Blackrock Funds

10/03/2025 | Press release | Distributed by Public on 10/03/2025 08:22

Semi-Annual Report by Investment Company (Form N-CSRS)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number:
811-05742
Name of Fund:
BlackRock FundsSM
BlackRock Real Estate Securities Fund
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock FundsSM,
50 Hudson Yards, New York, NY 10001
Registrant's telephone number, including area code:
(800) 441-7762
Date of fiscal year end:
01/31/2026
Date of reporting period:
07/31/2025
Item 1 - Reports to Stockholders
(a) The Reports to Shareholders are attached herewith
BlackRock Real Estate Securities Fund
Institutional Shares | BIREX
Semi-Annual Shareholder Report - July 31, 2025
This semi-annual shareholder report contains important information about BlackRock Real Estate Securities Fund (the "Fund") for the period of February 1, 2025 to July 31, 2025. You can find additional information about the Fund at blackrock.com/fundreports. You can also request this information by contacting us at (800) 441-7762.
What were the Fund costs for the last six months?
(based on a hypothetical $10,000 investment)
Class name Costs of a $10,000
investment 		Costs paid as a percentage of a
$10,000 investment
Institutional Shares $37 0.75%(a)
​(a)
Annualized.
Key Fund statistics
Net Assets $334,083,197
Number of Portfolio Holdings 37
Portfolio Turnover Rate 57%
What did the Fund invest in?
(as of July 31, 2025)
Industry allocation
Industry(a) Percent of
Net Assets
Specialized REITs 38.8 %
Residential REITs 13.1 %
Health Care REITs 12.5 %
Retail REITs 12.2 %
Industrial REITs 11.5 %
Office REITs 4.3 %
Diversified REITs 2.2 %
Hotel & Resort REITs 2.1 %
Health Care Providers & Services 1.7 %
Capital Markets 0.5 %
Short-Term Securities 0.5 %
Other Assets Less Liabilities 0.6 %
Ten largest holdings
Security(b) Percent of
Net Assets
Prologis, Inc. 7.6 %
Equinix, Inc. 6.7 %
Welltower, Inc. 6.7 %
American Tower Corp. 6.1 %
Digital Realty Trust, Inc. 5.4 %
Crown Castle, Inc. 4.9 %
AvalonBay Communities, Inc. 4.7 %
Simon Property Group, Inc. 4.4 %
VICI Properties, Inc. 4.1 %
Sun Communities, Inc. 3.1 %
​(a)
For purposes of this report, industry sub-classifications may differ from those utilized by the Fund for compliance purposes.
​(b)
Excludes short-term securities.
Additional information
If you wish to view additional information about the Fund, including but not limited to financial statements, the Fund's prospectus, and proxy voting policies and procedures, please visit blackrock.com/fundreports. For proxy voting records, visit blackrock.com/proxyrecords.
©2025 BlackRock, Inc. or its affiliates. All rights reserved. BLACKROCK is a registered trademark of BlackRock, Inc. or its affiliates. All other trademarks are those of their respective owners.
BlackRock Real Estate Securities Fund
Institutional Shares | BIREX
Semi-Annual Shareholder Report - July 31, 2025
BIREX-07/25-SAR
BlackRock Real Estate Securities Fund
Investor A Shares | BAREX
Semi-Annual Shareholder Report - July 31, 2025
This semi-annual shareholder report contains important information about BlackRock Real Estate Securities Fund (the "Fund") for the period of February 1, 2025 to July 31, 2025. You can find additional information about the Fund at blackrock.com/fundreports. You can also request this information by contacting us at (800) 441-7762.
What were the Fund costs for the last six months?
(based on a hypothetical $10,000 investment)
Class name Costs of a $10,000
investment 		Costs paid as a percentage of a
$10,000 investment
Investor A Shares $50 1.00%(a)
​(a)
Annualized.
Key Fund statistics
Net Assets $334,083,197
Number of Portfolio Holdings 37
Portfolio Turnover Rate 57%
What did the Fund invest in?
(as of July 31, 2025)
Industry allocation
Industry(a) Percent of
Net Assets
Specialized REITs 38.8 %
Residential REITs 13.1 %
Health Care REITs 12.5 %
Retail REITs 12.2 %
Industrial REITs 11.5 %
Office REITs 4.3 %
Diversified REITs 2.2 %
Hotel & Resort REITs 2.1 %
Health Care Providers & Services 1.7 %
Capital Markets 0.5 %
Short-Term Securities 0.5 %
Other Assets Less Liabilities 0.6 %
Ten largest holdings
Security(b) Percent of
Net Assets
Prologis, Inc. 7.6 %
Equinix, Inc. 6.7 %
Welltower, Inc. 6.7 %
American Tower Corp. 6.1 %
Digital Realty Trust, Inc. 5.4 %
Crown Castle, Inc. 4.9 %
AvalonBay Communities, Inc. 4.7 %
Simon Property Group, Inc. 4.4 %
VICI Properties, Inc. 4.1 %
Sun Communities, Inc. 3.1 %
​(a)
For purposes of this report, industry sub-classifications may differ from those utilized by the Fund for compliance purposes.
​(b)
Excludes short-term securities.
Additional information
If you wish to view additional information about the Fund, including but not limited to financial statements, the Fund's prospectus, and proxy voting policies and procedures, please visit blackrock.com/fundreports. For proxy voting records, visit blackrock.com/proxyrecords.
©2025 BlackRock, Inc. or its affiliates. All rights reserved. BLACKROCK is a registered trademark of BlackRock, Inc. or its affiliates. All other trademarks are those of their respective owners.
BlackRock Real Estate Securities Fund
Investor A Shares | BAREX
Semi-Annual Shareholder Report - July 31, 2025
BAREX-07/25-SAR
BlackRock Real Estate Securities Fund
Investor C Shares | BCREX
Semi-Annual Shareholder Report - July 31, 2025
This semi-annual shareholder report contains important information about BlackRock Real Estate Securities Fund (the "Fund") for the period of February 1, 2025 to July 31, 2025. You can find additional information about the Fund at blackrock.com/fundreports. You can also request this information by contacting us at (800) 441-7762.
What were the Fund costs for the last six months?
(based on a hypothetical $10,000 investment)
Class name Costs of a $10,000
investment 		Costs paid as a percentage of a
$10,000 investment
Investor C Shares $86 1.75%(a)
​(a)
Annualized.
Key Fund statistics
Net Assets $334,083,197
Number of Portfolio Holdings 37
Portfolio Turnover Rate 57%
What did the Fund invest in?
(as of July 31, 2025)
Industry allocation
Industry(a) Percent of
Net Assets
Specialized REITs 38.8 %
Residential REITs 13.1 %
Health Care REITs 12.5 %
Retail REITs 12.2 %
Industrial REITs 11.5 %
Office REITs 4.3 %
Diversified REITs 2.2 %
Hotel & Resort REITs 2.1 %
Health Care Providers & Services 1.7 %
Capital Markets 0.5 %
Short-Term Securities 0.5 %
Other Assets Less Liabilities 0.6 %
Ten largest holdings
Security(b) Percent of
Net Assets
Prologis, Inc. 7.6 %
Equinix, Inc. 6.7 %
Welltower, Inc. 6.7 %
American Tower Corp. 6.1 %
Digital Realty Trust, Inc. 5.4 %
Crown Castle, Inc. 4.9 %
AvalonBay Communities, Inc. 4.7 %
Simon Property Group, Inc. 4.4 %
VICI Properties, Inc. 4.1 %
Sun Communities, Inc. 3.1 %
​(a)
For purposes of this report, industry sub-classifications may differ from those utilized by the Fund for compliance purposes.
​(b)
Excludes short-term securities.
Additional information
If you wish to view additional information about the Fund, including but not limited to financial statements, the Fund's prospectus, and proxy voting policies and procedures, please visit blackrock.com/fundreports. For proxy voting records, visit blackrock.com/proxyrecords.
©2025 BlackRock, Inc. or its affiliates. All rights reserved. BLACKROCK is a registered trademark of BlackRock, Inc. or its affiliates. All other trademarks are those of their respective owners.
BlackRock Real Estate Securities Fund
Investor C Shares | BCREX
Semi-Annual Shareholder Report - July 31, 2025
BCREX-07/25-SAR

