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 U.S. Insights Long/Short 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, 50 Hudson Yards, New York, NY 10001

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

Date of fiscal year end: 05/31/2024

Date of reporting period: 11/30/2023

Item 1 – Report to Stockholders

(a) The Report to Shareholders is attached herewith.

NOVEMBER 30, 2023

2023 Semi-Annual Report

(Unaudited)

BlackRock Funds^SM

· BlackRock U.S. Insights Long/Short Equity Fund

Not FDIC Insured • May Lose Value • No Bank Guarantee

The Markets in Review

Dear Shareholder,

The combination of continued economic growth and cooling inflation provided a supportive backdrop for investors during the 12-month reporting period ended November 30, 2023. Significantly tighter monetary policy helped to rein in inflation, as the annual increase in the Consumer Price Index declined to its long-term average of approximately 3% in November 2023. Meanwhile, real economic growth proved more resilient than many investors anticipated. A moderating labor market also helped ease inflationary pressure, although wages continued to grow. This robust labor market powered further growth in consumer spending, backstopping the economy. On October 7, 2023, Hamas launched a horrific attack on Israel. The ensuing war will have a significant humanitarian impact and could lead to heightened economic and market volatility. We see geopolitics as a structural market risk going forward. See our geopolitical risk dashboard at blackrock.com for more details.

Equity returns were solid during the period, as interest rates stabilized, and the economy proved to be more resilient than many investors expected. The U.S. economy continued to show strength, and growth further accelerated in the third quarter of 2023. However, equity returns were uneven, as the performance of a few notable technology companies supported gains among large-capitalization U.S. stocks, while small-capitalization U.S. stocks declined overall. Meanwhile, international developed market equities advanced strongly, while emerging market equities posted modest gains.

The 10-year U.S. Treasury yield rose during the reporting period, driving its price down, as investors reacted to elevated inflation and attempted to anticipate interest rate changes. The corporate bond market benefited from improving economic sentiment, although high-yield corporate bond prices fared significantly better than investment-grade bonds as demand from yield-seeking investors remained strong.

The U.S. Federal Reserve (the “Fed”), attempting to manage persistent inflation, raised interest rates five times during the 12-month period, but slowed and then paused its tightening later in the period. The Fed also wound down its bond-buying programs and incrementally reduced its balance sheet by not replacing securities that reach maturity.

Supply constraints appear to have become an embedded feature of the new macroeconomic environment, making it difficult for developed economies to increase production without sparking higher inflation. Geopolitical fragmentation and an aging population risk further exacerbating these constraints, keeping the labor market tight and wage growth high. Although the Fed has decelerated the pace of interest rate hikes and recently opted for several pauses, we believe that the new economic regime means that the Fed will need to maintain high rates for an extended period despite the market’s hopes for interest rate cuts, as reflected in the recent rally. Furthermore, ongoing structural changes may mean that the Fed will be hesitant to cut interest rates in the event of faltering economic activity lest inflation accelerate again.

While we favor an overweight position in developed market equities in the long term, we prefer an underweight stance in the near term. Nevertheless, we are overweight on Japanese stocks in the near term as shareholder-friendly policies generate increased investor interest. We also believe that stocks with an AI tilt should benefit from an investment cycle that is set to support revenues and margins. In credit, there are selective opportunities in the near term despite tightening credit and financial conditions. For fixed income investing with a six- to twelve-month horizon, we see the most attractive investments in short-term U.S. Treasuries, U.S. mortgage-backed securities, and hard-currency emerging market bonds.

Overall, our view is that investors need to think globally, position themselves to be prepared for a decarbonizing economy, 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, 2023
	6-Month		12-Month
U.S. large cap equities (S&P 500® Index)		10.17%		13.84%
U.S. small cap equities (Russell 2000® Index)		4.24		(2.57)
International equities (MSCI Europe, Australasia, Far East Index)		5.12		12.36
Emerging market equities (MSCI Emerging Markets Index)		4.60		4.21
3-month Treasury bills (ICE BofA 3-Month U.S. Treasury Bill Index)		2.69		4.91
U.S. Treasury securities (ICE BofA 10-Year U.S. Treasury Index)		(3.98)		(2.27)
U.S. investment grade bonds (Bloomberg U.S. Aggregate Bond Index)		(0.80)		1.18
Tax-exempt municipal bonds (Bloomberg Municipal   Bond Index)		2.29		4.28
U.S. high yield bonds (Bloomberg U.S. Corporate High Yield 2% Issuer Capped Index)		5.52		8.69
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 T H I S  P A G E  I S  N O T  P A R T  O F  Y O U R  F U N D  R E P O R T

Table of Contents

	Page
The Markets in Review		2
Semi-Annual Report:
Fund Summary		4
About Fund Performance		5
Disclosure of Expenses		5
Derivative Financial Instruments		5
Financial Statements:
Schedule of Investments		6
Statement of Assets and Liabilities		14
Statement of Operations		16
Statement of Changes in Net Assets		17
Financial Highlights		18
Notes to Financial Statements		21
Disclosure of Investment Advisory Agreement		30
Disclosure of Investment Sub-Advisory Agreement		32
Statement Regarding Liquidity Risk Management Program		33
Additional Information		34
Glossary of Terms Used in this Report		36

3

Fund Summary as of November 30, 2023 BlackRock U.S. Insights Long/Short Equity Fund

Investment Objective

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

The Fund commenced operations on June 13, 2023.

Expense Example

	Actual								Hypothetical 5% Return
		Beginning Account Value (06/13/23	)(a)		Ending Account Value (11/30/23)		Expenses Paid During the Period	(b)		Beginning Account Value (06/13/23	)(a)		Ending Account Value (11/30/23)		Expenses Paid During the Period	(b)	Annualized Expense Ratio
Institutional	$	1,000.00		$	1,114.00	$	7.81		$	1,000.00		$	1,017.05	$	8.02		1.59	%
Investor A		1,000.00			1,112.00		9.03			1,000.00			1,015.80		9.27		1.84
Class K		1,000.00			1,114.00		7.66			1,000.00			1,017.20		7.87		1.56

^(a)  Commencement of operations.

^(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 170/366 for actual expenses and 183/366 for hypothetical expenses (to reflect the six month period shown).

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

Portfolio Information

SECTOR ALLOCATION

	Percent of Total Investments(a)
Sector(b)	Long			Short			Total
Financials		10.8	%		10.7	%		21.5	%
Energy		9.8			6.7			16.5
Real Estate		4.7			5.9			10.6
Utilities		4.4			6.0			10.4
Consumer Discretionary		6.2			4.0			10.2
Health Care		5.3			1.8			7.1
Industrials		4.0			2.5			6.5
Information Technology		2.4			3.1			5.5
Communication Services		2.9			1.5			4.4
Consumer Staples		1.2			2.6			3.8
Materials		1.4			2.1			3.5
		53.1	%		46.9	%		100.0	%

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

^(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.

4 2 0 2 3  BLACK ROCK  SEMI - ANNUAL  REPORT  TO  SHAREHOLDERS

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. 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.

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. Pursuant to Rule 18f-4 under the 1940 Act, among other things, the Fund must either use derivative financial instruments with embedded leverage in a limited manner or comply with an outer limit on fund leverage risk based on value-at-risk. 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.

ABOUT  FUND  PERFORMANCE  /  DISCLOSURE  OF  EXPENSES  /  DERIVATIVE  FINANCIAL  INSTRUMENTS 5

Schedule of Investments (unaudited) November 30, 2023 BlackRock U.S. Insights Long/Short Equity Fund (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Short-Term Securities
U.S. Treasury Obligations(a) — 92.2%
U.S. Treasury Bills, 5.31%, 12/26/23	USD		10,363	$	10,325,007
Total Short-Term Securities — 92.2% (Cost: $10,324,921)					10,325,007
Total Investments — 92.2% (Cost: $10,324,921)					10,325,007
Other Assets Less Liabilities — 7.8%					869,496
Net Assets — 100.0%				$	11,194,503

^(a)  Rates are discount rates or a range of discount rates as of period end.

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

Description	Number of Contracts		Expiration Date		Notional Amount (000)		Value/ Unrealized Appreciation (Depreciation)
Long Contracts
S&P 500 E-Mini Index		9		12/15/23	$	2,060	$	45,229

OTC Total Return Swaps

Reference Entity	Payment Frequency		Counterparty(i)	Termination Date		Net Notional		Accrued Unrealized Appreciation (Depreciation)			Net Value of Reference Entity		Gross Notional Amount Net Asset Percentage
Equity Securities Long/Short		Monthly	Barclays Bank PLC(a)		07/11/24	$	673,571	$	(6,233	)(b)	$	672,127		100.7	%
		Monthly	Goldman Sachs Bank USA(c)		08/19/26		312,628		40,268	(d)		352,860		48.6
		Monthly	HSBC Bank PLC(e)		02/10/28		311,546		50,942	(f)		373,211		50.1
		Monthly	Merrill Lynch International(g)		06/15/28		564,523		49,174	(h)		626,252		88.4
								$	134,151		$	2,024,450

^(b)  Amount includes $(4,789) of net dividends and financing fees.

