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 811-02857
811-21434
Name of Fund: BlackRock Total Return Fund of BlackRock Bond Fund, Inc.
Master Total Return Portfolio of Master Bond LLC
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: Donald C. Burke, Chief Executive
Officer, BlackRock Total Return Fund of BlackRock Bond Fund, Inc. and
Master Total Return Portfolio of Master Bond LLC, 800 Scudders Mill
Road, Plainsboro, NJ, 08536. Mailing address: P.O. Box 9011,
Princeton, NJ, 08543-9011
Registrant's telephone number, including area code: (800) 441-7762
Date of fiscal year end: 09/30/2007
Date of reporting period: 10/01/2006 - 09/30/2007
Item 1 - Report to Stockholders
EQUITIES FIXED INCOME REAL ESTATE LIQUIDITY ALTERNATIVES
BLACKROCK SOLUTIONS
BlackRock Total Return Fund
OF BLACKROCK BOND FUND, INC.
ANNUAL REPORT SEPTEMBER 30, 2007
(BLACKROCK logo)
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
This report is transmitted to shareholders only. It is not authorized for
use as an offer of sale or a solicitation of an offer to buy shares of the
Fund unless accompanied or preceded 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.
BlackRock Bond Fund, Inc.
P.O. Box 9011
Princeton, NJ 08543-9011
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BlackRock Total Return Fund of BlackRock Bond Fund, Inc.
Table of Contents Page
A Letter to Shareholders 3
Annual Report:
Fund Summary 4
About Fund Performance 6
Disclosure of Expenses 7
Fund Financial Statements:
Statement of Assets and Liabilities 9
Statement of Operations 10
Statements of Changes in Net Assets 11
Fund Financial Highlights 12
Fund Notes to Financial Statements 24
Fund Report of Independent Registered Public Accounting Firm 32
Important Tax information 32
Master Portfolio Information 33
Master Financial Statements:
Master Schedule of Investments 34
Statement of Assets and Liabilities 48
Statement of Operations 49
Statement of Changes in Net Assets 50
Master Financial Highlights 50
Master Notes to Financial Statements 51
Master Report of Independent Registered Public Accounting Firm 55
Officers and Directors 56
Proxy Results 59
BlackRock Fund Information 60
Mutual Fund Family 62
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
A Letter to Shareholders
Dear Shareholder
The September reporting period took financial markets on a wild ride. While
subprime mortgage woes dominated headlines for much of 2007, troubles
intensified in the final months of the period, spawning a widespread "credit
crunch" that crept into other areas of the market. The U.S. Federal Reserve
Board (the "Fed") and other countries' central banks stepped in to inject
liquidity into the markets and bolster investor confidence. The Fed cut the
discount rate, the rate banks pay to borrow money directly from the Fed, from
6.25% to 5.25% in two moves in August and September. The central bankers also
cut the more widely followed federal funds target rate, which had remained
unchanged at 5.25% for over a year, to 4.75% in September. After a tumultuous
summer, the dust began to settle toward period-end amid speculation that the
worst of the credit crunch had passed.
Although heightened volatility and a weakening U.S. economy have been
recurring themes throughout the past year, equity markets have displayed
surprising resilience. Most recently, the credit turmoil dampened corporate
merger-and-acquisition activity, a key source of strength for equity markets.
However, market fundamentals have held firm, dividend payouts and share
buybacks have continued to grow, and valuations remain attractive. These
tailwinds generally have prevailed over the headwinds created by the slowing
U.S. economy and troubled housing market.
In fixed income markets, mixed economic signals and the credit market debacle
resulted in a flight to quality. At the height of the uncertainty, investors
shunned bonds associated with the housing and credit markets in favor of
higher-quality Treasury issues. The yield on 10-year Treasury issues, which
touched 5.30% in June (its highest level in five years), fell to 4.59% by
period-end, while prices correspondingly rose.
Against this backdrop, financial markets posted generally positive results for
the six-month period, and relatively stronger returns for the full year ended
September 30, 2007:
Total Returns as of September 30, 2007 6-month 12-month
U.S. equities (S&P 500 Index) +8.44% +16.44%
Small cap U.S. equities (Russell 2000 Index) +1.19 +12.34
International equities (MSCI Europe, Australasia, Far East Index) +8.72 +24.86
Fixed income (Lehman Brothers U.S. Aggregate Bond Index) +2.31 + 5.14
Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) +1.15 + 3.10
High yield bonds (Lehman Brothers U.S. Corporate High Yield 2% Issuer Cap Index) +0.56 + 7.62
Past performance is no guarantee of future results. Index performance shown
for illustrative purposes only. You cannot invest directly in an index.
As you navigate market volatility, we encourage you to review your
investment goals with your financial professional and to make portfolio
changes, as needed. For more market insight, we invite you to view "What's
Ahead in 2007: Third Quarter Update" and "Are You Prepared for Volatility?"
at www.blackrock.com/funds. We thank you for entrusting BlackRock with your
investment assets, and we look forward to continuing to serve you in the
months and years ahead.
Sincerely,
/s/ Robert C. Doll, Jr.
- -----------------------
Robert C. Doll, Jr.
Vice Chairman, BlackRock, Inc.
THIS PAGE NOT PART OF YOUR FUND REPORT
Fund Summary
Portfolio Management Commentary
The Fund was formerly known as BlackRock Bond Fund.
How did the Fund perform?
* The Fund's total return lagged that of its benchmark for the period.
What factors influenced performance?
* The first eight months of the fiscal year were relatively uneventful in
comparison to the final four. Bond yields rose sharply (and prices fell)
in early June, with the 10-year Treasury yield touching 5.33%, its highest
level since 2001. This was largely based on stronger-than-expected
economic readings, which led investors to believe that the Federal Reserve
Board (the "Fed") would keep short-term interest rates on hold for some
time. Just weeks later, perceptions changed dramatically amid escalating
troubles in the subprime mortgage market.
* Financial markets were highly volatile as fears spread about which
investments might have exposure to the subprime segment. The liquidity of
mortgage-backed securities began drying up, which led to a wider liquidity
crisis as banks restricted their short-term lending. The Fed and other
countries' central banks stepped in to inject liquidity into the markets
and bolster investor confidence. The Fed cut the discount rate from 6.25%
to 5.25% and the federal funds rate from 5.25% to 4.75% in an effort to
offset deteriorating credit conditions in the housing market and help
prevent any negative spillover in the economy.
* Spread sectors (mortgage-backed securities, commercial MBS, investment-
grade corporate bonds, asset-backed securities and U.S. agency issues),
which had outperformed Treasury issues in the first half of the fiscal
year, lost ground in the latter half as investors fled to the perceived
safety of Treasury issues.
* Detracting from Fund performance was our overweight exposure to mortgage
pass-through securities and commercial mortgages. Although their
performance lagged amid the subprime turmoil, we believe these securities
were unduly punished and are positioned to perform well as the markets
heal. Our allocation to global bonds also hampered relative performance.
* Benefiting Fund results was our underweighting of corporate and agency
bonds, which also suffered amid the recent credit crunch. Favorable bond
security selection also was a positive contributor, as was our
opportunistic allocation to the high yield and emerging markets sectors.
Describe recent portfolio activity.
* We continued to emphasize high-quality, short-duration assets. We
increased our overall allocation to high-quality bonds in the residential
and commercial mortgage markets as spreads widened in these sectors.
* The Portfolio remained underweight relative to its benchmark in corporate
bonds throughout the year. However, we closed the gap somewhat in the
second half by adding to investment grade corporate debt in both the new-
issue and secondary market.
Describe the Portfolio's positioning at period-end.
* The Portfolio's duration (a measure of interest rate sensitivity) was
modestly short relative to its benchmark. We also had a small yield curve
steepening bias, reflecting our view that the relatively flat yield curve
will return to a more normal slope in time.
* The Portfolio maintains large overweight positions in residential and
commercial mortgages. Fundamentally, we believe current valuations for
mortgages are very attractive. We remained underweight in the investment
grade corporate and agency markets. From a sector perspective, we are
overweight in financials and underweight in industrials, utilities and non-
corporate sectors.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Total Return Based on a $10,000 Investment
A line graph illustrating the growth of a $10,000 investment in Institutional
Shares*++ and Investor A Shares*++ compared to a similar investment in Lehman
Brothers U.S. Aggregate Bond Index++++ and Merrill Lynch Corporate Master
Index++++++. Values illustrated are as follows:
Institutional Shares*++
Date Value
12/7/2001** $10,000.00
September 2002 $10,724.00
September 2003 $11,458.00
September 2004 $11,858.00
September 2005 $12,220.00
September 2006 $12,647.00
September 2007 $13,162.00
Investor A Shares*++
Date Value
12/7/2001** $ 9,600.00
September 2002 $10,271.00
September 2003 $10,942.00
September 2004 $11,291.00
September 2005 $11,602.00
September 2006 $11,973.00
September 2007 $12,436.00
Lehman Brothers U.S. Aggregate Bond Index++++
Date Value
12/7/2001** $10,000.00
September 2002 $10,948.00
September 2003 $11,540.00
September 2004 $11,965.00
September 2005 $12,299.00
September 2006 $12,750.00
September 2007 $13,405.00
Merrill Lynch Corporate Master Index++++++
Date Value
12/7/2001** $10,000.00
September 2002 $10,804.00
September 2003 $11,997.00
September 2004 $12,556.00
September 2005 $12,917.00
September 2006 $13,365.00
September 2007 $13,910.00
* Assuming maximum sales charge, if any, transaction costs and other
operating expenses, including advisory fees.
** Commencement of operations.
++ The Fund invests primarily in long-term, fixed income securities that
are rated in the four highest categories of the recognized rating
agencies (Baa or better by Moody's Investors Service, Inc. or BBB or
better by Standard & Poor's).
++++ This unmanaged market-weighted Index is comprised of investment grade
corporate bonds (rated BBB or better), mortgages and U.S. Treasury
and government agency issues with at least one year to maturity.
++++++ This unmanaged Index is comprised of all investment grade corporate
bonds rated BBB or higher, of all maturities.
Past performance is not indicative of future results.
Performance Summary for the Period Ended September 30, 2007
Average Annual Total Returns*
1 Year 5 Years Since Inception**
6-Month w/o sales w/sales w/o sales w/sales w/o sales w/sales
Total Returns charge charge charge charge charge charge
BlackRock +1.81% +4.24% -- +4.36% -- +5.02% --
Institutional +1.63 +3.97 -- +4.18 -- +4.84 --
Service +1.60 +3.88 -- +3.84 -- +4.47 --
Investor A +1.57 +3.76 -0.39% +3.90 +3.06% +4.55 +3.82%
Investor A1 +1.56 +3.84 +2.80 +4.05 +3.84 +4.70 +4.52
Investor B +1.22 +3.15 -0.82 +3.36 +3.01 +4.01 +3.86
Investor B1 +1.45 +3.51 +2.52 +3.65 +3.65 +4.30 +4.30
Investor B2 +1.59 +3.59 -0.88 +3.22 +2.88 +3.88 +3.74
Investor C +1.29 +3.12 +2.12 +3.11 +3.11 +3.78 +3.78
Investor C1 +1.29 +3.20 +2.20 +3.33 +3.33 +3.98 +3.98
Investor C2 +1.45 +3.51 +2.52 +3.65 +3.65 +4.30 +4.30
Class R +1.51 +3.50 -- +3.65 -- +4.30 --
Lehman Brothers U.S.
Aggregate Bond Index +2.31 +5.14 -- +4.13 -- +5.17 --
Merrill Lynch Corporate
Master Index +1.09 +4.08 -- +5.18 -- +5.84 --
* Assuming maximum sales charges. See "About Fund Performance" on page 6 for a detailed description of share classes,
including any related sales charges and fees.
** The Fund commenced operations on 12/7/2001.
Past performance is not indicative of future results.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
About Fund Performance
The Fund, a series of BlackRock Bond Fund, Inc., was formally known as
BlackRock Bond Fund. Effective October 2, 2006, the Fund's Class A, Class B,
Class C and Class I Shares were redesignated Investor A, Investor B, Investor
C1 and Institutional Shares, respectively. Class R Shares did not change their
designation. As previously communicated to shareholders, new sales charge
schedules came into effect at the same time for certain of these classes.
Also effective October 2, 2006, Investor C Shares commenced operations.
Effective October 16, 2006, in connection with the Fund's acquisition of the
assets and liabilities of the Intermediate Term Fund, another series of
BlackRock Bond Fund, Inc., Investor A1, Investor B1 and Investor C2 Shares of
the Fund commenced operations.
Effective September 24, 2007, the Fund acquired substantially all the assets
and assumed substantially all the liabilities of BlackRock Total Return
Portfolio ("Total Return Portfolio"), a series of BlackRock Funds II. The Fund
was the surviving entity in the transaction but Total Return Portfolio was the
accounting survivor. As a result, the Fund assumed the performance and
financial history of Total Return Portfolio. In connection with this
acquisition, shareholders of Total Return Portfolio were issued Service
Shares, Investor B2 Shares, Investor C Shares, Class R Shares and BlackRock
Shares, as applicable. Also in connection with this transaction, effective
September 24, 2007, Institutional, Investor A, Investor A1, Investor B,
Investor B1, Investor C1 and Investor C2 Shares were deemed to have commenced
operations.
* BlackRock Shares are not subject to any sales charge. BlackRock Shares
bear no ongoing distribution or service fees and are available only to
eligible investors.
* Institutional Shares are not subject to any sales charge. Institutional
Shares bear no ongoing distribution or service fees and are available only
to eligible investors. Prior to September 24, 2007, Institutional Share
performance results are those of BlackRock Shares restated to reflect
Institutional Share fees.
* Service Shares are not subject to any sales charge. Service Shares are
subject to a service fee of 0.25% per year (but no distribution fee) and
are available only to eligible investors. Prior to September 24, 2007,
Service Share performance results are those of Investor A Shares of a
predecessor fund restated to reflect Service Share fees.
* Investor A Shares incur a maximum initial sales charge (front-end load) of
4% and a service fee of 0.25% per year (but no distribution fee). Prior to
September 24, 2007, Investor A Share performance results are those of
BlackRock Shares restated to reflect Investor A Share fees.
* Investor A1 Shares incur a maximum initial sales charge (front-end load)
of 1% and a service fee of 0.10% per year (but no distribution fee). Prior
to September 24, 2007, Investor A1 Share performance results are those of
BlackRock Shares restated to reflect Investor A1 Share fees.
* Investor B Shares are subject to a maximum contingent deferred sales
charge of 4%, declining to 0% after six years. In addition, Investor B
Shares are subject to a distribution fee of 0.50% per year and a service
fee of 0.25% per year. Prior to September 24, 2007, Investor B Share
performance results are those of BlackRock Shares restated to reflect
Investor B Share fees.
* Investor B1 Shares are subject to a maximum contingent deferred sales
charge of 1%, declining to 0% after three years. In addition, Investor B1
Shares are subject to a distribution fee of 0.25% per year and a service
fee of 0.25% per year. Prior to September 24, 2007, Investor B1 Share
performance results are those of BlackRock Shares restated to reflect
Investor B1 Share fees.
* Investor B2 Shares are subject to a maximum contingent deferred sales
charge of 4.50%, declining to 0% after six years. In addition, Investor B2
Shares are subject to a distribution fee of 0.75% per year and a service
fee of 0.25% per year.
* Investor C Shares are subject to a distribution fee of 0.75% per year and
a service fee of 0.25% per year. In addition, Investor C Shares are
subject to a 1% contingent deferred sales charge if redeemed within one
year of purchase.
* Investor C1 Shares are subject to a distribution fee of 0.55% per year and
a service fee of 0.25% per year. In addition, Investor C1 Shares are
subject to a 1% contingent deferred sales charge if redeemed within one
year of purchase. Prior to September 24, 2007, Investor C1 Share
performance results are those of BlackRock Shares restated to reflect
Investor C1 Share fees.
* Investor C2 Shares are subject to a distribution fee of 0.25% per year and
a service fee of 0.25% per year. In addition, Investor C2 Shares are
subject to a 1% contingent deferred sales charge if redeemed within one
year of purchase. Prior to September 24, 2007, Investor C2 Share
performance results are those of BlackRock Shares restated to reflect
Investor C2 Share fees.
* Class R Shares do not incur a maximum initial sales charge (front-end
load) or deferred sales charge. These shares are subject to a distribution
fee of 0.25% per year and a service fee of 0.25% per year. Class R Shares
are available only to certain retirement plans. Prior to October 2, 2006,
Class R Share performance results are those of the BlackRock Shares (which
have no distribution or service fees) restated to reflect Class R Share
fees.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
About Fund Performance (concluded)
Performance information reflects past performance and does not guarantee
future results. Current performance may be lower or higher than the
performance data quoted. Refer to www.blackrock.com to obtain performance data
current to the most recent month-end. Performance results do not reflect the
deduction of taxes that a shareholder would pay on fund distributions or the
redemption of fund shares. Figures shown in each of the performance tables on
page 5 assume reinvestment of all dividends and capital gain distributions, if
any, at net asset value on the payable date. Investment return and principal
value of shares will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. Dividends 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. The Fund's Manager waived a
portion of its fee. Without such waiver, the Fund's performance would have
been lower.
Disclosure of Expenses
Shareholders of this Fund may incur the following charges: (a) expenses
related to transactions, including sales charges, redemption fees and exchange
fees; and (b) operating expenses including advisory fees, distribution fees
including 12b-1 fees, and other Fund expenses. The expense example on page 8
(which is based on a hypothetical investment of $1,000 invested on April 1,
2007 and held through September 30, 2007) is intended to assist shareholders
both in calculating expenses based on an investment in the Fund and in
comparing these expenses with similar costs of investing in other mutual funds.
The table on page 8 provides information about actual account values and
actual expenses. In order to estimate the expenses a shareholder paid during
the period covered by this report, shareholders can divide their account value
by $1,000 and then multiply the result by the number corresponding to their
share class under the heading entitled "Expenses Paid During the Period Ended
September 30, 2007."
The table also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses. In order to assist shareholders
in comparing the ongoing expenses of investing in this Fund and other funds,
compare the 5% hypothetical example with the 5% hypothetical examples that
appear in other funds' shareholder reports.
The expenses shown in the table are intended to highlight shareholders'
ongoing costs only and do not reflect any transactional expenses, such as
sales charges, redemption fees or exchange fees. Therefore, the table on the
right 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.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Disclosure of Expenses (concluded)
Expense Example
Actual Hypothetical**
Expenses Expenses
Paid During the Paid During the
Period++++ Ended Period++++ Ended
Beginning Ending September 30, Beginning Ending September 30,
Account Value++ Account Value 2007 Account Value++ Account Value 2007
BlackRock $1,000 $1,018.10 $2.77 $1,000 $1,022.16 $2.77
Institutional $1,000 $1,016.30 $0.11 $1,000 $1,000.89 $0.11
Service $1,000 $1,016.00 $4.57 $1,000 $1,020.36 $4.58
Investor A $1,000 $1,015.70 $0.17 $1,000 $1,000.83 $0.17
Investor A1 $1,000 $1,015.60 $0.12 $1,000 $1,000.88 $0.12
Investor B $1,000 $1,012.20 $0.28 $1,000 $1,000.73 $0.27
Investor B1 $1,000 $1,014.50 $0.22 $1,000 $1,000.79 $0.21
Investor B2 $1,000 $1,016.80 $5.13 $1,000 $1,019.81 $5.14
Investor C $1,000 $1,012.90 $7.78 $1,000 $1,017.17 $7.80
Investor C1 $1,000 $1,012.90 $0.26 $1,000 $1,000.74 $0.26
Investor C2 $1,000 $1,014.50 $0.23 $1,000 $1,000.77 $0.23
Class R $1,000 $1,015.10 $5.53 $1,000 $1,019.42 $5.54
* For each class of the Fund, expenses are equal to the annualized expense ratio for the class
(.55% for BlackRock, .55% for Institutional, .91% for Service, .90% for Investor A, .64% for
Investor A1, 1.43% for Investor B, 1.12% for Investor B1, 1.02% for Investor B2, 1.55% for
Investor C, 1.37% for Investor C1, 1.21% for Investor C2 and 1.10% for Class R), multiplied by
the average account value over the period, multiplied by 182/365 for BlackRock, Service, Investor B2,
Investor C and Class R Shares and 7/365 for Institutional, Investor A, Investor A1, Investor B,
Investor B1, Investor C1 and Investor C2 (to reflect the one-half year period for BlackRock, Service,
Investor B2, Investor C and Class R Shares and the actual days since inception for Institutional,
Investor A, Investor A1, Investor B, Investor B1, Investor C1 and Investor C2).
Currently, Investor B2 does not accrue distribution fees (12b-1 fees) due to regulatory fee limits.
If, during the period, the distribution fees were accrued, the actual expense ratio would have been
approximately 1.63%; the actual expenses paid would have been approximately $8.20; and the hypothetical
expenses paid would have been approximately $8.20.
** Hypothetical 5% annual return before expenses is calculated by pro-rating the number of days in the
most recent fiscal half year for BlackRock, Service, Investor B2, Investor C and Class R Shares and the
actual days since inception for Institutional, Investor A, Investor A1, Investor B, Investor B1, Investor C1
and Investor C2 divided by 365.
++ April 1, 2007 for BlackRock, Service, Investor B2, Investor C and Class R Shares and September 24, 2007
(commencement of operations) for Institutional, Investor A, Investor A1, Investor B, Investor B1,
Investor C1 and Investor C2.
++++ The period represents the six months ended for BlackRock, Service, Investor B2, Investor C and Class R
Shares and from September 24, 2007 (commencement of operations) for Institutional, Investor A, Investor A1,
Investor B, Investor B1, Investor C1 and Investor C2.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Statement of Assets and Liabilities BlackRock Total Return Fund
As of September 30, 2007
Assets
Investment in Master Total Return Portfolio of Master Bond LLC (the "Master Portfolio")
(identified cost--$3,037,962,289) $ 3,031,950,847
Prepaid expenses 38,391
---------------
Total assets 3,031,989,238
---------------
Liabilities
Payables:
Dividends to shareholders $ 9,407,333
Other affiliates 851,779
Investment advisory fee 692,967
Distribution fee 685,865
Administration fee 23,694 11,661,638
---------------
Accrued expenses 182,862
---------------
Total liabilities 11,844,500
---------------
Net Assets
Net assets $ 3,020,144,738
===============
Net Assets Consist of
BlackRock Shares of Common Stock, $.10 par value, 100,000,000 shares authorized $ 4,296,733
Institutional Shares of Common Stock, $.10 par value, 250,000,000 shares authorized 7,346,392
Service Shares of Common Stock, $.10 par value, 50,000,000 shares authorized 15,505
Investor A Shares of Common Stock, $.10 par value, 100,000,000 shares authorized 6,048,323
Investor A1 Shares of Common Stock, $.10 par value, 50,000,000 shares authorized 1,293,868
Investor B Shares of Common Stock, $.10 par value, 250,000,000 shares authorized 1,701,029
Investor B1 Shares of Common Stock, $.10 par value, 50,000,000 shares authorized 376,643
Investor B2 Shares of Common Stock, $.10 par value, 50,000,000 shares authorized 9,008
Investor C Shares of Common Stock, $.10 par value, 100,000,000 shares authorized 1,206,989
Investor C1 Shares of Common Stock, $.10 par value, 100,000,000 shares authorized 3,451,861
Investor C2 Shares of Common Stock, $.10 par value, 50,000,000 shares authorized 181,209
Class R Shares of Common Stock, $.10 par value, 250,000,000 shares authorized 550,671
Paid-in capital in excess of par 3,063,261,437
Accumulated distributions in excess of investment income--net $ (4,604,527)
Accumulated realized capital losses--net (58,978,961)
Unrealized depreciation--net (6,011,442)
---------------
Total accumulated losses--net (69,594,930)
---------------
Net Assets $ 3,020,144,738
===============
Net Asset Value
BlackRock--Based on net assets of $490,237,272 and 42,967,327 shares outstanding $ 11.41
===============
Institutional--Based on net assets of $837,730,441 and 73,463,915 shares outstanding $ 11.40
===============
Service--Based on net assets of $1,768,577 and 155,049 shares outstanding $ 11.41
===============
Investor A--Based on net assets of $690,100,059 and 60,483,233 shares outstanding $ 11.41
===============
Investor A1--Based on net assets of $147,533,468 and 12,938,678 shares outstanding $ 11.40
===============
Investor B--Based on net assets of $193,972,968 and 17,010,285 shares outstanding $ 11.40
===============
Investor B1--Based on net assets of $42,960,763 and 3,766,431 shares outstanding $ 11.41
===============
Investor B2--Based on net assets of $1,027,299 and 90,077 shares outstanding $ 11.40
===============
Investor C--Based on net assets of $137,585,898 and 12,069,893 shares outstanding $ 11.40
===============
Investor C1--Based on net assets of $393,738,018 and 34,518,613 shares outstanding $ 11.41
===============
Investor C2--Based on net assets of $20,653,769 and 1,812,091 shares outstanding $ 11.40
===============
Class R--Based on net assets of $62,836,206 and 5,506,714 shares outstanding $ 11.41
===============
See Notes to Financial Statements.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Statement of Operations BlackRock Total Return Fund
For the Year Ended September 30, 2007
Investment Income
Interest $ 24,753,088
Securities lending--net 110
Net investment income allocated from the Master Portfolio:
Interest 3,955,263
Expenses (82,900)
---------------
Total income 28,625,561
---------------
Expenses
Investment advisory fees $ 2,505,182
Administration fee 457,637
Interest expense on reverse repurchase agreements 338,942
Custodian fees 99,026
Registration fees 62,198
Printing and shareholder reports 59,413
Service and distribution fees--Investor C1 57,441
Service and distribution fees--Investor C 45,268
Professional fees 43,745
Transfer agent fees--Investor A 41,083
Transfer agent fees--Institutional 32,241
Service fees--Investor A 31,598
Service and distribution fees--Investor B 26,436
Transfer agent fees--BlackRock* 26,030
Directors' fees and expenses 23,452
Transfer agent fees--Investor C 21,840
Transfer agent fees--Investor C1 16,015
Transfer agent fees--Investor B 12,978
Service and distribution fees--Class R 5,931
Transfer agent fees--Class R 4,775
Transfer agent fees--Investor A1 4,033
Service and distribution fees--Investor B1 3,938
Service fees--Service** 2,981
Service fees--Investor A1 2,691
Service and distribution fees--Investor B2 2,014
Transfer agent fees--Investor B1 2,083
Service and distribution fees--Investor C2 1,889
Transfer agent fees--Investor C2 1,314
Transfer agent fees--Service** 545
Transfer agent fees--Investor B2 181
Pricing fees 42
Other 43,551
---------------
Total expenses before waiver 3,976,493
Waiver of expenses (1,325,196)
---------------
Total expenses after waiver 2,651,297
---------------
Investment income--net 25,974,264
---------------
Realized & Unrealized Gain (Loss)--Net
Realized gain (loss) on:
Investments--net (871,576)
Options written--net 626,298
Foreign currency transactions--net (924,126)
Financial futures contracts and swaps--net (2,801,308)
Allocations from the Master Portfolio--net 4,585,567 614,855
---------------
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Statement of Operations (concluded) BlackRock Total Return Fund
Realized & Unrealized Gain (Loss)--Net (concluded)
Change in unrealized appreciation/depreciation on:
Investments--net $ 2,313,032
Options written--net (815,846)
Foreign currency transactions--net (449,574)
Swaps--net (651,075)
Allocations from the Master Portfolio--net 17,016 $ 413,553
--------------- ---------------
Total realized and unrealized loss--net 1,028,408
---------------
Net Increase in Net Assets Resulting from Operations $ 27,002,672
===============
* Includes expenses from BlackRock Total Return Portfolio Institutional Shares prior to September 24, 2007.
