlackRock Advantage ESG U.S. Equity Fund	$	556,109,411	$	95,993,454	$	(15,637,073	)	$	80,356,381

9. BANK BORROWINGS

The Trust, on behalf of the Fund, along with certain other funds managed by the Manager and its affiliates (“Participating Funds”), is a party to a 364-day, $2.25 billion credit agreement with a group of lenders. Under this agreement, the Fund may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Fund, can borrow up to an aggregate commitment amount of $1.75 billion at any time outstanding, subject to asset coverage and other limitations as specified in the agreement. The credit agreement has the following terms: a fee of 0.10% per annum on unused commitment amounts and interest at a rate

NOTES  TO  FINANCIAL  STATEMENTS 25

Notes to Financial Statements (unaudited) (continued)

equal to the higher of (a) one-month London Interbank Offered Rate (“LIBOR”) (but, in any event, not less than 0.00%) on the date the loan is made plus 0.80% per annum or (b) the Fed Funds rate (but, in any event, not less than 0.00%) in effect from time to time plus 0.80% per annum on amounts borrowed. The agreement expires in April 2022 unless extended or renewed. These fees were allocated among such funds based upon portions of the aggregate commitment available to them and relative net assets of Participating Funds. For the six months ended November 30, 2021, the Fund did not borrow under the credit agreement.

10. PRINCIPAL RISKS

In the normal course of business, the Fund invests in securities or other instruments and may enter into certain transactions, and such activities subject the Fund to various risks, including among others, fluctuations in the market (market risk) or failure of an issuer to meet all of its obligations. The value of securities or other instruments may also be affected by various factors, including, without limitation: (i) the general economy; (ii) the overall market as well as local, regional or global political and/or social instability; (iii) regulation, taxation or international tax treaties between various countries; or (iv) currency, interest rate and price fluctuations. Local, regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues, recessions, or other events could have a significant impact on the Fund and its investments. The Fund’s prospectus provides details of the risks to which the Fund is subject.

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

Market Risk: An outbreak of respiratory disease caused by a novel coronavirus has developed into a global pandemic and has resulted in closing borders, quarantines, disruptions to supply chains and customer activity, as well as general concern and uncertainty. The impact of this pandemic, and other global health crises that may arise in the future, could affect the economies of many nations, individual companies and the market in general in ways that cannot necessarily be foreseen at the present time. This pandemic may result in substantial market volatility and may adversely impact the prices and liquidity of a fund’s investments. The duration of this pandemic and its effects cannot be determined with certainty.

Valuation Risk: The market values of equities, such as common stocks and preferred securities or equity related investments, such as futures and options, may decline due to general market conditions which are not specifically related to a particular company. They may also decline due to factors which affect a particular industry or industries. The Fund may invest in illiquid investments. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. The Fund may experience difficulty in selling illiquid investments in a timely manner at the price that it believes the investments are worth. Prices may fluctuate widely over short or extended periods in response to company, market or economic news. Markets also tend to move in cycles, with periods of rising and falling prices. This volatility may cause the Fund’s NAV to experience significant increases or decreases over short periods of time. If there is a general decline in the securities and other markets, the NAV of the Fund may lose value, regardless of the individual results of the securities and other instruments in which the Fund invests.

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

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

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

Concentration Risk: A diversified portfolio, where this is appropriate and consistent with a fund’s objectives, minimizes the risk that a price change of a particular investment will have a material impact on the NAV of a fund. The investment concentrations within the Fund’s portfolio are disclosed in its Schedule of Investments.

The Fund invests a significant portion of its assets in securities within a single or limited number of market sectors. When a Fund concentrates its investments in this manner, it assumes the risk that economic, regulatory, political and social conditions affecting such sectors may have a significant impact on the Fund and could affect the income from, or the value or liquidity of, the Fund’s portfolio. Investment percentages in specific sectors are presented in the Schedule of Investments.

LIBOR Transition Risk: The United Kingdom’s Financial Conduct Authority announced a phase out of the LIBOR. Although many LIBOR rates will be phased out by the end of 2021, a selection of widely used USD LIBOR rates will continue to be published through June 2023 in order to assist with the transition. The Fund may be exposed to financial instruments tied to LIBOR to determine payment obligations, financing terms, hedging strategies or investment value. The transition process away from LIBOR might lead to increased volatility and illiquidity in markets for, and reduce the effectiveness of new hedges placed against, instruments whose terms currently include LIBOR. The ultimate effect of the LIBOR transition process on the Fund is uncertain.