^(d)  Amount includes $36 of net dividends and financing fees.

^(f)  Amount includes $(10,723) of net dividends and financing fees.

^(h)  Amount includes $(12,555) of net dividends and financing fees.

⁽ⁱ⁾  The Fund receives the total return on a portfolio of long positions underlying the total return swap. The Fund pays the total return on a portfolio of short positions underlying the total return swap. In addition, the Fund pays or receives a variable rate of interest, based on a specified benchmark. The benchmark and spread are determined based upon the country and/or currency of the individual underlying positions.

The following are the specified benchmarks (plus or minus a range) used in determining the variable rate of interest:

	(a)	(c)	(e)
Range:	15-20 basis points	0-42 basis points	0-20 basis points
Benchmarks:	USD Overnight Bank Funding Rate	U.S. Overnight Federal Funds Effective Rate	USD Overnight Bank Funding Rate
	(g)
Range:	0-20 basis points
Benchmarks:	USD Overnight Bank Funding Rate

6 2 0 2 3   BLACK ROCK  SEMI - ANNUAL  REPORT  TO  SHAREHOLDERS

Schedule of Investments (unaudited) (continued) November 30, 2023   BlackRock U.S. Insights Long/Short Equity Fund

The following table represents the individual long and short positions and related values of equity securities underlying the total return swap with Barclays Bank PLC as of period end, termination date July 11, 2024:

	Shares		Value		% of Basket Value
Reference Entity — Long
Common Stocks
Beverages
Constellation Brands, Inc., Class A		853	$	205,138		30.5	%
Broadline Retail
Amazon.com, Inc.		138		20,160		3.0
Capital Markets
Intercontinental Exchange, Inc.		3,129		356,205		53.0
Commercial Services & Supplies
GFL Environmental, Inc.		1,526		43,796		6.5
Electric Utilities
NextEra Energy, Inc.		4,194		245,391		36.5
Electrical Equipment
AMETEK, Inc.		289		44,861		6.7
Financial Services
Mastercard, Inc., Class A		1,817		751,929		111.9
Visa, Inc., Class A		2,949		756,949		112.6
				1,508,878
Health Care Equipment & Supplies
IDEXX Laboratories, Inc.		15		6,987		1.0
Health Care Providers & Services
Cardinal Health, Inc.		1,144		122,500		18.2
Hotels, Restaurants & Leisure
Booking Holdings, Inc.		24		75,017		11.2
Insurance
Reinsurance Group of America, Inc.		229		37,341		5.6
Media
Comcast Corp., Class A		8,074		338,220		50.3
Oil, Gas & Consumable Fuels
BP PLC		9,308		337,787		50.3
Devon Energy Corp.		10,439		469,442		69.8
Diamondback Energy, Inc.		544		83,999		12.5
Suncor Energy, Inc.		17,744		585,375		87.1
				1,476,603
Pharmaceuticals
Sanofi SA		2,133		99,718		14.8
Professional Services
Dun & Bradstreet Holdings, Inc.		8,554		90,587		13.5
Real Estate Management & Development
CBRE Group, Inc., Class A		1,200		94,752		14.1

	Shares		Value			% of Basket Value
Residential REITs
Camden Property Trust		74	$	6,679			1.0	%
Mid-America Apartment Communities, Inc.		651		81,037			12.1
				87,716
Software
Microsoft Corp.		1,959		742,285			110.4
Specialized REITs
Equinix, Inc.		55		44,826			6.7
Specialty Retail
Ulta Beauty, Inc.		802		341,644			50.8
Trading Companies & Distributors
SiteOne Landscape Supply, Inc.		277		39,007			5.8
Total Reference Entity — Long				6,021,632
Reference Entity — Short
Common Stocks
Banks
PNC Financial Services Group, Inc. (The)		2,603		(348,698	)		(51.9	)
Biotechnology
Moderna, Inc.		470		(36,519	)		(5.4	)
Capital Markets
Blackstone, Inc., Class A		2,445		(274,745	)		(40.9	)
Janus Henderson Group PLC		350		(9,166	)		(1.4	)
Northern Trust Corp.		68		(5,389	)		(0.8	)
T Rowe Price Group, Inc.		1,243		(124,462	)		(18.5	)
				(413,762	)
Chemicals
Linde PLC		980		(405,495	)		(60.3	)
Distributors
Pool Corp.		186		(64,601	)		(9.6	)
Electric Utilities
FirstEnergy Corp.		6,989		(258,173	)		(38.4	)
Southern Co. (The)		2,210		(156,866	)		(23.4	)
				(415,039	)
Electrical Equipment
Eaton Corp. PLC		329		(74,910	)		(11.1	)
Entertainment
Take-Two Interactive Software, Inc.		479		(75,778	)		(11.3	)
Health Care Equipment & Supplies
Koninklijke Philips NV, Registered Shares		4,970		(101,487	)		(15.1	)
Health Care REITs
Ventas, Inc.		6,829		(313,042	)		(46.6	)
Welltower, Inc.		5,103		(454,677	)		(67.6	)
				(767,719	)
Health Care Technology
Doximity, Inc., Class A		951		(22,111	)		(3.3	)
Hotels, Restaurants & Leisure
Airbnb, Inc., Class A		580		(73,277	)		(10.9	)
Insurance
Aon PLC, Class A		513		(168,516	)		(25.1	)

SCHEDULE  OF  INVESTMENTS 7

Schedule of Investments (unaudited) (continued) November 30, 2023   BlackRock U.S. Insights Long/Short Equity Fund

	Shares		Value			% of Basket Value
Insurance (continued)
Arthur J Gallagher & Co.		2,547	$	(634,203	)		(94.4	)%
Marsh & McLennan Cos., Inc.		1,734		(345,794	)		(51.4	)
				(1,148,513	)
Media
Trade Desk, Inc. (The), Class A		1,222		(86,102	)		(12.8	)
Multi-Utilities
CenterPoint Energy, Inc.		2,647		(74,831	)		(11.1	)
Oil, Gas & Consumable Fuels
Murphy Oil Corp.		7,326		(313,333	)		(46.6	)
Occidental Petroleum Corp.		2,246		(132,851	)		(19.8	)
PBF Energy, Inc., Class A		1,611		(71,528	)		(10.7	)
Range Resources Corp.		1,477		(48,003	)		(7.1	)
				(565,715	)
Personal Care Products
Kenvue, Inc.		1,995		(40,778	)		(6.1	)
Pharmaceuticals
Organon & Co.		1,078		(12,203	)		(1.8	)
Professional Services
TransUnion		1,023		(60,071	)		(8.9	)
Retail REITs
Simon Property Group, Inc.		2,598		(324,464	)		(48.3	)
Semiconductors & Semiconductor Equipment
Wolfspeed, Inc.		1,784		(65,758	)		(9.8	)
Software
nCino, Inc.		1,241		(34,289	)		(5.1	)
Specialized REITs
Digital Realty Trust, Inc.		339		(47,046	)		(7.0	)
Specialty Retail
Tractor Supply Co.		445		(90,339	)		(13.4	)
Total Reference Entity — Short				(5,349,505	)
Net Value of Reference Entity — Barclays Bank PLC			$	672,127

The following table represents the individual long and short positions and related values of equity securities underlying the total return swap with Goldman Sachs Bank USA as of period end, termination date August 19, 2026:

	Shares		Value		% of Basket Value
Reference Entity — Long
Common Stocks
Banks
Citigroup, Inc.		1,657	$	76,388		21.6	%
Broadline Retail
Amazon.com, Inc.		3,547		518,181		146.9
Capital Markets
S&P Global, Inc.		945		392,959		111.4

	Shares		Value			% of Basket Value
Commercial Services & Supplies
GFL Environmental, Inc.		1,135	$	32,574			9.2	%
Construction & Engineering
Comfort Systems U.S.A., Inc.		858		166,092			47.1
Consumer Staples Distribution & Retail
Dollar General Corp.		322		42,221			12.0
Electric Utilities
American Electric Power Co., Inc.		5,323		423,445			120.0
NextEra Energy, Inc.		928		54,297			15.4
				477,742
Health Care Equipment & Supplies
Alcon, Inc.		2,698		204,050			57.8
IDEXX Laboratories, Inc.		174		81,052			23.0
				285,102
Health Care Providers & Services
Cardinal Health, Inc.		97		10,387			2.9
Media
Comcast Corp., Class A		9,381		392,970			111.4
Fox Corp., Class A, NVS		4,857		143,476			40.6
				536,446
Oil, Gas & Consumable Fuels
BP PLC		981		35,600			10.1
Devon Energy Corp.		1,579		71,008			20.1
TotalEnergies SE		1,172		79,755			22.6
				186,363
Professional Services
Dun & Bradstreet Holdings, Inc.		619		6,555			1.9
Residential REITs
AvalonBay Communities, Inc.		548		94,771			26.9
Software
Microsoft Corp.		33		12,504			3.5
Specialized REITs
Equinix, Inc.		107		87,206			24.7
Total Reference Entity — Long				2,925,491
Reference Entity — Short
Common Stocks
Biotechnology
Moderna, Inc.		511		(39,705	)		(11.2	)
Capital Markets
Janus Henderson Group PLC		2,570		(67,308	)		(19.1	)
Chemicals
Linde PLC		172		(71,168	)		(20.2	)
Distributors
Pool Corp.		309		(107,322	)		(30.4	)
Electric Utilities
Avangrid, Inc.		5,950		(183,676	)		(52.1	)
Electrical Equipment
Rockwell Automation, Inc.		1,024		(282,051	)		(79.9	)
Entertainment
Spotify Technology SA		413		(76,450	)		(21.7	)