(b) Not Applicable

Item 2 -

Code of Ethics - Not Applicable to this semi-annual report

Item 3 -

Audit Committee Financial Expert - Not Applicable to this semi-annual report

Item 4 -

Principal Accountant Fees and Services - Not Applicable to this semi-annual report

Item 5 -

Audit Committee of Listed Registrant - Not Applicable

Item 6 -

Investments

(a) The registrant's Schedule of Investments is included as part of the Financial Statements and Financial Highlights for Open-EndManagement Investment Companies filed under Item 7 of this Form.

(b) Not Applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSRfiling.

Item 7 -

Financial Statements and Financial Highlights for Open-EndManagement Investment Companies

(a) The registrant's Financial Statements are attached herewith.

(b) The registrant's Financial Highlights are attached herewith.

JULY 31, 2025

2025 Semi-Annual Financial

Statements and Additional

Information (Unaudited)

BlackRock FundsSM

• BlackRock Real Estate Securities Fund

Not FDIC Insured • May Lose Value • No Bank Guarantee

Table of Contents

Page

Derivative Financial Instruments

3

Schedule of Investments

4

Statement of Assets and Liabilities

6

Statement of Operations

8

Statements of Changes in Net Assets

9

Financial Highlights

10

Notes to Financial Statements

13

Additional Information

21

Disclosure of Investment Advisory Agreement and Sub-AdvisoryAgreements

23

Glossary of Terms Used in these Financial Statements

26
2  

Derivative Financial Instruments

The Fund may invest in various derivative financial instruments. These instruments are used to obtain exposure to a security, commodity, index, market, and/or other assets without owning or taking physical custody of securities, commodities and/or other referenced assets or to manage market, equity, credit, interest rate, foreign currency exchange rate, commodity and/or other risks. Derivative financial instruments may give rise to a form of economic leverage and involve risks, including the imperfect correlation between the value of a derivative financial instrument and the underlying asset, possible default of the counterparty to the transaction or illiquidity of the instrument. Pursuant to Rule 18f-4under the 1940 Act, among other things, the Fund must either use derivative financial instruments with embedded leverage in a limited manner or comply with an outer limit on fund leverage risk based on value-at-risk.The Fund's successful use of a derivative financial instrument depends on the investment adviser's ability to predict pertinent market movements accurately, which cannot be assured. The use of these instruments may result in losses greater than if they had not been used, may limit the amount of appreciation the Fund can realize on an investment and/or may result in lower distributions paid to shareholders. The Fund's investments in these instruments, if any, are discussed in detail in the Notes to Financial Statements.

D E R I V A T I V E  F I N A N C I A L  I N S T R U M E N T S

3

Schedule of Investments (unaudited)

July 31, 2025

BlackRock Real Estate Securities Fund

(Percentages shown are based on Net Assets)

Security Shares Value

Common Stocks

Capital Markets - 0.5%

DigitalBridge Group, Inc., Class A

162,122 $  1,741,190
Diversified REITs - 2.2%

Essential Properties Realty Trust, Inc.

245,252 7,477,733
Health Care Providers & Services - 1.7%

Brookdale Senior Living, Inc.(a)

742,819 5,756,847
Health Care REITs - 12.5%

Alexandria Real Estate Equities, Inc.

74,960 5,729,193

American Healthcare REIT, Inc.

224,269 8,665,754

CareTrust REIT, Inc.

156,952 4,991,074

Welltower, Inc.

135,133 22,306,404
41,692,425
Hotel & Resort REITs - 2.1%

Ryman Hospitality Properties, Inc.

73,238 6,962,004
Industrial REITs - 11.5%

Americold Realty Trust, Inc.

266,959 4,292,701

EastGroup Properties, Inc.

53,151 8,676,369

Prologis, Inc.

237,519 25,362,279
38,331,349
Office REITs - 4.3%

BXP, Inc.

88,924 5,818,297

Hudson Pacific Properties, Inc.

1,942,813 4,759,892

Kilroy Realty Corp.

99,259 3,658,687
14,236,876
Residential REITs - 13.1%

American Homes 4 Rent, Class A

129,134 4,479,658

Apartment Investment & Management Co., Class A

385,935 3,245,713

AvalonBay Communities, Inc.

84,238 15,691,855

Essex Property Trust, Inc.

38,620 10,048,152

Sun Communities, Inc.

84,187 10,441,714
43,907,092
Retail REITs - 12.2%

Agree Realty Corp.

121,557 8,715,637

Brixmor Property Group, Inc.