** Includes expenses from BlackRock Total Return Portfolio Investor A Shares prior to September 24, 2007.
See Notes to Financial Statements.
Statements of Changes in Net Assets BlackRock Total Return Fund
For the Year Ended
September 30,
Increase (Decrease) in Net Assets: 2007 2006
Operations
Investment income--net $ 25,974,264 $ 15,760,682
Realized gain(loss)--net 614,855 (4,269,217)
Change in unrealized appreciation/depreciation--net 413,553 1,941,522
--------------- ---------------
Net increase in net assets resulting from operations 27,002,672 13,432,987
--------------- ---------------
Dividends to Shareholders
Investment income--net:
BlackRock++ (22,990,136) (15,736,040)
Institutional (835,421) --
Service++++ (54,310) (5,795)
Investor A (621,528) --
Investor A1 (140,805) --
Investor B (155,787) --
Investor B1 (37,390) --
Investor B2 (29,281) (4,974)
Investor C (185,522) (2,419)
Investor C1 (320,647) --
Investor C2 (17,587) --
Class R (56,412) --
--------------- ---------------
Net decrease in net assets resulting from dividends to shareholders (25,444,826) (15,749,283)
--------------- ---------------
Capital Share Transactions
Net increase in net assets derived from capital share transactions 2,647,204,535 48,950,900
--------------- ---------------
Net Assets
Total increase in net assets 2,648,762,381 45,071,788
Beginning of year 371,382,357 326,310,569
--------------- ---------------
End of year* $ 3,020,144,738 $ 371,382,357
=============== ===============
* Undistributed (accumulated distributions in excess of) investment income-net $ (4,604,527) $ 867,610
=============== ===============
++ Includes distributions from BlackRock Total Return Portfolio Institutional Shares prior to September 24, 2007.
++++ Includes distributions from BlackRock Total Return Portfolio Investor A Shares prior to September 24, 2007.
See Notes to Financial Statements.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Financial Highlights BlackRock Total Return Fund
BlackRock
The following per share data and ratios have been derived For the Year Ended September 30,
from information provided in the financial statements. 2007++ 2006 2005 2004 2003
Per Share Operating Performance
Net asset value, beginning of year $ 11.50 $ 11.65 $ 11.73 $ 11.86 $ 11.69
---------- ---------- ---------- ---------- ----------
Investment income--net .53* .51* .47* .43* .48
Realized and unrealized gain (loss)--net (.11) (.09) (.09) (.01) .33
---------- ---------- ---------- ---------- ----------
Total from investment operations .42 .42 .38 .42 .81
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.51) (.51) (.46) (.41) (.57)
Realized gain--net -- (.06) -- (.15) (.07)
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (.51) (.57) (.46) (.56) (.64)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 11.41 $ 11.50 $ 11.65 $ 11.73 $ 11.86
========== ========== ========== ========== ==========
Total Investment Return
Based on net asset value per share 4.24% 3.76% 3.21% 3.65% 7.00%
========== ========== ========== ========== ==========
Ratios to Average Net Assets
Expenses, net of waiver, excluding interest expense .41%+++ .40% .40% .40% .40%
========== ========== ========== ========== ==========
Expenses, net of waiver .48%+++ .40% .40% .40% .40%
========== ========== ========== ========== ==========
Expenses .75%+++ .69% .72% .71% .75%
========== ========== ========== ========== ==========
Investment income--net 5.13%+++ 4.50% 3.98% 3.68% 3.61%
========== ========== ========== ========== ==========
Supplemental Data
Net assets, end of year (in thousands) $ 490,237 $ 366,353 $ 326,033 $ 285,096 $ 224,248
========== ========== ========== ========== ==========
Portfolio turnover of the Fund*** 238% 192% 358% 412% 1,021%**
========== ========== ========== ========== ==========
Portfolio turnover of the Master Portfolio**** 153% -- -- -- --
========== ========== ========== ========== ==========
* Based on average shares outstanding.
** Includes dollar roll transactions; excluding these transactions the portfolio turnover rate would have been 319%.
*** Represents the portfolio turnover for the period October 1, 2006 to September 24, 2007.
**** Represents the portfolio turnover for the year.
++ On September 24, 2007, the Fund converted from a stand-alone investment company to a "feeder" fund that
seeks to achieve its investment objective by investing all of its assets in the Master Portfolio, which
has the same investment objective as the Fund. All investments are made at the Master Portfolio level.
This structure is sometimes called a "master/feeder" structure.
+++ Includes the Fund's share of the Master Portfolio's allocated expenses and/or investment income--net.
The performance prior to September 24, 2007 set forth in this table is the financial data of BlackRock Shares
of the BlackRock Total Return Portfolio. BlackRock Total Return Fund acquired all of the assets and certain stated
liabilities of the BlackRock Total Return Portfolio on September 24, 2007. The net asset values and other per share
information listed have been restated to reflect the conversion ratio of 1.134182.
See Notes to Financial Statements.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Financial Highlights (continued) BlackRock Total Return Fund
Institutional
For the Period
September 24,
2007++ to
The following per share data and ratios have been derived September 30,
from information provided in the financial statements. 2007
Per Share Operating Performance
Net asset value, beginning of period $ 11.38
-----------
Investment income--net* .01
Realized and unrealized gain .03
-----------
Total from investment operations .04
-----------
Less dividends and distributions:
Investment income--net (.02)
Realized gain--net --
-----------
Total dividends and distributions (.02)
-----------
Net asset value, end of period $ 11.40
===========
Total Investment Return
Based on net asset value per share .27%+++
===========
Ratios to Average Net Assets***
Expenses, net of waiver .55%**
===========
Expenses .67%**
===========
Investment income-net 4.54%**
===========
Supplemental Data
Net assets, end of period (in thousands) $ 837,730
===========
Portfolio turnover of the Master Portfolio**** 153%
===========
* Based on average shares outstanding.
** Annualized.
*** Includes the Fund's share of the Master Portfolio's allocated expenses and/or investment income--net.
**** Represents the portfolio turnover for the year.
++ Commencement of operations.
+++ Aggregate total investment return.
See Notes to Financial Statements.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Financial Highlights (continued) BlackRock Total Return Fund
Service
The following per share data and ratios have been derived For the Year Ended September 30,
from information provided in the financial statements. 2007++ 2006 2005 2004 2003
Per Share Operating Performance
Net asset value, beginning of year $ 11.50 $ 11.64 $ 11.72 $ 11.78 $ 11.62
---------- ---------- ---------- ---------- ----------
Investment income--net .50* .45* .43* .43* .42
Realized and unrealized gain (loss)--net (.12) (.07) (.10) .01 .32
---------- ---------- ---------- ---------- ----------
Total from investment operations .38 .38 .33 .44 .74
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.47) (.46) (.41) (.36) (.51)
Realized gain--net -- (.06) -- (.14) (.07)
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (.47) (.52) (.41) (.50) (.58)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 11.41 $ 11.50 $ 11.64 $ 11.72 $ 11.78
========== ========== ========== ========== ==========
Total Investment Return
Based on net asset value per share 3.88% 3.38% 2.77% 3.78% 6.53%
========== ========== ========== ========== ==========
Ratios to Average Net Assets
Expenses, net of waiver, excluding interest expense .75%+++ .85% .80% .78% .85%
========== ========== ========== ========== ==========
Expenses, net of waiver .91%+++ .88% .80% .78% .85%
========== ========== ========== ========== ==========
Expenses 1.25%+++ 31.07% 1.08% 1.07% 1.20%
========== ========== ========== ========== ==========
Investment income--net 4.80%+++ 3.93% 3.57% 3.74% 3.17%
========== ========== ========== ========== ==========
Supplemental Data
Net assets, end of year (in thousands) $ 1,769 --** --** $ 29 --**
========== ========== ========== ========== ==========
Portfolio turnover of the Fund**** 238% 192% 358% 412% 1,021%***
========== ========== ========== ========== ==========
Portfolio turnover of the Master Portfolio***** 153% -- -- -- --
========== ========== ========== ========== ==========
* Based on average shares outstanding.
** Amount is less than $1,000.
*** Includes dollar roll transactions; excluding these transactions the portfolio turnover rate would have been 319%.
**** Represents the portfolio turnover for the period October 1, 2006 to September 24, 2007.
***** Represents the portfolio turnover for the year.
++ On September 24, 2007, the Fund converted from a stand-alone investment company to a "feeder" fund that
seeks to achieve its investment objective by investing all of its assets in the Master Portfolio, which
has the same investment objective as the Fund. All investments will be made at the Master Portfolio level.
This structure is sometimes called a "master/feeder" structure.
+++ Includes the Fund's share of the Master Portfolio's allocated expenses and/or investment income--net.
The performance prior to September 24, 2007 set forth in this table is the financial data of Service Shares
of the BlackRock Total Return Portfolio. BlackRock Total Return Fund acquired all of the assets and certain
stated liabilities of the BlackRock Total Return Portfolio on September 24, 2007. The net asset values and
other per share information listed have been restated to reflect the conversion ratio of 1.126588.
See Notes to Financial Statements.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Financial Highlights (continued) BlackRock Total Return Fund
Investor A
For the Period
September 24,
2007++ to
The following per share data and ratios have been derived September 30,
from information provided in the financial statements. 2007
Per Share Operating Performance
Net asset value, beginning of period $ 11.38
-----------
Investment income--net* .01
Realized and unrealized gain--net .03
-----------
Total from investment operations .04
-----------
Less dividends and distributions:
Investment income--net (.01)
Realized gain--net --
-----------
Total dividends and distributions (.01)
-----------
Net asset value, end of period $ 11.41
===========
Total Investment Return++++
Based on net asset value per share .35%+++++
===========
Ratios to Average Net Assets+++
Expenses, net of waiver .90%**
===========
Expenses 1.02%**
===========
Investment income--net 4.17%**
===========
Supplemental Data
Net assets, end of period (in thousands) $ 690,100
===========
Portfolio turnover of the Master Portfolio*** 153%
===========
* Based on average shares outstanding.
** Annualized.
*** Represents the portfolio turnover for the year.
++ Commencement of operations.
++++ Total investment returns exclude the effects of sales charges.
+++ Includes the Fund's share of the Master Portfolio's allocated expenses and/or investment income--net.
+++++ Aggregate total investment return.
See Notes to Financial Statements.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Financial Highlights (continued) BlackRock Total Return Fund
Investor A1
For the Period
September 24,
2007++ to
The following per share data and ratios have been derived September 30,
from information provided in the financial statements. 2007
Per Share Operating Performance
Net asset value, beginning of period $ 11.38
-----------
Investment income--net* .01
Realized and unrealized gain--net .03
-----------
Total from investment operations .04
-----------
Less dividends and distributions:
Investment income--net (.02)
Realized gain--net --
-----------
Total dividends and distributions (.02)
-----------
Net asset value, end of period $ 11.40
===========
Total Investment Return++++
Based on net asset value per share .27%+++++
===========
Ratios to Average Net Assets+++
Expenses, net of waiver .64%**
===========
Expenses .72%**
===========
Investment income--net 4.43%**
===========
Supplemental Data
Net assets, end of period (in thousands) $ 147,533
===========
Portfolio turnover of the Master Portfolio*** 153%
===========
* Based on average shares outstanding.
** Annualized.
*** Represents the portfolio turnover for the year.
++ Commencement of operations.
++++ Total investment returns exclude the effects of sales charges.
+++ Includes the Fund's share of the Master Portfolio's allocated expenses and/or investment income--net.
+++++ Aggregate total investment return.
See Notes to Financial Statements.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Financial Highlights (continued) BlackRock Total Return Fund
Investor B
For the Period
September 24,
2007++ to
The following per share data and ratios have been derived September 30,
from information provided in the financial statements. 2007
Per Share Operating Performance
Net asset value, beginning of period $ 11.38
-----------
Investment income--net* .01
Realized and unrealized gain--net .02
-----------
Total from investment operations .03
-----------
Less dividends and distributions:
Investment income--net (.01)
Realized gain--net --
-----------
Total dividends and distributions (.01)
-----------
Net asset value, end of period $ 11.40
===========
Total Investment Return++++
Based on net asset value per share .26%+++++
===========
Ratios to Average Net Assets+++
Expenses, net of waiver 1.43%**
===========
Expenses 1.51%**
===========
Investment income--net 3.64%**
===========
Supplemental Data
Net assets, end of period (in thousands) $ 193,973
===========
Portfolio turnover of the Master Portfolio*** 153%
===========
* Based on average shares outstanding.
** Annualized.
*** Represents the portfolio turnover for the year.
++ Commencement of operations.
++++ Total investment returns exclude the effects of sales charges.
+++ Includes the Fund's share of the Master Portfolio's allocated expenses and/or investment income--net.
+++++ Aggregate total investment return.
See Notes to Financial Statements.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Financial Highlights (continued) BlackRock Total Return Fund
Investor B1
For the Period
September 24,
2007++ to
The following per share data and ratios have been derived September 30,
from information provided in the financial statements. 2007
Per Share Operating Performance
Net asset value, beginning of period $ 11.38
-----------
Investment income--net* .01
Realized and unrealized gain--net .03
-----------
Total from investment operations .04
-----------
Less dividends and distributions:
Investment income--net (.01)
Realized gain--net --
-----------
Total dividends and distributions (.01)
-----------
Net asset value, end of period $ 11.41
===========
Total Investment Return++++
Based on net asset value per share .35%+++++
===========
Ratios to Average Net Assets+++
Expenses, net of waiver 1.12%**
===========
Expenses 1.20%**
===========
Investment income--net 3.96%**
===========
Supplemental Data
Net assets, end of period (in thousands) $ 42,961
===========
Portfolio turnover of the Master Portfolio*** 153%
===========
* Based on average shares outstanding.
** Annualized.
*** Represents the portfolio turnover for the year.
++ Commencement of operations.
++++ Total investment returns exclude the effects of sales charges.
+++ Includes the Fund's share of the Master Portfolio's allocated expenses and/or investment income--net.
+++++ Aggregate total investment return.
See Notes to Financial Statements.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Financial Highlights (continued) BlackRock Total Return Fund
Investor B2
The following per share data and ratios have been derived For the Year Ended September 30,
from information provided in the financial statements. 2007++ 2006 2005 2004 2003
Per Share Operating Performance
Net asset value, beginning of year $ 11.49 $ 11.63 $ 11.71 $ 11.85 $ 11.68
---------- ---------- ---------- ---------- ----------
Investment income--net .49* .38* .33* .28* .33
Realized and unrealized gain (loss) (.12) (.09) (.09) -- .33
---------- ---------- ---------- ---------- ----------
Total from investment operations .37 .29 .24 .28 .66
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.46) (.37) (.32) (.27) (.42)
Realized gain--net -- (.06) -- (.15) (.07)
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (.46) (.44) (.32) (.42) (.49)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 11.40 $ 11.49 $ 11.63 $ 11.71 $ 11.85
========== ========== ========== ========== ==========
Total Investment Return++
Based on net asset value per share 3.59% 2.50% 2.02% 2.38% 5.68%
========== ========== ========== ========== ==========
Ratios to Average Net Assets
Expenses, net of waiver, excluding interest expense .88%+++ 1.62% 1.56% 1.63% 1.65%
========== ========== ========== ========== ==========
Expenses, net of waiver 1.03%+++ 1.62% 1.56% 1.63% 1.65%
========== ========== ========== ========== ==========
Expenses 1.28%+++ 3.30% 1.84% 1.97% 2.00%
========== ========== ========== ========== ==========
Investment income--net 4.73%+++ 3.29% 2.84% 2.46% 2.36%
========== ========== ========== ========== ==========
Supplemental Data
Net assets, end of year (in thousands) $ 1,027 $ 226 $ 137 $ 103 $ 80
========== ========== ========== ========== ==========
Portfolio turnover of the Fund*** 238% 192% 358% 412% 1,021%**
========== ========== ========== ========== ==========
Portfolio turnover of the Master Portfolio**** 153% -- -- -- --
========== ========== ========== ========== ==========
* Based on average shares outstanding.
** Includes dollar roll transactions; excluding these transactions the portfolio turnover rate would have been 319%.
*** Represents the portfolio turnover for the period October 1, 2006 to September 24, 2007.
**** Represents the portfolio turnover for the year.
++ Total investment returns exclude the effects of sales charges.
++++ On September 24, 2007, the Fund converted from a stand-alone investment company to a "feeder" fund that
seeks to achieve its investment objective by investing all of its assets in the Master Portfolio, which
has the same investment objective as the Fund. All investments will be made at the Master Portfolio level.
This structure is sometimes called a "master/feeder" structure.
+++ Includes the Fund's share of the Master Portfolio's allocated expenses and/or investment income--net.
The performance prior to September 24, 2007 set forth in this table is the financial data of Investor B Shares
of the BlackRock Total Return Portfolio. BlackRock Total Return Fund acquired all of the assets and certain
stated liabilities of the BlackRock Total Return Portfolio on September 24, 2007. The net asset values and other
per share information listed have been restated to reflect the conversion ratio of 1.132883.
See Notes to Financial Statements.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Financial Highlights (continued) BlackRock Total Return Fund
Investor C
The following per share data and ratios have been derived For the Year Ended September 30,
from information provided in the financial statements. 2007++++ 2006 2005 2004 2003
Per Share Operating Performance
Net asset value, beginning of year $ 11.49 $ 11.63 $ 11.71 $ 11.86 $ 11.69
---------- ---------- ---------- ---------- ----------
Investment income--net .16* .38* .32* .31* .33
Realized and unrealized gain (loss) .16 (.09) (.08) (.03) .33
---------- ---------- ---------- ---------- ----------
Total from investment operations .32 .29 .24 .28 .66
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.41) (.37) (.32) (.27) (.42)
Realized gain--net -- (.06) -- (.16) (.07)
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (.41) (.43) (.32) (.43) (.49)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 11.40 $ 11.49 $ 11.63 $ 11.71 $ 11.86
========== ========== ========== ========== ==========
Total Investment Return++
Based on net asset value per share 3.12% 2.50% 2.02% 2.28% 5.68%
========== ========== ========== ========== ==========
Ratios to Average Net Assets
Expenses, net of waiver, excluding interest expense 1.46%+++ 1.62% 1.55% 1.63% 1.65%
========== ========== ========== ========== ==========
Expenses, net of waiver 1.53%+++ 1.62% 1.56% 1.63% 1.65%
========== ========== ========== ========== ==========
Expenses 2.08%+++ 10.03% 1.84% 1.97% 2.00%
========== ========== ========== ========== ==========
Investment income - net 3.85%+++ 3.27% 2.78% 2.46% 2.37%
========== ========== ========== ========== ==========
Supplemental Data
Net assets, end of year (in thousands) $ 137,586 $ 102 $ 53 --** --**
========== ========== ========== ========== ==========
Portfolio turnover of the Fund**** 238% 192% 358% 412% 1,021%***
========== ========== ========== ========== ==========
Portfolio turnover of the Master Portfolio***** 153% -- -- -- --
========== ========== ========== ========== ==========
* Based on average shares outstanding.
** Amount is less than $1,000.
*** Includes dollar roll transactions; excluding these transactions the portfolio turnover rate would have been 319%.
**** Represents the portfolio turnover for the period October 1, 2006 to September 24, 2007.
***** Represents the portfolio turnover for the year.
++ Total investment returns exclude the effects of sales charges.
++++ On September 24, 2007, the Fund converted from a stand-alone investment company to a "feeder" fund that
seeks to achieve its investment objective by investing all of its assets in the Master Portfolio, which
has the same investment objective as the Fund. All investments will be made at the Master Portfolio level.
This structure is sometimes called a "master/feeder" structure.
+++ Includes the Fund's share of the Master Portfolio's allocated expenses and/or investment income--net.
The performance prior to September 24, 2007 set forth in this table is the financial data of Investor C Shares
of the BlackRock Total Return Portfolio. BlackRock Total Return Fund acquired all of the assets and certain
stated liabilities of the BlackRock Total Return Portfolio on September 24, 2007. The net asset values and
other per share information listed have been restated to reflect the conversion ratio of 1.133781.
See Notes to Financial Statements.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Financial Highlights (continued) BlackRock Total Return Fund
Investor C1
For the Period
September 24,
2007++ to
The following per share data and ratios have been derived September 30,
from information provided in the financial statements. 2007
Per Share Operating Performance
Net asset value, beginning of period $ 11.38
-----------
Investment income--net* .01
Realized and unrealized gain--net .03
-----------
Total from investment operations .04
-----------
Less dividends and distributions:
Investment income--net (.01)
Realized gain--net --
-----------
Total dividends and distributions (.01)
-----------
Net asset value, end of period $ 11.41
===========
Total Investment Return++++
Based on net asset value per share .35%+++++
===========
Ratios to Average Net Assets+++
Expenses, net of waiver 1.37%**
===========
Expenses 1.45%**
===========
Investment income--net 3.70%**
===========
Supplemental Data
Net assets, end of period (in thousands) $ 393,738
===========
Portfolio turnover of the Master Portfolio*** 153%
===========
* Based on average shares outstanding.
** Annualized.
*** Represents the portfolio turnover for the year.
++ Commencement of operations.
++++ Total investment returns exclude the effects of sales charges.
+++ Includes the Fund's share of the Master Portfolio's allocated expenses and/or investment income--net.
+++++ Aggregate total investment return.
See Notes to Financial Statements.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Financial Highlights (continued) BlackRock Total Return Fund
Investor C2
For the Period
September 24,
2007++ to
The following per share data and ratios have been derived September 30,
from information provided in the financial statements. 2007
Per Share Operating Performance
Net asset value, beginning of period $ 11.37
-----------
Investment income--net* .01
Realized and unrealized gain--net .03
-----------
Total from investment operations .04
-----------
Less dividends and distributions:
Investment income--net (.01)
Realized gain--net --
-----------
Total dividends and distributions (.01)
-----------
Net asset value, end of period $ 11.40
===========
Total Investment Return++++
Based on net asset value per share .35%+++++
===========
Ratios to Average Net Assets+++
Expenses, net of waiver 1.21%**
===========
Expenses 1.29%**
===========
Investment income--net 3.87%**
===========
Supplemental Data
Net assets, end of period (in thousands) $ 20,654
===========
Portfolio turnover of the Master Portfolio*** 153%
===========
* Based on average shares outstanding.
** Annualized.
*** Represents the portfolio turnover for the year.
++ Commencement of operations.
++++ Total investment returns exclude the effects of sales charges.
+++ Includes the Fund's share of the Master Portfolio's allocated expenses and/or investment income--net.
+++++ Aggregate total investment return.
See Notes to Financial Statements.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Financial Highlights (concluded) BlackRock Total Return Fund
Class R
For the Period
October 2,
2006++ to
The following per share data and ratios have been derived September 30,
from information provided in the financial statements. 2007
Per Share Operating Performance
Net asset value, beginning of period $ 11.50
-----------
Investment income--net* .11
Realized and unrealized gain--net .26
-----------
Total from investment operations .37
-----------
Less dividends and distributions:
Investment income--net (.46)
Realized gain--net --
-----------
Total dividends and distributions (.46)
-----------
Net asset value, end of period $ 11.41
===========
Total Investment Return
Based on net asset value per share 3.48%+++
===========
Ratios to Average Net Assets++++
Expenses, net of waiver and excluding interest expense 1.06%**
===========
Expenses, net of waiver 1.10%**
===========
Expenses 1.37%**
===========
Investment income--net 4.01%**
===========
Supplemental Data
Net assets, end of period (in thousands) $ 62,836
===========
Portfolio turnover of the Fund*** 238%
===========
Portfolio turnover of the Master Portfolio**** 153%
===========
* Based on average shares outstanding.
** Annualized.
*** Represents the portfolio turnover for the period October 1, 2006 to September 24, 2007.
**** Represents the portfolio turnover for the year.
++ Commencement of operations.
++++ Includes the Fund's share of the Master Portfolio's allocated expenses and/or investment income--net.
+++ Aggregate total investment return.
The performance prior to September 24, 2007 set forth in this table is the financial data of Class R Shares of
the BlackRock Total Return Portfolio. BlackRock Total Return Fund acquired all of the assets and certain stated
liabilities of the BlackRock Total Return Portfolio on September 24, 2007. The net asset values and other per share
information listed have been restated to reflect the conservation ratio of 1.133286.
See Notes to Financial Statements.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Notes to Financial Statements BlackRock Total Return Fund
1. Significant Accounting Policies:
BlackRock Total Return Fund (the "Fund"), formerly BlackRock Bond Fund, is a
series of BlackRock Bond Fund, Inc. (the "Bond Fund"). The Fund is registered
under the Investment Company Act of 1940, as amended, as a diversified, open-
end management investment company. The Fund seeks to achieve its investment
objective by investing all of its assets in Master Total Return Portfolio
(formerly "Master Bond Portfolio") (the "Master Portfolio"), of Master Bond
LLC ("Master LLC"), a mutual fund that has the same investment objective and
strategies as the Fund. The value of the Fund's investment in the Master
Portfolio reflects the Fund's proportionate interest in the net assets of the
Master Portfolio. The performance of the Fund is directly affected by the
performance of the Master Portfolio. The financial statements of the Master
Portfolio, including the Schedule of Investments, are included elsewhere in
this report and should be read in conjunction with the Fund's financial
statements. The Fund's financial statements are prepared in conformity with
U.S. generally accepted accounting principles, which may require the use of
management accruals and estimates. Actual results may differ from these
estimates. The percentage of the Master Portfolio owned by the Fund at
September 30, 2007 was 76.2%.
On September 24, 2007, the Fund acquired substantially all of the assets and
assumed substantially all of the liabilities of BlackRock Total Return
Portfolio ("Total Return Portfolio"), a portfolio of BlackRock Funds II. The
Fund is the surviving entity in the Reorganization, however, Total Return
Portfolio is the accounting survivor. As a result, the Fund assumed the
performance and accounting history of Total Return Portfolio at the closing of
the Reorganization. The Fund's net assets as of September 24, 2007 of
$2,538,462,638, including $6,028,458 of net unrealized depreciation, were
combined with those of the Total Return Portfolio. The aggregate net assets
immediately after the acquisition amounted to $3,034,201,488. Also on
September 24, 2007, all of the portfolio securities held by the Fund were
subsequently contributed to the Master Portfolio in exchange for an investment
in the Master Portfolio. The Fund offers multiple classes of shares. On
September 24, 2007, pursuant to the Reorganization, Investor A Shares of the
Total Return Portfolio converted to Service Shares, Investor B Shares of the
Total Return Portfolio converted to Investor B2 Shares, Institutional Shares
of the Total Return Portfolio converted to BlackRock Shares and Investor C
Shares and Class R Shares of Total Return Portfolio received Investor C Shares
and Class R Shares of the Fund, respectively. Also, effective September 24,
2007, Institutional, Investor A, Investor A1, Investor B, Investor B1,
Investor C1 and Investor C2 Shares commenced operations. Institutional and
Service Shares are sold without a sales charge and only to certain eligible
investors. Investor A and Investor A1 Shares are sold with a front-end sales
charge. Investor B, Investor B1, Investor B2, Investor C, Investor C1 and
Investor C2 Shares are subject to a contingent deferred sales charge and also
bear certain expenses related to the distribution of such shares. In addition,
Investor A1, Investor B, Investor B1, Investor B2, Investor C1 and Investor C2
Shares are sold only to certain eligible investors. Class R Shares commenced
operations on October 2, 2006 and are sold only to certain retirement plans.