8 2 0 2 3   BLACK ROCK  SEMI - ANNUAL  REPORT  TO  SHAREHOLDERS

Schedule of Investments (unaudited) (continued) November 30, 2023 BlackRock U.S. Insights Long/Short Equity Fund

	Shares		Value			% of Basket Value
Financial Services
PayPal Holdings, Inc.		4,271	$	(246,052	)		(69.7	)%
Health Care Equipment & Supplies
Koninklijke Philips NV, Registered Shares		3,590		(73,308	)		(20.8	)
Health Care REITs
Omega Healthcare Investors, Inc.		592		(18,796	)		(5.3	)
Hotels, Restaurants & Leisure
Airbnb, Inc., Class A		402		(50,789	)		(14.4	)
Insurance
Aflac, Inc.		2,221		(183,699	)		(52.1	)
Aon PLC, Class A		225		(73,910	)		(20.9	)
				(257,609	)
IT Services
International Business Machines Corp.		923		(146,351	)		(41.5	)
Media
Trade Desk, Inc. (The), Class A		395		(27,832	)		(7.9	)
Multi-Utilities
CenterPoint Energy, Inc.		947		(26,772	)		(7.6	)
WEC Energy Group, Inc.		3,163		(264,490	)		(74.9	)
				(291,262	)
Oil, Gas & Consumable Fuels
Murphy Oil Corp.		3,919		(167,616	)		(47.5	)
Range Resources Corp.		12,923		(419,997	)		(119.0	)
				(587,613	)
Professional Services
TransUnion		599		(35,173	)		(10.0	)
Semiconductors & Semiconductor Equipment
Wolfspeed, Inc.		16		(590	)		(0.2	)
Specialized REITs
Digital Realty Trust, Inc.		69		(9,576	)		(2.7	)
Total Reference Entity — Short				(2,572,631	)
Net Value of Reference Entity — Goldman Sachs Bank USA			$	352,860

The following table represents the individual long and short positions and related values of equity securities underlying the total return swap with HSBC Bank PLC as of period end, termination date February 10, 2028:

	Shares		Value		% of Basket Value
Reference Entity — Long
Common Stocks
Capital Markets
Intercontinental Exchange, Inc.		985	$	112,132		30.0	%
S&P Global, Inc.		866		360,109		96.5
				472,241
Chemicals
Sherwin-Williams Co. (The)		1,622		452,214		121.2

	Shares		Value			% of Basket Value
Electric Utilities
American Electric Power Co., Inc.		3,417	$	271,822			72.8	%
Electrical Equipment
AMETEK, Inc.		1,519		235,794			63.2
Health Care Equipment & Supplies
Alcon, Inc.		556		42,050			11.3
Insurance
Reinsurance Group of America, Inc.		2,001		326,283			87.4
Life Sciences Tools & Services
Thermo Fisher Scientific, Inc.		878		435,277			116.6
Media
Comcast Corp., Class A		440		18,432			4.9
Fox Corp., Class A, NVS		2,571		75,947			20.4
				94,379
Oil, Gas & Consumable Fuels
BP PLC		575		20,867			5.6
Suncor Energy, Inc.		4,624		152,546			40.9
				173,413
Professional Services
SS&C Technologies Holdings, Inc.		2,982		167,767			44.9
Residential REITs
Camden Property Trust		772		69,681			18.7
Mid-America Apartment Communities, Inc.		114		14,191			3.8
				83,872
Software
Microsoft Corp.		47		17,809			4.8
Specialized REITs
American Tower Corp.		627		130,905			35.1
Equinix, Inc.		167		136,107			36.4
				267,012
Textiles, Apparel & Luxury Goods
Ralph Lauren Corp., Class A		616		79,698			21.4
Total Reference Entity — Long				3,119,631
Reference Entity — Short
Common Stocks
Aerospace & Defense
L3Harris Technologies, Inc.		618		(117,920	)		(31.6	)
Automobiles
Thor Industries, Inc.		740		(73,312	)		(19.6	)
Capital Markets
Blackstone, Inc., Class A		1,151		(129,338	)		(34.7	)
Chemicals
Linde PLC		458		(189,507	)		(50.8	)
Consumer Staples Distribution & Retail
Walmart, Inc.		619		(96,372	)		(25.8	)
Electric Utilities
FirstEnergy Corp.		5,806		(214,474	)		(57.5	)
Health Care Providers & Services
DaVita, Inc.		756		(76,704	)		(20.6	)

SCHEDULE  OF  INVESTMENTS 9

Schedule of Investments (unaudited) (continued) November 30, 2023 BlackRock U.S. Insights Long/Short Equity Fund

	Shares		Value			% of Basket Value
Health Care REITs
Omega Healthcare Investors, Inc.		6,103	$	(193,770	)		(51.9	)%
Ventas, Inc.		2,415		(110,704	)		(29.7	)
				(304,474	)
Hotels, Restaurants & Leisure
Airbnb, Inc., Class A		2,303		(290,961	)		(78.0	)
IT Services
International Business Machines Corp.		1,251		(198,358	)		(53.1	)
Media
Trade Desk, Inc. (The), Class A		224		(15,783	)		(4.2	)
Multi-Utilities
CenterPoint Energy, Inc.		5,455		(154,213	)		(41.3	)
Oil, Gas & Consumable Fuels
Murphy Oil Corp.		4,426		(189,300	)		(50.7	)
Occidental Petroleum Corp.		164		(9,701	)		(2.6	)
				(199,001	)
Pharmaceuticals
Organon & Co.		5,112		(57,868	)		(15.5	)
Professional Services
ManpowerGroup, Inc.		2,710		(201,109	)		(53.9	)
Retail REITs
Simon Property Group, Inc.		2,086		(260,520	)		(69.8	)
Software
nCino, Inc.		2,440		(67,417	)		(18.1	)
Specialized REITs
Digital Realty Trust, Inc.		714		(99,089	)		(26.5	)
Total Reference Entity — Short				(2,746,420	)
Net Value of Reference Entity — HSBC Bank PLC			$	373,211

The following table represents the individual long and short positions and related values of equity securities underlying the total return swap with Merrill Lynch International as of period end, termination date June 15, 2028:

	Shares		Value		% of Basket Value
Reference Entity — Long
Common Stocks
Automobile Components
Lear Corp.		877	$	117,299		18.7	%
Automobiles
General Motors Co.		11,025		348,390		55.6
Broadline Retail
Amazon.com, Inc.		1,681		245,577		39.2
Capital Markets
Intercontinental Exchange, Inc.		250		28,460		4.5

	Shares		Value		% of Basket Value
Commercial Services & Supplies
GFL Environmental, Inc.		596	$	17,105		2.7	%
Consumer Staples Distribution & Retail
Dollar General Corp.		585		76,705		12.3
Dollar Tree, Inc.		639		78,974		12.6
				155,679
Electric Utilities
American Electric Power Co., Inc.		913		72,629		11.6
NextEra Energy, Inc.		6,644		388,741		62.1
				461,370
Electrical Equipment
AMETEK, Inc.		2,794		433,713		69.3
Financial Services
Fidelity National Information Services, Inc.		4,308		252,621		40.3
Health Care Equipment & Supplies
Alcon, Inc.		3,918		296,318		47.3
IDEXX Laboratories, Inc.		148		68,942		11.0
STERIS PLC		687		138,046		22.1
				503,306
Health Care Providers & Services
Cardinal Health, Inc.		2,059		220,478		35.2
Insurance
Reinsurance Group of America, Inc.		518		84,465		13.5
Oil, Gas & Consumable Fuels
BP PLC		7,508		272,465		43.5
Devon Energy Corp.		1,179		53,020		8.5
Shell PLC		11,601		763,346		121.9
TotalEnergies SE		4,392		298,875		47.7
				1,387,706
Residential REITs
AvalonBay Communities, Inc.		1,799		311,119		49.7
Camden Property Trust		37		3,339		0.5
Mid-America Apartment Communities, Inc.		2,941		366,096		58.5
				680,554
Software
Microsoft Corp.		23		8,715		1.4
Specialized REITs
American Tower Corp.		27		5,637		0.9
Equinix, Inc.		109		88,836		14.2
				94,473
Specialty Retail
Ulta Beauty, Inc.		549		233,869		37.3
Textiles, Apparel & Luxury Goods
Ralph Lauren Corp., Class A		437		56,539		9.0
Trading Companies & Distributors
SiteOne Landscape Supply, Inc.		298		41,964		6.7
Total Reference Entity — Long				5,372,283

