BlackRock High Yield Instl (BHYIX) 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 SMID-Cap Growth 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: 05/31/2023

Date of reporting period: 11/30/2022

Item 1 – Report to Stockholders

(a) The Report to Shareholders is attached herewith.

NOVEMBER 30, 2022

2022 Semi-Annual Report
(Unaudited)

BlackRock Funds^SM

·   BlackRock SMID-Cap Growth Equity Fund

Not FDIC Insured • May Lose Value • No Bank Guarantee

The Markets in Review

Dear Shareholder,

Significant economic headwinds emerged during the 12-month reporting period ended November 30, 2022, disrupting the economic recovery and strong financial markets of 2021. The U.S. economy shrank in the first half of 2022 before returning to moderate growth in the third quarter, marking a shift to a more challenging post-reopening economic environment. Changes in consumer spending patterns and a tight labor market led to elevated inflation, which reached a 40-year high before beginning to moderate. Moreover, while the foremost effect of Russia’s invasion of Ukraine has been a severe humanitarian crisis, the ongoing war continued to present challenges for both investors and policymakers.

Equity prices fell as interest rates rose, particularly weighing on relatively high-valuation growth stocks as inflation decreased the value of future cash flows and investors shifted focus to balance sheet resilience. Both large- and small-capitalization U.S. stocks fell, although declines for small-capitalization U.S. stocks were slightly steeper. Emerging market stocks and international equities from developed markets also declined significantly, pressured by rising interest rates and a strengthening U.S. dollar.

The 10-year U.S. Treasury yield rose notably during the reporting period, driving its price down, as investors reacted to higher inflation and attempted to anticipate its impact on future interest rate changes. The corporate bond market also faced inflationary headwinds, and increasing uncertainty led to higher corporate bond spreads (the difference in yield between U.S. Treasuries and similarly-dated corporate bonds).

The U.S. Federal Reserve (the “Fed”), acknowledging that inflation has been more persistent than expected, raised interest rates six times. Furthermore, the Fed wound down its bond-buying programs and is accelerating the reduction of its balance sheet. While the Fed suggested that additional rate hikes were likely, it also gave indications that the pace of increases would slow if inflation continued to subside.

The pandemic’s restructuring of the economy brought an ongoing mismatch between supply and demand, contributing to the current inflationary regime. While growth has slowed in 2022, we believe that taming inflation requires a more dramatic economic decline to bring demand back to a lower level that is more in line with the economy’s capacity. The Fed has been raising interest rates at the fastest pace in decades, and seems set to overtighten in its effort to get inflation back to target. With this in mind, we believe the possibility of a U.S. recession in the near-term is high, but this prospect has not yet been fully priced in by markets. Investors should expect a period of higher volatility as markets adjust to the new economic reality and policymakers attempt to adapt to rapidly changing conditions.

In this environment, while we favor an overweight to equities in the long-term, the market’s concerns over excessive rate hikes from central banks moderate our outlook. Rising input costs and a deteriorating economic backdrop are likely to challenge corporate earnings, so we are underweight equities overall in the near term. However, we see better opportunities in credit, where valuations are attractive and higher yields provide income opportunities. We believe that global investment-grade corporates, global inflation-linked bonds, and U.S. mortgage-backed securities offer strong opportunities for a six- to twelve-month horizon.

Overall, 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, 2022
	6-Month	12-Month
U.S. large cap equities (S&P 500® Index)	(0.40)%	(9.21)%
U.S. small cap equities (Russell 2000® Index)	1.98	(13.01)
International equities (MSCI Europe, Australasia, Far East Index)	(3.59)	(10.14)
Emerging market equities (MSCI Emerging Markets Index)	(8.15)	(17.43)
3-month Treasury bills (ICE BofA 3-Month U.S. Treasury Bill Index)	0.98	1.11
U.S. Treasury securities (ICE BofA 10-Year U.S. Treasury Index)	(5.33)	(15.69)
U.S. investment grade bonds (Bloomberg U.S. Aggregate Bond Index)	(4.06)	(12.84)
Tax-exempt municipal bonds (Bloomberg Municipal Bond Index)	(1.43)	(8.64)
U.S. high yield bonds (Bloomberg U.S. Corporate High Yield 2% Issuer Capped Index)	(2.87)	(8.95)
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
Financial Statements:
Schedule of Investments		7
Statement of Assets and Liabilities		10
Statement of Operations		12
Statements of Changes in Net Assets		13
Financial Highlights		14
Notes to Financial Statements		17
Statement Regarding Liquidity Risk Management Program		24
Additional Information		25
Glossary of Terms Used in this Report		27

3

Fund Summary   as of November 30, 2022 BlackRock SMID-Cap Growth Equity Fund

Investment Objective

BlackRock SMID-Cap Growth Equity Fund’s (the “Fund”) investment objective is long-term capital appreciation.

Portfolio Management Commentary

How did the Fund perform?

For the six-month period ended November 30, 2022, the Fund underperformed its benchmark, the Russell 2500TM Growth Index.