26 2 0 2 1   BLACK ROCK   SEMI - ANNUAL   REPORT   TO   SHAREHOLDERS

Notes to Financial Statements (unaudited) (continued)

11. CAPITAL SHARE TRANSACTIONS

Transactions in capital shares for each class were as follows:

	Six Months Ended 11/30/21						Year Ended 05/31/21
Fund Name / Share Class	Shares			Amounts			Shares			Amounts
BlackRock Advantage ESG U.S. Equity Fund
Institutional
Shares sold		11,690,031		$	231,260,767			8,851,510		$	152,780,886
Shares issued in reinvestment of distributions		603,432			11,477,287			229,405			3,739,573
Shares redeemed		(1,428,903	)		(28,069,536	)		(4,697,463	)		(73,998,089	)
		10,864,560		$	214,668,518			4,383,452		$	82,522,370
Investor A
Shares sold		2,094,289		$	40,927,214			2,374,833		$	40,308,618
Shares issued in reinvestment of distributions		181,129			3,430,572			70,758			1,157,143
Shares redeemed		(319,998	)		(6,246,697	)		(573,740	)		(10,066,473	)
		1,955,420		$	38,111,089			1,871,851		$	31,399,288
Investor C
Shares sold		352,325		$	6,786,363			466,173		$	7,915,937
Shares issued in reinvestment of distributions		41,928			784,065			16,276			264,413
Shares redeemed and automatic conversion of shares		(40,102	)		(783,588	)		(90,037	)		(1,481,148	)
		354,151		$	6,786,840			392,412		$	6,699,202
Class K
Shares sold		1,052,524		$	20,704,745			1,707,494		$	28,785,454
Shares issued in reinvestment of distributions		94,699			1,803,061			35,714			590,452
Shares redeemed		(123,272	)		(2,412,326	)		(113,383	)		(1,878,506	)
		1,023,951		$	20,095,480			1,629,825		$	27,497,400
		14,198,082		$	279,661,927			8,277,540		$	148,118,260

12. SUBSEQUENT EVENTS

Management’s evaluation of the impact of all subsequent events on the Fund’s financial statements was completed through the date the financial statements were issued and the following items were noted:

On July 27, 2021, the Board approved a proposal to change the name of the Fund from BlackRock Advantage ESG U.S. Equity Fund to BlackRock Sustainable Advantage Large Cap Core Fund and certain changes to the Fund’s investment objective, investment strategies and investment process. These changes were effective on December 1, 2021.

NOTES  TO  FINANCIAL  STATEMENTS 27

Statement Regarding Liquidity Risk Management Program

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the “Liquidity Rule”), BlackRock Funds^SM (the “Trust”) has adopted and implemented a liquidity risk management program (the “Program”) for BlackRock Advantage ESG U.S. Equity Fund (the “Fund”), a series of the Trust, which is reasonably designed to assess and manage the Fund’s liquidity risk.

The Board of Trustees (the “Board”) of the Trust, on behalf of the Fund, met on November 9-10, 2021 (the “Meeting”) to review the Program. The Board previously appointed BlackRock Advisors, LLC or BlackRock Fund Advisors (“BlackRock”), each an investment adviser to certain BlackRock funds, as the program administrator for the Fund’s Program, as applicable. BlackRock also previously delegated oversight of the Program to the 40 Act Liquidity Risk Management Committee (the “Committee”). At the Meeting, the Committee, on behalf of BlackRock, provided the Board with a report that addressed the operation of the Program and assessed its adequacy and effectiveness of implementation, including the management of the Fund’s Highly Liquid Investment Minimum (“HLIM”) where applicable, and any material changes to the Program (the “Report”). The Report covered the period from October 1, 2020 through September 30, 2021 (the “Program Reporting Period”).

The Report described the Program’s liquidity classification methodology for categorizing the Fund’s investments (including derivative transactions) into one of four liquidity buckets. It also referenced the methodology used by BlackRock to establish the Fund’s HLIM and noted that the Committee reviews and ratifies the HLIM assigned to the Fund no less frequently than annually. The Report also discussed notable events affecting liquidity over the Program Reporting Period, including the imposition of capital controls in certain countries.

The Report noted that the Program complied with the key factors for consideration under the Liquidity Rule for assessing, managing and periodically reviewing the Fund’s liquidity risk, as follows:

a) The Fund’s investment strategy and liquidity of portfolio investments during both normal and reasonably foreseeable stressed conditions. During the Program Reporting Period, the Committee reviewed whether the Fund’s strategy is appropriate for an open-end fund structure with a focus on funds with more significant and consistent holdings of less liquid and illiquid assets. The Committee also factored a fund’s concentration in an issuer into the liquidity classification methodology by taking issuer position sizes into account. Where a fund participated in borrowings for investment purposes (such as tender option bonds or reverse repurchase agreements), such borrowings were factored into the Program’s calculation of a fund’s liquidity bucketing. Derivative exposure was also considered in such calculation.

b) Short-term and long-term cash flow projections during both normal and reasonably foreseeable stressed conditions. During the Program Reporting Period, the Committee reviewed historical redemption activity and used this information as a component to establish the Fund’s reasonably anticipated trading size (“RATS”). The Fund has adopted an in-kind redemption policy which may be utilized to meet larger redemption requests. The Committee may also take into consideration a fund’s shareholder ownership concentration (which, depending on product type and distribution channel, may or may not be available), a fund’s distribution channels, and the degree of certainty associated with a fund’s short-term and long-term cash flow projections.

c) Holdings of cash and cash equivalents, as well as borrowing arrangements. The Committee considered the terms of the credit facility committed to the Fund, the financial health of the institution providing the facility and the fact that the credit facility is shared among multiple funds (including that a portion of the aggregate commitment amount is specifically designated for BlackRock Floating Rate Income Portfolio, a series of BlackRock Funds V). The Committee also considered other types of borrowing available to the Fund, such as the ability to use reverse repurchase agreements and interfund lending, as applicable.