The acquisition was accomplished by a tax-free exchange.
In addition, on October 16, 2006, the Fund acquired all of the net assets of
BlackRock Intermediate Term Fund of the Bond Fund pursuant to a plan of
reorganization. The acquisition was accomplished by a tax-free exchange.
All classes of shares have identical voting, dividend, liquidation and other
rights and the same terms and conditions, except that Service, Investor A,
Investor A1, Investor B, Investor B1, Investor B2, Investor C, Investor C1,
Investor C2 and Class R Shares bear certain expenses related to the shareholder
servicing of such shares and Investor B, Investor B1, Investor B2, Investor C,
Investor C1, Investor C2 and Class R Shares also bear certain expenses related
to the distribution of such shares. Each class has exclusive voting rights with
respect to matters relating to its shareholder servicing and distribution
expenditures (except that Investor B, Investor B1 and Investor B2 shareholders
may vote on certain changes to the Investor A and Investor A1 distribution
plans as applicable). Income, expenses (other than expenses attributable to a
specific class) and realized and unrealized gains and losses are allocated
daily to each class based on its relative net assets. The following is a
summary of significant accounting policies followed by the Fund.
(a) Valuation of investments--The Fund records its investment in the Master
Portfolio at fair value. Valuation of securities held by the Master Portfolio
is discussed in Note 1(a) of the Master Portfolio's Notes to Financial
Statements, which is included elsewhere in this report.
Prior to September 24, 2007, debt securities were traded primarily in the over-
the-counter ("OTC") markets and were valued at the last available bid price in
the OTC market or on the basis of values obtained by a pricing service.
Pricing services use valuation matrixes that incorporate both dealer-supplied
valuations and valuation models. The procedures of the pricing service and its
valuations were reviewed by the officers of the Fund under the general
direction of the Board of Directors. Such valuations and procedures were
reviewed periodically by the Board of Directors of the Fund. Financial futures
contracts and options thereon, which were traded on exchanges, were valued at
their closing prices as of the close of such exchanges. Effective September 4,
2007, exchange traded options were valued at the mean price and previously
were valued at the last sale price. Options traded in the OTC market were
valued at the last asked price (options written) or the last bid price
(options purchased). Swap agreements were valued based upon quoted fair
valuations received daily by the Fund from a pricing service or counterparty.
Valuations of short-term investment vehicles were generally based on the net
asset value of the underlying investment vehicle or amortized cost.
Investments in open-end investment companies were valued at their net asset
value each business day. Securities and other assets for which market
quotations were not readily available were valued at fair value as determined
in good faith by or under the direction of the Board of Directors of the Fund.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Notes to Financial Statements (continued) BlackRock Total Return Fund
Generally, trading in foreign securities was substantially completed each day
at various times prior to the close of business on the New York Stock Exchange
("NYSE"). The values of such securities used in computing the net assets of
the Fund were determined as of such times. Foreign currency exchange rates
were generally determined as of the close of business on the NYSE.
Occasionally, events affecting the values of such securities and such exchange
rates could occur between the times at which they were determined and the
close of business on the NYSE that may not have been reflected in the
computation of the Fund's net assets. If events (for example, a company
announcement, market volatility or a natural disaster) occurred during such
periods that were expected to materially affect the value of such securities,
those securities might be valued at their fair value as determined in good
faith by the Fund's Board of Directors or by BlackRock Advisors, LLC (the
"Manager"), an indirect, wholly owned subsidiary of BlackRock, Inc., using a
pricing service and/or procedures in accordance with a valuation policy
approved by the Fund's Board of Directors.
(b) Derivative financial instruments--Prior to September 24, 2007, the Fund
directly engaged in various portfolio investment strategies both to increase
the return of the Fund and to hedge, or protect, its exposure to interest rate
movements and movements in the securities markets. Losses could have arisen
due to changes in the value of the contract due to an unfavorable change in
the price of the underlying security or if the counterparty did not perform
under the contract. The counterparty for certain instruments might have
pledged cash or securities as collateral.
* Financial futures contracts--Prior to September 24, 2007, the Fund purchased
and sold financial futures contracts and options on such financial futures
contracts. Financial futures contracts are contracts for delayed delivery of
securities at a specific future date and at a specific price or yield. Upon
entering into a contract, the Fund deposited and maintained as collateral such
initial margin as required by the exchange on which the transaction was
effected. Pursuant to the contract, the Fund agreed to receive from or pay to
the broker an amount of cash equal to the daily fluctuation in value of the
contract. Such receipts or payments are known as variation margin and were
recorded by the Fund as unrealized gains or losses. When the contract was
closed, the Fund recorded a realized gain or loss equal to the difference
between the value of the contract at the time it was opened and the value at
the time it was closed.
* Options--Prior to September 24, 2007, the Fund purchased and wrote call and
put options. When the Fund wrote an option, an amount equal to the premium
received by the Fund was reflected as an asset and an equivalent liability.
The amount of the liability was subsequently marked-to-market to reflect the
current market value of the option written. When a security was purchased or
sold through an exercise of an option, the related premium paid (or received)
was added to (or deducted from) the basis of the security acquired or deducted
from (or added to) the proceeds of the security sold. When an option expires
(or the Fund entered into a closing transaction), the Fund realized a gain or
loss on the option to the extent of the premiums received or paid (or a gain
or loss to the extent that the cost of the closing transaction exceeded the
premium paid or received).
* Written and purchased options are non-income producing investments.
* Forward foreign exchange contracts--Prior to September 24, 2007, the Fund
entered into forward foreign exchange contracts as a hedge against either
specific transactions or portfolio positions. The contract was marked-to-
market daily and the change in market value was recorded by the Fund as an
unrealized gain or loss. When the contract was closed, the Fund recorded a
realized gain or loss equal to the difference between the value at the time it
was opened and the value at the time it was closed.
* Foreign currency options and futures--Prior to September 24, 2007, the Fund
purchased or sold listed or OTC foreign currency options, foreign currency
futures and related options on foreign currency futures as a short or long
hedge against possible variations in foreign exchange rates. Such transactions
might have been effected with respect to hedges on non-U.S. dollar-denominated
securities owned by the Fund, sold by the Fund but not yet delivered, or
committed or anticipated to be purchased by the Fund.
* Swaps--Prior to September 24, 2007, the Fund entered into swap agreements,
which are OTC contracts in which the Fund and a counterparty agree to make
periodic net payments on a specified notional amount. The net payments can be
made for a set period of time or may be triggered by a predetermined credit
event. The net periodic payments may be based on a fixed or variable interest
rate; the change in market value of a specified security, basket of
securities, or index; or the return generated by a security. These periodic
payments received or made by the Fund were recorded in the accompanying
Statement of Operations as realized gains or losses, respectively. Gains or
losses were also realized upon termination of the swap agreements. Swaps were
marked-to-market daily and changes in value were recorded as unrealized
appreciation (depreciation). Risks include changes in the returns of the
underlying instruments, failure of the counterparties to perform under the
contracts' terms and the possible lack of liquidity with respect to the swap
agreements.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Notes to Financial Statements (continued) BlackRock Total Return Fund
(c) Foreign currency transactions--Prior to September 24, 2007, transactions
denominated in foreign currencies were recorded at the exchange rate
prevailing when recognized. Foreign currency transactions were the result of
settling (realized) or valuing (unrealized) assets or liabilities expressed in
foreign currencies into U.S. dollars. Realized and unrealized gains or losses
from investments included the effects of foreign exchange rates on
investments. Foreign securities may have involved a number of risk factors and
special considerations not presented with investments in securities of U.S.
corporations.
(d) Security transactions, investment income and expenses--Security
transactions in the Master Portfolio and the Fund (prior to September 24,
2007) are accounted for on a trade date basis.
The Fund records daily its proportionate share of the Master Portfolio's
income, expenses and realized and unrealized gains and losses. In addition,
the Fund accrues its own expenses. Certain expenses have been allocated to the
individual series of the Bond Fund on a pro rata basis based upon the
respective aggregate net asset value of each such series. Prior to September
24, 2007, realized gains and losses on security transactions of the Fund were
determined on the identified cost basis. Interest income was recognized on the
accrual basis. The Fund amortized all premiums and discounts on debt
securities.
(e) Income taxes--It is the Fund's policy to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no federal income tax provision is required.
(f) Prepaid registration fees--Prepaid registration fees are charged to
expense as the related shares are issued.
(g) Dividends and distributions--Dividends from net investment income are
declared daily and paid monthly. Distributions of capital gains are recorded
on the ex-dividend dates.
(h) Securities lending--Prior to September 24, 2007, the Fund lent securities
to financial institutions that provided cash or securities issued or
guaranteed by the U.S. government as collateral, which were maintained at all
times in an amount equal to at least 100% of the current market value of the
loaned securities. The market value of the loaned securities was determined at
the close of business and any additional required collateral was delivered to
the Fund on the next business day. Where the Fund received securities as
collateral for the loaned securities, it collected a fee from the borrower.
The Fund typically received the income on the loaned securities but did not
receive the income on the collateral. Where the Fund received cash collateral,
it would invest such collateral and retain the amount earned on such
investment, net of any amount rebated to the borrower. Loans of securities are
terminable at any time and the borrower, after notice, is required to return
borrowed securities within five business days.
(i) TBA commitments--Prior to September 24, 2007, the Fund entered into to be
announced ("TBA") commitments to purchase or sell securities for a fixed price
at a future date. TBA commitments are considered securities in themselves, and
involve a risk of loss if the value of the security to be purchased/sold
declines/increases prior to settlement date, which is in addition to the risk
of decline in the value of the Fund's other assets. Unsettled TBA commitments
were valued at the current market value of the underlying securities,
according to the procedures described under "Valuation of investments."
(j) Reverse repurchase agreements--Prior to September 24, 2007, the Fund
entered into reverse repurchase agreements. Under reverse repurchase
agreements, the Fund sold securities to the counterparty and agreed to
repurchase them at a mutually agreed upon date and price, and may have
exchanged their respective commitments to pay or receive interest. If the
counterparty defaulted on its obligation, the Fund's ability to receive
interest would be delayed or limited. Furthermore, if the Fund did not have
sufficient client income to pay its obligation under the reverse repurchase
agreement, the Fund would be in default and the counterparty would have been
able to terminate the repurchase agreement. At the time the Fund entered into
a reverse repurchase agreement, it would have established a segregated account
with the custodian containing cash, or cash equivalents of liquid high grade
debt securities having a value at least equal to the repurchase price.
(k) Mortgage dollar rolls--Prior to September 24, 2007, the Fund sold mortgage-
backed securities for delivery in the current month and simultaneously
contract to repurchase substantially similar (same type, coupon and maturity)
securities on a specific future date.
(l) Recent accounting pronouncements--In July 2006, the Financial Accounting
Standards Board ("FASB") issued Interpretation No. 48 ("FIN 48"), "Accounting
for Uncertainty in Income Taxes--an interpretation of FASB Statement No. 109."
FIN 48 prescribes the minimum recognition threshold a tax position must meet
in connection with accounting for uncertainties in income tax positions taken
or expected to be taken by an entity, including mutual funds, before being
measured and recognized in the financial statements. Adoption of FIN 48 is
required for the last net asset value calculation in the first required
financial statement reporting period for fiscal years beginning after December
15, 2006. The impact on the Fund's financial statements, if any, is currently
being assessed.
In September 2006, "Statement of Financial Accounting Standards No. 157, Fair
Value Measurements" ("FAS 157"), was issued and is effective for fiscal years
beginning after November 15, 2007. FAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. At this time, management is evaluating the implications of FAS
157 and its impact on the Fund's financial statements, if any, has not been
determined.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Notes to Financial Statements (continued) BlackRock Total Return Fund
In addition, in February 2007, FASB "Statement of Financial Accounting
Standards No. 159, The Fair Value Option for Financial Assets and Financial
Liabilities" ("FAS 159"), was issued and is effective for fiscal years
beginning after November 15, 2007. Early adoption is permitted as of the
beginning of a fiscal year that begins on or before November 15, 2007,
provided the entity also elects to apply the provisions of FAS 157. FAS 159
permits entities to choose to measure many financial instruments and certain
other items at fair value that are not currently required to be measured at
fair value. FAS 159 also establishes presentation and disclosure requirements
designed to facilitate comparisons between entities that choose different
measurement attributes for similar types of assets and liabilities. At this
time, management is evaluating the implications of FAS 159 and its impact on
the Fund's financial statements, if any, has not been determined.
(m) Reclassifications - U.S. generally accepted accounting principles require
that certain components of net assets be adjusted to reflect permanent
differences between financial and tax reporting. Accordingly, during the
current year, $2,086,934 has been reclassified between paid-in capital in
excess of par and accumulated net realized capital losses, $56,897,715 has
been reclassified between accumulated net realized capital losses and paid-in
capital in excess of par and $6,001,575 has been reclassified between
distributions in excess of net investment income and paid-in capital in excess
of par as a result of permanent differences attributable to the expiration of
capital loss carryforwards and the difference between the surviving entity for
tax and accounting purposes. These reclassifications have no effect on net
assets or net asset values per share.
2. Investment Advisor Agreement and Transactions with Affiliates:
The Bond Fund has entered into an Investment Advisory Agreement with the
Manager. Merrill Lynch & Co., Inc. ("Merrill Lynch") and The PNC Financial
Services Group, Inc. ("PNC") are the principal owners of BlackRock, Inc. The
Bond Fund also entered into separate Distribution Agreements and Distribution
Plans with FAM Distributors, Inc. ("FAMD") and BlackRock Distributors, Inc.
("BDI") (collectively, the "Distributor"). FAMD is a wholly owned subsidiary
of Merrill Lynch Group, Inc., and BDI is an affiliate of BlackRock, Inc.
The Manager is responsible for the management of each of the Bond Fund's
portfolios, including the Fund, and provides the necessary personnel,
facilities, equipment and certain other services necessary to the operation of
the Bond Fund. For such services, effective September 24, 2007 the Manager
receives, at the end of each month, a fee with respect to the Fund at the
annual rates set forth below which are based upon the aggregate average daily
value of the Bond Fund's net assets at the following annual rates: .50% of the
Bond Fund's average daily net assets not exceeding $250 million; .45% of the
average daily net assets in excess of $250 million but not exceeding $500
million; .40% of average daily net assets in excess of $500 million but not
exceeding $750 million; and .35% of average daily net assets in excess of $750
million. For the year ended September 30, 2007, the aggregate average daily
net assets of the Bond Fund, including the Fund and the Bond Fund's other
series, BlackRock High Income Fund, was approximately $3,922,606,000.
Effective September 24, 2007, the Manager has contractually agreed to waive
the Fund's investment advisory fee in the amount of the Fund's share of the
investment advisory fee paid by the Fund. For the period September 24, 2007 to
September 30, 2007, the Manager earned fees of $213,632 of which $78,148 were
waived. For the period October 1, 2006 to September 24, 2007, the Total Return
Portfolio paid the Manager at the following annual rates, based on its average
daily net assets: .50% of its average daily net assets not exceeding $1
billion; .45% of its average daily net assets in excess of $1 billion but not
exceeding $2 billion; .425% of its average daily net assets in excess of $2
billion but not exceeding $3 billion; and .40% of its average daily net assets
in excess of $3 billion.
For the year ended September 30, 2007, the Manager contractually agreed to
waive and/or reimburse fees and/or expenses in order to limit expenses
(excluding interest expense and certain other fund expenses) as a percentage
of average daily net assets allocated to each class of the Fund as follows:
1.65% (for Investor B2 Shares), .85% (for Service Shares) and .40% (for
BlackRock Shares), until February 1, 2008. In addition to the contractual
waivers described above, the Manager has voluntarily agreed to waive and/or
reimburse fees or expenses in order to limit expenses (excluding interest
expense and certain other Fund expenses) as a percentage of average daily net
assets allocated to each class of the Fund as follows: 1.53% (for Investor B2
Shares) and .76% (for Service Shares). The Manager has agreed not to reduce or
discontinue this voluntary waiver or reimbursement until September 30, 2008,
unless approved by the Board of Directors of the Fund, including a majority of
the non-interested Directors.
In addition, the Manager has entered into a sub-advisory agreement with
BlackRock Financial Management, Inc., an affiliate of the Manager, under which
the Manager pays the sub-adviser a fee that is a percentage of the Management
fee paid by the Fund to the Manager. There is no increase in the aggregate
fees paid by the Bond Fund for these services.
For the period October 1, 2006 to September 24, 2007, PFPC Inc. ("PFPC"), an
indirect wholly owned subsidiary of PNC and an affiliate of the Manager, and
the Manager acted as co-administrators for the Fund. For these services, the
co-administrators received a combined administration fee computed daily and
payable monthly, based on a percentage of the average daily net assets of the
Fund. The combined administration fee was paid at the following annual rates:
..075% of the first $500 million of net assets of the Fund, .065% of the next
$500 million and .055% of assets in excess of $1 billion. In addition, each of
the share classes is charged an administration fee based on the following
percentage of average daily net assets of each respective class: .025% of the
first $500 million, .015% of the next $500 million and .005% of assets in
excess of $1 billion. In addition, PFPC and the Manager may have, at their
discretion, voluntarily waived all or any portion of their administration fees
for any share class.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Notes to Financial Statements (continued) BlackRock Total Return Fund
For the period October 1, 2006 to September 24, 2007 the Manager earned fees
of $2,291,550 of which $1,129,102 was waived. For the year ended September 30,
2007, the following shows various types of class specific expenses borne
directly by each class (transfer agent fees and service and distribution fees
are detailed in the Statement of Operations) of the Fund and any associated
waivers of those expenses:
Administration Transfer
Fees Administration Agent
(class specific) Fee Waivers Fee Waivers
BlackRock $111,989 $111,988 $4,967
Institutional $ 1,386 $ 3 $ 658
Service $ 4 $ 3 $ 155
Investor A $ 283 $ 34 $ 64
Investor B $ 159 $ 1 $ 22
Investor C $ 494 -- $ 14
R Class $ 13 $ 7 $ 30
Total $114,328 $112,036 $5,910
Pursuant to the Distribution Plans adopted by the Bond Fund in accordance with
Rule 12b-1 under the Investment Company Act of 1940, the Fund pays the
Distributor 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 shares as follows:
Service Distribution
Fee Fee
Service .25% --
Investor A .25% --
Investor A1 .10% --
Investor B .25% .50%
Investor B1 .25% .25%
Investor B2 .25% .75%
Investor C .25% .75%
Investor C1 .25% .55%
Investor C2 .25% .25%
Class R .25% .25%
Pursuant to sub-agreements with each Distributor, broker-dealers, including
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S"), a wholly owned
subsidiary of Merrill Lynch, and each Distributor provide shareholder
servicing and distribution services to the Fund. The ongoing service fee
compensates the Distributor and each broker-dealer (including MLPF&S) for
providing shareholder servicing to Service, Investor A, Investor A1, Investor
B, Investor B1, Investor B2, Investor C, Investor C1, Investor C2 and Class R
shareholders. The ongoing distribution fee compensates the Distributor and the
broker-dealers for providing shareholder and distribution-related services to
Investor B, Investor B1, Investor B2, Investor C, Investor C1, Investor C2 and
Class R shareholders. Effective February 1, 2007, the Fund did not accrue
Investor B2 distribution fees because of regulatory fee limits.
For the year ended September 30, 2007, FAMD and BDI earned underwriting
discounts and direct commissions and MLPF&S and BDI earned dealer concessions
on sales of the Fund's Investor A and Service Shares, which totaled $24,374
and $13,122, respectively.
For the year end September 30, 2007, affiliates received contingent deferred
sales charges of $787, $41, $554 and $124, relating to transactions in
Investor B, Investor B2, Investor C and Investor C1 Shares, respectively.
The Manager maintains a call center, which is responsible for providing
certain shareholder services to the Fund, such as responding to shareholder
inquiries and processing transactions based upon instructions from
shareholders with respect to the subscription and redemption of Fund shares.
During the year ended September 30, 2007, the following amounts have been
accrued by the Fund to reimburse the Manager for costs incurred running the
call center, which are a component of the transfer agent fees in the
accompanying Statement of Operations.
Call Center
Fees
BlackRock $ 12
Institutional $10,448
Service $ 31
Investor A $ 6,437
Investor A1 $ 1,401
Investor B $ 2,653
Investor B1 $ 545
Investor B2 $ 19
Investor C $ 1,173
Investor C1 $ 3,973
Investor C2 $ 233
Class R $ 435
Effective September 24, 2007, State Street Bank and Trust Company became the
custodian of the Fund. Previously, PFPC Trust Company ("PTC"), an indirect,
wholly owned subsidiary of PNC, served as custodian for the Fund. For these
services, the custodian received a custodian fee computed daily and paid
monthly, based on a percentage of the average daily gross assets of the Fund.
The fee was paid at the following rates: .0073% of the first $250 million of
average gross assets, .006% of the next $250 million of average gross assets,
..0056% of the next $250 million of average gross assets, .0048% of the next
$250 million of average gross assets, and .004% of average gross assets in
excess of $1 billion; plus per transaction charges and other miscellaneous
fees incurred on behalf of the Fund.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Notes to Financial Statements (continued) BlackRock Total Return Fund
The Fund earned income on positive cash balances in demand deposit accounts
that were maintained by PFPC on behalf of the Fund. The income earned for the
year ended September 30, 2007 was $231. The Fund also received $26 of earnings
credits related to cash balances with PFPC.
PFPC is the Fund's transfer agent.
Certain officers and/or directors of the Bond Fund are officers and/or
directors of BlackRock, Inc. or its affiliates.
3. Investments:
For the period October 1, 2006 to September 24, 2007 purchases and sales
(including paydowns) of investments, excluding short-term securities, were
$1,385,302,035 and $1,076,197,282, respectively.
Transactions in options written for the period October 1, 2006 to September
24, 2007 were as follows:
Number of
Total Return Contracts Premium
Options written, beginning of period 4,921 $ 2,041,322
Written 14,420 1,566,301
Expired (8,780) (35,120)
Closed (5,161) 1,763,088
--------------- ---------------
Options written, end of period* 5,400 $ 1,809,415
=============== ===============
* Contributed to the Master Portfolio as a result of reorganization.
4. Capital Share Transactions:
Net increase in net assets derived from capital share transactions was
$2,647,204,535 and $48,950,900 for the years ended September 30, 2007 and
September 30, 2006, respectively.
Transactions in capital shares for each class were as follows:
BlackRock Shares for the Year Dollar
Ended September 30, 2007 Shares Amount
Shares sold 20,100,906 $ 203,203,853
Conversion of shares from Institutional
Shares 638,927 6,376,491
Shares issued resulting from
reorganization 88 1,002
Shares issued to shareholders in
reinvestment of dividends 1,928,160 19,398,684
--------------- ---------------
Total issued 22,668,081 228,980,030
Shares redeemed (15,836,259) (101,695,357)
--------------- ---------------
Net increase 6,831,822 $ 127,284,673
=============== ===============
BlackRock Shares for the Year Dollar
Ended September 30, 2006 Shares Amount
Shares sold 5,049,078 $ 50,837,046
Shares issued to shareholders in
reinvestment of dividends 1,462,174 14,732,053
--------------- ---------------
Total issued 6,511,252 65,569,099
Shares redeemed (2,122,689) (21,359,972)
--------------- ---------------
Net increase 4,388,563 $ 44,209,127
=============== ===============
Institutional Shares for the
Period October 1, 2006 to Dollar
September 24, 2007* Shares Amount
Shares sold 367,104 $ 3,781,383
Shares issued to shareholders in
reinvestment of dividends 43,930 492,566
--------------- ---------------
Total issued 411,034 4,273,949
--------------- ---------------
Conversion of shares to
BlackRock Shares (638,927) (6,376,491)
Shares redeemed (208,614) (1,335,499)
--------------- ---------------
Total redeemed (847,541) (7,711,990)
--------------- ---------------
Net decrease (436,507) $ (3,438,041)
=============== ===============
* On September 24, 2007 Institutional Shares were converted to
BlackRock Shares.
Institutional Shares for the Year Dollar
Ended September 30, 2006 Shares Amount
Shares sold 440,163 $ 4,430,195
Shares issued to shareholders in
reinvestment of dividends 565 5,629
--------------- ---------------
Total issued 440,728 4,435,824
Shares redeemed (4,233) (42,349)
--------------- ---------------
Net increase 436,495 $ 4,393,475
=============== ===============
Institutional Shares for the
Period September 24, 2007* to Dollar
September 30, 2007 Shares Amount
Shares sold 406,037 $ 4,627,109
Shares issued resulting from
reorganization 75,665,114 860,809,633
Shares issued to shareholders in
reinvestment of dividends 11,768 134,157
--------------- ---------------
Total issued 76,082,919 865,570,899
Shares redeemed (2,619,004) (29,852,242)
--------------- ---------------
Net increase 73,463,915 $ 835,718,657
=============== ===============
* Commencement of operations.
Service Shares for the Year Dollar
Ended September 30, 2007 Shares Amount
Shares sold 2,020 $ 20,698
Conversion of Shares from
Investor A 155,022 1,557,971
Shares issued resulting from
reorganization 88 1,001
Shares issued to shareholders in
reinvestment of dividends 58 660
--------------- ---------------
Total issued 157,188 1,580,330
Shares redeemed (2,151) (22,031)
--------------- ---------------
Net increase 155,037 $ 1,558,299
=============== ===============
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Notes to Financial Statements (continued) BlackRock Total Return Fund
Service Shares for the Year Dollar
Ended September 30, 2006 Shares Amount
Shares sold -- --
Shares issued to shareholders in
reinvestment of dividends -- $ 4
--------------- ---------------
Total issued -- $ 4
--------------- ---------------
Shares redeemed -- --
--------------- ---------------
Net increase -- $ 4
=============== ===============
Investor A Shares for the
Period October 1, 2006 to Dollar
September 24, 2007* Shares Amount
Shares sold 164,938 $ 1,666,370
Shares issued to shareholders in
reinvestment of dividends 4,406 44,284
--------------- ---------------
Total issued 169,344 1,710,654
--------------- ---------------
Conversion of shares to Service Shares (155,022) (1,557,971)
Shares redeemed (43,698) (233,019)
--------------- ---------------
Total redeemed (198,720) (1,790,990)
--------------- ---------------
Net decrease (29,376) $ (80,336)
=============== ===============
* On September 24, 2007, Investor A Shares were converted to Service Shares.
Investor A Shares for the Year Dollar
Ended September 30, 2006 Shares Amount
Shares sold 27,739 $ 277,273
Shares issued to shareholders in
reinvestment of dividends 598 6,029
--------------- ---------------
Total issued 28,337 283,302
Shares redeemed (7,489) (75,802)
--------------- ---------------
Net increase 20,848 $ 207,500
=============== ===============
Investor A Shares for the
Period September 24, 2007* to Dollar
September 30, 2007 Shares Amount
Shares sold 503,711 $ 5,753,905
Shares issued resulting from
reorganization 60,328,117 686,711,582
Shares issued to shareholders in
reinvestment of dividends 2,883 32,895
--------------- ---------------
Total issued 60,834,711 692,498,382
Shares redeemed (351,478) (4,004,320)
--------------- ---------------
Net increase 60,483,233 $ 688,494,062
=============== ===============
* Commencement of operations.
Investor A1 Shares for the
Period September 24, 2007* to Dollar
September 30, 2007 Shares Amount
Shares sold 113,381 $ 1,291,687
Shares issued resulting from
reorganization 12,970,692 147,553,481
Shares issued to shareholders in
reinvestment of dividends 638 7,280
--------------- ---------------
Total issued 13,084,711 148,852,448
Shares redeemed (146,033) (1,663,265)
--------------- ---------------
Net increase 12,938,678 $ 147,189,183
=============== ===============
* Commencement of operations.