What factors influenced performance?

The largest detractors from relative performance included investment decisions in the healthcare, communication services and financials sectors. Within healthcare, selection among life sciences tools and services companies detracted the most from performance, specifically an off-benchmark position in West Pharmaceutical Services, Inc. Following healthcare, selection in communication services weighed the most on performance, most notably overweight positions in Cable One, Inc. and Liberty Media Corp. within the media sub-sector. Lastly, selection in financials detracted from relative performance, primarily due to an off-benchmark position in Carlyle Group, Inc. within the capital markets industry.

At the sector level, the largest positive contributors to the Fund’s relative performance were investment decisions in industrials, consumer discretionary and materials. In industrials, stock selection in the aerospace and defense sub-sector contributed to performance, most notably an overweight in Axon Enterprise, Inc. Following industrials, selection in consumer discretionary contributed the most to return, specifically an off-benchmark position in Etsy, Inc. within the internet and direct marketing retail industry. Lastly, positioning in materials proved beneficial, primarily due to a lack of exposure to Chemours Co. in the chemicals industry.

Describe recent portfolio activity.

During the period, exposure to industrials increased with an allocation to the professional services industry. Exposure to the consumer discretionary sector increased as well. Conversely, exposure to information technology decreased the most as the allocation to the software was trimmed. Exposure to the communication services sector decreased as well. The Fund’s cash position slightly decreased as well during the period.

Describe portfolio positioning at period end.

Relative to the Russell 2500TM Growth Index, at the end of the reporting period the Fund’s largest overweight was in the consumer discretionary sector, followed by industrials and communication services. Conversely, the materials sector was the largest underweight, followed by energy and consumer staples.

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

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

Fund Summary   as of November 30, 2022 (continued) BlackRock SMID-Cap Growth Equity Fund

Performance

				Average Annual Total Returns(a)(b)
				1 Year						Since Inception(c)
	6-Month Total Returns			Without Sales Charge			With Sales Charge			Without Sales Charge			With Sales Charge
Institutional		(1.57	)%		(40.53	)%		N/A			(33.19	)%		N/A
Investor A		(1.84	)		(40.73	)		(43.84	)%		(33.40	)		(35.88	)%
Class K		(1.57	)		(40.48	)		N/A			(33.15	)		N/A
Russell 2500™ Growth Index(d)		3.51			(21.16	)		N/A			(17.91	)		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.

^(b)  Under normal circumstances, the Fund invests at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in equity securities issued by U.S. small- and mid-capitalization companies which Fund management believes have above-average earnings growth potential, and derivatives that have similar economic characteristics to such equity securities.

^(c)  The Fund commenced operations on June 29, 2021.

^(d)  An index that measures the performance of the small to mid-cap growth segment of the U.S. equity universe. It includes those Russell 2500TM companies with higher growth earning potential as defined by FTSE Russell’s leading style methodology.

N/A - Not applicable as 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 5% Return
		Beginning Account Value (06/01/22)	Ending Account Value (11/30/22)	Expenses Paid During the Period	(a)		Beginning Account Value (06/01/22)	Ending Account Value (11/30/22)	Expenses Paid During the Period	(a)	Annualized Expense Ratio
Institutional		$       1,000.00	$          984.30	$          4.23			$       1,000.00	$       1,020.81	$          4.31		0.85	%
Investor A		1,000.00	981.60	5.46			1,000.00	1,019.56	5.57		1.10
Class K		1,000.00	984.30	3.73			1,000.00	1,021.31	3.80		0.75

^(a)  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
Axon Enterprise, Inc.		4.6	%
Paylocity Holding Corp.		2.6
Entegris, Inc.		2.6
Casella Waste Systems, Inc., Class A		2.5
WillScot Mobile Mini Holdings Corp.		2.5
Planet Fitness, Inc., Class A		2.5
Five9, Inc.		2.5
Booz Allen Hamilton Holding Corp.		2.4
Bio-Techne Corp.		2.4
Lattice Semiconductor Corp.		2.4

SECTOR ALLOCATION
Sector(b)	Percent of Net Assets
Industrials		23.4	%
Information Technology		22.3
Consumer Discretionary		20.7
Health Care		17.2
Financials		5.9
Communication Services		4.5
Energy		2.5
Other (each representing less than 1%)		0.7
Short-Term Securities		10.0
Liabilities in Excess of Other Assets		(7.2	)

^(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 ratings group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

FUND   SUMMARY 5

About Fund Performance

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

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.

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 assumes 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, administration 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 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.