219,528 5,736,267
Security Shares Value
Retail REITs (continued)

Realty Income Corp.

30,703 $  1,723,359

Regency Centers Corp.

138,444 9,884,902

Simon Property Group, Inc.

90,231 14,778,935
40,839,100
Specialized REITs - 38.8%

American Tower Corp.

97,175 20,250,298

Crown Castle, Inc.

156,468 16,443,222

CubeSmart

191,855 7,465,078

Digital Realty Trust, Inc.

103,179 18,204,903

EPR Properties

108,521 5,972,996

Equinix, Inc.

28,502 22,378,915

Iron Mountain, Inc.

55,420 5,395,691

PotlatchDeltic Corp.

146,572 5,993,329

Public Storage

27,349 7,437,287

SBA Communications Corp.

12,109 2,721,135

Smartstop Self Storage REIT, Inc.

113,135 3,833,014

VICI Properties, Inc.

416,806 13,587,876
129,683,744

Total Long-Term Investments - 98.9%
(Cost: $291,184,673)

330,628,360

Short-Term Securities

Money Market Funds - 0.5%

BlackRock Liquidity Funds, T-Fund,Institutional Shares, 4.20%(b)(c)

1,572,061 1,572,061

Total Short-Term Securities - 0.5%
(Cost: $1,572,061)

1,572,061

Total Investments - 99.4%
(Cost: $292,756,734)

332,200,421

Other Assets Less Liabilities - 0.6%

1,882,776

Net Assets - 100.0%

$  334,083,197
(a)

Non-incomeproducing security.

(b)

Affiliate of the Fund.

(c)

Annualized 7-dayyield as of period end.

4

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Schedule of Investments (unaudited) (continued)

July 31, 2025

BlackRock Real Estate Securities Fund

Affiliates

Investments in issuers considered to be affiliate(s) of the Fund during the six months ended July 31, 2025 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

Affiliated Issuer Value at
01/31/25 		Purchases
at Cost 		Proceeds
from Sales 		Net
Realized
Gain
(Loss) 		Change in
Unrealized
Appreciation
(Depreciation) 		Value at
07/31/25 		Shares
Held at
07/31/25 		Income Capital
Gain
Distributions
from
Underlying
Funds

BlackRock Cash Funds: Institutional, SL Agency Shares(a)

$  1,291,537 $ - $  (1,291,521 )(b) $ (16 ) $ - $ - - $ 664 (c) $ -

BlackRock Liquidity Funds, T-Fund,Institutional Shares

2,816,961 - (1,244,900 )(b) - - 1,572,061 1,572,061 62,331 -
$ (16 ) $ - $  1,572,061 $  62,995 $ -
(a)

As of period end, the entity is no longer held.

(b)

Represents net amount purchased (sold).

(c)

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

For purposes of this report, industry and sector sub-classificationsmay differ from those utilized by the Fund for compliance purposes.

Derivative Financial Instruments Categorized by Risk Exposure

For the period ended July 31, 2025, the effect of derivative financial instruments in the Statement of Operations was as follows:

Commodity
Contracts 		Credit
Contracts 		Equity
Contracts 		Foreign
Currency
Exchange
Contracts 		Interest
Rate
Contracts 		Other
Contracts 		Total

Net Realized Gain (Loss) from:

Swaps

$ - $ - $ (10,218 ) $ - $ - $ - $  (10,218 )

Net Change in Unrealized Appreciation (Depreciation) on:

Swaps

$ - $ - $ (26,358 ) $ - $ - $ - $ (26,358 )

Average Quarterly Balances of Outstanding Derivative Financial Instruments

Equity swaps:

Average notional value - long

$  - (a)

Average notional value - short

- (a)
(a)

Derivative financial instrument not held at any quarter-end.The risk exposure table serves as an indicator of activity during the period.

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

Fair Value Hierarchy as of Period End

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

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

Level 1 Level 2 Level 3 Total

Assets

Investments

Long-Term Investments

Common Stocks

$  330,628,360 $ - $ - $  330,628,360

Short-Term Securities

Money Market Funds

1,572,061 - - 1,572,061
$  332,200,421 $           - $           - $  332,200,421

See notes to financial statements.

S C H E D U L E  O F  I N V E S T M E N T S

5

Statement of Assets and Liabilities (unaudited)

July 31, 2025

BlackRock
Real Estate
Securities Fund

ASSETS

Investments, at value - unaffiliated(a)

$ 330,628,360

Investments, at value - affiliated(b)

1,572,061

Receivables:

Investments sold

1,140,485

Capital shares sold

1,248,786

Dividends - unaffiliated

78,507

Dividends - affiliated

11,249

From the Manager

32,355

Prepaid expenses

20,558

Total assets

334,732,361

LIABILITIES

Payables:

Administration fees

12,271

Capital shares redeemed

183,695

Investment advisory fees

183,312

Trustees' and Officer's fees

591

Other accrued expenses

33,759

Other affiliate fees

15,349

Printing fees

37,341

Professional fees

11,830

Registration fees

43,093

Service and distribution fees

6,736

Transfer agent fees

121,187

Total liabilities

649,164

Commitments and contingent liabilities

NET ASSETS

$ 334,083,197

NET ASSETS CONSIST OF:

Paid-incapital

$ 363,679,992

Accumulated loss

(29,596,795 )

NET ASSETS

$  334,083,197

(a) Investments, at cost - unaffiliated

$ 291,184,673

(b) Investments, at cost - affiliated

$ 1,572,061
6

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Statement of Assets and Liabilities (unaudited) (continued)

July 31, 2025

BlackRock

Real Estate

Securities Fund

NET ASSET VALUE

Institutional

Net assets

$  310,332,386

Shares outstanding

21,066,295

Net asset value

$ 14.73

Shares authorized

Unlimited

Par value

$ 0.001
Investor A

Net assets

$ 21,426,120

Shares outstanding

1,453,827

Net asset value

$ 14.74

Shares authorized

Unlimited

Par value

$ 0.001
Investor C

Net assets

$ 2,324,691

Shares outstanding

159,659

Net asset value

$ 14.56

Shares authorized

Unlimited

Par value

$ 0.001

See notes to financial statements.