Investor B Shares for the
Period September 24, 2007* to Dollar
September 30, 2007 Shares Amount
Shares sold 93,680 $ 1,067,348
Shares issued resulting from
reorganization 17,057,414 194,056,260
Shares issued to shareholders in
reinvestment of dividends 1,733 19,756
--------------- ---------------
Total issued 17,152,827 195,143,364
Shares redeemed (142,542) (1,624,147)
--------------- ---------------
Net increase 17,010,285 $ 193,519,217
=============== ===============
* Commencement of operations.
Investor B1 Shares for the
Period September 24, 2007* to Dollar
September 30, 2007 Shares Amount
Shares sold 23,753 $ 270,785
Shares issued resulting from
reorganization 3,825,998 43,538,462
Shares issued to shareholders in
reinvestment of dividends 301 3,430
--------------- ---------------
Total issued 3,850,052 43,812,677
Shares redeemed (83,621) (953,527)
--------------- ---------------
Net increase 3,766,431 $ 42,859,150
=============== ===============
* Commencement of operations.
Investor B2 Shares for the Year Dollar
Ended September 30, 2007* Shares Amount
Shares sold 95,533 $ 963,204
Shares issued resulting from
reorganization 88 1,002
Shares issued to shareholders in
reinvestment of dividends 2,163 21,771
--------------- ---------------
Total issued 97,784 985,977
Shares redeemed (30,034) (181,070)
--------------- ---------------
Net increase 67,750 $ 804,907
=============== ===============
* On September 24, 2007, Investor B Shares were converted to
Investor B2 Shares.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Notes to Financial Statements (concluded) BlackRock Total Return Fund
Investor B2 Shares for the Year Dollar
Ended September 30, 2006* Shares Amount
Shares sold 10,232 $ 103,086
Shares issued to shareholders in
reinvestment of dividends 538 5,426
--------------- ---------------
Total issued 10,770 108,512
Shares redeemed (1,761) (17,707)
--------------- ---------------
Net increase 9,009 $ 90,805
=============== ===============
* On September 24, 2007, Investor B Shares were converted to
Investor B2 Shares.
Investor C Shares for the Year Dollar
Ended September 30, 2007 Shares Amount
Shares sold 689,112 $ 7,259,283
Shares issued resulting from
reorganization 11,486,320 130,627,924
Shares issued to shareholders in
reinvestment of dividends 5,921 59,704
--------------- ---------------
Total issued 12,181,353 137,946,911
Shares redeemed (121,546) (768,658)
--------------- ---------------
Net increase 12,059,807 $ 137,178,253
=============== ===============
Investor C Shares for the Year Dollar
Ended September 30, 2006 Shares Amount
Shares sold 7,331 $ 73,530
Shares issued to shareholders in
reinvestment of dividends 257 2,588
--------------- ---------------
Total issued 7,588 76,118
Shares redeemed (2,621) (26,129)
--------------- ---------------
Net increase 4,967 $ 49,989
=============== ===============
Investor C1 Shares for the
Period September 24, 2007* to Dollar
September 30, 2007 Shares Amount
Shares sold 141,453 $ 1,613,113
Shares issued resulting from
reorganization 34,599,791 393,742,613
Shares issued to shareholders in
reinvestment of dividends 1,964 22,407
--------------- ---------------
Total issued 34,743,208 395,378,133
Shares redeemed (224,595) (2,559,812)
--------------- ---------------
Net increase 34,518,613 $ 392,818,321
=============== ===============
* Commencement of operations.
Investor C2 Shares for the
Period September 24, 2007* to Dollar
September 30, 2007 Shares Amount
Shares sold 8,943 $ 101,881
Shares issued resulting from
reorganization 1,837,573 20,895,323
Shares issued to shareholders in
reinvestment of dividends 77 873
--------------- ---------------
Total issued 1,846,593 20,998,077
Shares redeemed (34,502) (392,995)
--------------- ---------------
Net increase 1,812,091 $ 20,605,082
=============== ===============
* Commencement of operations.
Class R Shares for the
Period October 2, 2006* to Dollar
September 30, 2007 Shares Amount
Shares sold 233,764 $ 2,586,461
Shares issued resulting from
reorganization 5,316,505 60,524,355
Shares issued to shareholders in
reinvestment of dividends 316 3,474
--------------- ---------------
Total issued 5,550,585 63,114,290
Shares redeemed (43,871) (421,182)
--------------- ---------------
Net increase 5,506,714 $ 62,693,108
=============== ===============
* Commencement of operations.
5. Reverse Repurchase Agreement:
For the period October 1, 2006 through September 24, 2007, the Fund's average
amount outstanding was approximately $11,801,366 and daily weighted average
interest rate was 4.41%.
6. Distributions to Shareholders:
The tax character of distributions paid during the fiscal years ended
September 30, 2007 and September 30, 2006 was as follows:
9/30/2007 9/30/2006
Distributions paid from:
Ordinary income $ 25,444,826 $ 16,705,414
Net long-term capital gains -- 606,685
--------------- ---------------
Total taxable distributions $ 25,444,826 $ 17,312,099
=============== ===============
As of September 30, 2007, the components of accumulated earnings (losses)
on a tax basis were as follows:
Undistributed ordinary income--net $ 3,601,512
Undistributed long-term capital gains-net --
---------------
Total undistributed earnings--net 3,601,512
Capital loss carryforward (45,266,553)*
Unrealized gains (losses)--net (27,929,889)**
---------------
Total accumulated earnings (losses)--net $ (69,594,930)
===============
* On September 30, 2007, the Fund had a net capital loss carryforward of
$45,266,553, of which $392,843 expires in 2008, $12,816,607 expires in
2009, $71,451, expires in 2013, $8,099,993 expires in 2014 and $23,885,659
expires in 2015. This amount will be available to offset like amounts of
any future taxable gains.
** The difference between book-basis and tax-basis net unrealized gains
(losses) is attributable primarily to the tax deferral of losses on wash
sales, the tax deferral of losses on straddles, the realization for tax
purposes of unrealized gains (losses) on certain futures and forward foreign
currency contracts, the difference between book and tax amortization methods
for premiums and discounts on fixed income securities, the deferral of post-
October capital losses for tax purposes and accounting for swap agreements.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Report of Independent Registered Public Accounting Firm
BlackRock Total Return Fund
To the Shareholders and Board of Directors of
BlackRock Bond Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of
BlackRock Total Return Fund, one of the portfolios constituting BlackRock Bond
Fund, Inc. (the "Fund"), formerly BlackRock Bond Fund, as of September 30, 2007
and the related statement of operations for the year then ended, the statements
of changes in net assets for each of the two years in the period then ended,
and the financial highlights for each of the five years in the period
then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. The Fund is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Fund's internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
BlackRock Total Return Fund of BlackRock Bond Fund, Inc. as of September 30,
2007, the results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended, and its
financial highlights for each of the five years in the period then ended, in
conformity with accounting principles generally accepted in the United States
of America.
Deloitte & Touche LLP
Princeton, New Jersey
November 29, 2007
Important Tax Information (unaudited)
The following information is provided with respect to the ordinary income
distributions paid by BlackRock Total Return Fund of BlackRock Bond Fund, Inc.
for the fiscal year ended September 30, 2007:
Federal Obligation Interest
Month Paid: October 2006 - September 2007 10.21%*
Interest-Related Dividends for Non-U.S. Residents
Month Paid: October 2006 - December 2006 75.45%**
January 2007 - September 2007 93.92%**
* The law varies in each state as to whether and what percentage of dividend
income attributable to Federal Obligations is exempt from state income tax.
We recommend that you consult your tax adviser to determine if any portion
of the dividends you received is exempt from state income taxes.
** Represents the portion of the taxable ordinary income dividends eligible
for exemption from U.S. withholding tax for nonresident aliens and foreign
corporations.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Portfolio Summary Master Total Return Portfolio
As of September 30, 2007
Percent of
Long-Term
Asset Mix Investments
U.S. Government Agency Mortgage-Backed Securities 36.7%
Non-Government Agency Mortgage-Backed Securities 21.5
Asset-Backed Securities 17.5
Corporate Bonds 12.5
U.S. Government & Agency Obligations 5.7
Foreign Government Obligations 0.7
Preferred Securities 0.6
U.S. Government Agency Mortgage-Backed Obligations--
Collateralized Mortgage Obligations 3.7
Options purchased 1.1
Options written (0.2)
Percent of
Quality Ratings by Long-Term
S&P/Moody's Investments
AAA/Aaa 84.0%
AA/Aa 5.4
A/A 2.8
BBB/Baa 2.4
BB/Ba 0.9
B/B 0.3
NR (Not Rated) 4.2
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Schedule of Investments as of September 30, 2007 Master Total Return Portfolio
(in U.S. dollars)
Face
Amount Asset-Backed Securities++ Value
ACE Securities Corp. (b):
USD 580,803 Series 2003-OP1 Class A2, 5.491%
due 12/25/2033 $ 575,252
11,203,000 Series 2005-ASP1 Class M1, 5.811%
due 9/25/2035 8,692,734
17,259,855 Series 2005-HE6 Class A2B, 5.331%
due 10/25/2035 (e) 17,197,247
18,589,749 Series 2006-NC3 Class A2A, 5.181%
due 12/25/2036 18,458,624
16,560,788 Aegis Asset Backed Securities Trust Series
2006-1 Class A1, 5.211% due 1/25/2037 (b) 16,473,743
American Express Credit Account Master
Trust Class A (b):
29,308,000 Series 2003-2, 5.72% due 10/15/2010 29,321,159
2,675,000 Series 2005-3, 5.725% due 1/18/2011 2,671,510
Ameriquest Mortgage Securities, Inc. (b):
11,525,000 Series 2003-7 Class M1, 5.981%
due 8/25/2033 11,034,842
8,800,000 Series 2004-R1 Class M2, 5.711%
due 2/25/2034 8,450,033
16,411,458 Asset Backed Funding Certificates Series
2006-OPT3 Class A3A, 5.191%
due 11/25/2036 (b) 16,317,466
29,100,000 Banc of America Securities Auto Trust Series
2006-G1 Class A4, 5.17% due 12/20/2010 29,140,269
Bank One Issuance Trust (b):
3,450,000 Series 2002-A5 Class A5, 5.873%
due 6/15/2010 3,450,491
32,000,000 Series 2002-A6 Class A, 5.943%
due 6/15/2012 31,986,461
2,375,000 Series 2003-A3 Class A3, 5.863%
due 12/15/2010 2,375,741
Bear Stearns Asset Backed Securities
Trust (b):
6,243,953 Series 2005-4 Class A, 5.461%
due 1/25/2036 6,154,356
25,720,149 Series 2005-HE10 Class A2, 5.421%
due 8/25/2035 25,399,809
11,407,000 Series 2005-SD1 Class 1A2, 5.431%
due 7/25/2027 11,291,657
139,151 Series 2006-EC1 Class A1, 5.211%
due 12/25/2035 139,067
15,514,232 Series 2006-HE8 Class 1A1, 5.201%
due 10/25/2036 15,407,017
14,309,032 Series 2006-HE10 Class 21A1, 5.201%
due 12/25/2036 14,190,796
Capital Auto Receivables Asset Trust:
4,850,000 Series 2004-2 Class D, 5.82%
due 5/15/2012 (a) 4,806,178
1,127,559 Series 2005-1 Class A4, 4.05%
due 7/15/2009 1,123,162
2,799,970 Series 2006-SN1A Class A2A, 5.40%
due 1/20/2009 (a) 2,799,518
Carrington Mortgage Loan Trust (b):
622,219 Series 2006-FRE1 Class A1, 5.196%
due 7/25/2036 620,572
17,752,403 Series 2006-NC5 Class A1, 5.181%
due 1/25/2037 17,621,720
Face
Amount Asset-Backed Securities++ Value
Carrington Mortgage Loan Trust (b)
(concluded):
USD 21,447,623 Series 2007-RFC1 Class A1, 5.181%
due 12/25/2036 $ 21,309,309
2,750,000 Chase Credit Card Master Trust Series
2002-7 Class A, 5.873% due 2/15/2010 (b) 2,750,391
Chase Issuance Trust:
2,275,000 Series 2004-A9 Class A9, 3.22%
due 6/15/2010 2,273,269
3,600,000 Series 2005-A5 Class A5, 5.773%
due 2/15/2012 (b) 3,588,143
2,375,000 Series 2006-A3 Class A3, 5.743%
due 7/15/2011 (b) 2,367,581
Chase Manhattan Auto Owner Trust:
4,025,000 Series 2005-B Class A4, 4.88%
due 6/15/2012 4,014,005
10,900,000 Series 2006-A Class A4, 5.36%
due 1/15/2013 10,953,867
Citibank Credit Card Issuance Trust:
1,125,000 Series 2003-A3 Class A3, 3.10%
due 3/10/2010 1,114,727
1,805,000 Series 2003-A6 Class A6, 2.90%
due 5/17/2010 1,780,787
25,810,000 Series 2003-A11 Class A11, 5.41%
due 10/15/2009 (b) 25,810,511
2,550,000 Series 2006-A2 Class A2, 4.85%
due 2/10/2011 2,549,279
Countrywide Asset Backed Certificates (b):
2,283,560 Series 2003-2 Class M1, 5.829%
due 6/26/2033 1,826,848
909,397 Series 2003-BC3 Class A2, 5.441%
due 9/25/2033 901,125
1,947,299 Series 2004-5 Class A, 5.581%
due 10/25/2034 1,834,472
8,750,000 Series 2004-5 Class M2, 5.801%
due 7/25/2034 7,867,381
10,300,000 Series 2004-13 Class AF4, 4.583%
due 1/25/2033 10,088,143
187,195 Series 2004-13 Class AV4, 5.421%
due 6/25/2035 178,882
10,715,000 Series 2004-13 Class MF1, 5.071%
due 12/25/2034 10,426,775
1,202,267 Series 2006-8 Class 2A1, 5.161%
due 1/25/2046 1,196,483
21,354,636 Series 2006-20 Class 2A1, 5.181%
due 4/25/2037 21,207,370
19,969,555 Series 2006-21 Class 2A1, 5.181%
due 5/25/2037 19,809,800
16,206,452 Series 2006-22 Class 2A1, 5.181%
due 5/25/2037 16,065,474
26,084,863 Series 2006-25 Class 2A1, 5.201%
due 6/25/2037 25,871,432
13,588,936 Series 2006-26 Class 2A1, 5.211%
due 6/25/2037 13,480,554
25,800,000 Daimler Chrysler Auto Trust Series 2006-D
Class A3, 4.98% due 2/08/2011 25,754,277
19,985,000 Discover Card Master Trust I Series 2005-1
Class A, 5.763% due 9/16/2010 (b) 19,966,696
15,086,000 Equifirst Mortgage Loan Trust Series 2004-2
Class M1, 5.681% due 7/25/2034 (b) 14,803,881
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Schedule of Investments (continued) Master Total Return Portfolio
(in U.S. dollars)
Face
Amount Asset-Backed Securities++ Value
First Franklin Mortgage Loan Asset Backed
Certificates (b):
USD 1,125,770 Series 2004-FF10 Class A2, 5.531%
due 12/25/2032 $ 1,115,492
17,222,008 Series 2005-FF10 Class A6, 5.481%
due 11/25/2035 16,240,266
Ford Credit Auto Owner Trust Class A4:
6,091,294 Series 2004-A, 3.54% due 11/15/2008 6,075,391
25,925,000 Series 2005-A, 3.72% due 10/15/2009 25,717,929
18,700,000 Series 2006-B, 5.25% due 9/15/2011 18,726,178
11,833,406 Fremont Home Loan Trust Series 2005-E
Class 2A2, 5.301% due 1/25/2036 (b) 11,800,524
19,421,753 HSI Asset Securitization Corp. Trust
Series 2006-HE1 Class 2A1, 5.181%
due 10/25/2036 (b) 19,281,198
10,500,000 Harley-Davidson Motorcycle Trust
Series 2006-2 Class A2, 5.35% due
3/15/2013 10,542,529
Home Equity Asset Trust (b):
1,877,612 Series 2005-1 Class A2, 5.411%
due 5/25/2035 1,875,363
1,190,915 Series 2005-3 Class 1A2, 5.761%
due 8/25/2035 1,188,961
26,390,000 Honda Auto Receivables Owner Trust Series
2006-3 Class A3, 5.12% due 10/15/2010 26,375,702
25,106,027 IXIS Real Estate Capital Trust Series
2007-HE1 Class A1, 5.191% due
5/25/2037 (b) 24,935,283
19,227,483 Indymac Residential Asset Backed Trust Series
2006-E Class 2A1, 5.191% due 4/25/2037 (b) 19,091,478
4,252,500 Irwin Home Equity Series 2005-C Class 1A1,
7.905% due 4/25/2030 (b) 4,205,481
12,565,818 JPMorgan Mortgage Acquisition Corp. Series
2006-HE3 Class A2, 5.201%
due 11/25/2036 (b) 12,498,418
18,928,909 Long Beach Mortgage Loan Trust Series
2006-11 Class 2A1, 5.191% due
12/25/2036 (b) 18,779,625
MBNA Credit Card Master Note Trust:
1,500,000 Series 2003-A6 Class A6, 2.75%
due 10/15/2010 1,478,817
3,250,000 Series 2003-A7 Class A7, 2.65%
due 11/15/2010 3,196,865
3,650,000 Series 2006-A4 Class A4, 5.743%
due 9/15/2011 (b) 3,639,198
2,725,000 MBNA Master Credit Card Trust Series 1998-E
Class A, 5.505% due 9/15/2010 (b) 2,725,664
Morgan Stanley ABS Capital I (b):
2,333,286 Series 2005-HE1 Class A2MZ, 5.431%
due 12/25/2034 2,257,083
398,358 Series 2005-NC2 Class A1MZ, 5.381%
due 3/25/2035 397,813
435,612 Series 2005-NC2 Class A2MZ, 5.381%
due 3/25/2035 434,939
1,118,292 Series 2006-HE2 Class A2A, 5.201%
due 3/25/2036 1,114,025
15,373,032 Series 2006-HE8 Class A2A, 5.181%
due 10/25/2036 15,282,721
18,595,295 Series 2007-NC1 Class A2A, 5.181%
due 11/25/2036 18,473,504
Face
Amount Asset-Backed Securities++ Value
USD 8,908,840 Nationstar Home Equity Loan Trust Series
2006-B Class AV1, 5.201%
due 9/25/2036 (b) $ 8,876,967
3,850,849 New Century Home Equity Loan Trust
Series 2005-2 Class A2MZ, 5.391%
due 6/25/2035 (b) 3,743,983
2,818,953 Nomura Home Equity Loan, Inc. Series 2006-HE1
Class A1, 5.211% due 2/25/2036 (b) 2,811,409
479,198 Novastar Home Equity Loan Series 2006-2
Class A2A, 5.181% due 6/25/2036 (b) 478,582
2,898,225 Option One Mortgage Loan Trust Series
2003-4 Class A2, 5.451% due 7/25/2033 (b) 2,870,348
Park Place Securities, Inc.
Series 2005-WCH1 (b):
1,232,064 Class A1B, 5.431% due 1/25/2035 1,182,605
1,046,634 Class A3D, 5.471% due 1/25/2035 1,001,308
4,020,000 Popular ABS Mortgage Pass-Through Trust
Series 2005-1 Class M2, 5.507% due
5/25/2035 3,544,225
14,836,777 RAAC Series 2005-SP2 Class 2A, 5.431%
due 6/25/2044 (b) 14,471,217
Residential Asset Mortgage Products, Inc. (b):
806,590 Series 2004-RS11 Class A2, 5.401%
due 12/25/2033 806,424
5,305,043 Series 2005-RS3 Class AI2, 5.301%
due 3/25/2035 5,292,313
16,561,582 Series 2006-EFC2 Class A1, 5.191%
due 12/25/2036 16,482,244
1,535,608 Series 2006-RS4 Class A1, 5.211%
due 7/25/2036 1,529,997
2,181,354 Residential Asset Securities Corp.
Series 2003-KS5 Class AIIB, 5.711%
due 7/25/2033 (b) 2,159,393
2,800,000 SLM Student Loan Trust Series 2005-6
Class A5B, 5.37% due 7/27/2026 (b) 2,797,295
Small Business Administration Series 2002-P10
Class 1:
294,559 5.199% due 8/10/2012 295,837
1,106,940 4.504% due 2/10/2014 1,057,185
Soundview Home Equity Loan Trust (b):
24,900,000 Series 2005-OPT3 Class A4, 5.431%
due 11/25/2035 24,032,716
3,120,121 Series 2007-OPT1 Class 2A1, 5.211%
due 6/25/2037 3,096,791
Structured Asset Investment Loan Trust (b):
17,050,000 Series 2003-BC6 Class M1, 5.881%
due 7/25/2033 16,019,157
16,700,000 Series 2003-BC7 Class M1, 5.881%
due 7/25/2033 15,694,660
5,737,000 Series 2004-8 Class M4, 6.131%
due 9/25/2034 4,497,234
472,631 Series 2006-1 Class A1, 5.211%
due 1/25/2036 471,311
712,178 Structured Asset Receivables Corp. Series
2003-2, 5.72% due 1/21/2009 (b) 710,397
Structured Asset Securities Corp.:
588,844 Series 2003-Al2 Class A, 3.357%
due 1/25/2031 (a) 516,823
4,196,456 Series 2004-23XS Class 2A1, 5.62%
due 1/25/2035 (b) 4,158,201
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Schedule of Investments (continued) Master Total Return Portfolio
(in U.S. dollars)
Face
Amount Asset-Backed Securities++ Value
Structured Asset Securities Corp.
(concluded):
USD 20,771,302 Series 2006-BC6 Class A2, 5.211%
due 1/25/2037 (b) $ 20,524,327
2,612,518 Series 2007-BC1 Class A2, 5.181%
due 2/25/2037 (b) 2,578,504
USAA Auto Owner Trust Series 2006-4:
23,200,000 Class A3, 5.01% due 6/15/2011 23,181,456
21,651,000 Class A4, 4.98% due 10/15/2012 21,563,032
Total Asset-Backed Securities
(Cost--$1,055,550,015)--26.1% 1,039,387,274
U.S. Government & Agency Obligations
Fannie Mae:
3,445,000 4% due 1/26/2009 (e) 3,423,255
25,300,000 7.125% due 1/15/2030 31,370,735
Resolution Funding Corp. (j):
100,000 6.29% due 7/15/2018 58,812
100,000 6.30% due 10/15/2018 57,996
U.S. Treasury Inflation Indexed Bonds:
9,231,450 3.875% due 1/15/2009 9,420,409
16,551,100 3.50% due 1/15/2011 17,273,920
38,618,214 1.625% due 1/15/2015 36,958,828
41,781,614 2.375% due 1/15/2027 42,323,480
U.S. Treasury Notes (e):
155,150,000 4.125% due 8/31/2012 154,519,781
41,240,000 4.75% due 8/15/2017 41,794,183
Total U.S. Government & Agency Obligations
(Cost--$329,311,001)--8.5% 337,201,399
U.S. Government Agency
Mortgage-Backed Securities++
Fannie Mae Guaranteed Pass-Through
Certificates:
2,614,494 4% due 5/01/2019 - 2/01/2022 2,463,589
101,957,005 4.50% due 3/01/2020 - 8/01/2037 (g) 98,031,828
1,944,864 4.562% due 1/01/2035 (b) 1,936,223
408,417,082 5.00% due 9/01/2017 - 10/15/2037 (e)(g) 394,693,946
17,577,340 5.47% due 12/01/2036 17,639,655
297,267,364 5.50% due 7/01/2014 - 10/15/2037 (e)(g) 293,978,471
562,377,061 6.00% due 1/01/2021 - 10/15/2037 (g) 563,484,244
1,800,000 6.28% due 8/01/2011 1,857,916
373,035,030 6.50% due 3/01/2016 - 10/15/2037 (g) 379,837,308
302,395 7.00% due 3/01/2031 - 9/01/2036 313,128
Freddie Mac Mortgage Participation
Certificates:
575,247 4.00% due 5/01/2010 - 5/01/2019 560,561
5,061,601 4.50% due 5/01/2018 - 8/01/2020 4,886,896
77,757,552 5.00% due 12/01/2018 - 10/15/2037 (g) 74,314,368
155,554,241 5.50% due 8/01/2017 - 10/15/2037 (g) 153,022,614
2,507,202 5.68% due 1/01/2037 (b) 2,527,443
28,024,934 5.98% due 1/01/2037 (b) 28,113,192
357,294,883 6.00% due 5/01/2013 - 11/15/2037 357,594,847
1,122,599 6.50% due 5/01/2017 - 12/01/2034 1,148,059
2,914,374 7.00% due 2/01/2031 - 4/01/2032 3,030,494
Ginnie Mae MBS Certificates:
1,122,599 4.75% due 5/20/2034 1,582,392
223,086,749 5.50% due 11/15/2033 - 10/21/2037 (g) 219,662,139
160,362,142 6.00% due 11/15/2028 - 10/21/2037 (g) 161,147,612
Face U.S. Government Agency
Amount Mortgage-Backed Securities++ Value
Ginnie Mae MBS Certificates (concluded):
USD 87,689,286 6.50% due 4/15/2031 - 10/18/2037 (g) $ 89,496,630
170,655 7.00% due 6/15/2031 - 9/15/2031 178,775
531,194 7.50% due 4/15/2031 - 3/15/2032 557,316
Total U.S. Government Agency
Mortgage-Backed Securities
(Cost--$2,858,688,936)--71.7% 2,852,059,646
U.S. Government Agency
Mortgage-Backed Obligations--
Collateralized Mortgage Obligations
Fannie Mae Trust:
36,598,677 Series 360 Class 2, 5% due 8/01/2035 (h) 9,636,893
2,727,385 Series 363 Class 2, 5.50%
due 11/01/2035 (h) 715,533
3,087,280 Series 367 Class 2, 5.50%
due 1/25/2036 (h) 810,233
35,776,661 Series 378 Class 4, 5% due 7/01/2036 (h) 8,882,740
4,464,369 Series 378 Class 5, 5% due 7/01/2036 (h) 1,099,871
651,928 Series 1999-7 Class AB, 6% due 3/25/2029 651,726
1,800,000 Series 2002-73 Class AN, 5%
due 11/25/2017 1,766,494
1,680,000 Series 2003-35 Class TE, 5%
due 5/25/2018 1,647,323
20,000,000 Series 2003-41 Class XU, 4% due 7/25/2015 19,676,876
21,152,000 Series 2003-87 Class TJ, 4.50%
due 9/25/2018 20,058,841
1,202,104 Series 2004-29 Class HC, 7.50%
due 7/25/2030 1,281,014
2,154,587 Series 2004-60 Class LB, 5% due 4/25/2034 2,125,306
2,301,024 Series 2005-57 Class PA, 5.50%
due 5/25/2027 2,307,835
20,955,400 Series 2005-63 Class PA, 5.50%
due 10/25/2024 20,998,784
2,460,726 Series 2005-80 Class PB, 5.50%
due 4/25/2030 2,472,513
2,610,982 Series 2006-26 Class QA, 5.50%
due 6/25/2026 2,620,408
4,600,000 Series 2006-M2 Class A2A, 5.271%
due 10/20/2032 (b) 4,521,401
15,824,378 Series 2007-22 Class PA, 5.50%
due 3/25/2037 15,868,990
Freddie Mac Multiclass Certificates:
1,111,764 Series 232 Class IO, 5% due 8/01/2035 (h) 292,739
12,133,525 Series 2675 Class CB, 4% due 5/15/2016 11,888,977
15,000,000 Series 2687 Class PM, 4.50%
due 11/15/2026 14,885,115
1,743,797 Series 2825 Class VP, 5.50% due 6/15/2015 1,758,135
10,121,270 Series 3068 Class VA, 5.50%
due 10/15/2016 10,152,082
17,312,864 Series 3137 Class XP, 6% due 4/15/2036 17,708,939
14,476,808 Series 3210 Class PA, 6% due 3/15/2029 14,680,857
30,077,011 Series 3242 Class QA, 5.50%
due 3/15/2030 30,263,636
Total U.S. Government Agency
Mortgage-Backed Obligations--
Collateralized Mortgage Obligations
(Cost--$216,180,918)--5.5% 218,773,261
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Schedule of Investments (continued) Master Total Return Portfolio
(in U.S. dollars)
Face Non-Government Agency
Amount Mortgage-Backed Securities++ Value
Collateralized Mortgage Obligations--16.1%
USD 1,052,448 Banc of America Alternative Loan Trust
Series 2004-7 Class 4A1, 5% due
8/25/2019 $ 1,011,329
98,223,821 Bear Stearns Adjustable Rate Mortgage
Trust Series 2005-4 Class 3A1, 5.374%
due 8/25/2035 (b) 98,101,041
13,321 BlackRock Capital Finance LP Series 1997-R2
Class AP, 9.514% due 12/25/2035 (a)(b)(c) 13,321
19,919,002 Citicorp Mortgage Securities, Inc. Series
2007-7 Class 1A1, 6% due 8/25/2037 19,386,766
Citigroup Mortgage Loan Trust, Inc. (b):
46,768,641 Series 2005-4 Class A, 5.345%
due 8/25/2035 (a) 46,139,203
6,012,238 Series 2007-AR4 Class 2A2A, 5.775%
due 3/25/2037 6,059,915
26,515,000 Citimortgage Alternative Loan Trust Series
2007-A1 , 6% due 11/30/2037 26,071,702
23,130 Collateralized Mortgage Obligation Trust
Series 57 Class D, 9.90% due 2/01/2019 23,138
Countrywide Alternative Loan Trust (b):
2,426,862 Series-OC8 Class 2A1A, 5.221%
due 11/25/2036 2,424,479
1,173,993 Series 2004-18CB Class 2A5, 5.581%
due 9/25/2034 1,170,355
17,856,011 Series 2006-OC9 Class A1, 5.206%
due 9/25/2035 17,829,598
15,379,425 Series 2006-OC10 Class 2A1, 5.221%
due 11/25/2036 15,343,804
23,016,242 Series 2006-OC11 Class 2A1, 5.231%
due 1/25/2037 22,966,561
14,635,505 Countrywide Home Loan Mortgage Pass-
Through Trust Series 2007-16 Class A1,
6.50% due 10/25/2037 14,755,775
253,397 Countrywide Home Loans Series 2004-29
Class1 A1, 5.401% due 2/25/2035 (b) 253,035
13,381,356 First Horizon Asset Securities, Inc.