10 2 0 2 3   BLACK ROCK  SEMI - ANNUAL  REPORT  TO  SHAREHOLDERS

Schedule of Investments (unaudited) (continued) November 30, 2023 BlackRock U.S. Insights Long/Short Equity Fund

	Shares		Value			% of Basket Value
Reference Entity — Short
Common Stocks
Banks
JPMorgan Chase & Co.		1,741	$	(271,735	)		(43.4	)%
PNC Financial Services Group, Inc. (The)		34		(4,555	)		(0.7	)
				(276,290	)
Capital Markets
Ares Management Corp., Class A		2,284		(256,379	)		(40.9	)
Blackstone, Inc., Class A		1,068		(120,011	)		(19.2	)
Northern Trust Corp.		1,913		(151,605	)		(24.2	)
				(527,995	)
Distributors
Pool Corp.		725		(251,807	)		(40.2	)
Electric Utilities
Southern Co. (The)		8,564		(607,873	)		(97.1	)
Health Care Technology
Doximity, Inc., Class A		3,763		(87,490	)		(14.0	)
Hotels, Restaurants & Leisure
Airbnb, Inc., Class A		608		(76,815	)		(12.3	)
Insurance
Marsh & McLennan Cos., Inc.		458		(91,334	)		(14.6	)
IT Services
International Business Machines Corp.		2,659		(421,611	)		(67.3	)
Life Sciences Tools & Services
Danaher Corp.		338		(75,479	)		(12.0	)
Media
Trade Desk, Inc. (The), Class A		3,196		(225,190	)		(36.0	)
Multi-Utilities
CenterPoint Energy, Inc.		917		(25,924	)		(4.1	)

	Shares		Value			% of Basket Value
Oil, Gas & Consumable Fuels
Exxon Mobil Corp.		2,084	$	(214,110	)		(34.2	)%
Murphy Oil Corp.		251		(10,735	)		(1.7	)
Occidental Petroleum Corp.		10,057		(594,872	)		(95.0	)
PBF Energy, Inc., Class A		100		(4,440	)		(0.7	)
Range Resources Corp.		1,163		(37,798	)		(6.0	)
				(861,955	)
Personal Care Products
Kenvue, Inc.		35,344		(722,431	)		(115.4	)
Pharmaceuticals
Organon & Co.		440		(4,981	)		(0.8	)
Professional Services
ManpowerGroup, Inc.		452		(33,543	)		(5.3	)
TransUnion		106		(6,224	)		(1.0	)
				(39,767	)
Retail REITs
Simon Property Group, Inc.		863		(107,780	)		(17.2	)
Semiconductors & Semiconductor Equipment
Wolfspeed, Inc.		385		(14,191	)		(2.3	)
Software
nCino, Inc.		43		(1,188	)		(0.2	)
Specialty Retail
Five Below, Inc.		393		(74,065	)		(11.8	)
Tractor Supply Co.		872		(177,025	)		(28.3	)
				(251,090	)
Technology Hardware, Storage & Peripherals
Apple Inc.		394		(74,840	)		(11.9	)
Total Reference Entity — Short				(4,746,031	)
Net Value of Reference Entity — Merrill Lynch International			$	626,252

Balances Reported in the Statement of Assets and Liabilities for OTC Swaps

	Swap Premiums Paid		Swap Premiums Received		Unrealized Appreciation		Unrealized Depreciation
OTC Swaps	$	—	$	—	$	140,384	$	(6,233	)

SCHEDULE   OF   INVESTMENTS 11

Schedule of Investments (unaudited) (continued) November 30, 2023 BlackRock U.S. Insights Long/Short Equity Fund

Derivative Financial Instruments Categorized by Risk Exposure

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

	Commodity Contracts		Credit Contracts		Equity Contracts		Foreign Currency Exchange Contracts		Interest Rate Contracts		Other Contracts		Total
Assets — Derivative Financial Instruments
Futures contracts
Unrealized appreciation on futures contracts(a)	$	—	$	—	$	45,229	$	—	$	—	$	—	$	45,229
Swaps — OTC
Unrealized appreciation on OTC swaps;
Swap premiums paid		—		—		140,384		—		—		—		140,384
	$	—	$	—	$	185,613	$	—	$	—	$	—	$	185,613
Liabilities — Derivative Financial Instruments
Swaps — OTC
Unrealized depreciation on OTC swaps;
Swap premiums received	$	—	$	—	$	6,233	$	—	$	—	$	—	$	6,233

^(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, 2023, 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	$	—	$	—	$	14,769	$	—	$	—	$	—	$	14,769
Swaps		—		—		775,670		—		—		—		775,670
	$	—	$	—	$	790,439	$	—	$	—	$	—	$	790,439
Net Change in Unrealized Appreciation (Depreciation) on:
Futures contracts	$	—	$	—	$	45,229	$	—	$	—	$	—	$	45,229
Swaps		—		—		134,151		—		—		—		134,151
	$	—	$	—	$	179,380	$	—	$	—	$	—	$	179,380

Average Quarterly Balances of Outstanding Derivative Financial Instruments

Futures contracts
Average notional value of contracts — long	$	2,045,869
Total return swaps
Average notional amount	$	1,933,212

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

Derivative Financial Instruments – Offsetting as of Period End

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

	Assets			Liabilities
Derivative Financial Instruments
Futures contracts	$	7,875		$	—
Swaps — OTC(a)		140,384			6,233
Total derivative assets and liabilities in the Statement of Assets and Liabilities	$	148,259		$	6,233
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)		(7,875	)		—
Total derivative assets and liabilities subject to an MNA	$	140,384		$	6,233

^(a)  Includes unrealized appreciation (depreciation) on OTC swaps and swap premiums (paid/received) in the Statement of Assets and Liabilities.

12 2 0 2 3   BLACK ROCK  SEMI - ANNUAL  REPORT  TO  SHAREHOLDERS

Schedule of Investments (unaudited) (continued) November 30, 2023 BlackRock U.S. Insights Long/Short Equity Fund

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

Counterparty	Derivative Assets Subject to an MNA by Counterparty		Derivatives Available for Offset(a)		Non- Cash Collateral Received(b)		Cash Collateral Received(b)			Net Amount of Derivative Assets(c)
Goldman Sachs Bank USA	$	40,268	$	—	$	—	$	—		$	40,268
HSBC Bank PLC		50,942		—		—		—			50,942
Merrill Lynch International		49,174		—		—		(49,174	)		—
	$	140,384	$	—	$	—	$	(49,174	)	$	91,210
Counterparty	Derivative Liabilities Subject to an MNA by Counterparty		Derivatives Available for Offset(a)		Non- Cash Collateral Pledged(b)		Cash Collateral Pledged(b)			Net Amount of Derivative Liabilities(d)
Barclays Bank PLC	$	6,233	$	—	$	—	$	—		$	6,233

^(a)  The amount of derivatives available for offset is limited to the amount of derivative assets and/or liabilities that are subject to an MNA.

^(b)  Excess of collateral received/pledged, if any, from the individual counterparty is not shown for financial reporting purposes.

^(c)  Net amount represents the net amount receivable from the counterparty in the event of default.

^(d)  Net amount represents the net amount payable due to the counterparty in the event of default.

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of 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
Short-Term Securities
U.S. Treasury Obligations	$	—	$	10,325,007		$	—	$	10,325,007
Derivative Financial Instruments(a)
Assets
Equity Contracts	$	45,229	$	140,384		$	—	$	185,613
Liabilities
Equity Contracts		—		(6,233	)		—		(6,233	)
	$	45,229	$	134,151		$	—	$	179,380

^(a)  Derivative financial instruments are swaps and futures contracts. Swaps and futures contracts are valued at the unrealized appreciation (depreciation) on the instrument.

See notes to financial statements.