S T A T E M E N T  O F  A S S E T S  A N D  L I A B I L I T I E S

7

Statement of Operations (unaudited)

Six Months Ended July 31, 2025

BlackRock
Real Estate
Securities Fund

INVESTMENT INCOME

Dividends - unaffiliated

$   6,553,317

Dividends - affiliated

62,331

Securities lending income - affiliated - net

664

Total investment income

6,616,312

EXPENSES

Investment advisory

1,249,990

Transfer agent - class specific

197,304

Administration

70,833

Professional

62,893

Service and distribution - class specific

39,465

Administration - class specific

33,350

Registration

29,541

Accounting services

27,277

Printing and postage

18,260

Custodian

4,454

Trustees and Officer

4,338

Miscellaneous

6,576

Total expenses

1,744,281

Less:

Administration fees waived by the Manager - class specific

(33,350 )

Fees waived and/or reimbursed by the Manager

(225,789 )

Transfer agent fees waived and/or reimbursed by the Manager - class specific

(195,647 )

Total expenses after fees waived and/or reimbursed

1,289,495

Net investment income

5,326,817

REALIZED AND UNREALIZED GAIN (LOSS)

Net realized loss from:

Investments - unaffiliated

(622,461 )

Investments - affiliated

(16 )

Swaps

(10,218 )
(632,695 )

Net change in unrealized appreciation (depreciation) on:

Investments - unaffiliated

(6,119,577 )

Swaps

(26,358 )
(6,145,935 )

Net realized and unrealized loss

(6,778,630 )

NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS

$ (1,451,813 )

See notes to financial statements.

8

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Statements of Changes in Net Assets

BlackRock Real Estate Securities Fund
Six Months
Ended
07/31/25
(unaudited) 		Year Ended
01/31/25

INCREASE (DECREASE) IN NET ASSETS

OPERATIONS

Net investment income

$ 5,326,817 $ 7,011,478

Net realized gain (loss)

(632,695 ) 10,736,599

Net change in unrealized appreciation (depreciation)

(6,145,935 ) 10,594,665

Net increase (decrease) in net assets resulting from operations

(1,451,813 ) 28,342,742

DISTRIBUTIONS TO SHAREHOLDERS(a)

From net investment income and net realized gain:

Institutional

(4,919,106 )(b) (6,502,729 )

Investor A

(317,753 )(b) (505,212 )

Investor C

(26,164 )(b) (39,301 )

Return of capital:

Institutional

- (1,355,110 )

Investor A

- (105,282 )

Investor C

- (8,190 )

Decrease in net assets resulting from distributions to shareholders

(5,263,023 ) (8,515,824 )

CAPITAL SHARE TRANSACTIONS

Net increase (decrease) in net assets derived from capital share transactions

(3,691,705 ) 52,404,452

NET ASSETS

Total increase (decrease) in net assets

(10,406,541 ) 72,231,370

Beginning of period

344,489,738 272,258,368

End of period

$  334,083,197 $  344,489,738
(a)

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

(b)

A portion of the distributions from net investment income may be deemed a return of capital or net realized gain at fiscal year-end.

See notes to financial statements.

S T A T E M E N T S  O F  C H A N G E S  I N  N E T  A S S E T S

9

Financial Highlights

(For a share outstanding throughout each period)

BlackRock Real Estate Securities Fund
Institutional
Six Months
Ended
07/31/25
(unaudited) 		Year Ended
01/31/25 		Year Ended
01/31/24 		Year Ended
01/31/23 		Year Ended
01/31/22 		Year Ended
01/31/21

Net asset value, beginning of period

$ 15.00 $ 14.00 $ 14.72 $ 17.52 $ 13.50 $ 14.52

Net investment income(a)

0.24 0.35 0.35 0.34 0.18 0.19

Net realized and unrealized gain (loss)

(0.27 ) 1.08 (0.65 ) (2.56 ) 4.15 (0.92 )

Net increase (decrease) from investment operations

(0.03 ) 1.43 (0.30 ) (2.22 ) 4.33 (0.73 )

Distributions(b)

From net investment income

(0.24 )(c) (0.36 ) (0.34 ) (0.35 ) (0.23 ) (0.22 )

From net realized gain

- - - (0.20 ) (0.08 ) -

Return of capital

- (0.07 ) (0.08 ) (0.03 ) - (0.07 )

Total distributions

(0.24 ) (0.43 ) (0.42 ) (0.58 ) (0.31 ) (0.29 )

Net asset value, end of period

$ 14.73 $ 15.00 $ 14.00 $ 14.72 $ 17.52 $ 13.50

Total Return(d)

Based on net asset value

(0.20 )%(e) 10.23 % (1.89 )% (12.53 )% 32.21 % (4.85 )%

Ratios to Average Net Assets(f)

Total expenses

1.02 %(g) 1.05 % 1.10 % 0.98 % 1.02 % 1.16 %

Total expenses after fees waived and/or reimbursed

0.75 %(g) 0.75 % 0.75 % 0.75 % 0.75 % 0.84 %

Net investment income

3.22 %(g) 2.36 % 2.56 % 2.19 % 1.06 % 1.48 %

Supplemental Data

Net assets, end of period (000)

$ 310,332 $ 319,147 $ 246,878 $ 436,099 $ 505,048 $ 87,699

Portfolio turnover rate

57 %(h) 59 %(h) 65 %(h) 56 %(h) 73 %(h) 58 %(h)
(a)

Based on average shares outstanding.

(b)

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

(c)

A portion of the distributions from net investment income may be deemed a return of capital or net realized gain at fiscal year-end.

(d)

Where applicable, assumes the reinvestment of distributions.

(e)

Not annualized.

(f)

Excludes fees and expenses incurred indirectly as a result of investments in underlying funds.

(g)

Annualized.

(h)

Excludes underlying investments in equity swaps.

See notes to financial statements.