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

Schedule of Investments (unaudited) November 30, 2022 BlackRock SMID-Cap Growth Equity Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Common Stocks
Aerospace & Defense — 6.6%
Axon Enterprise, Inc.(a)		2,104	$	387,199
HEICO Corp.(b)		1,070		173,672
				560,871
Auto Components — 2.3%
Fox Factory Holding Corp.(a)		1,829		194,057
Biotechnology — 2.1%
Halozyme Therapeutics, Inc.(a)		3,112		178,193
Building Products — 0.7%
AZEK Co., Inc.(a)		3,263		63,106
Capital Markets — 5.9%
Carlyle Group, Inc.		663		20,666
Morningstar, Inc.		759		186,054
TPG, Inc.		3,418		113,819
Tradeweb Markets, Inc., Class A		2,910		178,848
				499,387
Commercial Services & Supplies — 3.2%
Casella Waste Systems, Inc., Class A(a)		2,498		215,053
GFL Environmental, Inc.		1,833		53,102
				268,155
Construction & Engineering — 3.8%
Comfort Systems USA, Inc.		821		104,070
WillScot Mobile Mini Holdings Corp.(a)		4,460		215,017
				319,087
Distributors — 1.7%
Pool Corp.		439		144,611
Diversified Consumer Services — 2.8%
Bright Horizons Family Solutions, Inc.(a)		124		9,201
Duolingo, Inc.(a)		1,388		96,702
European Wax Center, Inc., Class A		2,415		35,018
Mister Car Wash, Inc.(a)		9,306		95,293
				236,214
Entertainment — 1.9%
Liberty Media Corp.-Liberty Formula One, Class C, NVS(a)		2,686		163,685
Equity Real Estate Investment Trusts (REITs) — 0.4%
Rexford Industrial Realty, Inc.		543		30,022
Food Products — 0.3%
Freshpet, Inc.(a)		377		25,267
Health Care Equipment & Supplies — 2.2%
Figs, Inc., Class A(a)		7,795		61,035
Inmode Ltd.(a)		1,530		58,737
Insulet Corp.(a)		236		70,651
				190,423
Health Care Technology — 2.7%
Certara, Inc.(a)		2,046		34,741
Doximity, Inc., Class A(a)		4,727		160,671
Phreesia, Inc.(a)		1,220		33,940
				229,352
Hotels, Restaurants & Leisure — 10.6%
Churchill Downs, Inc.		639		141,832
Domino’s Pizza, Inc.		321		124,782
Evolution AB(c)		1,685		173,562
Penn Entertainment, Inc.(a)		1,550		54,545

Security	Shares		Value
Hotels, Restaurants & Leisure (continued)
Planet Fitness, Inc., Class A(a)		2,711	$	212,434
Vail Resorts, Inc.		736		189,549
				896,704
Interactive Media & Services — 2.0%
Match Group, Inc.(a)		3,360		169,882
Internet & Direct Marketing Retail — 2.3%
Etsy, Inc.(a)		1,070		141,336
Fiverr International Ltd.(a)		1,594		56,061
				197,397
IT Services — 3.1%
DigitalOcean Holdings, Inc.(a)(b)		2,011		59,988
Globant SA(a)		936		175,388
Jack Henry & Associates, Inc.		121		22,911
				258,287
Life Sciences Tools & Services — 10.1%
Azenta, Inc.		2,379		143,240
Bio-Techne Corp.		2,408		204,656
Charles River Laboratories International, Inc.(a)		869		198,627
Olink Holding AB, ADR(a)		1,288		30,693
Repligen Corp.(a)		946		169,183
West Pharmaceutical Services, Inc.		482		113,106
				859,505
Machinery — 4.0%
Chart Industries, Inc.(a)(b)		1,111		158,862
Graco, Inc.		2,512		175,765
				334,627
Media — 0.6%
Cable One, Inc.		69		49,976
Oil, Gas & Consumable Fuels — 2.5%
Diamondback Energy, Inc.		598		88,516
EQT Corp.		2,910		123,413
				211,929
Professional Services — 2.4%
Booz Allen Hamilton Holding Corp.		1,933		205,671
Road & Rail — 2.3%
Saia, Inc.(a)		808		196,821
Semiconductors & Semiconductor Equipment — 8.5%
Ambarella, Inc.(a)(b)		1,834		136,083
Entegris, Inc.		2,846		219,967
Lattice Semiconductor Corp.(a)(b)		2,803		204,143
Monolithic Power Systems, Inc.		413		157,749
				717,942
Software — 10.8%
Bill.com Holdings, Inc.(a)(b)		1,102		132,703
Confluent, Inc., Class A(a)(b)		6,013		138,479
Five9, Inc.(a)		3,243		207,909
Gitlab, Inc., Class A(a)		2,533		100,180
HubSpot, Inc.(a)		391		118,485
Paylocity Holding Corp.(a)		1,014		220,879
				9.18,635
Specialty Retail — 1.0%
Burlington Stores, Inc.(a)		426		83,360
Trading Companies & Distributors — 0.4%
SiteOne Landscape Supply, Inc.(a)		299		37,533
Total Long-Term Investments — 97.2% (Cost: $9,796,183)				8,240,699

SCHEDULE   OF  INVESTMENTS 7

Schedule of Investments (unaudited) (continued) November 30, 2022 BlackRock SMID-Cap Growth Equity Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Short-Term Securities
Money Market Funds — 10.0%
BlackRock Liquidity Funds, T-Fund, Institutional Class, 3.57%(d)(e)		244,285	$	244,285
SL Liquidity Series, LLC, Money Market Series, 4.05%(d)(e)(f)		604,563		604,321
Total Short-Term Securities — 10.0% (Cost: $848,449)				848,606
Total Investments — 107.2% (Cost: $10,644,632)				9,089,305
Liabilities in Excess of Other Assets — (7.2)%				(607,382	)
Net Assets — 100.0%			$	8,481,923

^(a)  Non-income producing security.