There were no material changes to the Program during the Program Reporting Period other than the enhancement of certain model components in the Program’s methodology. The Report provided to the Board stated that the Committee concluded that based on the operation of the functions, as described in the Report, the Program is operating as intended and is effective in implementing the requirements of the Liquidity Rule.

28 2 0 2 1   BLACK ROCK   SEMI - ANNUAL   REPORT   TO   SHAREHOLDERS

Additional Information  

Regulation Regarding Derivatives

On October 28, 2020, the Securities and Exchange Commission (the “SEC”) adopted regulations governing the use of derivatives by registered investment companies (“Rule 18f-4”). The Fund will be required to implement and comply with Rule 18f-4 by August 19, 2022. Once implemented, Rule 18f-4 will impose limits on the amount of derivatives a fund can enter into, eliminate the asset segregation framework currently used by funds to comply with Section 18 of the 1940 Act, treat derivatives as senior securities and require funds whose use of derivatives is more than a limited specified exposure amount to establish and maintain a comprehensive derivatives risk management program and appoint a derivatives risk manager.

General Information

Quarterly performance, semi-annual and annual reports, current net asset value and other information regarding the Fund may be found on BlackRock’s website, which can be accessed at blackrock.com. Any reference to BlackRock’s website in this report is intended to allow investors public access to information regarding the Fund and does not, and is not intended to, incorporate BlackRock’s website in this report.

Householding

The Fund will mail only one copy of shareholder documents, including prospectuses, annual and semi-annual reports, Rule 30e-3 notices and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called “householding” and is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please call the Fund at (800) 441-7762.

Availability of Quarterly Schedule of Investments

The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Fund’s Form N-PORT is available on the SEC’s website at sec.gov. Additionally, the Fund makes its portfolio holdings for the first and third quarters of each fiscal year available at blackrock.com/fundreports.

Availability of Proxy Voting Policies, Procedures and Voting Records

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities and information about how the Fund voted proxies relating to securities held in the Fund’s portfolio during the most recent 12-month period ended June 30 is available without charge, upon request (1) by calling (800) 441-7762; (2) on the BlackRock website at blackrock.com; and (3) on the SEC’s website at 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.com for more information.

Shareholder Privileges

Account Information

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

Automatic Investment Plans

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

Systematic Withdrawal Plans

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

Retirement Plans

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

ADDITIONAL  INFORMATION 29

Additional Information  (continued)

BlackRock Privacy Principles

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

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

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

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

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

Fund and Service Providers

Investment Adviser and Administrator

BlackRock Advisors, LLC

Wilmington, DE 19809

Accounting Agent and Custodian

State Street Bank and Trust Company

Boston, MA 02111

Transfer Agent

BNY Mellon Investment Servicing (US) Inc.

Wilmington, DE 19809

Distributor

BlackRock Investments, LLC

New York, NY 10022

Independent Registered Public Accounting Firm

Deloitte & Touche LLP

Boston, MA 02116

Legal Counsel

Sidley Austin LLP

New York, NY 10019

Address of the Fund

100 Bellevue Parkway

Wilmington, DE 19809

30 2 0 2 1   BLACK ROCK   SEMI - ANNUAL   REPORT   T O   SHAREHOLDERS

Glossary of Terms Used in this Report

Portfolio Abbreviation
S&P	Standard & Poor’s

GLOSSARY  OF  TERMS  USED  IN  THIS  REPORT 31

Want to know more?

blackrock.com | 800-441-7762

This report is intended for current holders. It is not authorized for use as an offer of sale or a solicitation of an offer to buy shares of the 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.

IMP-11/21-SAR

        

(b) Not Applicable

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 Registrant – 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(a) 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 period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12 – Disclosure of Securities Lending Activities for Closed-End Management Investment

Companies – Not Applicable

Item 13 – Exhibits attached hereto

(a)(1) Code of Ethics – Not Applicable to this semi-annual report

(a)(2) Section 302 Certifications are attached

(a)(3) Any written solicitation to purchase securities under Rule 23c-1 – Not applicable

(a)(4) Change in Registrant’s independent public accountant – Not applicable

(b) Section 906 Certifications are attached

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^SM

By:	/s/ John M. Perlowski
	John M. Perlowski
	Chief Executive Officer (principal executive officer) of
	BlackRock FundsSM

Date: February 2, 2022

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 FundsSM

Date: February 2, 2022

By:	/s/ Trent Walker
	Trent Walker
	Chief Financial Officer (principal financial officer) of
	BlackRock FundsSM

Date: February 2, 2022