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Financial Highlights (continued)

(For a share outstanding throughout each period)

BlackRock Real Estate Securities Fund (continued)
Investor A
Six Months
Ended
07/31/25
(unaudited) 		Year Ended
01/31/25 		Year Ended
01/31/24 		Year Ended
01/31/23 		Year Ended
01/31/22 		Year Ended
01/31/21

Net asset value, beginning of period

$ 15.01 $ 14.00 $ 14.72 $ 17.52 $ 13.46 $ 14.49

Net investment income(a)

0.22 0.33 0.28 0.29 0.20 0.17

Net realized and unrealized gain (loss)

(0.27 ) 1.07 (0.61 ) (2.54 ) 4.08 (0.94 )

Net increase (decrease) from investment operations

(0.05 ) 1.40 (0.33 ) (2.25 ) 4.28 (0.77 )

Distributions(b)

From net investment income

(0.22 )(c) (0.32 ) (0.31 ) (0.32 ) (0.15 ) (0.20 )

From net realized gain

- - - (0.20 ) (0.07 ) -

Return of capital

- (0.07 ) (0.08 ) (0.03 ) - (0.06 )

Total distributions

(0.22 ) (0.39 ) (0.39 ) (0.55 ) (0.22 ) (0.26 )

Net asset value, end of period

$ 14.74 $ 15.01 $ 14.00 $ 14.72 $ 17.52 $ 13.46

Total Return(d)

Based on net asset value

(0.33 )%(e) 10.03 % (2.14 )% (12.76 )% 31.91 % (5.17 )%

Ratios to Average Net Assets(f)

Total expenses

1.34 %(g) 1.25 % 1.24 % 1.47 % 1.35 % 1.40 %

Total expenses after fees waived and/or reimbursed

1.00 %(g) 1.00 % 1.00 % 1.00 % 1.00 % 1.09 %

Net investment income

2.96 %(g) 2.22 % 2.07 % 1.89 % 1.28 % 1.40 %

Supplemental Data

Net assets, end of period (000)

$ 21,426 $ 22,824 $ 22,865 $ 25,120 $ 33,621 $ 181,893

Portfolio turnover rate

57 %(h) 59 %(h) 65 %(h) 56 %(h) 73 %(h) 58 %(h)
(a)

Based on average shares outstanding.

(b)

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

(c)

A portion of the distributions from net investment income may be deemed a return of capital or net realized gain at fiscal year-end.

(d)

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

(e)

Not annualized.

(f)

Excludes fees and expenses incurred indirectly as a result of investments in underlying funds.

(g)

Annualized.

(h)

Excludes underlying investments in equity swaps.

See notes to financial statements.

F I N A N C I A L  H I G H L I G H T S

11

Financial Highlights (continued)

(For a share outstanding throughout each period)

BlackRock Real Estate Securities Fund (continued)
Investor C
Six Months
Ended
07/31/25
(unaudited) 		Year Ended
01/31/25 		Year Ended
01/31/24 		Year Ended
01/31/23 		Year Ended
01/31/22 		Year Ended
01/31/21

Net asset value, beginning of period

$ 14.83 $ 13.84 $ 14.55 $ 17.33 $ 13.38 $ 14.39

Net investment income(a)

0.16 0.21 0.18 0.18 0.03 0.11

Net realized and unrealized gain (loss)

(0.27 ) 1.06 (0.60 ) (2.52 ) 4.09 (0.96 )

Net increase (decrease) from investment operations

(0.11 ) 1.27 (0.42 ) (2.34 ) 4.12 (0.85 )

Distributions(b)

From net investment income

(0.16 )(c) (0.23 ) (0.23 ) (0.22 ) (0.13 ) (0.12 )

From net realized gain

- - - (0.20 ) (0.04 ) -

Return of capital

- (0.05 ) (0.06 ) (0.02 ) - (0.04 )

Total distributions

(0.16 ) (0.28 ) (0.29 ) (0.44 ) (0.17 ) (0.16 )

Net asset value, end of period

$ 14.56 $ 14.83 $ 13.84 $ 14.55 $ 17.33 $ 13.38

Total Return(d)

Based on net asset value

(0.72 )%(e) 9.18 % (2.84 )% (13.43 )% 30.88 % (5.85 )%

Ratios to Average Net Assets(f)

Total expenses

2.12 %(g) 2.10 % 2.13 % 2.11 % 2.15 % 2.22 %

Total expenses after fees waived and/or reimbursed

1.75 %(g) 1.75 % 1.75 % 1.75 % 1.75 % 1.86 %

Net investment income

2.21 %(g) 1.45 % 1.34 % 1.17 % 0.16 % 0.92 %

Supplemental Data

Net assets, end of period (000)

$ 2,325 $ 2,519 $ 2,515 $ 3,002 $ 4,037 $ 1,889

Portfolio turnover rate

57 %(h) 59 %(h) 65 %(h) 56 %(h) 73 %(h) 58 %(h)
(a)

Based on average shares outstanding.

(b)

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

(c)

A portion of the distributions from net investment income may be deemed a return of capital or net realized gain at fiscal year-end.

(d)

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

(e)

Not annualized.

(f)

Excludes fees and expenses incurred indirectly as a result of investments in underlying funds.

(g)

Annualized.

(h)

Excludes underlying investments in equity swaps.

See notes to financial statements.

12

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Notes to Financial Statements (unaudited)

1.

ORGANIZATION

BlackRock FundsSM (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-endmanagement investment company. The Trust is organized as a Massachusetts business trust. BlackRock Real Estate Securities Fund (the "Fund") is a series of the Trust. The Fund is classified as non-diversified.

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

Share Class Initial Sales Charge CDSC Conversion Privilege

Institutional Shares

No No None

Investor A Shares

Yes No (a) None

Investor C Shares

No Yes (b) To Investor A Shares after approximately 8 years
(a)

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

(b)

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

The Fund, together with certain other registered investment companies advised by BlackRock Advisors, LLC (the "Manager") or its affiliates, is included in a complex of funds referred to as the BlackRock Multi-Asset Complex.

2.

SIGNIFICANT ACCOUNTING POLICIES

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

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

Cash: The Fund may maintain cash at its custodian which, at times may exceed United States federally insured limits. The Fund may, at times, have outstanding cash disbursements that exceed deposited cash amounts at the custodian during the reporting period. The Fund is obligated to repay the custodian for any overdraft, including any related costs or expenses, where applicable. For financial reporting purposes, overdraft fees, if any, are included in interest expense in the Statement of Operations.

Distributions: Distributions paid by the Fund are recorded on the ex-dividenddates. The portion of distributions, if any, that exceeds a fund's current and accumulated earnings and profits, as measured on a tax basis, constitute a non-taxablereturn of capital. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP.

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

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

The Fund has an arrangement with its custodian whereby credits are earned on uninvested cash balances. For financial reporting purposes, custodian credits, if any, are included in interest income in the Statement of Operations.

Segment Reporting: The Chief Financial Officer acts as the Fund's Chief Operating Decision Maker ("CODM") and is responsible for assessing performance and allocating resources with respect to the Fund. The CODM has concluded that the Fund operates as a single operating segment since the Fund has a single investment strategy as disclosed in its prospectus, against which the CODM assesses performance. The financial information provided to and reviewed by the CODM is presented within the Fund's financial statements.