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

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

^(d)  Affiliate of the Fund.

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

^(f)  All or a portion of this security was purchased with the cash collateral from loaned securities.

Affiliates

Investments in issuers considered to be affiliate(s) of the Fund during the six months ended November 30, 2022 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

Affiliated Issuer	Value at 05/31/22		Purchases at Cost			Proceeds from Sale		Net Realized Gain (Loss)			Change in Unrealized Appreciation (Depreciation)		Value at 11/30/22		Shares Held at 11/30/22		Income			Capital Gain Distributions from Underlying Funds
BlackRock Liquidity Funds, T-Fund, Institutional Class	$	190,657	$	53,628	(a)	$	—	$	—		$	—	$	244,285		244,285	$	3,064		$	—
SL Liquidity Series, LLC, Money Market Series		430,483		174,184	(a)		—		(455	)		109		604,321		604,563		989	(b)		—
								$	(455	)	$	109	$	848,606			$	4,053		$	—

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

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

For Fund compliance purposes, the Fund’s industry classifications refer to one or more of the industry sub-classifications used by one or more widely recognized market indexes or 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.

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
Aerospace & Defense	$	560,871	$	—	$	—	$	560,871
Auto Components		194,057		—		—		194,057

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

Schedule of Investments (unaudited) (continued) November 30, 2022 BlackRock SMID-Cap Growth Equity Fund

	Level 1		Level 2		Level 3		Total
Common Stocks (continued)
Biotechnology	$	178,193	$	—	$	—	$	178,193
Building Products		63,106		—		—		63,106
Capital Markets		499,387		—		—		499,387
Commercial Services & Supplies		268,155		—		—		268,155
Construction & Engineering		319,087		—		—		319,087
Distributors		144,611		—		—		144,611
Diversified Consumer Services		236,214		—		—		236,214
Entertainment		163,685		—		—		163,685
Equity Real Estate Investment Trusts (REITs)		30,022		—		—		30,022
Food Products		25,267		—		—		25,267
Health Care Equipment & Supplies		190,423		—		—		190,423
Health Care Technology		229,352		—		—		229,352
Hotels, Restaurants & Leisure		723,142		173,562		—		896,704
Interactive Media & Services		169,882		—		—		169,882
Internet & Direct Marketing Retail		197,397		—		—		197,397
IT Services		258,287		—		—		258,287
Life Sciences Tools & Services		859,505		—		—		859,505
Machinery		334,627		—		—		334,627
Media		49,976		—		—		49,976
Oil, Gas & Consumable Fuels		211,929		—		—		211,929
Professional Services		205,671		—		—		205,671
Road & Rail		196,821		—		—		196,821
Semiconductors & Semiconductor Equipment		717,942		—		—		717,942
Software		918,635		—		—		918,635
Specialty Retail		83,360		—		—		83,360
Trading Companies & Distributors		37,533		—		—		37,533
Short-Term Securities
Money Market Funds		244,285		—		—		244,285
	$	8,311,422	$	173,562	$	—		8,484,984
Investments valued at NAV(a)								604,321
							$	9,089,305

^(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.

See notes to financial statements.

SCHEDULE   OF  INVESTMENTS 9

Statement of Assets and Liabilities (unaudited)

November 30, 2022

	BlackRock SMID-Cap Growth Equity Fund
ASSETS
Investments, at value — unaffiliated(a)(b)	$	8,240,699
Investments, at value — affiliated(c)		848,606
Foreign currency, at value(d)		1,004
Receivables:
Securities lending income — affiliated		253
Dividends — unaffiliated		2,955
Dividends — affiliated		937
From the Manager		2,320
Total assets		9,096,774
LIABILITIES
Collateral on securities loaned		604,775
Payables:
Administration fees		343
Investment advisory fees		4,631
Trustees’ and Officer’s fees		4,593
Other accrued expenses		494
Service fees		15
Total liabilities		614,851
NET ASSETS	$	8,481,923
NET ASSETS CONSIST OF:
Paid-in capital	$	15,003,890
Accumulated loss		(6,521,967	)
NET ASSETS	$	8,481,923
(a) Investments, at cost — unaffiliated	$	9,796,183
(b) Securities loaned, at value	$	590,304
(c)  Investments, at cost — affiliated	$	848,449
(d) Foreign currency, at cost	$	1,068

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

Statement of Assets and Liabilities (unaudited) (continued)

November 30, 2022

	BlackRock SMID-Cap Growth Equity Fund
NET ASSET VALUE
Institutional
Net assets	$	58,652
Shares outstanding		5,206
Net asset value	$	11.27
Shares authorized		Unlimited
Par value	$	0.001
Investor A
Net assets	$	75,072
Shares outstanding		6,688
Net asset value	$	11.22
Shares authorized		Unlimited
Par value	$	0.001
Class K
Net assets	$	8,348,199
Shares outstanding		740,000
Net asset value	$	11.28
Shares authorized		Unlimited
Par value	$	0.001

See notes to financial statements.