SCHEDULE    OF   INVESTMENTS 13

Statement of Assets and Liabilities (unaudited)

November 30, 2023

	BlackRock U.S. Insights Long/Short Equity Fund
ASSETS
Investments, at value — unaffiliated(a)	$	10,325,007
Cash		65,022
Cash pledged:
Collateral — OTC derivatives		112,000
Futures contracts		447,000
Receivables:
Swaps		997,924
From the Manager		17,386
Variation margin on futures contracts		7,875
Unrealized appreciation on OTC swaps		140,384
Prepaid expenses		12,300
Total assets		12,124,898
LIABILITIES
Payables:
Swaps		866,003
Administration fees		4
Investment advisory fees		3
Offering costs		24,259
Professional fees		33,862
Service and distribution fees		31
Unrealized depreciation on OTC swaps		6,233
Total liabilities		930,395
Commitments and contingent liabilities
NET ASSETS	$	11,194,503
NET ASSETS CONSIST OF:
Paid-in capital	$	10,054,325
Accumulated earnings		1,140,178
NET ASSETS	$	11,194,503
(a) Investments, at cost — unaffiliated	$	10,324,921

14 2 0 2 3   BLACK ROCK  SEMI - ANNUAL  REPORT  TO  SHAREHOLDERS

Statement of Assets and Liabilities (unaudited) (continued)

November 30, 2023

	BlackRock U.S. Insights Long/Short Equity Fund
NET ASSET VALUE
Institutional
Net assets	$	111,362
Shares outstanding		10,000
Net asset value	$	11.14
Shares authorized		Unlimited
Par value	$	0.001
Investor A
Net assets	$	167,973
Shares outstanding		15,100
Net asset value	$	11.12
Shares authorized		Unlimited
Par value	$	0.001
Class K
Net assets	$	10,915,168
Shares outstanding		980,000
Net asset value	$	11.14
Shares authorized		Unlimited
Par value	$	0.001

See notes to financial statements.

FINANCIAL  STATEMENTS 15

Statement of Operations (unaudited)

Period Ended November 30, 2023

	BlackRock U.S. Insights Long/Short Equity Fund(a)
INVESTMENT INCOME
Interest — unaffiliated	$	247,019
Total investment income		247,019
EXPENSES
Organization and offering		115,822
Investment advisory		66,714
Professional		34,251
Accounting services		17,269
Printing and postage		11,902
Administration		2,085
Trustees and Officer		1,642
Administration — class specific		982
Transfer agent — class specific		307
Custodian		237
Service and distribution — class specific		144
Registration		32
Miscellaneous		2,838
Total expenses excluding interest expense		254,225
Interest expense		36
Total expenses		254,261
Less:
Administration fees waived		(2,085	)
Administration fees waived — class specific		(973	)
Fees waived and/or reimbursed by the Manager		(174,183	)
Transfer agent fees waived and/or reimbursed — class specific		(280	)
Total expenses after fees waived and/or reimbursed		76,740
Net investment income		170,279
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain from:
Investments — unaffiliated		5
Futures contracts		14,769
Swaps		775,670
		790,444
Net change in unrealized appreciation (depreciation) on:
Investments — unaffiliated		86
Futures contracts		45,229
Foreign currency translations		(11	)
Swaps		134,151
		179,455
Net realized and unrealized gain		969,899
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	1,140,178

^(a)  The Fund commenced operations on June 13, 2023.

See notes to financial statements.

16 2 0 2 3   BLACK ROCK  SEMI - ANNUAL  REPORT  TO  SHAREHOLDERS

Statement of Changes in Net Assets

	BlackRock U.S. Insights Long/Short Equity Fund
		Period from 06/13/23 to 11/30/23 (unaudited	(a)   )
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income	$	170,279
Net realized gain		790,444
Net change in unrealized appreciation (depreciation)		179,455
Net increase in net assets resulting from operations		1,140,178
CAPITAL SHARE TRANSACTIONS
Net increase in net assets derived from capital share transactions		10,054,325
NET ASSETS
Total increase in net assets		11,194,503
Beginning of period		—
End of period	$	11,194,503

^(a)  Commencement of operations.

See notes to financial statements.

FINANCIAL  STATEMENTS 17

Financial Highlights

(For a share outstanding throughout each period)

	BlackRock U.S. Insights Long/Short Equity Fund
	Institutional
		Period from 06/13/23 to 11/30/23 (unaudited	(a)   )
Net asset value, beginning of period	$	10.00
Net investment income(b)		0.17
Net realized and unrealized gain		0.97
Net increase from investment operations		1.14
Net asset value, end of period	$	11.14
Total Return(c)
Based on net asset value		11.40	%(d)
Ratios to Average Net Assets(e)
Total expenses		3.64	%(f)(g)(h)
Total expenses after fees waived and/or reimbursed		1.43	%(f)(g)(h)
Net investment income		3.44	%(f)
Supplemental Data
Net assets, end of period (000)	$	111
Portfolio turnover rate(i)		—	%

^(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)  Includes non-recurring expenses of offering and organization costs. Without these costs, total expenses and total expenses after fees waived and/or reimbursed would have been 2.70% and 1.43%, respectively.

^(h)  Audit, offering, and organization costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses and total expenses after fees waived and/or reimbursed would have been 5.38% and 1.59%, respectively.

⁽ⁱ⁾  Excludes underlying investments in total return swaps.

See notes to financial statements.

18 2 0 2 3   BLACK ROCK  SEMI - ANNUAL  REPORT  TO  SHAREHOLDERS

Financial Highlights (continued)

(For a share outstanding throughout each period)

	BlackRock U.S. Insights Long/Short Equity Fund  (continued)
	Investor A
		Period from 06/13/23 to 11/30/23 (unaudited	(a)   )
Net asset value, beginning of period	$	10.00
Net investment income(b)		0.16
Net realized and unrealized gain		0.96
Net increase from investment operations		1.12
Net asset value, end of period	$	11.12
Total Return(c)
Based on net asset value		11.20	%(d)
Ratios to Average Net Assets(e)
Total expenses		3.89	%(f)(g)(h)
Total expenses after fees waived and/or reimbursed		1.68	%(f)(g)(h)
Net investment income		3.21	%(f)
Supplemental Data
Net assets, end of period (000)	$	168
Portfolio turnover rate(i)		—	%

^(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)  Includes non-recurring expenses of offering and organization costs. Without these costs, total expenses and total expenses after fees waived and/or reimbursed would have been 2.92% and 1.68%, respectively.

^(h)  Audit, offering, and organization costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses and total expenses after fees waived and/or reimbursed would have been 5.60% and 1.84%, respectively.

⁽ⁱ⁾  Excludes underlying investments in total return swaps.

See notes to financial statements.

FINANCIAL  HIGHLIGHTS 19

Financial Highlights (continued)

(For a share outstanding throughout each period)

	BlackRock U.S. Insights Long/Short Equity Fund  (continued)
	Class K
		Period from 06/13/23 to 11/30/23 (unaudited	(a)   )
Net asset value, beginning of period	$	10.00
Net investment income(b)		0.17
Net realized and unrealized gain		0.97
Net increase from investment operations		1.14
Net asset value, end of period	$	11.14
Total Return(c)
Based on net asset value		11.40	%(d)
Ratios to Average Net Assets(e)
Total expenses		3.59	%(f)(g)(h)
Total expenses after fees waived and/or reimbursed		1.56	%(f)(g)(h)
Net investment income		3.47	%(f)
Supplemental Data
Net assets, end of period (000)	$	10,915
Portfolio turnover rate(i)		—	%

^(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)  Includes non-recurring expenses of offering and organization costs. Without these costs, total expenses and total expenses after fees waived and/or reimbursed would have been 2.49% and 1.56%, respectively.

^(h)  Audit, offering, and organization costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses and total expenses after fees waived and/or reimbursed would have been 5.18% and 1.56%, respectively.

⁽ⁱ⁾  Excludes underlying investments in total return swaps.

See notes to financial statements.

20 2 0 2 3   BLACK ROCK  SEMI - ANNUAL  REPORT  TO  SHAREHOLDERS

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 U.S. Insights Long/Short Equity Fund (the “Fund”) is a series of the Trust. The Fund is classified as non-diversified.

The Fund commenced operations on June 13, 2023.

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 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. Interest income, including amortization and accretion of premiums and discounts on debt securities is recognized daily on an accrual basis. Income, expenses and realized and unrealized gains and losses are allocated daily to each class based on its relative net assets.

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

The Fund does not isolate the 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.

Bank Overdraft: The Fund had outstanding cash disbursements exceeding deposited cash amounts at the custodian during the reporting period. The Fund is obligated to repay the custodian for any overdraft, including any related costs or expenses, where applicable. For financial reporting purposes, overdraft fees, if any, are included in interest expense in the Statement of Operations.

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.

Organization and Offering Costs: Upon commencement of operations, organization costs associated with the establishment of the Fund were expensed by the Fund and reimbursed by the Manager. The Manager reimbursed the Fund $25,000, which is included in fees waived and/or reimbursed by the Manager in the Statement of Operations. Offering costs are amortized over a 12-month period beginning with the commencement of operations of a class of shares.

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.

NOTES  TO  FINANCIAL  STATEMENTS 21

Notes to Financial Statements (unaudited) (continued)

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 Fund (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.