Series 2005-AR3 Class 3A1, 5.504%
due 8/25/2035 (b) 13,398,618
17,223,106 GSR Mortgage Loan Trust Series 2005-AR4
Class 6A1, 5.25% due 7/25/2035 (b) 17,045,019
1,125,539 Harborview Mortgage Loan Trust Series
2005-10 Class 2A1A, 5.331% due
11/19/2035 (b) 1,104,970
Impac Secured Assets CMN Owner Trust
Series 2004-3 (b):
3,294,139 Class 1A4, 5.53% due 11/25/2034 3,296,927
11,950,000 Class M1, 6.105% due 11/25/2034 11,953,812
20,133,535 Indymac Index Mortgage Loan Trust
Series 2006-AR41 Class A3, 5.311%
due 2/25/2037 (b) 19,676,099
JPMorgan Mortgage Trust (b):
43,357,487 Series 2005-A5 Class TA1, 5.432%
due 8/25/2035 42,937,106
3,019,642 Series 2006-A2 Class 4A1, 3.886%
due 8/25/2034 2,968,489
27,657,340 Luminent Mortgage Trust Series 2006-7
Class 1A1, 5.311% due 5/25/2036 (b) 27,306,675
2,500,000 Maryland Insurance Backed Securities Trust
Series 2006-1A , 5.55% due 12/10/2049 2,443,750
33,445 Ocwen Residential MBS Corp. Series 1998-R2
Class AP, 6.92% due 11/25/2034 (a)(b) 21,739
1,449,160 Opteum Mortgage Acceptance Corp. Series
2006-2 Class A1A, 5.191% due 7/25/2036 (b) 1,445,586
Face Non-Government Agency
Amount Mortgage-Backed Securities++ Value
Collateralized Mortgage Obligations (concluded)
USD 2,315,297 RMAC Plc Series 2003-NS2A Class A2C,
6.101% due 9/12/2035 (b) $ 2,292,144
30,172,990 Structured Adjustable Rate Mortgage Loan
Trust Series 2007-3 Class 2A1, 5.74%
due 4/25/2037 (b) 30,588,774
Structured Asset Securities Corp. (b):
2,339,111 Series 2005-GEL2 Class A, 5.411%
due 4/25/2035 2,252,533
9,317,423 Series 2005-OPT1 Class A4M, 5.481%
due 11/25/2035 8,894,485
WaMu Mortgage Pass-Through Certificates (b):
1,158 Series 2000-1 Class B1, 5.708%
due 1/25/2040 (a) 1,048
74,433,970 Series 2007-HY3 Class 1A1, 5.676%
due 3/25/2037 74,284,358
37,975,641 Series 2007-HY3 Class 4A1, 5.349%
due 3/25/2037 37,706,394
Wells Fargo Mortgage Backed Securities Trust:
43,326,963 Series 2005-AR15 Class 2A1, 5.105%
due 9/25/2035 (b) 42,634,165
400,000 Series 2006-AR4 Class 2A4, 5.775%
due 4/25/2036 (b) 396,206
25,298,830 Series 2007-11 Class A96, 6%
due 8/25/2037 25,326,399
--------------
639,525,318
Commercial Mortgage-Backed Securities--16.0%
361,661 Asset Securitization Corp. Series 1997-D5
Class A1C, 6.75% due 2/14/2043 362,064
1,869,365 Banc of America Alternative Loan Trust Series
2004-7 Class 4A1, 6.503% due 4/15/2036 1,940,718
3,250,000 Banc of America Commercial Mortgage, Inc.
Series 2007-2 Class A4, 5.688%
due 4/10/2049 (b) 3,278,983
Bear Stearns Commercial Mortgage Securities:
24,498,164 Series 1998-C1 Class A2, 6.44%
due 6/16/2030 24,597,477
1,400,000 Series 2000-WF2 Class A2, 7.32%
due 10/15/2032 (b) 1,476,591
7,100,000 Series 2006-PW11 Class AJ, 5.625%
due 3/11/2039 (b) 6,891,646
CS First Boston Mortgage Securities Corp.:
3,510,863 Series 1998-C2 Class A2, 6.30%
due 11/15/2030 3,540,684
325,000 Series 2001-CK6 Class A3, 6.387%
due 8/15/2036 338,860
2,415,000 Series 2002-CKS4 Class A2, 5.183%
due 11/15/2036 2,409,093
10,288,856 Series 2002-CP5 Class A1, 4.106%
due 12/15/2035 (e) 10,046,889
2,320,000 Series 2003-C3 Class A5, 3.936%
due 5/15/2038 2,169,618
21,411,989 Capco America Securitization Corp. Series
1998-D7 Class A1B, 6.26% due 10/15/2030 21,566,936
Chase Commercial Mortgage Securities Corp.,
Class A2:
19,046,363 Series 1999-2, 7.198% due 1/15/2032 19,763,120
21,371,960 Series 2000-1, 7.757% due 4/15/2032 22,385,528
Citigroup Commercial Mortgage Trust Series
2007-C6 (b):
8,400,000 Class A4, 5.889% due 6/10/2017 8,491,858
8,750,000 Class AM, 5.889% due 6/10/2017 8,703,138
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Schedule of Investments (continued) Master Total Return Portfolio
(in U.S. dollars)
Face Non-Government Agency
Amount Mortgage-Backed Securities++ Value
Commercial Mortgage-Backed Securities (continued)
USD 634,577 Commercial Mortgage Acceptance Corp.
Series 1998-C2 Class A2, 6.03% due
9/15/2030 $ 634,130
3,200,000 Credit Suisse Mortgage Capital Certificates
Series 2007-C3 Class A4, 5.723%
due 6/15/2039 (b) 3,235,237
2,010,673 DLJ Commercial Mortgage Corp. Series
200-CKP1 Class A1B, 7.18% due 11/10/2033 2,112,429
First Union National Bank Commercial
Mortgage Class A2:
13,000,000 Series 2000-C1, 7.841% due 5/17/2032 13,753,923
2,160,000 Series 2001-C2, 6.663% due 1/12/2043 2,262,071
GE Capital Commercial Mortgage Corp.:
1,670,000 Series 2001-3 Class A2, 6.07%
due 6/10/2038 1,726,606
1,730,000 Series 2002-1A Class A3, 6.269%
due 12/10/2035 1,802,763
2,900,000 Series 2005-C4 Class A4, 5.512%
due 11/10/2045 (b) 2,889,220
GMAC Commercial Mortage Securities, Inc.:
19,003,523 Series 1998-C2 Class D, 6.50%
due 5/15/2035 19,275,547
20,427,334 Series 1999-C1 Class A2, 6.175%
due 5/15/2033 (b) 20,616,965
1,337,924 Series 1999-C2 Class A2, 6.945%
due 9/15/2033 1,370,072
1,140,988 Series 1999-C3 Class A2, 7.179%
due 8/15/2036 (b) 1,177,328
1,450,436 Series 2000-C1 Class A2, 7.724%
due 3/15/2033 (b) 1,520,983
1,279,993 Series 2000-C2 Class A2, 7.455%
due 8/16/2033 1,345,547
2,465,000 Series 2000-C2 Class A2, 5.475%
due 5/10/2040 (b) 2,487,334
15,000,000 Series 2001-C1 Class B, 6.67%
due 4/15/2034 (b) 15,751,440
700,000 Series 2004-C3 Class AAB, 4.702%
due 12/10/2041 681,179
GS Mortgage Securities Corp. II:
13,512,242 Series 2003-C1 Class X2, 1.029%
due 1/10/2040 (b)(h) 243,711
1,625,000 Series 2004-GG2 Class A4, 4.964%
due 8/10/2038 1,619,918
18,650,000 Series 2006-GG6 Class A2, 5.506%
due 4/10/2038 (b) 18,853,723
3,500,000 Series 2007-GG10 Class A4, 5.993%
due 8/10/2045 (b) 3,559,551
1,147,297 GS Mortgage Securities Corp, III Series
1999-C1 Class A2, 6.11% due 11/18/2030 (b) 1,152,829
Greenwich Capital Commercial Funding Corp.:
19,400,000 Series 2004-GG1 Class A4, 4.755%
due 6/10/2036 19,298,567
2,445,000 Series 2005-GG3 Class A3, 4.569%
due 8/10/2042 2,387,191
JPMorgan Chase Commercial Mortgage
Securities Corp.:
1,119,754 Series 2001-CIBC Class A3, 6.26%
due 3/15/2033 1,155,538
21,558,000 Series 2001-CIB2 Class A3, 6.429%
due 4/15/2035 22,496,969
2,120,000 Series 2001-CIB3 Class A3, 6.465%
due 11/15/2035 2,219,990
Face Non-Government Agency
Amount Mortgage-Backed Securities++ Value
Commercial Mortgage-Backed Securities (continued)
JPMorgan Chase Commercial Mortgage
Securities Corp. (concluded):
USD 17,650,000 Series 2006-CB17 Class A4, 5.429%
due 12/12/2043 $ 17,483,065
8,570,000 Series 2007-CB20 Class A4, 5.794%
due 2/12/2051 (b) 8,654,329
9,700,000 Series 2007-LD1 Class A2, 5.992%
due 6/15/2049 (b) 9,889,467
7,882,000 Series 2007-LD12 Class A2, 5.827%
due 8/15/2012 8,018,700
19,295,216 Keycorp Series 2000-C1 Class A2, 7.727%
due 5/17/2032 (b) 20,254,821
LB Commercial Conduit Mortgage Trust:
5,094,736 Series 1998-C1 Class A3, 6.48%
due 2/18/2030 5,088,486
819,579 Series 1998-C4 Class A1B, 6.21%
due 10/15/2035 824,905
15,790,837 Series 1999-C2 Class A2, 7.325%
due 10/15/2032 16,278,607
LB-UBS Commercial Mortgage Trust:
22,591,532 Series 2000-C3 Class A2, 7.95%
due 5/15/2025 (b) 23,866,679
1,122,886 Series 2000-C4 Class A2, 7.37%
due 8/15/2026 1,181,005
478,680 Series 2002-C7 Class A2, 3.899%
due 12/15/2026 477,483
1,100,000 Series 2005-C2 Class AJ, 5.205%
due 4/15/2030 (b) 1,050,289
15,850,000 Series 2005-C3 Class A5, 4.739%
due 7/15/2030 15,125,538
20,170,000 Series 2006-C7 Class A2, 5.30%
due 11/15/2038 20,217,049
20,260,000 Series 2007-C1 Class A4, 5.424%
due 2/15/2040 19,989,008
18,425,000 Series 2007-C2 Class A3, 5.43%
due 2/15/2040 18,179,824
23,850,000 Series 2007-C6 Class A4, 5.858%
due 7/15/2040 (b) 24,252,037
1,275,000 Merrill Lynch Mortgage Trust Series 2007-C1
Class AM, 6.022% due 7/12/2017 (b)(c) 1,280,487
Morgan Stanley Capital I:
248,559 Series 1998-HF2 Class A2, 6.48%
due 11/15/2030 (b) 249,642
463,891 Series 1999-FNV Class A2, 6.53%
due 3/15/2031 (b) 469,203
10,265,000 Series 2006-IQ12 Class A4, 5.332%
due 12/15/2043 10,094,786
3,520,000 Series 2007-HQ12 Class A2, 5.811%
due 6/12/2012 (b) 3,565,678
1,825,000 Series 2007-IQ15 Class AM, 6.078%
due 7/11/2017 (b) 1,839,372
20,343,921 Morgan Stanley Dean Witter Capital I
Series 2000-LIFE Class A2, 7.57%
due 11/15/2036 (b) 21,238,563
2,190,000 Prudential Mortgage Capital Funding, LLC
Series 2001-Rock Class A2, 6.605% due
5/10/2034 2,293,130
Salomon Brothers Mortgage Securities VII, Inc.:
1,321,199 Series 1999-C1 Class A2, 7.15%
due 5/18/2032 (b) 1,340,477
1,960,000 Series 2001-C2 Class A3, 6.499%
due 10/13/2011 2,050,237
1,650,000 Series 2000-C3 Class A2, 6.592%
due 12/18/2033 1,709,452
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Schedule of Investments (continued) Master Total Return Portfolio
(in U.S. dollars)
Face Non-Government Agency
Amount Mortgage-Backed Securities++ Value
Commercial Mortgage-Backed Securities (concluded)
USD 20,665,532 WaMu Commercial Mortgage Securities
Trust Series 2005-C1A Class X, 2.10%
due 5/25/2036 (b)(h) $ 851,536
Wachovia Bank Commercial Mortgage Trust:
17,875,000 Series 2006-C25 Class A4, 5.93%
due 5/15/2043 (b) 18,200,168
19,075,000 Series 2006-C25 Class A5, 5.93%
due 5/15/2043 (b) 19,433,675
15,101,000 Series 2006-C28 Class A2, 5.50%
due 10/15/2048 15,217,693
24,400,000 Series 2006-C29 Class A4, 5.308%
due 11/15/2048 23,921,694
--------------
638,181,049
Total Non-Government Agency
Mortgage-Backed Securities
(Cost--$1,273,449,108)--32.1% 1,277,706,367
Corporate Bonds
Aerospace & Defense--0.1%
340,000 BAE Systems Holdings, Inc., 5.20%
due 8/15/2015 (a) 324,042
762,000 L-3 Communications Corp. Series B, 6.375%
due 10/15/2015 748,665
1,150,000 United Technologies Corp., 5.691%
due 6/01/2009 (b) 1,150,005
--------------
2,222,712
Airlines--0.1%
2,432,028 American Airlines, Inc. Series 2003-1,
3.857% due 1/09/2012 (i) 2,337,787
2,555,000 Continental Airlines, Inc. Series 2002-1,
6.563% due 8/15/2013 2,643,786
--------------
4,981,573
Automobiles--0.0%
65,000 DaimlerChrysler NA Holding Corp., 4.05%
due 6/04/2008 64,288
Beverages--0.0%
185,000 Diageo Capital Plc, 3.50% due 11/19/2007 184,515
Biotechnology--0.0%
1,670,000 Amgen, Inc., 5.585% due 11/28/2008 (a)(b) 1,671,550
Building Products--0.1%
2,030,000 Momentive Performance Materials, Inc.,
10.125% due 12/01/2014 (a)(d) 1,999,550
Capital Markets--4.7%
400,000 The Bank of New York Co., Inc., 3.80%
due 2/01/2008 397,884
The Bear Stearns Cos., Inc.:
4,995,000 5.76% due 7/19/2010 (b) 4,906,738
13,615,000 6.95% due 8/10/2012 14,195,230
8,950,000 6.40% due 10/02/2017 8,910,235
16,960,000 Credit Suisse Guernsey Ltd., 5.86%
due 5/29/2049 (b) 16,042,159
6,895,000 Goldman Sachs Capital II, 5.793% (b)(f) 6,524,387
28,085,000 Goldman Sachs Group, Inc., 5.25%
due 10/15/2013 27,438,006
Face
Amount Corporate Bonds Value
Capital Markets (concluded)
Lehman Brothers Holdings, Inc.:
USD 2,875,000 5.645% due 5/25/2010 (b) $ 2,802,311
8,350,000 6% due 7/19/2012 8,479,433
8,415,000 Series I, 5.25% due 2/06/2012 8,240,793
8,000,000 Series MTN, 7% due 9/27/2027 8,191,096
Morgan Stanley:
705,000 5.05% due 1/21/2011 696,807
250,000 6.75% due 4/15/2011 261,283
69,900,000 5.493% due 1/09/2012 (b) 68,477,046
9,560,000 6.25% due 8/28/2017 9,762,662
200,000 Series F, 5.55% due 4/27/2017 194,046
40,000 UBS Preferred Funding Trust I, 8.622% (b)(f) 43,443
--------------
185,563,559
Commercial Banks--1.2%
220,000 Bank One Corp., 2.625% due 6/30/2008 215,769
Barclays Bank Plc (a)(b)(f):
6,660,000 8.55% 7,201,298
2,290,000 7.43% 2,433,535
5,125,000 Corporacion Andina de Fomento, 6.875%
due 3/15/2012 5,429,225
1,555,000 Eksportfinans A/S, 3.375% due 1/15/2008 1,550,225
440,000 First Union Corporation, 6.30%
due 4/15/2028 (b) 443,748
HBOS Treasury Services Plc (a):
350,000 3.50% due 11/30/2007 349,501
505,000 3.75% due 9/30/2008 496,971
415,000 HSBC Bank USA NA, 4.625% due 4/01/2014 387,308
14,550,000 JPMorgan Chase Capital XXV, 6.80%
due 10/01/2037 14,572,160
70,000 Nationwide Building Society, 4.25%
due 2/01/2010 (a) 68,566
11,800,000 Royal Bank of Scotland Group Plc,
6.99% (a)(b)(f) 11,810,856
Suntrust Banks, Inc:
665,000 3.625% due 10/15/2007 664,511
325,000 4% due 10/15/2008 321,681
430,000 Suntrust Bank Series CD, 4.415%
due 6/15/2009 423,524
45,000 Wachovia Bank NA, 4.375% due 8/15/2008 44,774
Wells Fargo & Co.:
600,000 4.20% due 1/15/2010 589,954
255,000 4.625% due 8/09/2010 252,328
740,000 4.875% due 1/12/2011 733,040
--------------
47,988,974
Computers & Peripherals--0.2%
8,245,000 International Business Machines Corp.,
5.70% due 9/14/2017 8,288,196
55,000 Seagate Technology HDD Holdings, 6.80%
due 10/01/2016 53,763
--------------
8,341,959
Consumer Finance--0.5%
890,000 American Express Co., 6.80%
due 9/01/2066 (b) 912,067
3,135,000 FIA Card Services NA, 4.625% due 8/03/2009 3,117,764
5,375,000 HSBC Finance Corp., 6.50% due 11/15/2008 5,448,304
MBNA Corp.:
870,000 5.625% due 11/30/2007 870,855
2,750,000 4.625% due 9/15/2008 2,736,663
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Schedule of Investments (continued) Master Total Return Portfolio
(in U.S. dollars)
Face
Amount Corporate Bonds Value
Consumer Finance (concluded)
SLM Corp.:
USD 6,000,000 5.40% due 10/25/2011 $ 5,601,798
1,450,000 5.125% due 8/27/2012 1,312,646
--------------
20,000,097
Diversified Financial Services--4.6%
275,000 Associates Corporation of North America,
6.25% due 11/01/2008 278,167
Bank of America Corp.:
75,000 7.80% due 2/15/2010 79,303
5,555,000 4.875% due 9/15/2012 5,436,395
5,000,000 7.80% due 9/15/2016 5,602,560
8,725,000 6% due 9/01/2017 8,927,324
Bank of America NA:
900,000 5.30% due 3/15/2017 873,008
3,850,000 6.10% due 6/15/2017 3,954,531
Citigroup, Inc.:
1,010,000 3.625% due 2/09/2009 992,224
1,540,000 4.125% due 2/22/2010 (e) 1,512,540
10,305,000 5.625% due 8/27/2012 10,425,744
12,000,000 5.50% due 2/15/2017 11,785,392
470,000 6% due 8/15/2017 480,915
3,785,000 5.875% due 5/29/2037 3,648,460
Ford Motor Credit Co. LLC:
545,000 5.80% due 1/12/2009 526,396
2,445,000 9.75% due 9/15/2010 2,494,355
General Electric Capital Corp.:
18,780,000 5% due 11/15/2011 18,695,171
385,000 5.875% due 2/15/2012 395,129
5,000,000 6.75% due 3/15/2032 5,504,865
13,825,000 6.15% due 8/07/2037 14,188,017
58,550,000 Series A, 5% due 12/01/2010 58,679,805
225,000 Series MTN, 5% due 4/10/2012 222,866
200,000 Series MTNA, 6.50% due 12/10/2007 200,415
JPMorgan Chase & Co.:
375,000 5.75% due 10/15/2008 376,220
100,000 7.125% due 6/15/2009 103,250
10,000 4.50% due 11/15/2010 9,853
JPMorgan Chase Bank NA:
16,025,000 6% due 7/05/2017 16,177,629
10,900,000 Series BKNT, 6% due 10/01/2017 11,005,665
370,000 USAA Cap Corp., 4% due 12/10/2007 (a) 368,980
--------------
182,945,179
Diversified Telecommunication Services--0.9%
17,575,000 AT&T, Inc., 6.50% due 9/01/2037 18,121,530
200,000 Cincinnati Bell, Inc., 7.25% due 7/15/2013 201,500
235,000 Citizens Communications Co., 6.25%
due 1/15/2013 229,125
GTE Corp.:
8,030,000 6.84% due 4/15/2018 8,564,397
75,000 6.94% due 4/15/2028 77,946
2,195,000 Qwest Communications International, Inc.,
7.50% due 2/15/2014 2,222,438
Qwest Corp.:
130,000 7.875% due 9/01/2011 136,500
135,000 8.944% due 6/15/2013 (b) 144,113
Telecom Italia Capital SA:
275,000 5.25% due 10/01/2015 261,065
2,045,000 6% due 9/30/2034 1,901,470
550,000 Telefonica Emisiones SAU, 7.045%
due 6/20/2036 585,850
Face
Amount Corporate Bonds Value
Diversified Telecommunication Services (concluded)
USD 160,000 Telefonica Europe BV, 7.75% due 9/15/2010 $ 170,848
95,000 Verizon Maryland, Inc. Series B, 5.125%
due 6/15/2033 78,389
35,000 Verizon New Jersey, Inc., 7.85%
due 11/15/2029 39,658
60,000 Verizon Virginia, Inc. Series A, 4.625%
due 3/15/2013 57,919
150,000 Wind Acquisition Finance SA, 10.75%
due 12/01/2015 (a) 166,125
Windstream Corp.:
240,000 8.125% due 8/01/2013 252,600
585,000 8.625% due 8/01/2016 623,756
--------------
33,835,229
Electric Utilities--0.2%
150,000 Florida Power & Light Co., 5.625%
due 4/01/2034 140,921
96,002 Midwest Generation LLC Series B, 8.56%
due 1/02/2016 (i) 102,722
3,755,000 Nevada Power Co., 6.65% due 4/01/2036 3,727,465
5,130,000 Sierra Pacific Power Co., 6% due 5/15/2016 5,018,782
--------------
8,989,890
Food Products--0.2%
7,555,000 Kraft Foods, Inc., 6.50% due 8/11/2017 7,803,945
Gas Utilities--0.0%
45,000 Colorado Interstate Gas Co., 6.80%
due 11/15/2015 46,585
El Paso Natural Gas Co.:
130,000 8.625% due 1/15/2022 150,947
5,000 8.375% due 6/15/2032 5,876
10,000 Targa Resources, Inc., 8.50%
due 11/01/2013 (a) 10,000
180,000 Transcontinental Gas Pipe Line Corp.