FINANCIAL   STATEMENTS 11

Statement of Operations (unaudited)

Six Months Ended November 30, 2022

	BlackRock SMID-Cap Growth Equity Fund
INVESTMENT INCOME
Dividends — unaffiliated		$	17,475
Dividends — affiliated			3,064
Securities lending income — affiliated — net			989
Foreign taxes withheld			(7	)
Total investment income			21,521
EXPENSES
Investment advisory			29,200
Professional			8,872
Trustees and Officer			5,265
Administration — class specific			2,154
Service — class specific			98
Miscellaneous			58
Total expenses			45,647
Less:
Fees waived and/or reimbursed by the Manager			(14,229	)
Total expenses after fees waived and/or reimbursed			31,418
Net investment loss			(9,897	)
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — unaffiliated			(1,957,281	)
Investments — affiliated			(455	)
Foreign currency transactions			540
			(1,957,196	)
Net change in unrealized appreciation (depreciation) on:
Investments — unaffiliated			1,821,849
Investments — affiliated			109
Foreign currency translations			(119	)
			1,821,839
Net realized and unrealized loss			(135,357	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS		$	(145,254	)

See notes to financial statements.

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

Statements of Changes in Net Assets

Six Months Ended November 30, 2022

	BlackRock SMID-Cap Growth Equity Fund
	Six Months Ended 11/30/22 (unaudited)			Period from 06/29/21(a) to 05/31/22
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment loss	$	(9,897	)	$	(55,152	)
Net realized loss		(1,957,196	)		(2,987,010	)
Net change in unrealized appreciation (depreciation)		1,821,839			(3,377,231	)
Net decrease in net assets resulting from operations		(145,254	)		(6,419,393	)
CAPITAL SHARE TRANSACTIONS
Net increase (decrease) in net assets derived from capital share transactions		(24,937	)		15,071,507
NET ASSETS
Total increase (decrease) in net assets		(170,191	)		8,652,114
Beginning of period		8,652,114			—
End of period	$	8,481,923		$	8,652,114

^(a)  Commencement of operations.

See notes to financial statements.

FINANCIAL   STATEMENTS 13

Financial Highlights

(For a share outstanding throughout each period)

	BlackRock SMID-Cap Growth Equity Fund
	Institutional
	Six Months Ended 11/30/22 (unaudited)			Period from 06/29/21(a) to 05/31/22
Net asset value, beginning of period	$	11.45		$	20.00
Net investment loss(b)		(0.02	)		(0.09	)
Net realized and unrealized loss		(0.16	)		(8.46	)
Net decrease from investment operations		(0.18	)		(8.55	)
Net asset value, end of period	$	11.27		$	11.45
Total Return(c)
Based on net asset value		(1.57	)%(d)		(42.75	)%(d)
Ratios to Average Net Assets(e)
Total expenses		1.19	%(f)		1.06	%(f)(g)
Total expenses after fees waived and/or reimbursed		0.85	%(f)		0.85	%(f)
Net investment loss		(0.33	)%(f)		(0.56	)%(f)
Supplemental Data
Net assets, end of period (000)	$	59		$	59
Portfolio turnover rate		30	%		54	%

^(a)  Commencement of operations.

^(b)  Based on average shares outstanding.

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

^(d)  Not annualized.

^(e)  Excludes fees and expenses incurred indirectly as a result of investments in underlying funds.

^(f)  Annualized.

^(g)  Audit costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses would have been 1.03%.

See notes to financial statements.

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

Financial Highlights (continued)

(For a share outstanding throughout each period)

	BlackRock SMID-Cap Growth Equity Fund (continued)
	Investor A
	Six Months Ended 11/30/22 (unaudited)				Period from 06/29/21(a) to 05/31/22
Net asset value, beginning of period		$	11.43		$	20.00
Net investment loss(b)			(0.03	)		(0.13	)
Net realized and unrealized loss			(0.18	)		(8.44	)
Net decrease from investment operations			(0.21	)		(8.57	)
Net asset value, end of period		$	11.22		$	11.43
Total Return(c)
Based on net asset value			(1.84	)%(d)		(42.85	)%(d)
Ratios to Average Net Assets(e)
Total expenses			1.44	%(f)		1.31	%(f)(g)
Total expenses after fees waived and/or reimbursed			1.10	%(f)		1.10	%(f)
Net investment loss			(0.58	)%(f)		(0.80	)%(f)
Supplemental Data
Net assets, end of period (000)		$	75		$	66
Portfolio turnover rate			30	%		54	%

^(a)  Commencement of operations.