• Fixed-income investments for which market quotations are readily available are generally valued using the last available bid price or current market quotations provided by independent dealers or third-party pricing services. Floating rate loan interests are valued at the mean of the bid prices from one or more independent brokers or dealers as obtained from a third-party pricing service. Pricing services generally value fixed-income securities assuming orderly transactions of an institutional round lot size, but a fund may hold or transact in such securities in smaller, odd lot sizes. Odd lots may trade at lower prices than institutional round lots. The pricing services may use matrix pricing or valuation models that utilize certain inputs and assumptions to derive values, including transaction data (e.g., recent representative bids and offers), market data, credit quality information, perceived market movements, news, and other relevant information. Certain fixed-income securities, including asset-backed and mortgage related securities may be valued based on valuation models that consider the estimated cash flows of each tranche of the entity, establish a benchmark yield and develop an estimated tranche specific spread to the benchmark yield based on the unique attributes of the tranche. The amortized cost method of valuation may be used with respect to debt obligations with sixty days or less remaining to maturity unless the Manager determines such method does not represent fair value.

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

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

• Swap agreements are valued utilizing quotes received daily by independent pricing services or through brokers, which are derived using daily swap curves and models that incorporate a number of market data factors, such as discounted cash flows, trades and values of the underlying reference instruments.

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.

22 2 0 2 3   BLACK ROCK  SEMI - ANNUAL  REPORT  TO  SHAREHOLDERS

Notes to Financial Statements (unaudited) (continued)

4. DERIVATIVE FINANCIAL INSTRUMENTS

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

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

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

In a centrally cleared swap, immediately following execution of the swap contract, the swap contract is novated to a central counterparty (the “CCP”) and the CCP becomes the Fund’s counterparty on the swap. The Fund is required to interface with the CCP through the broker. Upon entering into a centrally cleared swap, the Fund is required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on the size and risk profile of the particular swap. Securities deposited as initial margin are designated in the Schedule of Investments and cash deposited is shown as cash pledged for centrally cleared swaps in the Statement of Assets and Liabilities. Amounts pledged, which are considered restricted cash, are included in cash pledged for centrally cleared swaps in the Statement of Assets and Liabilities. Pursuant to the contract, the Fund agrees to receive from or pay to the broker variation margin. Variation margin is recorded as unrealized appreciation (depreciation) and shown as variation margin receivable (or payable) on centrally cleared swaps in the Statement of Assets and Liabilities. Payments received from (paid to) the counterparty are amortized over the term of the contract and recorded as realized gains (losses) in the Statement of Operations, including those at termination.

• Total return swaps — Total return swaps are entered into to obtain exposure to a security or market without owning such security or investing directly in such market or to exchange the risk/return of one security or market (e.g., fixed-income) with another security or market (e.g., equity or commodity prices) (equity risk, commodity price risk and/or interest rate risk).

Total return swaps are agreements in which there is an exchange of cash flows whereby one party commits to make payments based on the total return (distributions plus capital gains/losses) of an underlying instrument, or basket of underlying instruments, in exchange for fixed or floating rate interest payments. If the total return of the instrument(s) or index underlying the transaction exceeds or falls short of the offsetting fixed or floating interest rate obligation, the Fund receives payment from or makes a payment to the counterparty.

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

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

NOTES  TO  FINANCIAL  STATEMENTS 23

Notes to Financial Statements (unaudited) (continued)

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

Master Netting Arrangements: In order to define its contractual rights and to secure rights that will help it mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs certain OTC derivatives and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, a Fund may, under certain circumstances, offset with the counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of default including the bankruptcy or insolvency of the counterparty. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against the right of offset in bankruptcy, insolvency or other events.

Collateral Requirements: For derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by netting the mark-to-market amount for each transaction under such agreement and comparing that amount to the value of any collateral currently pledged by the Fund and the counterparty.

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

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

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 and administrative services. The Manager is responsible for the management of the Fund’s portfolio and provides the personnel, facilities, equipment and certain other services necessary to the operations of the Fund.

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

Average Daily Net Assets	Investment Advisory Fees
First $1 billion		1.36	%
$1 billion - $3 billion		1.28
$3 billion - $5 billion		1.22
$5 billion - $10 billion		1.18
Greater than $10 billion		1.15

The Manager entered into a sub-advisory agreement with BlackRock International Limited (“BIL”), an affiliate of the Manager. The Manager pays BIL for services it provides for that portion of the Fund for which BIL acts as sub-adviser, a monthly fee that is equal to a percentage of the investment advisory fees paid by the Fund to the Manager.

Service and Distribution Fees: The Trust, on behalf of the Fund, entered into a Distribution Agreement and 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 period ended November 30, 2023, the following table shows the class specific service and distribution fees borne directly by each share class of the Fund:

	Investor A		Total
Service and distribution — class specific	$	144	$	144

24 2 0 2 3   BLACK ROCK  SEMI - ANNUAL  REPORT  TO  SHAREHOLDERS

Notes to Financial Statements (unaudited) (continued)

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 period ended November 30, 2023, the Fund paid the following to the Manager in return for these services, which are included in administration — class specific in the Statement of Operations:

	Institutional		Investor A		Class K		Total
Administration — class specific	$	10	$	12	$	960	$	982

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 period ended November 30, 2023, the Fund did not pay any amounts to affiliates in return for these services.

For the period ended November 30, 2023, the following table shows the class specific transfer agent fees borne directly by each share class of the Fund:

	Institutional		Investor A		Class K		Total
Transfer agent — class specific	$	102	$	102	$	103	$	307

Other Fees: For the period ended November 30, 2023, affiliates earned underwriting discounts, direct commissions and dealer concessions on sales of the Fund’s Investor A Shares for a total of $119.

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, 2025. 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 period ended November 30, 2023, the amount waived and/or reimbursed was $66,714.

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, 2025. 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. This amount is included in fees waived and/or reimbursed by the Manager in the Statement of Operations. For the period ended November 30, 2023, there were no fees waived and/or reimbursed by the Manager pursuant to this agreement.

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

Institutional	Investor A			Class K
1.61%		1.86	%		1.56	%

The Manager has agreed not to reduce or discontinue these contractual expense limitations through June 30, 2025, 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 period ended November 30, 2023, the Manager waived and/or reimbursed investment advisory fees of $82,469, which is included in fees waived and/or reimbursed by the Manager in the Statement of Operations.

The Fund also had a waiver of administration fees, which are included in Administration fees waived in the Statement of Operations. For the period ended November 30, 2023, the amount was $2,085.

NOTES  TO  FINANCIAL  STATEMENTS 25

Notes to Financial Statements (unaudited) (continued)

In addition, these amounts waived and/or reimbursed by the Manager are included in administration fees waived by the Manager — class specific and transfer agent fees waived and/or reimbursed by the Manager — class specific, respectively, in the Statement of Operations. For the period ended November 30, 2023, class specific expense waivers and/or reimbursements were as follows:

	Institutional		Investor A		Class K		Total
Administration fees waived by the Manager — class specific	$	6	$	7	$	960	$	973
Transfer agent fees waived and/or reimbursed by the Manager — class specific		89		89		102		280

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 June 14, 2030, the repayment arrangement between the Fund and the Manager pursuant to which the 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, 2023, the fund level and class specific waivers and/or reimbursements subject to possible future recoupment under the expense limitation agreement were as follows:

	Expiring May 31,
Fund Level/Share Class	2026
Fund Level	$	176,268
Institutional		96
Investor A		96
Class K		1,062

Interfund Lending: In accordance with an exemptive order (the “Order”) from the U.S. Securities and Exchange Commission (“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, 2023, the Fund did not participate in the Interfund Lending Program.

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

6. PURCHASES AND SALES

For the period ended November 30, 2023, there were no purchases or sales.

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, 2023, 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.

26 2 0 2 3   BLACK ROCK  SEMI - ANNUAL  REPORT  TO  SHAREHOLDERS

Notes to Financial Statements (unaudited) (continued)

As of November 30, 2023, 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)
U.S. Insights Long/Short Equity	$	10,324,921	$	185,699	$	(6,233	)	$	179,466

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 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 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 2024 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 period ended November 30, 2023, 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.

Market Risk: The Fund may be exposed to prepayment risk, which is the risk that borrowers may exercise their option to prepay principal earlier than scheduled during periods of declining interest rates, which would force the Fund to reinvest in lower yielding securities. The Fund may also be exposed to reinvestment risk, which is the risk that income from the Fund’s portfolio will decline if the Fund invests the proceeds from matured, traded or called fixed-income securities at market interest rates that are below the Fund portfolio’s current earnings rate.

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.

NOTES  TO  FINANCIAL  STATEMENTS 27

Notes to Financial Statements (unaudited) (continued)

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

Counterparty Credit Risk: The Fund may be exposed to counterparty credit risk, or the risk that an entity may fail to or be unable to perform on its commitments related to unsettled or open transactions, 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.