3.

INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS

Investment Valuation Policies: The Fund's investments are valued at fair value (also referred to as "market value" within the financial statements) each day that the Fund is open for business and, for financial reporting purposes, as of the report date. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer

N O T E S  T O  F I N A N C I A L  S T A T E M E N T S

13

Notes to Financial Statements (unaudited) (continued)

a liability in an orderly transaction between market participants at the measurement date. The Board of Trustees of the Trust (the "Board") has approved the designation of the Fund's Manager as the valuation designee for the Fund. The Fund determines the fair values of its financial instruments using various independent dealers or pricing services under the Manager's policies. If a security's market price is not readily available or does not otherwise accurately represent the fair value of the security, the security will be valued in accordance with the Manager's policies and procedures as reflecting fair value. The Manager has formed a committee (the "Valuation Committee") to develop pricing policies and procedures and to oversee the pricing function for all financial instruments, with assistance from other BlackRock pricing committees.

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

•

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

•

Investments in open-endU.S. mutual funds (including money market funds) are valued at that day's net asset value ("NAV").

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

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

•

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

•

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and

•

Level 3 - Inputs that are unobservable and significant to the entire fair value measurement for the asset or liability (including the Valuation Committee's assumptions used in determining the fair value of financial instruments).

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

4.

SECURITIES AND OTHER INVESTMENTS

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

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

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

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Notes to Financial Statements (unaudited) (continued)

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

5.

DERIVATIVE FINANCIAL INSTRUMENTS

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

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

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

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

•

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

Equity swaps are designed to function as direct economic investments in long or short equity positions. This means that the Fund will receive the economic benefits and risks equivalent to direct investment in these positions, subject to certain adjustments due to events related to the counterparty. Benefits and risks include capital appreciation (depreciation), corporate actions and dividends received and paid. Equity swaps incur interest charges and credits ("financing fees") related to the notional value of the position. These interest charges and credits are based on a specified benchmark rate plus or minus a specified spread.

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

6.

INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

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

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

Average Daily Net Assets Investment Advisory Fees

First $1 billion

0.75 %

$1 billion - $3 billion

0.71

$3 billion - $5 billion

0.68

$5 billion - $10 billion

0.65

Greater than $10 billion

0.64

N O T E S  T O  F I N A N C I A L  S T A T E M E N T S

15

Notes to Financial Statements (unaudited) (continued)

The Manager entered into a sub-advisoryagreement with each of BlackRock International Limited ("BIL") and BlackRock (Singapore) Limited ("BSL") (collectively, the "Sub-Advisers"),each an affiliate of the Manager. The Manager pays BIL and BSL for services they provide for that portion of the Fund for which BIL and BSL, as applicable, acts as Sub-Adviser,a monthly fee that is equal to a percentage of the investment advisory fees paid by the Fund to the Manager.

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

Share Class Service Fees Distribution Fees

Investor A

0.25 % N/A

Investor C

0.25 0.75 %

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

For the six months ended July 31, 2025, the following table shows the class specific service and distribution fees borne directly by each share class of the Fund:

Investor A Investor C Total

Service and distribution - class specific

$ 27,435   $ 12,030   $  39,465  

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

Average Daily Net Assets Administration Fees

First $500 million

0.0425 %

$500 million - $1 billion

0.0400

$1 billion - $2 billion

0.0375

$2 billion - $4 billion

0.0350

$4 billion - $13 billion

0.0325

Greater than $13 billion

0.0300

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

For the six months ended July 31, 2025, the Fund paid the following to the Manager in return for these services, which are included in administration and administration - class specific in the Statement of Operations:

Institutional Investor A Investor C Total

Administration - class specific

$ 30,915   $ 2,195   $ 240   $  33,350  

Transfer Agent: Pursuant to written agreements, certain financial intermediaries, some of which may be affiliates, provide the Fund with sub-accounting,recordkeeping, sub-transferagency and other administrative services with respect to servicing of underlying investor accounts. For these services, these entities receive an asset-based fee or an annual fee per shareholder account, which will vary depending on share class and/or net assets. For the six months ended July 31, 2025, the Fund paid $87,319 for the Fund's Institutional Shares to affiliates of BlackRock in return for these services, which are included in transfer agent - class specific in the Statement of Operations.

The Manager maintains a call center that is responsible for providing certain shareholder services to the Fund. Shareholder services include responding to inquiries and processing purchases and sales based upon instructions from shareholders. For the six months ended July 31, 2025, the Fund reimbursed the Manager the following amounts for costs incurred in running the call center, which are included in transfer agent - class specific in the Statement of Operations:

Institutional Investor A Investor C Total

Reimbursed amounts

$ 380 $ 1,105 $ 162 $ 1,647

For the six months ended July 31, 2025, the following table shows the class specific transfer agent fees borne directly by each share class of the Fund:

 Institutional   Investor A   Investor C  Total

Transfer agent - class specific

$ 174,590 $ 20,154 $ 2,560 $ 197,304

Other Fees: For the six months ended July 31, 2025, affiliates earned underwriting discounts, direct commissions and dealer concessions on sales of the Fund's Investor A Shares for a total of $767.

For the six months ended July 31, 2025, affiliates received CDSCs in the amount of $538 and $695 for Investor A Shares and Investor C Shares, respectively.

Expense Limitations, Waivers and Reimbursements: The Manager contractually agreed to waive its investment advisory fees by the amount of investment advisory fees the Fund pays to the Manager indirectly through its investment in affiliated money market funds (the "affiliated money market fund waiver") through June 30, 2026. The

16

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Notes to Financial Statements (unaudited) (continued)

contractual agreement may be terminated upon 90 days' notice by a majority of the trustees who are not "interested persons" of the Trust, as defined in the 1940 Act ("Independent Trustees"), or by a vote of a majority of the outstanding voting securities of the Fund. The amount of waivers and/or reimbursements of fees and expenses made pursuant to the expense limitation described below will be reduced by the amount of the affiliated money market fund waiver. This amount is included in fees waived and/or reimbursed by the Manager in the Statement of Operations. For the six months ended July 31, 2025, the amount waived was $1,115.