^(b)  Based on average shares outstanding.

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

^(d)  Not annualized.

^(e)  Excludes fees and expenses incurred indirectly as a result of investments in underlying funds.

^(f)  Annualized.

^(g)  Audit costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses would have been 1.29%.

See notes to financial statements.

FINANCIAL   HIGHLIGHTS 15

Financial Highlights (continued)

(For a share outstanding throughout each period)

	BlackRock SMID-Cap Growth Equity Fund (continued)
	Class K
	Six Months Ended 11/30/22 (unaudited)			Period from 06/29/21(a) to 05/31/22
Net asset value, beginning of period	$	11.46		$	20.00
Net investment loss(b)		(0.01	)		(0.07	)
Net realized and unrealized loss		(0.17	)		(8.47	)
Net decrease from investment operations		(0.18	)		(8.54	)
Net asset value, end of period	$	11.28		$	11.46
Total Return(c)
Based on net asset value		(1.57	)%(d)		(42.70	)%(d)
Ratios to Average Net Assets(e)
Total expenses		1.09	%(f)		0.96	%(f)(g)
Total expenses after fees waived and/or reimbursed		0.75	%(f)		0.75	%(f)
Net investment loss		(0.23	)%(f)		(0.46	)%(f)
Supplemental Data
Net assets, end of period (000)	$	8,348		$	8,528
Portfolio turnover rate		30	%		54	%

^(a)  Commencement of operations. (b) Based on average shares outstanding.

^(c)  Where applicable, assumes the reinvestment of distributions. (d) Not annualized.

^(e)  Excludes fees and expenses incurred indirectly as a result of investments in underlying funds. (f) Annualized.

^(g)  Audit costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses would have been 0.93%.

See notes to financial statements.

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

Notes to Financial Statements (unaudited)

1. ORGANIZATION

BlackRock FundsSM (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 SMID-Cap Growth 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 Shares bear certain expenses related to shareholder servicing of such shares. Investor A Shares are generally available through financial intermediaries. Each class has exclusive voting rights with respect to matters relating to its shareholder servicing and distribution expenditures.

Share Class	Initial Sales Charge		CDSC			Conversion Privilege
Institutional and Class K Shares		No		No			None
Investor A Shares		Yes		No	(a)		None

^(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.

The Fund, together with certain other registered investment companies advised by BlackRock Advisors, LLC (the “Manager” or “BAL”) or its affiliates, is included in a complex of 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. Dividends from foreign securities where the ex-dividend dates may have passed are subsequently recorded when the Fund is informed of the ex-dividend dates. Under the applicable foreign tax laws, a withholding tax at various rates may be imposed on capital gains, dividends and interest. Upon notification from issuers, a portion of the dividend income received from a real estate investment trust may be redesignated as a reduction of cost of the related investment and/or realized gain. Income, expenses and realized and unrealized gains and losses are allocated daily to each class based on its relative net assets.

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

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

Foreign Taxes: The Fund may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, capital gains on investments, or certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Fund invests. These foreign taxes, if any, are paid by the Fund and are reflected in its Statement of Operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on securities lending income are presented as a reduction of securities lending income, foreign taxes on stock dividends are presented as “Foreign taxes withheld”, and foreign taxes on capital gains from sales of investments and foreign taxes on foreign currency transactions are included in their respective net realized gain (loss) categories. Foreign taxes payable or deferred as of May 31, 2022, if any, are disclosed in the Statement of Assets and Liabilities.

The Fund files withholding tax reclaims in certain jurisdictions to recover a portion of amounts previously withheld. The Fund may record a reclaim receivable based on collectability, which includes factors such as the jurisdiction’s applicable laws, payment history and market convention. The Statement of Operations includes tax reclaims recorded as well as professional and other fees, if any, associated with recovery of foreign withholding taxes.

Collateralization: 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.

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.

NOTES   TO   FINANCIAL   STATEMENTS 17

Notes to Financial Statements (unaudited) (continued)

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.

The Fund has an arrangement with its custodian whereby credits are earned on uninvested cash balances, which could be used to reduce custody fees and/or overdraft charges. The Fund may incur charges on overdrafts, subject to certain conditions.

3. INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS

Investment Valuation Policies: The Fund’s investments are valued at fair value (also referred to as “market value” within the financial statements) 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 Board of Trustees of the Trust (the “Board”) has approved the designation of the Fund’s Manager as the valuation designee for the Fund. The Fund determines the fair values of its financial instruments using various independent dealers or pricing services under the Manager’s policies. 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 the Manager’s policies and procedures as reflecting fair value. The Manager has formed a committee (the “Valuation Committee”) to develop pricing policies and procedures and to oversee the pricing function for all financial instruments, with assistance from other BlackRock pricing committees.

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.

Generally, trading in foreign instruments is substantially completed each day at various times prior to the close of trading on the NYSE. Each business day, the Fund uses current market factors supplied by independent pricing services to value certain foreign instruments (“Systematic Fair Value Price”). The Systematic Fair Value Price is designed to value such foreign securities at fair value as of the close of trading on the NYSE, which follows the close of the local markets.