Series B, 8.875% due 7/15/2012 200,250
--------------
413,658
Health Care Equipment & Supplies--0.1%
3,780,000 The Cooper Cos., Inc., 7.125% due 2/15/2015 3,723,300
Health Care Providers & Services--0.1%
3,465,000 UnitedHealth Group, Inc., 5.80%
due 3/15/2036 3,219,716
WellPoint, Inc.:
410,000 5.95% due 12/15/2034 377,929
195,000 5.85% due 1/15/2036 179,377
--------------
3,777,022
Hotels, Restaurants & Leisure--0.0%
American Real Estate Partners LP:
75,000 8.125% due 6/01/2012 74,344
40,000 7.125% due 2/15/2013 38,100
1,205,000 7.125% due 2/15/2013 (a) 1,147,763
145,000 Harrah's Operating Co., Inc., 5.75%
due 10/01/2017 110,925
35,000 Travelport LLC, 9.875% due 9/01/2014 35,700
--------------
1,406,832
Household Durables--0.0%
325,000 Belvoir Land LLC Series A-1, 5.27%
due 12/15/2047 284,872
600,000 Irwin Land LLC Series A-2, 5.40%
due 12/15/2047 537,108
--------------
821,980
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Schedule of Investments (continued) Master Total Return Portfolio
(in U.S. dollars)
Face
Amount Corporate Bonds Value
Independent Power Producers & Energy Traders--0.0%
USD 88,940 AES Ironwood LLC, 8.857%
due 11/30/2025 (i) $ 96,944
50,000 AES Red Oak LLC Series B, 9.20%
due 11/30/2029 (i) 54,750
90,000 NRG Energy, Inc., 7.375% due 2/01/2016 90,225
115,000 Orion Power Holdings, Inc., 12%
due 5/01/2010 125,925
300,000 TXU Corp., 4.80% due 11/15/2009 302,628
--------------
670,472
Insurance--1.3%
150,000 American General Corp., 7.50%
due 8/11/2010 158,652
5,255,000 American International Group, Inc., 6.25%
due 5/01/2036 5,332,096
Berkshire Hathaway Finance Corp.:
500,000 3.375% due 10/15/2008 491,768
105,000 4.125% due 1/15/2010 103,265
6,825,000 Chubb Corp., 6.375% due 3/29/2067 (b) 6,784,739
1,285,000 Hartford Life Global Funding Trusts, 5.864%
due 9/15/2009 (b) 1,283,390
Lincoln National Corp. (b):
4,185,000 7% due 5/17/2066 4,312,973
2,500,000 6.05% due 4/20/2067 2,407,230
7,995,000 Metlife, Inc., 6.40% due 12/15/2066 7,602,054
2,510,000 Monument Global MG Fund Float 10, 5.24%
due 6/16/2010 (b) 2,497,450
735,000 Principal Life Global Funding I, 3.625%
due 4/30/2008 (a) 725,704
6,460,000 Progressive Corp., 6.70% due 6/15/2037 (b) 6,267,395
4,415,000 Reinsurance Group of America, 6.75%
due 12/15/2065 (b) 4,180,952
465,000 TIAA Global Markets Inc., 3.875%
due 1/22/2008 (a) 462,734
5,715,000 The Travelers Cos., Inc., 6.25%
due 3/15/2067 (b) 5,525,576
5,275,000 ZFS Finance USA Trust I, 6.50%
due 5/09/2037 (a)(b) 5,099,875
--------------
53,235,853
Life Sciences Tools & Services--0.0%
Bio-Rad Laboratories, Inc.:
40,000 7.50% due 8/15/2013 40,600
100,000 6.125% due 12/15/2014 95,000
--------------
135,600
Machinery--0.0%
50,000 Briggs & Stratton Corp., 8.875%
due 3/15/2011 53,375
Media--1.9%
200,000 AOL Time Warner Inc., 6.75% due 4/15/2011 207,878
CSC Holdings, Inc. Series B:
860,000 8.125% due 7/15/2009 875,050
125,000 8.125% due 8/15/2009 127,188
605,000 Cablevision Systems Corp. Series B, 9.644%
due 4/01/2009 (b) 623,150
30,000 Charter Communications Holdings II, LLC,
10.25% due 9/15/2010 30,675
670,000 Comcast Cable Communications Holdings,
Inc., 8.375% due 3/15/2013 750,961
Face
Amount Corporate Bonds Value
Media (concluded)
USD 150,000 Comcast Cable Holdings LLC, 7.875%
due 8/01/2013 $ 164,160
Comcast Corp.:
425,000 5.90% due 3/15/2016 422,782
7,050,000 6.50% due 1/15/2017 7,272,505
155,000 7.05% due 3/15/2033 163,378
125,000 6.50% due 11/15/2035 123,431
7,000,000 6.45% due 3/15/2037 6,910,617
13,500,000 6.95% due 8/15/2037 14,169,735
3,895,000 Cox Communications, Inc., 7.125%
due 10/01/2012 4,128,014
Echostar DBS Corp.:
30,000 7% due 10/01/2013 30,675
30,000 7.125% due 2/01/2016 30,825
Idearc, Inc.:
195,000 8% due 11/15/2016 (a) 194,513
1,495,000 8% due 11/15/2016 1,491,263
120,000 Intelsat Bermuda Ltd., 9.25% due 6/15/2016 124,500
110,000 Intelsat Corp., 9% due 6/15/2016 113,300
News America, Inc.:
125,000 7.125% due 4/08/2028 128,653
140,000 7.625% due 11/30/2028 152,808
5,210,000 6.40% due 12/15/2035 5,031,594
5,060,000 6.75% due 1/09/2038 5,298,012
3,135,000 Shaw Communications, Inc., 7.20%
due 12/15/2011 3,205,538
360,000 TCI Communications, Inc., 8.75%
due 8/01/2015 417,329
9,475,000 Time Warner Cable, Inc., 5.85%
due 5/01/2017 (a) 9,211,671
Time Warner Cos., Inc.:
9,715,000 9.125% due 1/15/2013 11,137,441
720,000 7.57% due 2/01/2024 776,439
150,000 Time Warner Entertainment Co. LP, 8.375%
due 3/15/2023 173,659
--------------
73,487,744
Metals & Mining--0.3%
170,000 AK Steel Corp., 7.75% due 6/15/2012 172,125
165,000 Aleris International, Inc., 9%
due 12/15/2014 (d) 152,625
795,000 Arch Western Finance LLC, 6.75%
due 7/01/2013 779,100
Freeport-McMoRan Copper & Gold, Inc.:
3,060,000 8.25% due 4/01/2015 3,304,800
5,710,000 8.375% due 4/01/2017 6,238,175
415,000 Ispat Inland ULC, 9.75% due 4/01/2014 452,119
--------------
11,098,944
Multi-Utilities--0.1%
5,330,000 CMS Energy Corp., 6.55% due 7/17/2017 5,169,034
480,000 CenterPoint Energy, Inc., 7.25%
due 9/01/2010 504,411
--------------
5,673,445
Oil, Gas & Consumable Fuels--1.7%
10,000,000 Anadarko Petroleum Corp., 6.45%
due 9/15/2036 9,844,990
Chesapeake Energy Corp.:
55,000 6.375% due 6/15/2015 53,969
20,000 6.25% due 1/15/2018 19,300
45,000 6.875% due 11/15/2020 44,044
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Schedule of Investments (continued) Master Total Return Portfolio
(in U.S. dollars)
Face
Amount Corporate Bonds Value
Oil, Gas & Consumable Fuels (concluded)
USD 20,000 Compton Petroleum Finance Corp., 7.625%
due 12/01/2013 $ 19,300
80,000 ConocoPhillips, 7% due 3/30/2029 86,544
1,300,000 ConocoPhillips Australia Funding Co.,
5.46% due 4/09/2009 (b)(e) 1,295,445
Consolidated Natural Gas Co.:
235,000 Series A, 5% due 3/01/2014 225,295
150,000 Series C, 6.25% due 11/01/2011 154,233
Enterprise Products Operating LP:
450,000 4.95% due 6/01/2010 448,171
225,000 Series B, 4% due 10/15/2007 224,884
6,500,000 Gazprom OAO, 7.288% due 8/16/2037 (a) 6,912,750
35,000 KCS Energy, Inc., 7.125% due 4/01/2012 33,950
Midamerican Energy Holdings Co.:
7,100,000 5.95% due 5/15/2037 6,706,156
5,175,000 6.50% due 9/15/2037 (a) 5,230,911
6,635,000 Northwest Pipeline Corp., 7% due 6/15/2016 6,892,106
115,000 Overseas Shipholding Group, Inc., 7.50%
due 2/15/2024 111,550
18,000,000 Pemex Project Funding Master Trust, 6.994%
due 6/15/2010 (a)(b) 18,315,000
4,490,000 Sabine Pass LNG LP, 7.50% due 11/30/2016 4,422,650
920,000 Tennessee Gas Pipeline Co., 7%
due 10/15/2028 936,463
5,750,000 XTO Energy, Inc., 6.75% due 8/01/2037 5,999,723
--------------
67,977,434
Paper & Forest Products--0.0%
75,000 Bowater Canada Finance Corp., 7.95%
due 11/15/2011 61,688
190,000 Domtar, Inc., 7.125% due 8/15/2015 182,400
760,000 Georgia-Pacific Corp., 7.125%
due 1/15/2017 (a) 735,300
--------------
979,388
Pharmaceuticals--0.1%
Bristol-Myers Squibb Co.:
550,000 5.875% due 11/15/2036 524,576
75,000 6.875% due 8/01/2097 76,830
4,965,000 Wyeth, 6% due 2/15/2036 4,775,148
--------------
5,376,554
Real Estate Investment Trusts (REITs)--0.1%
180,000 AvalonBay Communities, Inc., 6.625%
due 9/15/2011 187,141
380,000 Camden Property Trust, 4.70% due 7/15/2009 377,009
2,075,000 Developers Diversified Realty Corp., 6.625%
due 1/15/2008 2,080,712
Rouse Co. LP:
325,000 6.75% due 5/01/2013 (a) 318,803
825,000 5.375% due 11/26/2013 740,611
--------------
3,704,276
Semiconductors & Semiconductor Equipment--0.1%
Freescale Semiconductor, Inc.:
2,195,000 9.125% due 12/15/2014 (d) 2,030,375
520,000 9.569% due 12/15/2014 (b) 490,100
--------------
2,520,475
Wireless Telecommunication Services--0.1%
140,000 Rogers Wireless, Inc., 7.50% due 3/15/2015 150,041
375,000 Sprint Nextel Corp., 6% due 12/01/2016 360,197
Face
Amount Corporate Bonds Value
Wireless Telecommunication Services (concluded)
Vodafone Group Plc:
USD 1,380,000 5.45% due 12/28/2007 (b) $ 1,379,311
275,000 5% due 12/16/2013 264,495
55,000 5% due 9/15/2015 51,896
--------------
2,205,940
Total Corporate Bonds
(Cost--$746,808,434)--18.7% 743,855,312
Foreign Government Obligations
8,037,500 Argentina Bonos, 5.374% due 8/03/2012 (b)(i) 7,222,516
775,000 Colombia Government International Bond,
7.375% due 9/18/2037 852,500
EUR 12,225,000 France Government Bond OAT, 3.75%
due 4/25/2017 16,539,460
Israel Government AID Bond,:
USD 850,000 5.50% due 9/18/2023 894,508
625,000 5.50% due 4/26/2024 658,521
Mexican Bonos:
MXN 9,700,000 8% due 12/07/2023 890,679
16,700,000 Series M 10, 7.25% due 12/15/2016 1,459,994
4,200,000 Series M 20,10% due 12/05/2024 457,886
Mexico Government International Bond:
USD 825,000 8.375% due 1/14/2011 909,563
2,378,000 6.375% due 1/16/2013 2,500,467
2,775,000 5.875% due 1/15/2014 2,856,863
320,000 5.625% due 1/15/2017 319,040
750,000 Series A, 6.75% due 9/27/2034 815,625
425,000 Peru Government International Bond, 6.55%
due 3/14/2037 (i) 438,600
NZD 635,000 Province of Manitoba Canada, 6.375%
due 9/01/2015 448,629
720,000 Province of Ontario Canada, 6.25%
due 6/16/2015 502,972
USD 1,029,600 Russia Government International Bond,
7.50% due 3/31/2030 (i) 1,161,286
Total Foreign Government Obligations
(Cost--$38,208,229)--1.0% 38,929,109
Preferred Securities
Capital Trusts
Capital Markets--0.2%
1,868,000 Lehman Brothers Holdings Capital Trust V,
5.857% (b)(f) 1,779,672
5,550,000 Mellon Capital IV Series 1, 6.244% (b)(f) 5,488,667
--------------
7,268,339
Commercial Banks--0.3%
3,555,000 BAC Capital Trust VI, 5.625% due 3/08/2035 3,175,632
45,000 BAC Capital Trust XI, 6.625% due 5/23/2036 45,793
5,200,000 USB Capital IX, 6.189% (b)(f) 5,203,453
3,575,000 Wachovia Capital Trust III, 5.80% (b)(f) 3,551,015
--------------
11,975,893
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Schedule of Investments (continued) Master Total Return Portfolio
(in U.S. dollars)
Face
Amount Capital Trusts Value
Oil, Gas & Consumable Fuels--0.1%
USD 3,555,000 Pemex Project Funding Master Trust, 7.375%
due 12/15/2014 $ 3,909,042
Total Capital Trusts
(Cost--$23,437,984)--0.6% 23,153,274
Shares
Held Preferred Stocks
Commercial Banks--0.0%
450,000 Barclays Bank Plc, 6.278% 392,142
Thrifts & Mortgage Finance--0.3%
214,200 Fannie Mae Series O, 7% (b) 11,165,175
Total Preferred Stocks
(Cost--$12,323,162)--0.3% 11,557,317
Face
Amount Trust Preferred
Commercial Banks--0.1%
USD 4,725,000 SunTrust Capital VIII, 6.10% due 12/15/2036 (b) 4,286,298
Total Trust Preferred
(Cost--$4,648,550)--0.1% 4,286,298
Total Preferred Securities
(Cost--$40,409,696)--1.0% 38,996,889
Short-Term Securities
13,700,000 Federal Home Loan Bank, 3.75%
due 10/01/2007 13,700,000
Total Short-Term Securities
(Cost--$13,700,000)--0.3% 13,700,000
Number of
Contracts** Options Purchased
Call Options Purchased
86 Receive a fixed rate of 5.735% and pay a
floating rate based on 3-month LIBOR,
expiring August 2010, Broker Lehman
Brothers Special Financing, 4,014,843
125 Receive a fixed rate of 5.78% and pay a
floating rate based on 3-month LIBOR,
expiring August 2010, Broker Deutsche
Bank AG 4,193,909
14 Receive a fixed rate of 6.075% and pay a
floating rate based on 3-month LIBOR,
expiring July 2012, Broker Lehman Brothers
Special Financing 837,427
15 Receive a fixed rate of 5.47% and pay a
floating rate based on 3-month LIBOR,
expiring May 2012, Broker Bank of America NA 621,098
Number of
Contracts** Options Purchased Value
Call Options Purchased (concluded)
5 Receive a fixed rate of 5.52% and pay a
floating rate based on 3-month LIBOR,
expiring September 2016, Broker Barclays
Bank PLC $ 279,565
67 Receive a fixed rate of 5.39% and pay a
floating rate based on 3-month LIBOR,
expiring March 2012, Broker Lehman Brothers
Special Financing 2,753,528
173 Receive a fixed rate of 5.525% and pay a
floating rate based on 3-month LIBOR,
expiring May 2012, broker Citibank N.A. 7,120,567
164 Receive a fixed rate of 5.705% and pay a
floating rate based on 3-month LIBOR,
expiring May 2012, broker Deutsche Bank AG 7,563,369
81 Receive a fixed rate of 6.025% and pay a
floating rate based on 3-month LIBOR,
expiring June 2012, broker Lehman Brothers
Special Financing 4,547,607
--------------
31,931,913
Put Options Purchased
86 Pay a fixed rate of 5.735% and receive a
floating rate based on 3-month LIBOR,
expiring August 2010, Broker Lehman
Brothers Special Financing 3,075,664
125 Pay a fixed rate of 5.78% and receive a
floating rate based 3-month LIBOR,
expiring August 2010, Broker Deutsche
Bank AG 6,159,424
14 Pay a fixed rate of 6.075% and receive a
floating rate based 3-month LIBOR, expiring
July 2012, Broker Lehman Brothers
Special Financing 528,856
15 Pay a fixed rate of 5.47% and receive a
floating rate based 3-month LIBOR, expiring
May 2012, Broker Bank of America NA 838,348
5 Pay a fixed rate of 5.52% and receive a
floating rate based 3-month LIBOR, expiring
September 2016, Broker Barclays Bank PLC 360,315
67 Pay a fixed rate of 5.39% and receive a
floating rate based on 3-month LIBOR,
expiring March 2012, Broker Lehman Brothers
Special Financing 4,177,777
173 Pay a fixed rate of 5.525% and receive a
floating rate based on 3-month LIBOR,
expiring May 2012, broker Citibank N.A. 8,976,537
164 Pay a fixed rate of 5.705% and receive a
floating rate based on 3-month LIBOR,
expiring May 2012, broker Deutsche Bank AG 7,407,802
81 Pay a fixed rate of 6.025% and receive a
floating rate based on 3-month LIBOR,
expiring June 2012, broker Lehman Brothers
Special Financing 3,033,126
--------------
34,557,849
Total Options Purchased
(Premiums Paid--$57,475,392)--1.7% 66,489,762
Total Investments Before TBA Sale
Commitments and Options Written
(Cost--$6,629,781,729)--166.6% 6,627,099,019
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Schedule of Investments (continued) Master Total Return Portfolio
(in U.S. dollars)
Face
Amount TBA Sale Commitments Value
Fannie Mae Guaranteed Pass-Through
Certificates:
USD 2,000,000 4.50% due 3/01/2020 - 8/01/2037 $ (1,926,190)
155,000,000 5.00% due 9/01/2017 - 10/15/2037 (148,806,766)
268,200,000 5.50% due 7/01/2014 - 10/15/2037 (264,838,117)
94,600,000 6.00% due 1/01/2021 - 10/15/2037 (94,749,469)
40,200,000 6.50% due 3/01/2016 - 10/15/2037 (40,939,278)
Fredddie Mac Mortgage Participation
Certificates:
2,300,000 4.50% due 5/01/2018 - 8/01/2020 (2,214,401)
108,200,000 5.50% due 8/01/2017 - 10/15/2037 (105,952,037)
GNMA:
11,700,000 5.50% due 11/15/2033 - 10/21/2037 (11,477,887)
Total TBA Sale Commitments (Premiums
Received--$667,829,420)--(16.9%) (670,904,145)
Number of
Contracts Options Written
Call Options Written
5** Pay a fixed rated of 5.135% and receive a
floating rate based on 3-month LIBOR,
expiring April 2008, Broker Barclays Bank PLC (89,490)
4** Receive a fixed rated of 5.46% and pay a
floating rate based on 3-month LIBOR,
expiring August 2008, Broker JP Morgan
Chase Bank (147,924)
29** Pay a fixed rated of 5.46% and receive a
floating rate based on 3-month LIBOR,
expiring August 2008, Broker JP Morgan
Chase Bank (982,873)
3** Pay a fixed rated of 5.67% and receive a
floating rate based on 3-month LIBOR,
expiring January 2010, Broker Citibank NA (164,195)
100** Pay a fixed rated of 5.7575% and receive a
floating rate based on 3-month LIBOR,
expiring July 2008, Broker Credit Suisse
International (1,084,500)
5** Pay a fixed rated of 5.485% and receive a
floating rate based on expiring 3-month
LIBOR, expiring October 2009, Broker
JP Morgan Chase Bank, (200,577)
Number of
Contracts** Options Written Value
Call Options Written (concluded)
67** Pay a fixed rate of 5.115% and receive a
floating rate based on 3-month LIBOR,
expiring March 2008, Broker Lehman
Brothers Special Financing $ (1,184,085)
855 U.S. Treasury Bonds, expiring November
2007 at USD 110 (561,094)
---------------
(4,414,738)
Put Options Written
5** Receive a fixed rate of 5.135% and pay a
floating rate based on 3-month LIBOR,
expiring April 2008, Broker Barclays Bank PLC (128,050)
4** Pay a fixed rated of 5.46% and receive a
floating rate based on 3-month LIBOR,
expiring August 2008, Broker JP Morgan
Chase Bank (92,547)
29** Receive a fixed rated of 5.46% and pay a
floating rate based on 3-month LIBOR,
expiring August 2008, Broker JP Morgan
Chase Bank (614,923)
3** Receive a fixed rate of 5.67% and pay a
floating rate based on 3-month LIBOR,
expiring January 2010, Broker Citibank NA (118,844)
100** Receive a fixed rate of 5.7575% and pay a
floating rate based on 3-month LIBOR,
expiring July 2008, Broker Credit Suisse
International (4,716,300)
5** Receive a fixed rate of 5.485% and pay a
floating rate based on 3-month LIBOR,
expiring October 2009, Broker JP Morgan
Chase Bank (194,141)
67** Receive a fixed rate of 5.115% and pay a
floating rate based on 3-month LIBOR,
expiring March 2008, Broker Lehman Brothers
Special Financing (1,819,597)
855 U.S. Treasury Bonds, expiring November 2007
at USD 108 (374,063)
---------------
(8,058,465)
Total Options Written (Premiums
Received--$11,297,031)--(0.3%) (12,473,203)
Total Investments, Net of TBA Sale Commitments and
Options Written (Cost--$5,950,655,278*)--149.4% 5,943,721,671
Liabilities in Excess of Other Assets--(49.4%) (1,963,549,511)
---------------
Net Assets--100.0% $ 3,980,172,160
===============
* The cost and unrealized appreciation (depreciation) of investments, net
of TBA sale commitments and options written, as of September 30, 2007,
as computed for federal income tax purposes, were as follows:
Aggregate cost $ 5,956,826,074
==================
Gross unrealized appreciation $ 42,714,811
Gross unrealized depreciation (55,819,214)
------------------
Net unrealized depreciation $ (13,104,403)
==================
** One contract represents a notional amount of $1,000,000.
++ Asset-Backed and Mortgage-Backed Securities are subject to principal
paydowns. As a result of the prepayments or refinancings of the
underlying instruments, the average life may be substantially less than
the original maturity.
(a) The security may be offered and sold to "qualified institutional buyers"
under Rule 144A of the Securities Act of 1933.
(b) Floating rate security.
(c) Investments in companies considered to be an affiliate of the Master
Portfolio, for purposes of Section 2(a)(3) of the Investment Company Act
of 1940, were as follows:
Realized Interest/
Purchase Sale Gain Dividend
Affiliate Cost Cost (Loss) Income
BlackRock Capital
Finance LP
Series 1997-R2
Class AP, 9.514%
due 12/25/2035 -- $ 2,988 $ (7) $ 1,247
BlackRock Liquidity Series,
LLC Money Market Series -- $ 403,300,250* -- $202,454
Merrill Lynch Mortgage
Investors, Inc.,
Series 05-HE2,
Class A2A $ 59,051 $ 59,501 -- $ 6,097
Merrill Lynch
Mortgage Trust
Series 2007-C1,
Class AM, 6.022%
due 7/12/2017 $1,277,440 -- -- $ 6,398
* Represents net sale cost.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Schedule of Investments (continued) Master Total Return Portfolio
(in U.S. dollars)
(d) Represents a pay-in-kind security which may pay interest/dividends in
additional face/shares.
(e) All or a portion of security held as collateral in connection with open
derivative transactions and reverse repurchase agreements.
(f) The security is a perpetual bond and has no definite maturity date.
(g) Represents or includes a "to-be-announced" transaction. The Master
Portfolio has committed to purchasing securities for which all specific
information is not available at this time.
(h) Represents the interest only portion of a mortgage-backed security and
has either a nominal or a notional amount of principal.
(i) Subject to principal paydowns.
(j) Represents a zero coupon bond; the interest rate shown reflects the
effective yield at the time of purchase.
o For Master Portfolio compliance purposes, the Master Portfolio's
industry classifications refer to any one or more of the industry
sub-classifications used by one or more widely recognized market
indexes or ratings group indexes, and/or as defined by Master
Portfolio management. This definition may not apply for purposes
of this report, which may combine industry sub-classifications for
reporting ease. Industries are shown as a percent of net assets.
These industry classifications are unaudited.
o Forward foreign exchange contracts as of September 30, 2007
were as follows:
Foreign Currency Settlement Unrealized
Purchased Date Appreciation
EUR 4,870,000 October 2007 $ 273,151
JPY 13,263,618,449 October 2007 3,858,729
-----------
Total Unrealized Appreciation on Forward
Foreign Exchange Contracts
(USD Commitment--$118,534,679) $ 4,131,880
===========
Unrealized
Foreign Currency Settlement Appreciation
Sold Date (Depreciation)
EUR 9,742,000 October 2007 $ (438,413)
JPY 4,731,285,000 October 2007 946,710
MXN 30,988,640 October 2007 35,916
NZD 1,296,466 October 2007 28,551
-----------
Total Unrealized Appreciation on Forward
Foreign Exchange Contracts--Net
(USD Commitment--$59,559,672) $ 572,764
===========
o Financial futures contracts purchased as of September 30, 2007
were as follows:
Unrealized
Number of Expiration Face Appreciation
Contracts Issue Date Value (Depreciation)
387 Euro Bund December
Future 2007 $ 62,589,746 $ (408,395)
112 Euro Dollar December
Future 2008 $ 26,573,730 218,070
41 10-Year U.S. December
Treasury Bond 2007 $ 4,470,371 10,160
791 Euro BOBL December
2007 $121,430,200 24,376
------------
Total Unrealized Depreciation--Net $ (155,789)
============
o Financial futures contracts sold as of September 30, 2007
were as follows:
Unrealized
Number of Expiration Face Appreciation
Contracts Issue Date Value (Depreciation)
1,801 2-Year U.S. December
Treasury Bond 2007 $372,249,751 $ (641,669)
2,916 5-Year U.S. December
Treasury Bond 2007 $312,131,847 28,722
781 30-Year U.S. December
Treasury Bond 2007 $ 87,571,737 612,268
------------
Total Unrealized Depreciation--Net $ (679)
============
o Swaps outstanding as of September 30, 2007 were as follows:
Unrealized
Notional Appreciation
Amount (Depreciation)
Receive (pay) a variable return based on the
change in the spread return of the Lehman
Brothers CMBS Aaa 8.5+ Yr Index and pay
a floating rate based on minus .485%
Broker, Wachovia Bank NA
Expires October 2007 USD 10,000,000 --
Pay (receive) a variable return based on the
change in the spread return of the Lehman
Brothers CMBS AAA 8.5+ Index and
receive a floating rate based on the spread
plus .40%
Broker, Morgan Stanley Capital Services Inc.
Expires October 2007 USD 3,370,000 --
Sold credit default protection on
Comcast Cable Communications, Inc. and
receive 1.15%
Broker, Morgan Stanley Capital Services, Inc.
Expires September 2008 USD 7,115,000 $ 75,411
Receive a fixed rate of 3.401% and pay
3.875% on Treasury Inflation Protected
Securities (TIPS) adjusted principal
Broker, JPMorgan Chase Bank
Expires January 2009 USD 19,239,000 (233,631)
Receive a fixed rate of 5.496% and pay a
floating rate based on 3-month USD LIBOR
Broker, Bank of America NA
Expires July 2009 USD 10,000,000 144,730
Receive a fixed rate of 4.7775% and pay a
floating rate based on 3-month USD LIBOR
Broker, CitiBank N.A.
Expires August 2009 USD 172,000,000 323,259
Receive a fixed rate of 5.2725% and pay a
floating rate based on 3-month LIBOR
Broker, CitiBank N.A.
Expires October 2009 USD 51,500,000 618,953
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Schedule of Investments (continued) Master Total Return Portfolio
(in U.S. dollars)
o Swaps outstanding as of September 30, 2007 were as follows (continued):
Unrealized
Notional Appreciation
Amount (Depreciation)
Receive a fixed rate of 4.51% and pay a
floating rate based on 3-month USD LIBOR
Broker, UBS Warburg
Expires September 2010 USD 5,600,000 $ (30,030)
Receive a fixed rate of 5% and pay a
floating rate based on 3-month USD LIBOR
Broker, Deutsche Bank AG London
Expires November 2010 USD 4,000,000 31,364
Receive a fixed rate of 5.158% and pay a
floating rate based on 3-month USD LIBOR
Broker, Goldman Sachs Capital Markets, L.P.
Expires November 2010 USD 5,700,000 70,385
Bought credit default protection on Sara
Lee Corp. and pay 0.57%
Broker, Lehman Brothers Special Finance
Expires December 2010 USD 7,580,000 (93,810)
Bought credit default protection on
RadioShack Corp. and pay 1.16%
Broker, UBS Warburg
Expires December 2010 USD 7,625,000 (38,705)
Bought credit default protection on
Limited Brands, Inc. and pay 1.065%
Broker, UBS Warburg
Expires December 2010 USD 7,625,000 (119,987)
Receive a fixed rate of 4.17% and pay
3.50% on Treasury Inflation Protected
Securities (TIPS) adjusted principal
Broker, Morgan Stanley Capital Services, Inc.