The Manager has contractually agreed to waive its investment advisory fee with respect to any portion of the Fund's assets invested in affiliated equity and fixed-income mutual funds and affiliated exchange-traded funds that have a contractual management fee through June 30, 2026. The contractual agreement may be terminated upon 90 days' notice by a majority of the Independent Trustees, or by a vote of a majority of the outstanding voting securities of the Fund. For the six months ended July 31, 2025, there were no fees waived by the Manager pursuant to this arrangement.

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

Institutional Investor A Investor C
0.75% 1.00% 1.75%

The Manager has agreed not to reduce or discontinue the contractual expense limitations through June 30, 2026, unless approved by the Board, including a majority of the Independent Trustees, or by a vote of a majority of the outstanding voting securities of the Fund. For the six months ended July 31, 2025, the Manager waived and/or reimbursed investment advisory fees of $224,674, which is included in fees waived and/or reimbursed by the Manager in the Statement of Operations.

In addition, these amounts waived and/or reimbursed by the Manager are included in administration fees waived by the Manager - class specific and transfer agent fees waived and/or reimbursed by the Manager - class specific, respectively, in the Statement of Operations. For the six months ended July 31, 2025, class specific expense waivers and/or reimbursements were as follows:

Institutional Investor A Investor C Total

Administration fees waived by the Manager - class specific

$ 30,915 $ 2,195 $ 240 $ 33,350

Transfer agent fees waived and/or reimbursed by the Manager - class specific

173,039 20,056 2,552  195,647

Securities Lending: The U.S. Securities and Exchange Commission ("SEC") has issued an exemptive order which permits BIM, an affiliate of the Manager, to serve as securities lending agent for the Fund, subject to applicable conditions. As securities lending agent, BIM bears all operational costs directly related to securities lending. The Fund is responsible for fees in connection with the investment of cash collateral received for securities on loan (the "collateral investment fees"). The cash collateral is invested in a money market fund, BlackRock Cash Funds: Institutional, managed by the Manager or its affiliates. However, BIM has agreed to reduce the amount of securities lending income it receives in order to effectively limit the collateral investment fees the Fund bears to an annual rate of 0.04%. The SL Agency Shares of such money market fund will not be subject to a sales load, distribution fee or service fee. The money market fund in which the cash collateral has been reinvested may impose a discretionary liquidity fee of up to 2% on all redemptions. Discretionary liquidity fees may be imposed or terminated at any time at the discretion of the board of directors of the money market fund, or its delegate, if it is determined that such fee would be, or would not be, respectively, in the best interest of the money market fund. Additionally, the money market fund will impose a mandatory liquidity fee if the money market fund's total net redemptions on a single day exceed 5% of the money market fund's net assets, unless the amount of the fee is less than 0.01% of the value of the shares redeemed. The money market fund will determine the size of the mandatory liquidity fee by making a good faith estimate of certain costs the money market fund would incur if it were to sell a pro rata amount of each security in the portfolio to satisfy the amount of net redemptions on that day. There is no limit to the size of a mandatory liquidity fee. If the money market fund cannot estimate the costs of selling a pro rata amount of each portfolio security in good faith and supported by data, it is required to apply a default liquidity fee of 1% on the value of shares redeemed on that day.

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

Pursuant to the current securities lending agreement, the Fund retains 81% of securities lending income (which excludes collateral investment fees), and this amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees.

In addition, commencing the business day following the date that the aggregate securities lending income earned across the BlackRock Multi-Asset Complex in a calendar year exceeds specified thresholds, the Fund, pursuant to the securities lending agreement, will retain for the remainder of that calendar year securities lending income in an amount equal to 84% of securities lending income (which excludes collateral investment fees), and this amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees.

Prior to January 1, 2025, commencing the business day following the date that the aggregate securities lending income earned across the BlackRock Multi-Asset Complex in a calendar year exceeded a specified threshold, the Fund would retain for the remainder of that calendar year securities lending income in an amount equal to 81% of securities lending income (which excluded collateral investment fees), and this amount retained could never be less than 70% of the total of securities lending income plus the collateral investment fees.

The share of securities lending income earned by the Fund is shown as securities lending income - affiliated - net in the Statement of Operations. For the six months ended July 31, 2025, the Fund paid BIM $151 for securities lending agent services.

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Notes to Financial Statements (unaudited) (continued)

Interfund Lending: Prior to March 3, 2025, in accordance with an exemptive order (the "Order") from the SEC, the Fund could participate in a joint lending and borrowing facility for temporary purposes (the "Interfund Lending Program"), subject to compliance with the terms and conditions of the Order, and to the extent permitted by the Fund's investment policies and restrictions. Effective March 3, 2025, the Interfund Lending Program was not renewed but remains available for renewal in the future.

During the period ended March 3, 2025, the Fund did not participate in the Interfund Lending Program.

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

7.

PURCHASES AND SALES

For the six months ended July 31, 2025, purchases and sales of investments, excluding short-term securities, were $189,494,692 and $191,942,246, respectively.

8.

INCOME TAX INFORMATION

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

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

Management has analyzed tax laws and regulations and their application to the Fund as of July 31, 2025, inclusive of the open tax return years, and does not believe that there are any uncertain tax positions that require recognition of a tax liability in the Fund's financial statements. Management's analysis is based on the tax laws and judicial and administrative interpretations thereof in effect as of the date of these financial statements, all of which are subject to change, possibly with retroactive effect, which may impact the Fund's NAV.

As of January 31, 2025, the Fund had non-expiringcapital loss carryforwards as follows:

Fund Name Non-Expiring Capital
Loss Carryforwards(a)

BlackRock Real Estate Securities Fund

$ (48,875,931 )
(a)

Amounts available to offset future realized capital gains.

As of July 31, 2025, gross unrealized appreciation and depreciation based on cost of investments (including short positions and derivatives, if any) for U.S. federal income tax purposes were as follows:

Fund Name Tax Cost Gross Unrealized
Appreciation 		Gross Unrealized
Depreciation 		Net Unrealized
Appreciation
(Depreciation)

BlackRock Real Estate Securities Fund

$  312,326,026 $ 23,407,113 $ (3,532,718 ) $ 19,874,395
9.