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 Valuation Committee in accordance with the Manager’s policies and procedures as reflecting fair value (“Fair Valued Investments”). The fair valuation approaches that may be used by the 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 Valuation Committee 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 Valuation Committee deems relevant and consistent with the principles of fair value measurement.

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 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 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, 2022, 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.

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

Notes to Financial Statements (unaudited) (continued)

4. SECURITIES AND OTHER INVESTMENTS

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

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, respectively.

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:

Counterparty		Securities Loaned at Value		Cash Collateral Received	(a)		Non-Cash Collateral Received	(a)		Net Amount	(b)
J.P. Morgan Securities LLC	$	206,116	$	(196,700	)	$	—		$	9,416
Jefferies LLC		162,310		(160,000	)		—			2,310
Morgan Stanley		195,537		(195,537	)		—			—
Toronto-Dominion Bank		26,341		(25,625	)		—			716
	$	590,304	$	(577,862	)	$	—		$	12,442

^(a)  Collateral received, if any, 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.

^(b)  The market value of the loaned securities is determined as of November 30, 2022. Additional collateral is delivered to the Fund on the next business day in accordance with the MSLA. The net amount would be subject to the borrower default indemnity in the event of default by the counterparty.

The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Fund benefits from a borrower default indemnity provided by BIM. BIM’s indemnity allows for full replacement of the securities loaned 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. 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		0.70	%
$1 billion - $3 billion		0.66
$3 billion - $5 billion		0.63
$5 billion - $10 billion		0.61
Greater than $10 billion		0.60

NOTES   TO   FINANCIAL   STATEMENTS 19

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

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, 2022, the following table shows the class specific service and distribution fees borne directly by each share class of the Fund:

	Investor A
Service and distribution — class specific	$	98

Administration: The Trust, on behalf of the Fund, entered into an Administration Agreement with BAL, which has agreed to provide general administrative services (other than investment advice and related portfolio activities). BAL has agreed to bear all of the Fund’s ordinary operating expenses, excluding, generally, investment advisory fees, distribution fees, brokerage and other expenses related to the execution of portfolio transactions, extraordinary expenses and certain other expenses which are borne by the Fund. BAL is entitled to receive for these administrative services an annual fee based on the average daily net assets of the Fund as follows: .

Average Daily Net Assets	Administration Fees
Institutional		0.15	%
Investor A		0.15
Class K		0.05

From time to time, BAL may waive such fees in whole or in part. Any such waiver will reduce the expenses of the Fund and, accordingly, have a favorable impact on its performance. BAL may delegate certain of its administration duties to sub-administrators. For the six months ended November 30, 2022, there were no fees waived/reimbursed by the BAL pursuant to this arrangement.

For the six months ended November 30, 2022, the following table shows the class specific administration fees borne directly by each share class of the Fund:

	Institutional		Investor A		Class K		Total
Administration — class specific	$	43	$	59	$	2,052	$	2,154

Other Fees: For the six months ended November 30, 2022, affiliates earned underwriting discounts, direct commissions and dealer concessions on sales of the Fund’s Investor A Shares for a total of $29.

Expense Limitations, Waivers and Reimbursements: 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, 2024. The contractual agreement may be terminated upon 90 days’ notice by a majority of the trustees who are not “interested persons” of the Trust, as defined in the 1940 Act (“Independent Trustees”), or by a vote of a majority of the outstanding voting securities of the 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, 2022, the amount waived was $92.

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, 2024. 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, 2022, there were no fees waived by the Manager pursuant to this arrangement.

The fees and expenses of the Fund’s Independent Trustees, counsel to the Independent Trustees and the Fund’s independent registered public accounting firm (together, the “independent expenses”) are paid directly by the Fund. BAL has contractually agreed to reimburse the Fund or provide an offsetting credit for such independent expenses through June 30, 2024. The amount waived is included in fees waived and/or reimbursed by the Manager in the Statement of Operations. For the six months ended November 30, 2022, the amount waived was $14,137.

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.

20 2 0 2 2  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 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.

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, 2022, the Fund paid BIM $208 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 six months ended November 30, 2022, the Fund did not participate in the Interfund Lending Program.

Trustees and Officers: Certain trustees and/or officers of the Trust are directors and/or officers of BlackRock or its affiliates.

6. PURCHASES AND SALES

For the six months ended November 30, 2022, purchases and sales of investments, excluding short-term securities, were $2,408,800 and $2,542,531, respectively.

7. INCOME TAX INFORMATION

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

The Fund files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on the Fund’s U.S. federal tax returns generally remains open for a period of three 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, 2022, 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 May 31, 2022, the Fund had non-expiring capital loss carryforwards available to offset future realized capital gains of $2,940,256.