Expires January 2011 USD 16,600,000 (809,254)
Bought credit default protection on Sara
Lee Corp. and pay 0.604%
Broker, JPMorgan Chase Bank
Expires March 2011 USD 7,720,000 (104,699)
Bought credit default protection on
Limited Brands, Inc. and pay 0.73%
Broker, Lehman Brothers Special Finance
Expires March 2011 USD 7,720,000 (29,344)
Bought credit default protection on
Computer Sciences Corp. and pay 0.88%
Broker, Morgan Stanley Capital Services, Inc.
Expires June 2011 USD 7,770,000 (173,520)
Receive a fixed rate of 4.906% and pay a
floating rate based on 3-month LIBOR
Broker, UBS Warburg
Expires December 2011 USD 200,000,000 614,547
Receive a fixed rate of 4.946% and pay a
floating rate based on 3-month LIBOR
Broker, CitiBank N.A.
Expires December 2011 USD 76,800,000 327,466
Unrealized
Notional Appreciation
Amount (Depreciation)
Receive a fixed rate of 4.897% and pay a
floating rate based on 3-month LIBOR
Broker, JPMorgan Chase Bank
Expires December 2011 USD 165,000,000 $ 399,115
Pay a fixed rate of 5.0016% and receive a
floating rate based on 3-month LIBOR
Broker, UBS Warburg
Expires January 2012 USD 63,300,000 (443,238)
Pay a fixed rate of 5.58875% and receive a
floating rate based on 3-month USD LIBOR
Broker, Goldman Sachs Capital Markets, L.P.
Expires July 2012 USD 57,600,000 (1,780,967)
Sold credit default protection on Colombia
(Republic of) and receive 1.31%
Broker, Deutsche Bank AG London
Expires August 2012 USD 9,610,000 71,912
Sold credit default protection on Lehman
Brothers Holdings and receive 0.95%
Broker, Deutsche Bank AG London
Expires September 2012 USD 3,625,000 17,527
Sold credit default protection on Lehman
Brothers Holdings, Inc. and receive 1.23%
Broker, Deutsche Bank AG London
Expires September 2012 USD 670,000 11,410
Sold credit default protection on Lehman
Brothers Holdings, Inc. and receive 1.12%
Broker, Deutsche Bank AG London
Expires September 2012 USD 9,000,000 110,151
Bought credit default protection on
Eastman Chemical Co. and pay 0.68%
Broker, Morgan Stanley Capital Services, Inc.
Expires September 2013 USD 7,800,000 (115,627)
Pay a fixed rate of 4.88911% and receive a
floating rate based on 3-month USD LIBOR
Broker, Goldman Sachs Capital Markets
Expires August 2014 USD 8,000,000 49,412
Pay a fixed rate of 5.03382% and receive a
floating rate based on 3-month USD LIBOR
Broker, Deutsche Bank AG London
Expires April 2015 USD 3,500,000 (84,792)
Pay a fixed rate of 4.5% and receive a
floating rate based on 3-month USD LIBOR
Broker, JPMorgan Chase Bank
Expires May 2015 USD 2,400,000 61,146
Receive a fixed rate of 4.725% and pay a
floating rate based on 3-month USD LIBOR
Broker, Morgan Stanley Capital Services Inc.
Expires August 2015 USD 4,700,000 (109,694)
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Schedule of Investments (concluded) Master Total Return Portfolio
(in U.S. dollars)
o Swaps outstanding as of September 30, 2007 were as follows (concluded):
Unrealized
Notional Appreciation
Amount (Depreciation)
Receive a fixed rate of 5.94% and pay a
floating rate based on 3-month USD LIBOR
Broker, Union Bank of Switzerland, A.G.
Expires December 2015 USD 1,400,000 $ 76,567
Receive a fixed rate of 6.65% and pay a
floating rate based on 3-month NZD Bank
Bill Rate
Broker, Citibank NA
Expires December 2015 NZD 2,000,000 (86,507)
Receive a fixed rate of 5.723% and pay a
floating rate based on 3-month USD LIBOR
Broker, JPMorgan Chase Bank
Expires July 2016 USD 4,800,000 197,028
Receive a fixed rate of 5.275% and pay a
floating rate based on 3-month USD LIBOR
Broker, Deutsche Bank AG London
Expires October 2016 USD 2,200,000 19,089
Receive a fixed rate of 5.085% and pay a
floating rate based on 3-month LIBOR
Broker, Deutsche Bank AG London
Expires November 2016 USD 17,100,000 (141,282)
Pay a fixed rate of 5.225% and receive a
floating rate based on 3-month LIBOR
Broker, Deutsche Bank AG London
Expires January 2017 USD 7,400,000 (30,512)
Receive a fixed rate of 5.16% and pay a
floating rate based on 3-month LIBOR
Broker, Deutsche Bank AG London
Expires February 2017 USD 30,300,000 (59,051)
Receive a fixed rate of 5.295% and pay a
floating rate based on 3-month USD LIBOR
Broker, UBS Warburg
Expires February 2017 USD 9,600,000 86,037
Pay a fixed rate of 5.071% and receive a
floating rate based on 3-month LIBOR
Broker, UBS Warburg
Expires March 2017 USD 70,300,000 545,926
Receive a fixed rate of 5.25% and pay a
floating rate based on 3-month USD LIBOR
Broker, Goldman Sachs Capital Markets, L.P
Expires April 2017 USD 900,000 (5,928)
Pay a fixed rate of 5.6825% and receive a
floating rate based on 3-month LIBOR
Broker, Lehman Brothers Special Finance
Expires June 2017 USD 49,200,000 (1,847,033)
Pay a fixed rate of 5.85% and receive a
floating rate based on 3-month USD LIBOR
Broker, Deutsche Bank AG London
Expires June 2017 USD 1,300,000 (64,282)
Unrealized
Notional Appreciation
Amount (Depreciation)
Pay a fixed rate of 5.74% and receive a
floating rate based on 3-month USD LIBOR
Broker, Deutsche Bank AG London
Expires June 2017 USD 1,800,000 $ (73,961)
Pay a fixed rate of 5.725% and receive a
floating rate based on 3-month LIBOR
Broker, Deutsche Bank AG London
Expires June 2017 USD 58,800,000 (2,383,969)
Pay a fixed rate of 5.5451% and receive a
floating rate based on 3-month USD LIBOR
Broker, Deutsche Bank AG London
Expires June 2017 USD 2,300,000 (60,459)
Pay a fixed rate of 5.775% and receive a
floating rate based on 3-month USD LIBOR
Broker, Deutsche Bank AG London
Expires July 2017 USD 16,800,000 (749,532)
Pay a fixed rate of 5.6425% and receive a
floating rate based on 3-month USD LIBOR
Broker, Citibank NA
Expires July 2017 USD 8,800,000 (303,457)
Receive a fixed rate of 5.3175% and pay a
floating rate based on 3-month USD LIBOR
Broker, Barclays Bank PLC
Expires August 2017 USD 17,000,000 153,797
Pay a fixed rate of 4.968% and receive a
floating rate based on 3 month USD-LIBOR
Broker, Deutsche Bank AG London
Expires September 2017 USD 79,700,000 1,506,420
Pay a fixed rate of 5.26054% and receive a
floating rate based on 3-month USD LIBOR
Broker, Morgan Stanley Capital Services Inc.
Expires September 2017 USD 56,600,000 (249,369)
Receive a fixed rate of 5.411% and pay a
floating rate based on 3-month LIBOR
Broker, JPMorgan Chase Bank
Expires August 2022 USD 86,925,000 438,925
Receive a fixed rate of 5.411% and pay a
floating rate based on 3-month USD LIBOR
Broker, Goldman Sachs Capital Markets, L.P.
Expires April 2027 USD 1,700,000 (1,365)
------------
Total $(4,273,428)
============
o Currency Abbreviations:
EUR Euro
JPY Japanese Yen
MXN Mexican Peso
NZD New Zealand Dollar
USD U.S. Dollar
See Notes to Financial Statements.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Statement of Assets and Liabilities Master Total Return Portfolio
As of September 30, 2007
Assets
Investments in unaffiliated securities, at value (identified cost--$6,571,015,660) $ 6,559,315,449
Investments in affiliated securities, at value (identified cost--$1,290,677) 1,293,808
Options purchased, at value (premiums paid--$57,475,392) 66,489,762
Unrealized appreciation on swaps 5,950,576
Swap premiums paid 46,404
Cash 12,371,990
Unrealized appreciation on forward foreign exchange contracts 5,143,057
Foreign cash (cost--$534,391) 540,272
Receivables:
Securities sold $ 1,127,207,192
Interest 28,763,334
Contributions 13,402,119
Swaps 8,402,799
Options written 971,306
Dividends 201,219
Principal paydowns 72,551 1,179,020,520
---------------
Prepaid expenses and other assets 74,577
---------------
Total assets 7,830,246,415
---------------
Liabilities
TBA sale commitments (proceeds--$667,829,420) 670,904,145
Cash held as collateral for swaptions 19,400,000
Reverse repurchase agreements 57,902,000
Options written, at value (premiums received--$11,297,031) 12,473,203
Unrealized depreciation on swaps 10,224,004
Unrealized depreciation on forward foreign exchange contracts 438,413
Payables:
Securities purchased 3,040,719,545
Withdrawals 30,030,670
Variation margin 2,908,250
Swaps 1,945,639
Investment adviser 191,584
Interest expense 44,527
Other affiliates 14,352 3,075,854,567
---------------
Accrued expenses and other liabilities 2,877,923
---------------
Total liabilities 3,850,074,255
---------------
Net Assets
Net assets $ 3,980,172,160
===============
Net Assets Consist of
Investors' capital $ 3,986,880,500
Unrealized depreciation--net (6,708,340)
---------------
Net Assets $ 3,980,172,160
===============
See Notes to Financial Statements.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Statement of Operations Master Total Return Portfolio
For the Year Ended September 30, 2007
Investment Income
Interest (including $13,742 from affiliates) $ 179,483,975
Dividends 794,016
Securities lending--net 202,454
---------------
Total income 180,480,445
---------------
Expenses
Investment advisory fees $ 2,174,631
Accounting services 637,528
Custodian fees 123,574
Professional fees 74,526
Interest expense on reverse repurchase agreements 57,133
Pricing fees 44,556
Directors' fees and expenses 34,354
Printing and shareholder reports 1,741
Other 75,999
---------------
Total expenses 3,224,042
---------------
Investment income--net 177,256,403
---------------
Realized & Unrealized Gain (Loss)--Net
Realized gain (loss) on:
Investments--net 10,643,079
Financial futures contracts and swaps--net (24,994,152)
Options written--net 2,012,629
Foreign currency transactions--net (3,348,776) (15,687,220)
---------------
Change in unrealized appreciation/depreciation on:
Investments--net (15,656,868)
Financial futures contracts and swaps--net 1,815,776
Options written--net (1,683,929)
Foreign currency transactions--net 4,638,687 (10,886,334)
--------------- ---------------
Total realized and unrealized loss--net (26,573,554)
---------------
Net Increase in Net Assets Resulting from Operations $ 150,682,849
===============
See Notes to Financial Statements.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Statements of Changes in Net Assets Master Total Return Portfolio
For the Year Ended
September 30,
Increase (Decrease) in Net Assets: 2007 2006
Operations
Investment income--net $ 177,256,403 $ 137,846,598
Realized loss--net (15,687,220) (37,631,688)
Change in unrealized appreciation/depreciation--net (10,886,334) 6,880,321
--------------- ---------------
Net increase in net assets resulting from operations 150,682,849 107,095,231
--------------- ---------------
Capital Transactions
Proceeds from contributions 1,930,068,321 636,922,287
Fair value of withdrawals (1,002,815,645) (713,610,950)
--------------- ---------------
Net increase (decrease) in net assets derived from capital transactions 927,252,676 (76,688,663)
--------------- ---------------
Net Assets
Total increase in net assets 1,077,935,525 30,406,568
Beginning of year 2,902,236,635 2,871,830,067
--------------- ---------------
End of year $ 3,980,172,160 $ 2,902,236,635
=============== ===============
See Notes to Financial Statements.
Financial Highlights Master Total Return Portfolio
For the Period
For the Year Ended October 1, 2003++
The following per share data and ratios have been derived September 30, to September 30,
from information provided in the financial statements. 2007 2006 2005 2004
Total Investment Return
Total investment return 4.45% 3.88% 3.13% 4.34%++++
============ ============ ============ ============
Ratios to Average Net Assets
Expenses, excluding interest expense .10% .12% .10% .10%
============ ============ ============ ============
Expenses .10% .12% .10% .10%
============ ============ ============ ============
Investment income--net 5.35% 4.90% 3.81% 3.39%
============ ============ ============ ============
Supplemental Data
Net assets, end of period (in thousands) $ 3,980,172 $ 2,902,237 $ 2,871,830 $ 2,726,752
============ ============ ============ ============
Portfolio turnover 153% 208% 235% 258%
============ ============ ============ ============
++ Commencement of operations.
++++ Aggregate total investment return.
See Notes to Financial Statements.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Notes to Financial Statements Master Total Return Portfolio
1. Significant Accounting Policies:
Master Total Return Portfolio (formerly "Master Bond Portfolio") (the "Master
Portfolio") is a part of Master Bond LLC (the "Master LLC") and is registered
under the Investment Company Act of 1940, as amended, and is organized as a
Delaware limited liability company. Prior to June 15, 2007, the Master LLC was
organized as a Delaware statutory trust (the "Trust"). The Limited Liability
Company Agreement (the "LLC Agreement") permits the Directors (and prior to
June 15, 2007, the Declaration of Trust permitted the Trustees) to issue
nontransferable interests in the Master LLC/Trust, subject to certain
limitations. Throughout this report the Trust and the Master LLC are referred
to as the Master LLC and the Board of Directors of the Master LLC and the
Board of Trustees of the Trust are referred to as the Board of Directors. The
Master Portfolio's financial statements are prepared in conformity with U.S.
generally accepted accounting principles, which may require the use of
management accruals and estimates. Actual results may differ from these
estimates. The following is a summary of significant accounting policies
followed by the Master Portfolio.
(a) Valuation of investments--Debt securities are traded primarily in the over-
the-counter ("OTC") markets and are valued at the last available bid price in
the OTC market or on the basis of values obtained by a pricing service. Pricing
services use valuation matrixes that incorporate both dealer-supplied
valuations and valuation models. The procedures of the pricing service and its
valuations are reviewed by the officers of the Master LLC under the general
direction of the Board of Directors. Such valuations and procedures will be
reviewed periodically by the Board of Directors of the Master LLC. Financial
futures contracts and options thereon, which are traded on exchanges, are
valued at their closing prices as of the close of such exchanges. Effective
September 4, 2007, exchange traded options are valued at the mean price and
previously were valued at the last sale price. Options traded in the OTC market
are valued at the last asked price (options written) or the last bid price
(options purchased). Swap agreements and options thereon are valued based upon
quoted fair valuations received daily by the Master Portfolio from a pricing
service or counterparty. Valuation of short-term investment vehicles is
generally based on the net asset value of the underlying investment vehicle or
amortized cost. Reverse repurchase agreements are valued at cost. Investments
in open-end investment companies are valued at their net asset value each
business day. Securities and other assets for which market quotations are not
readily available are valued at fair value as determined in good faith by or
under the direction of the Board of Directors of the Master LLC.
Equity securities held by the Master Portfolio that are traded on stock
exchanges or the NASDAQ Global Market are valued at the last sale price or
official close price on the exchange, as of the close of business on the day
the securities are being valued or, lacking any sales, at the last available
bid price for long positions, and at the last available asked price for short
positions. In cases where equity securities are traded on more than one
exchange, the securities are valued on the exchange designated as the primary
market by or under the authority of the Board of Directors of the Master LLC.
Long positions traded in the OTC market, NASDAQ Capital Market or Bulletin
Board are valued at the last available bid price or yield equivalent obtained
from one or more dealers or pricing services in accordance with a valuation
policy approved by the Board of Directors of the Master LLC. Short positions
traded in the OTC market are valued at the last available asked price.
Portfolio securities that are traded both in the OTC market and on a stock
exchange are valued according to the broadest and most representative market.
Generally, trading in foreign securities is substantially completed each day
at various times prior to the close of business on the New York Stock Exchange
("NYSE"). The values of such securities used in computing the net assets of
the Master Portfolio are determined as of such times. Foreign currency
exchange rates will generally be determined as of the close of business on the
NYSE. Occasionally, events affecting the values of such securities and such
exchange rates may occur between the times at which they are determined and
the close of business on the NYSE that may not be reflected in the computation
of the Master Portfolio's net assets. If events (for example, a company
announcement, market volatility or a natural disaster) occur during such
periods that are expected to materially affect the value of such securities,
those securities may be valued at their fair value as determined in good faith
by the Master LLC's Board of Directors or by BlackRock Advisors, LLC (the
"Manager"), an indirect, wholly owned subsidiary of BlackRock, Inc., using a
pricing service and/or procedures approved by the Master LLC's Board of
Directors.
(b) Derivative financial instruments--The Master Portfolio may engage in
various portfolio investment strategies both to increase the return of the
Master Portfolio and to hedge, or protect, its exposure to interest rate
movements and movements in the securities markets. Losses may arise due to
changes in the value of the contract due to an unfavorable change in the price
of the underlying security, or index, or if the counterparty does not perform
under the contract. The counterparty for certain instruments may pledge cash
or securities as collateral.
* Financial futures contracts--The Master Portfolio may purchase or sell
financial futures contracts and options on such financial futures contracts.
Financial futures contracts are contracts for delayed delivery of securities
at a specific future date and at a specific price or yield. Upon entering into
a contract, the Master Portfolio deposits and maintains as collateral such
initial margin as required by the exchange on which the transaction is
effected. Pursuant to the contract, the Master Portfolio agrees to receive
from or pay to the broker an amount of cash equal to the daily fluctuation in
value of the contract. Such receipts or payments are known as variation margin
and are recorded by the Master Portfolio as unrealized gains or losses. When
the contract is closed, the Master Portfolio records a realized gain or loss
equal to the difference between the value of the contract at the time it was
opened and the value at the time it was closed.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Notes to Financial Statements (continued) Master Total Return Portfolio
* Options--The Master Portfolio may purchase and write call and put options.
When the Master Portfolio writes an option, an amount equal to the premium
received by the Master Portfolio is reflected as an asset and an equivalent
liability. The amount of the liability is subsequently marked-to-market to
reflect the current market value of the option written. When a security is
purchased or sold through an exercise of an option, the related premium paid
(or received) is added to (or deducted from) the basis of the security
acquired or deducted from (or added to) the proceeds of the security sold.
When an option expires (or the Master Portfolio enters into a closing
transaction), the Master Portfolio realizes a gain or loss on the option to
the extent of the premiums received or paid (or a gain or loss to the extent
that the cost of the closing transaction exceeds the premium paid or received).
Written and purchased options are non-income producing investments.
* Forward foreign exchange contracts--The Master Portfolio may enter into
forward foreign exchange contracts as a hedge against either specific
transactions or portfolio positions. The contract is marked-to-market daily
and the change in market value is recorded by the Master Portfolio as an
unrealized gain or loss. When the contract is closed, the Master Portfolio
records a realized gain or loss equal to the difference between the value at
the time it was opened and the value at the time it was closed.
* Foreign currency options and futures--The Master Portfolio may also purchase
or sell listed or OTC foreign currency options, foreign currency futures and
related options on foreign currency futures as a short or long hedge against
possible variations in foreign exchange rates. Such transactions may be
effected with respect to hedges on non-U.S. dollar-denominated securities
owned by the Master Portfolio, sold by the Master Portfolio but not yet
delivered, or committed or anticipated to be purchased by the Master Portfolio.
* Swaps--The Master Portfolio may enter into swap agreements, which are OTC
contracts in which the Master Portfolio and a counterparty agree to make
periodic net payments on a specified notional amount. The net payments can be
made for a set period of time or may be triggered by a predetermined credit
event. The net periodic payments may be based on a fixed or variable interest
rate; the change in market value of a specified security, basket of securities,
or index; or the return generated by a security. These periodic payments
received or made by the Master Portfolio are recorded in the accompanying
Statement of Operations as realized gains or losses, respectively. Gains or
losses are also realized upon termination of the swap agreements. Swaps are
marked-to-market daily and changes in value are recorded as unrealized
appreciation (depreciation). Risks include changes in the returns of the
underlying instruments, failure of the counterparties to perform under the
contracts' terms and the possible lack of liquidity with respect to the
swap agreements.
(c) Foreign currency transactions--Transactions denominated in foreign
currencies are recorded at the exchange rate prevailing when recognized.
Assets and liabilities denominated in foreign currencies are valued at the
exchange rate at the end of the period. Foreign currency transactions are the
result of settling (realized) or valuing (unrealized) assets or liabilities
expressed in foreign currencies into U.S. dollars. Realized and unrealized
gains or losses from investments include the effects of foreign exchange rates
on investments. The Master Portfolio invests in foreign securities, which may
involve a number of risk factors and special considerations not present with
investments in securities of U.S. corporations.
(d) Income taxes--The Master Portfolio is classified as a partnership for
federal income tax purposes. As such, each investor in the Master Portfolio is
treated as owner of its proportionate share of the net assets, income,
expenses and realized and unrealized gains and losses of the Master Portfolio.
Therefore, no federal income tax provision is required. Under the applicable
foreign tax law, a withholding tax may be imposed on interest, dividends and
capital gains at various rates. It is intended that the Master Portfolio's
assets will be managed so an investor in the Master Portfolio can satisfy the
requirements of Subchapter M of the Internal Revenue Code.
(e) Security transactions and investment income--Security transactions are
accounted for on the date the securities are purchased or sold (the trade
dates). Realized gains and losses on security transactions are determined on
the identified cost basis. Dividend income is recorded on the ex-dividend
dates. Dividends from foreign securities where the ex-dividend date may have
passed are subsequently recorded when the Master Portfolio has determined the
ex-dividend date. Interest income is recognized on the accrual basis.
(f) Securities lending--The Master Portfolio may lend securities to financial
institutions that provide cash or securities issued or guaranteed by the U.S.
government as collateral, which will be maintained at all times in an amount
equal to at least 100% of the current market value of the loaned securities.
The market value of the loaned securities is determined at the close of
business of the Master Portfolio and any additional required collateral is
delivered to the Master Portfolio on the next business day. Where the Master
Portfolio receives securities as collateral for the loaned securities, it
collects a fee from the borrower. The Master Portfolio typically receives the
income on the loaned securities but does not receive the income on the
collateral. Where the Master Portfolio receives cash collateral, it may invest
such collateral and retain the amount earned on such investment, net of any
amount rebated to the borrower. Loans of securities are terminable at any time
and the borrower, after notice, is required to return borrowed securities
within five business days. The Master Portfolio may pay reasonable finder's,
lending agent, administrative and custodial fees in connection with its loans.
In the event that the borrower defaults on its obligation to return borrowed
securities because of insolvency or for any other reason, the Master Portfolio
could experience delays and costs in gaining access to the collateral. The
Master Portfolio also could suffer a loss where the value of the collateral
falls below the market value of the borrowed securities, in the event of
borrower default or in the event of losses on investments made with cash
collateral.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Notes to Financial Statements (continued) Master Total Return Portfolio
(g) TBA commitments--The Master Portfolio may enter into to-be-announced
("TBA") commitments to purchase or sell securities for a fixed price at a
future date. TBA commitments are considered securities in themselves, and
involve a risk of loss if the value of the security to be purchased/sold
declines/increases prior to settlement date, which is in addition to the risk
of decline in the value of the Master Portfolio's other assets. Unsettled TBA
commitments are valued at the current market value of the underlying
securities, according to the procedures described under "Valuation of
investments."
(h) Reverse repurchase agreements--The Master Portfolio may enter into
repurchase agreements. Under reverse repurchase agreements, the Master
Portfolio sells securities to the counterparty and agrees to repurchase them
at a mutually agreed upon date and price, and may exchange their respective
commitments to pay or receive interest. If the counterparty defaults on its
obligation, the Master Portfolio's ability to receive interest will be delayed
or limited. Furthermore, if the Master Portfolio does not have sufficient
client income to pay its obligation under the reverse repurchase agreement,
the Master Portfolio would be in default and the counterparty would be able to
terminate the repurchase agreement. At the time the Master Portfolio enters
into a reverse repurchase agreement, it will establish a segregated account
with the custodian containing cash, or cash equivalents of liquid high grade
debt securities having a value at least equal to the repurchase price.
(i) Mortgage dollar rolls--The Master Portfolio may sell mortgage-backed
securities for delivery in the current month and simultaneously contract to
repurchase substantially similar (same type) coupon and maturity securities on
a specific future date.
(j) Recent accounting pronouncements--In July 2006, the Financial Accounting
Standards Board ("FASB") issued Interpretation No. 48 ("FIN 48"), "Accounting
for Uncertainty in Income Taxes - an interpretation of FASB Statement No.
109." FIN 48 prescribes the minimum recognition threshold a tax position must
meet in connection with accounting for uncertainties in income tax positions
taken or expected to be taken by an entity, including mutual funds, before
being measured and recognized in the financial statements. Adoption of FIN 48
is required for the last net asset value calculation in the first required
financial statement reporting period for fiscal years beginning after December
15, 2006. The impact on the Master Portfolio's financial statements, if any,
is currently being assessed.
In September 2006, Statement of Financial Accounting Standards No. 157, "Fair
Value Measurements" ("FAS 157"), was issued and is effective for fiscal years
beginning after November 15, 2007. FAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. At this time, management is evaluating the implications of FAS
157 and its impact on the Master Portfolio's financial statements, if any, has
not been determined.
In addition, in February 2007, FASB Statement of Financial Accounting
Standards No. 159, "The Fair Value Option for Financial Assets and Financial
Liabilities" ("FAS 159"), was issued and is effective for fiscal years
beginning after November 15, 2007. Early adoption is permitted as of the
beginning of a fiscal year that begins on or before November 15, 2007,
provided the entity also elects to apply the provisions of FAS 157. FAS 159
permits entities to choose to measure many financial instruments and certain
other items at fair value that are not currently required to be measured at
fair value. FAS 159 also establishes presentation and disclosure requirements
designed to facilitate comparisons between entities that choose different
measurement attributes for similar types of assets and liabilities. At this
time, management is evaluating the implications of FAS 159 and its impact on
the Master Portfolio's financial statements, if any, has not been determined.
2. Investment Advisory Agreement and Transactions with Affiliates:
The Master LLC, on behalf of the Master Portfolio, has entered into an
Investment Advisory Agreement with the Manager. Merrill Lynch & Co., Inc.
("Merrill Lynch") and The PNC Financial Services Group, Inc. are the principal
owners of BlackRock, Inc.
The Manager is responsible for the management of the Master Portfolio's
investments and provides the necessary personnel, facilities, equipment and
certain other services necessary to the operations of the Master Portfolio.
For such services, the Master Portfolio pays a monthly fee with respect to the
Master Portfolio based upon the aggregate average daily value of the net
assets of the Master Portfolio and BlackRock High Income Fund of BlackRock
Bond Fund, Inc. at an annual rate of .20% of the average daily net assets not
exceeding $250 million; .15% of average daily net assets in excess of $250
million but less than $500 million; .10% of average daily net assets in excess
of $500 million but less than $750 million and .05% in excess of $750 million.