Geographic/Asset Class Risk: A diversified portfolio, where this is appropriate and consistent with the 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 of issuers located in the United States. A decrease in imports or exports, changes in trade regulations, inflation and/or an economic recession in the United States may have a material adverse effect on the U.S. economy and the securities listed on U.S. exchanges. Proposed and adopted policy and legislative changes in the United States may also have a significant effect on U.S. markets generally, as well as on the value of certain securities. Governmental agencies project that the United States will continue to maintain elevated public debt levels for the foreseeable future which may constrain future economic growth. Circumstances could arise that could prevent the timely payment of interest or principal on U.S. government debt, such as reaching the legislative “debt ceiling.” Such non-payment would result in substantial negative consequences for the U.S. economy and the global financial system. If U.S. relations with certain countries deteriorate, it could adversely affect issuers that rely on the United States for trade. The United States has also experienced increased internal unrest and discord. If these trends were to continue, they may have an adverse impact on the U.S. economy and the issuers in which the Fund invests.

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.

28 2 0 2 3   BLACK ROCK  SEMI - ANNUAL  REPORT  TO  SHAREHOLDERS

Notes to Financial Statements (unaudited) (continued)

10. CAPITAL SHARE TRANSACTIONS

Transactions in capital shares for each class were as follows:

	Period from 06/13/23(a) to 11/30/23
Share Class	Shares		Amount
Institutional
Shares sold		10,000	$	100,000
Investor A
Shares sold and automatic conversion of shares		15,100	$	154,325
Class K
Shares sold		980,000	$	9,800,000
		1,005,100	$	10,054,325

^(a)  Commencement of operations.

As of November 30, 2023, shares owned by BlackRock Financial Management, Inc., an affiliate of the Fund, were as follows:

Share Class
Institutional	10,000
Investor A	10,000
Class K	980,000

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 29

Disclosure of Investment Advisory Agreement

The Board of Trustees (the “Board,” the members of which are referred to as “Board Members”) of BlackRock Funds^SM (the “Trust”) met on May 22-24, 2023 (the “Organizational Meeting”) to consider the approval of the proposed investment advisory agreement (the “Agreement”) between the Trust, on behalf of BlackRock U.S. Insights Long/Short Equity Fund (the “Fund”), and BlackRock Advisors, LLC (the “Manager” or “BlackRock”), the Fund’s investment advisor. The Agreement was the same agreement that had been previously approved by the Board with respect to certain series of the Trust.

The Approval Process

Consistent with the requirements of the Investment Company Act of 1940 (the “1940 Act”), the Trust is required to consider the initial approval of the Agreement. The Board members whom are not “interested persons” of the Fund, as defined in the 1940 Act, are considered independent Board members (the “Independent Board Members”). In connection with this deliberative process, the Board assessed, among other things, the nature, extent and quality of the services to be provided to the Fund by BlackRock, BlackRock’s personnel and affiliates, including (as applicable): investment management services; accounting oversight; administrative and shareholder services; oversight of the Fund’s service providers; risk management and oversight; and legal, regulatory and compliance services.

At the Organizational Meeting, the Board received and reviewed materials relating to its consideration of the proposed Agreement. The Board considered all factors it believed relevant with respect to the Fund, including, among other things: (a) the nature, extent and quality of the services to be provided by BlackRock; (b) the investment performance of BlackRock portfolio management; (c) the advisory fee and the estimated cost of the services and estimated profits to be realized by BlackRock and its affiliates from their relationship with the Fund; (d) the existence and sharing of potential economies of scale; (e) any fall-out benefits to BlackRock and its affiliates as a result of BlackRock’s relationship with the Fund; (f) possible alternatives to the proposed Agreement; (g) the policies and practices of BlackRock with respect to portfolio transactions for the Fund; (h) BlackRock’s portfolio compliance systems and capabilities; and (i) other factors deemed relevant by the Board Members.

In considering approval of the Agreement, the Board met with the relevant investment advisory personnel from BlackRock and considered all information it deemed reasonably necessary to evaluate the terms of the Agreement. The Board received materials in advance of the Organizational Meeting relating to its consideration of the Agreement, including (a) information independently compiled and prepared by Broadridge Financial Solutions, Inc. (“Broadridge”) regarding the Fund’s fees and estimated expense ratio as compared with a peer group of funds as determined by Broadridge (“Expense Peers”); (b) information regarding BlackRock’s economic outlook for the Fund and its general investment outlook for the markets; (c) information regarding fees paid to service providers that are affiliates of BlackRock; and (d) information outlining the legal duties of the Board under the 1940 Act with respect to the consideration and approval of the Agreement. The Board also noted information received at prior Board meetings concerning compliance records and regulatory matters relating to BlackRock.

The Board also considered other matters it deemed important to the approval process, such as other payments made to BlackRock or its affiliates relating to securities lending and cash management and BlackRock’s services related to the valuation and pricing of the portfolio holdings of the Fund. The Board noted the willingness of BlackRock’s personnel to engage in open, candid discussions with the Board. The Board Members did not identify any particular information or any single factor as determinative, and each Board Member may have attributed different weights to the various items and factors considered.

A. Nature, Extent and Quality of the Services to be Provided by BlackRock

The Board, including the Independent Board Members, reviewed the nature, extent and quality of services to be provided by BlackRock, including the investment advisory services to be provided to the Fund. The Board received information concerning the investment philosophy and investment process to be used by BlackRock in managing the Fund, as well as a description of the capabilities, personnel and services of BlackRock. The Board considered the scope of the services provided by BlackRock to the Fund under the Agreement relative to services typically provided by third parties to other funds. The Board noted that the standard of care applicable under the Agreement was comparable to that found generally in investment company advisory agreements. The Board concluded that the scope of BlackRock’s services to be provided to the Fund was consistent with the Fund’s operational requirements, including, in addition to seeking to meet the Fund’s investment objective(s), compliance with investment restrictions, tax and reporting requirements and related shareholder services.

The Board, including the Independent Board Members, also considered the quality of the administrative and other non-investment advisory services to be provided by BlackRock and its affiliates to the Fund. The Board evaluated the procedures of BlackRock designed to fulfill its fiduciary duty to the Fund with respect to possible conflicts of interest, including BlackRock’s code of ethics (regulating the personal trading of BlackRock’s officers and employees), the procedures by which BlackRock allocates trades among its various investment advisory clients, the integrity of the systems in place to ensure compliance with the foregoing and the record of BlackRock in these matters. The Board also noted information received at prior Board meetings concerning standards of BlackRock with respect to the execution of portfolio transactions.

The Board considered, among other factors, with respect to BlackRock: the experience of investment personnel generally and the Fund’s portfolio management team; research capabilities; investments by portfolio managers in the funds they manage; portfolio trading capabilities; use of technology; commitment to compliance; credit analysis capabilities; risk analysis and oversight capabilities; and the approach to training and retaining portfolio managers and other research, advisory and management personnel. The Board also considered BlackRock’s overall risk management program, including the continued efforts of BlackRock and its affiliates to address cybersecurity risks and the role of BlackRock’s Risk & Quantitative Analysis Group. The Board engaged in a review of BlackRock’s compensation structure with respect to the Fund’s portfolio management team and BlackRock’s ability to attract and retain high-quality talent and create performance incentives. The Board also considered the business reputation of BlackRock and its financial resources and concluded that BlackRock would be able to meet any reasonably foreseeable obligation under the Agreement.

In addition to investment advisory services, the Board considered the nature and quality of the administrative and other non-investment advisory services to be provided to the Fund. The Board considered that BlackRock and its affiliates will provide the Fund with certain administrative, shareholder and other services (in addition to any such services provided to the Fund by third parties) and officers and other personnel as are necessary for the operations of the Fund. In particular, BlackRock and its affiliates will provide the Fund with administrative services, including, among others: (i) responsibility for disclosure documents, such as the prospectus, the summary prospectus (as applicable), the statement of additional information and periodic shareholder reports; (ii) oversight of daily accounting and pricing; (iii) responsibility for periodic filings with regulators; (iv) overseeing and coordinating the activities of third-party service providers, including, among others, the Fund’s custodian, fund accountant, transfer agent, and auditor; (v) organizing Board meetings and preparing the materials for such Board meetings; (vi) providing legal and compliance support; (vii) furnishing analytical and other support to assist the Board in its consideration of strategic issues such as the merger, consolidation or repurposing of certain open-end funds; and (viii) performing or managing

30 2 0 2 3   BLACK ROCK  SEMI - ANNUAL  REPORT  TO  SHAREHOLDERS

Disclosure of Investment Advisory Agreement (continued)

administrative functions necessary for the operation of the Fund, such as tax reporting, expense management, fulfilling regulatory filing requirements, overseeing the Fund’s distribution partners, and shareholder call center and other services. The Board reviewed the structure and duties of BlackRock’s fund administration, shareholder services, and legal and compliance departments and considered BlackRock’s policies and procedures for assuring compliance with applicable laws and regulations.

B. The Investment Performance of the Fund and BlackRock

The Board, including the Independent Board Members, previously received and considered information about BlackRock’s investment performance for other funds. The Board, however, did not consider the performance history of the Fund because the Fund was newly organized and had not yet commenced operations as of the date of the Organizational Meeting.