As of November 30, 2022, 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 SMID-Cap Growth Equity Fund	$	10,692,270	$	401,717	$	(2,004,682	)	$	(1,602,965	)

8. 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, $2.50 billion credit agreement with a group of lenders. Under this agreement, the Fund may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Fund, can borrow up to an aggregate commitment amount of $1.75 billion at any time outstanding, subject to asset coverage and other limitations as specified in the agreement. The credit agreement has the following terms: a fee of 0.10% per annum on unused commitment amounts and interest at a rate equal to the higher of (a) Overnight Bank Funding Rate (“OBFR”) (but, in any event, not less than 0.00%) on the date the loan is made plus 0.80% per annum, (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 or (c) the sum of (x) Daily Simple Secured Overnight

NOTES   TO   FINANCIAL   STATEMENTS 21

Notes to Financial Statements (unaudited) (continued)

Financing Rate (“SOFR”) (but, in any event, not less than 0.00%) on the date the loan is made plus 0.10% and (y) 0.80% per annum. The agreement expires in April 2023 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. During the six months ended November 30, 2022, the Fund did not borrow under the credit agreement.

9. PRINCIPAL RISKS

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

Infectious Illness Risk: An outbreak of an infectious illness, such as the COVID-19 pandemic, may adversely impact the economies of many nations and the global economy and may impact individual issuers and capital markets in ways that cannot be foreseen. An infectious illness outbreak may result in, among other things, closed international borders, prolonged quarantines, supply chain disruptions, market volatility or disruptions and other significant economic, social and political impacts.

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.

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.

Significant Shareholder Redemption Risk: Certain shareholders may own or manage a substantial amount of fund shares and/or hold their fund investments for a limited period of time. Large redemptions of fund shares by these shareholders may force a fund to sell portfolio securities, which may negatively impact the fund’s NAV, increase the fund’s brokerage costs, and/or accelerate the realization of taxable income/gains and cause the fund to make additional taxable distributions to shareholders.

LIBOR Transition Risk: The United Kingdom’s Financial Conduct Authority announced a phase out of the London Interbank Offered Rate (“LIBOR”). Although many LIBOR rates ceased to be published or no longer are representative of the underlying market they seek to measure after December 31, 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.

10. CAPITAL SHARE TRANSACTIONS

Transactions in capital shares for each class were as follows:

	Six Months Ended 11/30/22				Period from 06/29/21(a) to 05/31/22
Share Class	Shares		Amount		Shares		Amount
Institutional
Shares sold		86	$	973		5,120	$	101,500

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

Notes to Financial Statements (unaudited) (continued)

	Six Months Ended 11/30/22						Period from 06/29/21(a) to 05/31/22
Share Class	Shares			Amount			Shares			Amount
Investor A
Shares sold		7,441		$	83,132			5,854		$	113,435
Shares redeemed		(6,487	)		(66,850	)		(120	)		(1,495	)
		954		$	16,282			5,734		$	111,940
Class K
Shares sold		71		$	786			745,986		$	14,882,531
Shares redeemed		(3,998	)		(42,978	)		(2,059	)		(24,464	)
		(3,927	)	$	(42,192	)		743,927		$	14,858,067
		(2,887	)	$	(24,937	)		754,781		$	15,071,507

^(a) Commencement of operations.

As of November 30, 2022, shares owned by BlackRock Financial Management, Inc., an affiliate of the Fund, were as follows:

Share Class
Institutional	5,000
Investor A	5,000
Class K	740,000

11. SUBSEQUENT EVENTS

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

NOTES   TO   FINANCIAL   STATEMENTS 23

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 FundsSM (the “Trust”) has adopted and implemented a liquidity risk management program (the “Program”) for BlackRock SMID-Cap Growth 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 8-9, 2022 (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, 2021 through September 30, 2022 (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. A fund’s 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 utilized for liquidity classifications. 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, and BlackRock Floating Rate Loan ETF, a series of BlackRock ETF Trust II). 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 classification 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.

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

Additional Information

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.

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.

ADDITIONAL  INFORMATION 25

Additional Information   (continued)

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	Independent Registered Public Accounting Firm
BlackRock Advisors, LLC	Deloitte & Touche LLP
Wilmington, DE 19809	Boston, MA 02116
Accounting Agent and Transfer Agent	Distributor
BNY Mellon Investment Servicing (US) Inc.	BlackRock Investments, LLC
Wilmington, DE 19809	New York, NY 10022
Custodian	Legal Counsel
The Bank of New York Mellon	Sidley Austin LLP
New York, NY 10286	New York, NY 10019
	Address of the Trust
	100 Bellevue Parkway
	Wilmington, DE 19809

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

Glossary of Terms Used in this Report

Portfolio Abbreviation
ADR	American Depositary Receipt
NVS	Non-Voting Shares

GLOSSARY   OF   TERMS   USED   IN  THIS   REPORT 27

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.

SMID-11/22-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: January 20, 2023

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: January 20, 2023
By:	/s/ Trent Walker
	Trent Walker
	Chief Financial Officer (principal financial officer) of
	BlackRock FundsSM

Date: January 20, 2023