For the year ended September 30, 2007, the aggregate average daily net assets
of the Master Portfolio and BlackRock High Income Fund was approximately
$4,786,830,000. In addition, the Manager has entered into a Sub-Advisory
Agreement with BlackRock Financial Management, Inc., an affiliate of the
Manager, under which the Manager pays the sub-adviser for services it provides
a monthly fee at an annual rate that is a percentage of the management fee
paid by the Master Portfolio to the Manager.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Notes to Financial Statements (concluded) Master Total Return Portfolio
The Master Portfolio has received an exemptive order from the Securities and
Exchange Commission permitting it to lend portfolio securities to Merrill
Lynch, Pierce, Fenner & Smith Incorporated, a wholly owned subsidiary of
Merrill Lynch, or its affiliates. Pursuant to that order, the Master Portfolio
has retained BlackRock Investment Management, LLC ("BIM") as the securities
lending agent for a fee based on a share of the returns on investment of cash
collateral. BIM may, on behalf of the Master Portfolio, invest cash collateral
received by the Master LLC for such loans, among other things, in a private
investment company managed by the Manager or in registered money market funds
advised by the Manager or its affiliates. For the year ended September 30,
2007, BIM received $81,040 in securities lending agent fees from the Master
Portfolio.
For the year ended September 30, 2007, the Master Portfolio reimbursed the
Manager $62,443 for certain accounting services.
Certain officers and/or directors of the Master LLC are officers and/or
directors of BlackRock, Inc. or its affiliates.
3. Investments:
Purchases and sales (including paydowns) of investments, excluding short-term
securities, for the year ended September 30, 2007 were $6,756,331,976 and
$7,230,855,196, respectively.
Transactions in call options written for the year ended September 30, 2007
were as follows:
Number of Premiums
Contracts* Received
Outstanding call options written,
beginning of year -- --
Options written 1,161 $ 7,695,728
Options closed (93) (2,039,400)
Options expired -- --
--------------- ---------------
Outstanding call options written,
end of year 1,068 $ 5,656,328
=============== ===============
Transactions in put options written for the year ended September 30, 2007
were as follows:
Number of Premiums
Contracts* Received
Outstanding put options written,
beginning of year 1,311 $ 528,241
Options written 1,348 7,755,451
Options closed (93) (2,039,400)
Options expired (1,498) (603,589)
--------------- ---------------
Outstanding put options written,
end of year 1,068 $ 5,640,703
=============== ===============
* Some contracts represent a notional amount of $1,000,000.
4. Short-Term Borrowings:
The Master Portfolio, along with certain other funds managed by the Manager
and its affiliates, is a party to a $500,000,000 credit agreement with a group
of lenders, which expires November 2007. The Master Portfolio may borrow under
the credit agreement to fund shareholder redemptions and for other lawful
purposes other than for leverage. The Master Portfolio may borrow up to the
maximum amount allowable under the Master Portfolio's current prospectus and
statement of additional information, subject to various other legal,
regulatory or contractual limits. The Master Portfolio pays a commitment fee
of .06% per annum based on the Master Portfolio's pro rata share of the unused
portion of the credit agreement. Amounts borrowed under the credit agreement
bear interest at a rate equal to, at each fund's election, the federal funds
rate plus .35% or a base rate as defined in the credit agreement. The Master
Portfolio did not borrow under the credit agreement during the year ended
September 30, 2007.
5. Reverse Repurchase Agreements:
For the period ended September 24, 2007 to September 30, 2007 the Master
Portfolio's average amount outstanding was approximately $51,022,000 and daily
weighted average interest rate was 4.56%.
6. Acquisitions:
On October 16, 2006, an investor of the Master Portfolio acquired all of the
net assets of BlackRock Intermediate Term Fund of BlackRock Bond Fund, Inc.
pursuant to a plan of reorganization. As a result of the reorganization, which
included $674,588 of net unrealized depreciation, the Master Portfolio
received an in-kind contribution of portfolio securities.
On September 24, 2007, an investor of the Master Portfolio acquired all of the
net assets of BlackRock Total Return Portfolio of BlackRock Funds II, pursuant
to a plan of reorganization. As a result of the reorganization, which included
$2,150,618 of net unrealized depreciation, the Master Portfolio received an
in-kind contribution of portfolio securities.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Report of Independent Registered Public Accounting Firm
Master Total Return Portfolio
To the Investors and Board of Directors of
Master Bond LLC:
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments, of Master Total Return Portfolio,
(formerly Master Bond Portfolio), of Master Bond LLC (formerly Master Bond
Trust) (the "Master LLC") as of September 30, 2007 and the related statement
of operations for the year then ended, the statements of changes in net assets
for each of the two years in the period then ended and the financial
highlights for the respective periods then ended. These financial statements
and financial highlights are the responsibility of the Master LLC's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. The Master LLC is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Master LLC's internal control over financial reporting. Accordingly, we
express no such opinion. An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. Our procedures included confirmation of securities owned as of
September 30, 2007 by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other auditing
procedures. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Master Total Return Portfolio of Master Bond LLC as of September 30, 2007, the
results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and its financial
highlights for the respective periods then ended, in conformity with
accounting principles generally accepted in the United States of America.
Deloitte & Touche LLP
Princeton, New Jersey
November 29, 2007
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Officers and Directors as of September 30, 2007
Number of
Funds and
Portfolios in
Position(s) Length of Fund Complex Other Public
Name, Address Held with Time Overseen by Directorships
and Year of Birth Fund Served Principal Occupation(s) During Past 5 Years Director Held by Director
Interested Director
Robert C. Doll, Jr.* Fund 2005 to Vice Chairman and Director of BlackRock, Inc., 120 Funds None
P.O. Box 9011 President 2007 Global Chief Investment Officer for Equities, 161 Portfolios
Princeton, NJ and Chairman of the BlackRock Retail Operating
08543-9011 Director Committee, and member of the BlackRock Executive
1954 Committee since 2006; President of the funds
advised by Merrill Lynch Investment Managers, L.P.
("MLIM") and its affiliates ("MLIM/FAM-advised
funds") from 2005 to 2006 and Chief Investment
Officer thereof from 2001 to 2006; President of
MLIM and Fund Asset Management, L.P. ("FAM") from
2001 to 2006; Co-Head (Americas Region) thereof
from 2000 to 2001 and Senior Vice President from
1999 to 2001; President and Director of Princeton
Services, Inc. ("Princeton Services") and President
of Princeton Administrators, L.P. ("Princeton
Administrators") from 2001 to 2006; Chief Investment
Officer of OppenheimerFunds, Inc. in 1999 and Executive
Vice President thereof from 1991 to 1999.
* Mr. Doll is a director, trustee or member of an advisory board of certain other
investment companies for which BlackRock Advisors, LLC and its affiliates act as
investment adviser. Mr. Doll is an "interested person," as defined in the
Investment Company Act, of the Fund based on his positions with BlackRock, Inc.
and its affiliates. Directors serve until their resignation, removal or death, or
until December 31 of the year in which they turn 72. As Fund President, Mr. Doll
serves at the pleasure of the Board of Directors.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Officers and Directors (continued)
Number of
Funds and
Portfolios in
Position(s) Length of Fund Complex Other Public
Name, Address Held with Time Overseen by Directorships
and Year of Birth Fund Served Principal Occupation(s) During Past 5 Years Director Held by Director
Independent Directors*
Ronald W. Forbes** Director 1981 to Professor Emeritus of Finance, School of 46 Funds None
P.O. Box 9095 2007 Business, State University of New York at 48 Portfolios
Princeton, NJ Albany since 2000 and Professor thereof
08543-9095 from 1989 to 2000; International Consultant,
1940 Urban Institute, Washington, D.C. from 1995
to 1999.
Cynthia A. Montgomery Director 1994 to Professor, Harvard Business School since 1989; 46 Funds Newell
P.O. Box 9095 2007 Associate Professor, J.L. Kellogg Graduate 48 Portfolios Rubbermaid, Inc.
Princeton, NJ School of Management, Northwestern University (manufacturing)
08543-9095 from 1985 to 1989; Associate Professor, Graduate
1952 School of Business Administration, University
of Michigan from 1979 to 1985; Director, Harvard
Business School Publishing since 2005; Director,
McLean Hospital since 2005.
Jean Margo Reid Director 2004 to Self-employed consultant since 2001; Counsel 46 Funds None
P.O. Box 9095 present of Alliance Capital Management (investment 48 Portfolios
Princeton, NJ adviser) in 2000; General Counsel, Director
08543-9095 and Secretary of Sanford C. Bernstein & Co.,
1945 Inc. (investment adviser/broker-dealer) from
1997 to 2000; Secretary, Sanford C. Bernstein
Fund, Inc. from 1994 to 2000; Director and
Secretary of SCB, Inc. since 1998; Director
and Secretary of SCB Partners, Inc. since 2000;
and Director of Covenant House from 2001 to 2004.
Roscoe S. Suddarth Director 2000 to President, Middle East Institute, from 1995 46 Funds None
P.O. Box 9095 2007 to 2001; Foreign Service Officer, United States 48 Portfolios
Princeton, NJ Foreign Service, from 1961 to 1995 and Career
08543-9095 Minister from 1989 to 1995; Deputy Inspector
1935 General, U.S. Department of State, from 1991
to 1994; U.S. Ambassador to the Hashemite
Kingdom of Jordan from 1987 to 1990.
Richard R. West Director 1980 to Professor of Finance from 1984 to 1995, Dean 46 Funds Bowne & Co., Inc.
P.O. Box 9095 present from 1984 to 1993 and since 1995 Dean Emeritus 48 Portfolios (financial
Princeton, NJ of New York University's Leonard N. Stern printers);
08543-9095 School of Business Administration. Vornado Realty
1938 Trust (real
estate company );
Alexander's, Inc.
(real estate
company)
* Directors serve until their resignation, removal or death, or until December 31
of the year in which they turn 72.
** Chairman of the Board of Directors and the Audit Committee.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Officers and Directors (concluded)
Position(s) Length of
Name, Address Held with Time
and Year of Birth Fund Served Principal Occupation(s) During Past 5 Years
Fund Officers*
Donald C. Burke Vice 1993 to Managing Director of BlackRock, Inc. since 2006; Managing Director of Merrill
P.O. Box 9011 President 2007 and Lynch Investment Managers, L.P. ("MLIM") and Fund Asset Management, L.P.
Princeton, NJ and 1999 to ("FAM") in 2006; First Vice President of MLIM and FAM from 1997 to 2005 and
08543-9011 Treasurer 2007 Treasurer thereof from 1999 to 2006; Vice President of MLIM and FAM from 1990
1960 to 1997.
Karen Clark Chief 2007 Managing Director of BlackRock, Inc. and Chief Compliance Officer of certain
P.O. Box 9011 Compliance BlackRock-advised funds since 2007; Director of BlackRock, Inc. from 2005 to
Princeton, NJ Officer 2007; Principal and Senior Compliance Officer, State Street Global Advisors,
08543-9011 from 2001 to 2005; Principal Consultant, PricewaterhouseCoopers, LLP from 1998
1965 to 2001; and Branch Chief, Division of Investment Management and Office of
Compliance Inspections and Examinations, U.S. Securities and Exchange
Commission, from 1993 to 1998.
Howard Surloff Secretary 2007 to Managing Director of BlackRock Inc. and General Counsel of U.S. Funds at
P.O. Box 9011 present BlackRock, Inc since 2006. General Counsel (U.S.) of Goldman Sachs Asset
Princeton, NJ Management from 1993 to 2006.
08543-9011
1965
* Officers of the Fund serve at the pleasure of the Board of Directors.
Further information about the Fund's Officers and Directors is available in
the Fund's Statement of Additional Information, which can be obtained without
charge by calling 1-800-441-7762.
Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, MA 02101
Transfer Agent
PFPC Inc.
Wilmington, DE 19809
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Proxy Results
During the six-month period ended September 30, 2007, the shareholders of
BlackRock Total Return Fund of BlackRock Bond Fund, Inc. voted on the
following proposals, which were approved at a special shareholders' meeting on
September 7, 2007. The proposal to elect the Fund's Board of Directors was
part of the reorganization of the Fund's Board of Directors to take effect on
or about November 1, 2007. A description of the proposals and number of shares
voted are as follows:
Shares Voted Shares Withheld
For From Voting
To elect the Fund's Board of Directors: James H. Bodurtha 215,107,653 6,394,086
Bruce R. Bond 215,128,580 6,373,159
Donald W. Burton 215,119,617 6,382,122
Richard S. Davis 215,114,223 6,387,516
Stuart E. Eizenstat 215,085,544 6,416,195
Laurence D. Fink 215,119,555 6,382,184
Kenneth A. Froot 215,108,576 6,393,163
Henry Gabbay 215,123,738 6,378,001
Robert M. Hernandez 215,114,933 6,386,806
John F. O'Brien 215,092,266 6,409,473
Roberta Cooper Ramo 215,131,264 6,370,475
Jean Margo Reid 215,137,937 6,363,802
David H. Walsh 215,109,528 6,392,211
Fred G. Weiss 215,117,032 6,384,707
Richard R. West 215,105,054 6,396,685
Shares Voted Shares Voted Shares Voted
For Against Abstain
To approve a change in the Fund's investment objective. 121,157,724 2,134,890 3,609,879
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
BlackRock Fund Information
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 nonpublic personal information. The following information
is provided to help you understand what personal information BlackRock
collects, how we protect that information and why in certain cases we share
such information with select parties.
If you are located in a jurisdiction where specific laws, rules or regulations
require BlackRock to provide you with additional or different privacy-related
rights beyond what is set forth below, then BlackRock will comply with those
specific laws, rules or regulations.
BlackRock obtains or verifies personal nonpublic 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 Web sites.
BlackRock does not sell or disclose to nonaffiliated third parties any
nonpublic personal information about its Clients, except as permitted by law
or as is necessary to service Client accounts. These nonaffiliated 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
nonpublic 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 nonpublic personal information of its Clients, including procedures
relating to the proper storage and disposal of such information.
Availability of Additional Information
Electronic copies of most financial reports and prospectuses are available on
the Fund's Web site or shareholders can sign up for e-mail notifications of
quarterly statements, annual and semi-annual reports and prospectuses by
enrolling in the Fund's electronic delivery program.
To enroll:
Shareholders Who Hold Accounts with Investment Advisers, Banks or Brokerages:
Please contact your financial advisor. Please note that not all investment
advisers, banks or brokerages may offer this service.
Shareholders Who Hold Accounts Directly with BlackRock:
1) Access the BlackRock Web site at
http://www.blackrock.com/edelivery
2) Select "eDelivery" under the "More Information" section
3) Log into your account
The Fund will mail only one copy of shareholder documents, including
prospectuses, annual and semi-annual reports and proxy statements, to
shareholders with multiple accounts at the same address. This practice is
commonly called "householding" and it 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 contact the Fund at
(800) 441-7762.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Availability of Additional Information (concluded)
Availability of Proxy Voting Policies and Procedures
The Fund has delegated proxy voting responsibilities to BlackRock and its
affiliates, subject to the general oversight of the Fund's Board of Directors.
A description of the policies and procedures that BlackRock and its affiliates
use to determine how to vote proxies relating to portfolio securities is
available without charge, upon request, on our Web site at www.blackrock.com,
by calling (800) 441-7762, or on the Web site of the Securities and Exchange
Commission (the "Commission") at http://www.sec.gov.
Availability of Proxy Voting Record
Information on how proxies relating to the Fund's voting securities were voted
(if any) by the Fund's previous manager during the most recent 12-month period
ended June 30 is available, upon request and without charge, on our Web site
at www.blackrock.com, by calling (800) 441-7762 or on the Web site of the
Commission at http://www.sec.gov.
Availability of Quarterly Portfolio Schedule
The Fund files its complete schedule of portfolio holdings for the first and
third quarters of its fiscal year with the Commission on Form N-Q. The Fund's
Forms N-Q are available on the Commission's Web site at http://www.sec.gov and
may be reviewed and copied at the Commission's Public Reference Room in
Washington, D.C. Information regarding the operation of the Public Reference
Room may be obtained by calling (800) SEC-0330. The Fund's Forms N-Q may also
be obtained upon request, without charge, by calling (800) 441-7762.
Shareholder Privileges
Account Information
Call us at (800) 441-7762 8:00 AM - 6:00 PM EST to get information about your
account balances, recent transactions and share prices. You can also reach us
on the Web at www.blackrock.com/funds.
Automatic Investment Plans
Investor Class shareholders who want to invest regularly can arrange to have
$50 or more automatically deducted from their checking or savings account and
invested in any of the BlackRock funds.
Systematic Withdrawal Plans
Investor Class shareholders can establish a systematic withdrawal plan and
receive periodic payments of $50 or more from their BlackRock funds, as long
as their account 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 TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
A World-Class 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.
Equity Funds
BlackRock All-Cap Global Resources Portfolio
BlackRock Aurora Portfolio
BlackRock Asset Allocation Portfolio++
BlackRock Balanced Capital Fund++
BlackRock Basic Value Fund
BlackRock Capital Appreciation Portfolio
BlackRock Developing Capital Markets Fund
BlackRock Equity Dividend Fund
BlackRock EuroFund
BlackRock Focus Twenty Fund
BlackRock Focus Value Fund
BlackRock Fundamental Growth Fund
BlackRock Global Allocation Fund++
BlackRock Global Dynamic Equity Fund
BlackRock Global Financial Services Fund
BlackRock Global Growth Fund
BlackRock Global Opportunities Portfolio
BlackRock Global Resources Portfolio
BlackRock Global Science & Technology
Opportunities Portfolio
BlackRock Global SmallCap Fund
BlackRock Healthcare Fund
BlackRock Health Sciences Opportunities Portfolio*
BlackRock Index Equity Portfolio*
BlackRock International Fund
BlackRock International Index Fund
BlackRock International Opportunities Portfolio*
BlackRock International Value Fund
BlackRock Large Cap Core Fund
BlackRock Large Cap Growth Fund
BlackRock Large Cap Value Fund
BlackRock Latin America Fund
BlackRock Mid-Cap Growth Equity Portfolio
BlackRock Mid-Cap Value Equity Portfolio
BlackRock Mid Cap Value Opportunities Fund
BlackRock Natural Resources Trust
BlackRock Pacific Fund
BlackRock Small Cap Core Equity Portfolio
BlackRock Small Cap Growth Equity Portfolio
BlackRock Small Cap Growth Fund II
BlackRock Small Cap Index Fund
BlackRock Small Cap Value Equity Portfolio*
BlackRock Small/Mid-Cap Growth Portfolio
BlackRock S&P 500 Index Fund
BlackRock Technology Fund
BlackRock U.S. Opportunities Portfolio
BlackRock Utilities and Telecommunications Fund
BlackRock Value Opportunities Fund
Fixed Income Funds
BlackRock Commodity Strategies Fund
BlackRock Enhanced Income Portfolio
BlackRock GNMA Portfolio
BlackRock Government Income Portfolio
BlackRock High Income Fund
BlackRock High Yield Bond Portfolio
BlackRock Inflation Protected Bond Portfolio
BlackRock Intermediate Bond Portfolio II
BlackRock Intermediate Government
Bond Portfolio
BlackRock International Bond Portfolio
BlackRock Low Duration Bond Portfolio
BlackRock Managed Income Portfolio
BlackRock Short-Term Bond Fund
BlackRock Total Return Fund
BlackRock Total Return Portfolio II
BlackRock World Income Fund
Municipal Bond Funds
BlackRock AMT-Free Municipal Bond Portfolio
BlackRock California Insured Municipal Bond Fund
BlackRock Delaware Municipal Bond Portfolio
BlackRock Florida Municipal Bond Fund
BlackRock High Yield Municipal Fund
BlackRock Intermediate Municipal Fund
BlackRock Kentucky Municipal Bond Portfolio
BlackRock Municipal Insured Fund
BlackRock National Municipal Fund
BlackRock New Jersey Municipal Bond Fund
BlackRock New York Municipal Bond Fund
BlackRock Ohio Municipal Bond Portfolio
BlackRock Pennsylvania Municipal Bond Fund
BlackRock Short-Term Municipal Fund
Target Risk & Target Date Funds
BlackRock Prepared Portfolios
Conservative Prepared Portfolio
Moderate Prepared Portfolio
Growth Prepared Portfolio
Aggressive Growth Prepared Portfolio
BlackRock Lifecycle Prepared Portfolios
Prepared Portfolio 2010
Prepared Portfolio 2015
Prepared Portfolio 2020
Prepared Portfolio 2025
Prepared Portfolio 2030
Prepared Portfolio 2035
Prepared Portfolio 2040
Prepared Portfolio 2045
Prepared Portfolio 2050
* See the prospectus for information on specific limitations on investments
in the fund.
++ Mixed asset fund.
BlackRock mutual funds are distributed by BlackRock Distributors, Inc. and
certain funds are also distributed by FAM Distributors, Inc. You should
consider the investment objectives, risks, charges and expenses of the funds
under consideration carefully before investing. Each fund's prospectus
contains this and other information and is available at www.blackrock.com or
by calling 800-882-0052 or from your financial advisor. The prospectus should
be read carefully before investing.
BLACKROCK TOTAL RETURN FUND OF BLACKROCK BOND FUND, INC. SEPTEMBER 30, 2007
Item 2 - Code of Ethics - The registrant (or the "Fund") has adopted a code
of ethics, as of the end of the period covered by this report,
applicable to the registrant's principal executive officer,
principal financial officer and principal accounting officer, or
persons performing similar functions. During the period covered by
this report, there have been no amendments to or waivers granted
under the code of ethics. A copy of the code of ethics is available
without charge at www.blackrock.com.
Item 3 - Audit Committee Financial Expert - The registrant's board of
directors or trustees, as applicable (the "board of directors") has
determined that (i) the registrant has the following audit committee
financial experts serving on its audit committee and (ii) each audit
committee financial expert is independent:
Ronald W. Forbes (term ended, effective November 1, 2007)
Robert M. Hernandez (term began, effective November 1, 2007)
Fred G. Weiss (term began, effective November 1, 2007)
Richard R. West
Edward D. Zinbarg (retired as of December 31, 2006)
Under applicable securities laws, a person determined to be an audit
committee financial expert will not be deemed an "expert" for any
purpose, including without limitation for the purposes of Section 11
of the Securities Act of 1933, as a result of being designated or
identified as an audit committee financial expert. The designation
or identification as an audit committee financial expert does not
impose on such person any duties, obligations, or liabilities
greater than the duties, obligations, and liabilities imposed on
such person as a member of the audit committee and board of
directors in the absence of such designation or identification.
Item 4 - Principal Accountant Fees and Services
(a) Audit Fees (b) Audit-Related Fees (1) (c) Tax Fees (2) (d) All Other Fees (3)
Current Previous Current Previous Current Previous Current Previous
Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year
Entity Name End End End End End End End End
Master Total
Return Portfolio
of Master $45,500 $45,500 $0 $0 $9,200 $9,200 $0 $0
Bond LLC
BlackRock Total
Return Fund
of BlackRock $37,074 $6,600 $0 $0 $6,100 $6,000 $1,042 $0
Bond Fund, Inc.
(1) The nature of the services include assurance and related services reasonably
related to the performance of the audit of financial statements not included
in Audit Fees.
(2) The nature of the services include tax compliance, tax advice and tax planning.
(3) The nature of the services include a review of compliance procedures and
attestation thereto.
(e)(1) Audit Committee Pre-Approval Policies and Procedures:
The registrant's audit committee (the "Committee") has adopted
policies and procedures with regard to the pre-approval of services.
Audit, audit-related and tax compliance services provided to the
registrant on an annual basis require specific pre-approval by the
Committee. The Committee also must approve other non-audit services
provided to the registrant and those non-audit services provided to
the registrant's affiliated service providers that relate directly
to the operations and the financial reporting of the registrant.
Certain of these non-audit services that the Committee believes are
a) consistent with the SEC's auditor independence rules and b)
routine and recurring services that will not impair the independence
of the independent accountants may be approved by the Committee
without consideration on a specific case-by-case basis ("general pre-
approval"). However, such services will only be deemed pre-approved
provided that any individual project does not exceed $5,000
attributable to the registrant or $50,000 for all of the registrants
the Committee oversees. Any proposed services exceeding the pre-
approved cost levels will require specific pre-approval by the
Committee, as will any other services not subject to general pre-
approval (e.g., unanticipated but permissible services). The
Committee is informed of each service approved subject to general
pre-approval at the next regularly scheduled in-person board
meeting.
(e)(2) None of the services described in each of Items 4(b)
through (d) were approved by the audit committee pursuant to
paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not Applicable
(g) Affiliates' Aggregate Non-Audit Fees:
Current Previous
Fiscal Year Fiscal Year
Entity Name End End
Master Total Return Portfolio
of Master Bond LLC $293,700 $3,059,450
BlackRock Total Return Fund of
BlackRock Bond Fund, Inc. $291,642 $3,056,250
(h) The registrant's audit committee has considered and determined
that the provision of non-audit services that were rendered to the
registrant's investment adviser (not including any non-affiliated
sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by the registrant's investment
adviser), and any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services
to the registrant that were not pre-approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with
maintaining the principal accountant's independence.
Regulation S-X Rule 2-01(c)(7)(ii) - $284,500, 0%
Item 5 - Audit Committee of Listed Registrants - Not Applicable
Item 6 - Schedule of Investments - The registrant's Schedule of Investments
is included as part of the Report to Stockholders filed under Item 1
of this form.
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies - Not Applicable
Item 8 - Portfolio Managers of Closed-End Management Investment Companies -
Not Applicable
Item 9 - Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers - Not Applicable
Item 10 - Submission of Matters to a Vote of Security Holders - The
registrant's Nominating Committee will consider nominees to the
Board recommended by shareholders when a vacancy becomes available.
Shareholders who wish to recommend a nominee should send nominations
which include biographical information and set forth the
qualifications of the proposed nominee to the registrant's
Secretary. There have been no material changes to these procedures.
Item 11 - Controls and Procedures
11(a) - The registrant's principal executive and principal financial
officers or persons performing similar functions have concluded that
the registrant's disclosure controls and procedures (as defined in
Rule 30a-3(c) under the Investment Company Act of 1940, as amended
(the "1940 Act")) are effective as of a date within 90 days of the
filing of this report based on the evaluation of these controls and
procedures required by Rule 30a-3(b) under the 1940 Act and Rule
15d-15(b) under the Securities and Exchange Act of 1934, as amended.
11(b) - There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act)
that occurred during the second fiscal quarter of the period covered
by this report that have materially affected, or are reasonably
likely to materially affect, the registrant's internal control over
financial reporting.
Item 12 - Exhibits attached hereto
12(a)(1) - Code of Ethics - See Item 2
12(a)(2) - Certifications - Attached hereto
12(a)(3) - Not Applicable
12(b) - Certifications - Attached hereto
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
BlackRock Total Return Fund of BlackRock Bond Fund, Inc. and
Master Total Return Portfolio of Master Bond LLC
By: /s/ Donald C. Burke
-------------------
Donald C. Burke,
Chief Executive Officer (principal executive officer) of
BlackRock Total Return Fund of BlackRock Bond Fund, Inc. and
Master Total Return Portfolio of Master Bond LLC
Date: November 20, 2007
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/ Donald C. Burke
-------------------
Donald C. Burke,
Chief Executive Officer (principal executive officer) of
BlackRock Total Return Fund of BlackRock Bond Fund, Inc. and
Master Total Return Portfolio of Master Bond LLC
Date: November 20, 2007
By: /s/ Neal J. Andrews
-------------------
Neal J. Andrews,
Chief Financial Officer (principal financial officer) of
BlackRock Total Return Fund of BlackRock Bond Fund, Inc. and
Master Total Return Portfolio of Master Bond LLC
Date: November 20, 2007