C. Consideration of the Advisory/Management Fees and the Estimated Cost of the Services to be Provided and Estimated Profits to be Realized by BlackRock and its Affiliates from their Relationship with the Fund

In connection with the initial approval of the Agreement, the Board, including the Independent Board Members, reviewed the Fund’s contractual management fee rate compared with those of its Expense Peers. The contractual management fee rate represents a combination of the advisory fee and any administrative fees, before taking into account any reimbursements or fee waivers. The Board also compared the Fund’s estimated total expense ratio, as well as its estimated actual management fee rate, to those of its Expense Peers. The total expense ratio represents a fund’s total net operating expenses, including any 12b-1 or non-12b-1 service fees. The total expense ratio gives effect to any expense reimbursements or fee waivers that benefit a fund, and the actual management fee rate gives effect to any management fee reimbursements or waivers that benefit a fund. Additionally, the Board noted information received at prior Board meetings concerning the services provided and the fees charged by BlackRock and its affiliates to other types of clients with similar investment mandates, as applicable, including institutional accounts and sub-advised mutual funds (including mutual funds sponsored by third parties).

The Board noted that the Fund’s contractual management fee rate ranked in the fourth quartile, and that the estimated actual management fee rate and estimated total expense ratio would rank in the first quartile and third quartile, respectively, relative to the Fund’s Expense Peers. The Board also noted that the Fund has an advisory fee arrangement that includes breakpoints that adjust the fee rate downward as the size of the Fund increases above certain contractually specified levels. The Board additionally noted that the breakpoints can, conversely, adjust the advisory fee rate upward as the size of the Fund decreases below certain contractually specified levels. The Board further noted that BlackRock and the Board have contractually agreed to a cap on the Fund’s total expenses as a percentage of the Fund’s average daily net assets on a class-by-class basis.

Following consideration of this information, the Board, including the independent Board Members, concluded that the fees to be paid pursuant to the Agreement were fair and reasonable in light of the services provided.

As the Fund had not commenced operations as of the date of the Organizational Meeting, BlackRock was not able to provide the Board with specific information concerning the expected profits to be realized by BlackRock and its affiliates from their relationships with the Fund. BlackRock, however, will provide the Board with such information at future meetings.

D. Economies of Scale

The Board, including the Independent Board Members, considered the extent to which economies of scale might be realized as the assets of the Fund increase, including the existence of fee waivers and/or expense caps, as applicable, noting that any contractual fee waivers and expense caps had been approved by the Board.

E. Other Factors Deemed Relevant by the Board Members

The Board, including the Independent Board Members, also took into account other ancillary or “fall-out” benefits that BlackRock or its affiliates may derive from BlackRock’s respective relationships with the Fund, both tangible and intangible, such as BlackRock’s ability to leverage its investment professionals who manage other portfolios and risk management personnel, an increase in BlackRock’s profile in the investment advisory community, and the engagement of BlackRock’s affiliates as service providers to the Fund, including for administrative, distribution, securities lending and cash management services. The Board also considered BlackRock’s overall operations and its efforts to expand the scale of, and improve the quality of, its operations. The Board also noted that, subject to applicable law, BlackRock may use and benefit from third-party research obtained by soft dollars generated by certain registered fund transactions to assist in managing all or a number of its other client accounts.

In connection with its consideration of the Agreement, the Board also received information regarding BlackRock’s brokerage and soft dollar practices. The Board received reports from BlackRock which included information on brokerage commissions and trade execution practices throughout the year.

The Board noted the competitive nature of the open-end fund marketplace, and that shareholders are able to redeem their Fund shares if they believe that the Fund’s fees and expenses are too high or if they are dissatisfied with the performance of the Fund.

Conclusion

The Board Members present at the Organizational Meeting, including the Independent Board Members, unanimously approved the Agreement between the Manager and the Trust, with respect to the Fund, for a two-year term beginning on the effective date of the Agreement. Based upon its evaluation of all of the aforementioned factors in their totality, as well as other information, the Board, including the Independent Board Members, was satisfied that the terms of the Agreement were fair and reasonable and in the best interest of the Fund and its shareholders. In arriving at its decision to approve the Agreement, the Board did not identify any single factor or group of factors as all-important or controlling, but considered all factors together, and different Board Members may have attributed different weights to the various factors considered. The Independent Board Members were also assisted by the advice of independent legal counsel in making this determination.

DISCLOSURE  OF  INVESTMENT  ADVISORY  AGREEMENT 31

Disclosure of Investment Sub-Advisory Agreement

The Board of Trustees (the “Board,” the members of which are referred to as “Board Members”) of BlackRock Funds (the “Trust”) met on May 22-24, 2023 (the “Meeting”) to consider the initial approval of the proposed sub-advisory agreement (the “Sub-Advisory Agreement”) between BlackRock Advisors, LLC (the “Manager”), the Trust’s investment advisor, and BlackRock International Limited (the “Sub-Advisor”) with respect to BlackRock U.S. Insights Long/Short Equity Fund (the “Fund”), a series of the Trust.

Consistent with the requirements of the Investment Company Act of 1940 (the “1940 Act”), at the Meeting, the Board reviewed materials relating to its consideration of the Sub-Advisory Agreement. The Board Members who are not “interested persons” of the Fund, as defined in the 1940 Act, are considered independent Board members (the “Independent Board Members”). At the Meeting, the Board also considered the initial approval of the proposed investment advisory agreement (the “Advisory Agreement”) between the Trust and the Manager, on behalf of the Fund. At the Meeting, the Board, including the Independent Board Members, unanimously approved the Advisory Agreement between the Manager and the Trust, with respect to the Fund, for a two-year term beginning on the effective date of the Advisory Agreement. A discussion of the basis for the Board’s approval of the Advisory Agreement at the Meeting is included in the semi-annual shareholder report for the Fund for the period ended November 30, 2023. The factors considered by the Board at the Meeting in connection with the approval of the proposed Sub-Advisory Agreement were substantially the same as the factors considered at the Meeting with respect to approval of the Advisory Agreement.

Following discussion, the Board, including the Independent Board Members, unanimously approved the Sub-Advisory Agreement between the Manager and the Sub-Advisor, with respect to the Fund, for a two-year term beginning on the effective date of the Sub-Advisory Agreement. Based upon its evaluation of all of the aforementioned factors in their totality, as well as other information, the Board, including a majority of the Independent Board Members, was satisfied that the terms of the Sub-Advisory Agreement were fair and reasonable and in the best interest of the Fund and its shareholders. In arriving at its decision to approve the Sub-Advisory Agreement, the Board did not identify any single factor or group of factors as all-important or controlling, but considered all factors together, and different Board Members may have attributed different weights to the various factors considered. The Independent Board Members were also assisted by the advice of independent legal counsel in making this determination.

32 2 0 2 3   BLACK ROCK  SEMI - ANNUAL  REPORT  TO  SHAREHOLDERS

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 U.S. Insights Long/Short 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 16-17, 2023 (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, 2022 through September 30, 2023 (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 funds, 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.

STATEMENT  REGARDING  LIQUIDITY  RISK  MANAGEMENT  PROGRAM 33

Additional Information

Tailored Shareholder Reports for Open-End Mutual Funds and ETFs

Effective January 24, 2023, the SEC adopted rule and form amendments to require open-end mutual funds and ETFs to transmit concise and visually engaging streamlined annual and semiannual reports to shareholders that highlight key information. Other information, including financial statements, will no longer appear in a streamlined shareholder report but must be available online, delivered free of charge upon request, and filed on a semiannual basis on Form N-CSR. The rule and form amendments have a compliance date of July 24, 2024. At this time, management is evaluating the impact of these amendments on the shareholder reports for the Fund.

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.

34 2 0 2 3   BLACK ROCK  SEMI - ANNUAL  REPORT  TO  SHAREHOLDERS

Additional Information (continued)

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

Sub-Adviser

BlackRock International Limited

Edinburgh, EH3 8JB

United Kingdom

Accounting Agent and Transfer Agent

BNY Mellon Investment Servicing (US) Inc.

Wilmington, DE 19809

Custodian

The Bank of New York Mellon

New York, NY 10286

Distributor

BlackRock Investments, LLC

New York, NY 10001

Independent Registered Public Accounting Firm

Deloitte & Touche LLP

Boston, MA 02116

Legal Counsel

Sidley Austin LLP

New York, NY 10019

Address of the Trust

100 Bellevue Parkway

Wilmington, DE 19809

ADDITIONAL  INFORMATION 35

Glossary of Terms Used in this Report

Currency Abbreviation
USD	United States Dollar
Portfolio Abbreviation
NVS	Non-Voting Shares
OTC	Over-the-Counter
S&P	Standard & Poor’s

36 2 0 2 3   BLACK ROCK  SEMI - ANNUAL  REPORT  TO  SHAREHOLDERS

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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.

ILSE-11/23-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 – Recovery of Erroneously Awarded Compensation – Not Applicable

Item 14 – Exhibits attached hereto

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

(a)(2) Section 302 Certifications are attached

2

(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

3

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 23, 2024

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 23, 2024

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

Date: January 23, 2024

4