BANK BORROWINGS

The Trust, on behalf of the Fund, along with certain other funds managed by the Manager and its affiliates ("Participating Funds"), is party to a 364-day,$2.40 billion credit agreement with a group of lenders. Under this agreement, the Fund may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Fund, can borrow up to an aggregate commitment amount of $1.75 billion at any time outstanding, subject to asset coverage and other limitations as specified in the agreement. The credit agreement has the following terms: a fee of 0.10% per annum on unused commitment amounts and interest at a rate equal to the higher of (a) Overnight Bank Funding Rate ("OBFR") (but, in any event, not less than 0.00%) on the date the loan is made plus 0.80% per annum, (b) the Fed Funds rate (but, in any event, not less than 0.00%) in effect from time to time plus 0.80% per annum on amounts borrowed or (c) the sum of (x) Daily Simple Secured Overnight Financing Rate ("SOFR") (but, in any event, not less than 0.00%) on the date the loan is made plus 0.10% and (y) 0.80% per annum. The agreement expires in April 2026 unless extended or renewed. These fees were allocated among such funds based upon portions of the aggregate commitment available to them and relative net assets of Participating Funds. During the six months ended July 31, 2025, the Fund did not borrow under the credit agreement.

10.

PRINCIPAL RISKS

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

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Notes to Financial Statements (unaudited) (continued)

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

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

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

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

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

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

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

11.

CAPITAL SHARE TRANSACTIONS

Transactions in capital shares for each class were as follows:

Six Months Ended 07/31/25 Year Ended 01/31/25
Share Class Shares Amount Shares Amount

Institutional

Shares sold

2,285,249 $ 34,134,518 7,939,755 $  119,333,215

Shares issued in reinvestment of distributions

335,536 4,888,626 521,722 7,804,120

Shares redeemed

(2,824,192 )  (41,549,100 ) (4,826,820 ) (72,996,520 )
(203,407 ) $ (2,525,956 ) 3,634,657 $ 54,140,815

Investor A

Shares sold and automatic conversion of shares

96,549 $ 1,447,323 279,127 $ 4,135,171

Shares issued in reinvestment of distributions

21,692 316,446 40,578 606,953

Shares redeemed

(184,951 ) (2,777,447 ) (431,914 ) (6,306,101 )
(66,710 ) $ (1,013,678 ) (112,209 ) $ (1,563,977 )

N O T E S  T O  F I N A N C I A L  S T A T E M E N T S

19

Notes to Financial Statements (unaudited) (continued)

Six Months Ended 07/31/25 Year Ended 01/31/25
Share Class Shares Amount Shares Amount

Investor C

Shares sold

5,032 $ 73,756 29,235 $ 425,269

Shares issued in reinvestment of distributions

1,757 25,362 3,161 46,719

Shares redeemed and automatic conversion of shares

(16,981 ) (251,189 ) (44,257 ) (644,374 )
(10,192 ) $ (152,071 ) (11,861 ) $ (172,386 )
(280,309 ) $  (3,691,705 ) 3,510,587 $  52,404,452
12.

SUBSEQUENT EVENTS

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

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Additional Information

Changes in and Disagreements with Accountants

Not applicable.

Proxy Results

Not applicable.

Remuneration Paid to Trustees, Officers, and Others

Compensation to the independent directors/trustees of the Trust is paid by the Trust, on behalf of the Fund.

General Information

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

Electronic Delivery

Shareholders can sign up for e-mailnotifications of quarterly statements, annual and semi-annual shareholder reports and prospectuses by enrolling in the electronic delivery program.

To enroll in electronic delivery:

Shareholders Who Hold Accounts with Investment Advisors, Banks or Brokerages:

Please contact your financial advisor. Please note that not all investment advisors, banks or brokerages may offer this service.

Shareholders Who Hold Accounts Directly with BlackRock:

1. Access the BlackRock website at blackrock.com

2. Select "Access Your Account"

3. Next, select "eDelivery" in the "Related Resources" box and follow the sign-upinstructions.

BlackRock's Mutual Fund Family

BlackRock offers a diverse lineup of open-endmutual funds crossing all investment styles and managed by experts in equity, fixed-income and tax-exemptinvesting. Visit blackrock.com for more information.

Shareholder Privileges

Account Information

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

Automatic Investment Plans

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

Systematic Withdrawal Plans

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

Retirement Plans

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

A D D I T I O N A L  I N F O R M A T I O N

21

Additional Information (continued)

Fund and Service Providers

Investment Adviser and Administrator

BlackRock Advisors, LLC

Wilmington, DE 19809

Sub-Adviser

BlackRock International Limited

Edinburgh, EH3 8BL

United Kingdom

BlackRock (Singapore) Limited

079912 Singapore

Accounting Agent and Transfer Agent

BNY Mellon Investment Servicing (US) Inc.

Wilmington, DE 19809

Custodian

The Bank of New York Mellon

New York, NY 10286

Independent Registered Public Accounting Firm

Deloitte & Touche LLP

Boston, MA 02110

Distributor

BlackRock Investments, LLC

New York, NY 10001

Legal Counsel

Sidley Austin LLP

New York, NY 10019

Address of the Trust

100 Bellevue Parkway

Wilmington, DE 19809

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Disclosure of Investment Advisory Agreement and Sub-AdvisoryAgreements

The Board of Trustees (the "Board", the members of which are referred to as "Board Members") of BlackRock Funds (the "Trust") met on April 22, 2025 (the "April Meeting") and May 20-21,2025 (the "May Meeting") to consider the approval to continue the investment advisory agreement (the "Advisory Agreement") between the Trust, on behalf of BlackRock Real Estate Securities Fund (the "Fund"), and BlackRock Advisors, LLC (the "Manager"), the Fund's investment advisor.

The Board also considered the approval to continue the sub-advisoryagreements (the "Sub-AdvisoryAgreements") between (1) the Manager and BlackRock International Limited ("BIL") with respect to the Fund and (2) BlackRock (Singapore) Limited ("BSL" and together with BIL, the "Sub-Advisors")with respect to the Fund. The Manager and the Sub-Advisorsare referred to herein as "BlackRock". The Advisory Agreement and the Sub-AdvisoryAgreements are referred to herein as the "Agreements".

The Approval Process

Consistent with the requirements of the Investment Company Act of 1940 (the "1940 Act"), the Board considers the approval of the continuation of the Agreements for the Fund on an annual basis. The Board Members who are not "interested persons" of the Trust, as defined in the 1940 Act, are considered independent Board Members (the "Independent Board Members"). The Board's consideration entailed a year-long deliberative process during which the Board and its committees assessed BlackRock's various services to the Fund, including through the review of written materials and oral presentations, and the review of additional information provided in response to requests from the Independent Board Members. The Board had four quarterly meetings per year, as well as numerous ad hoc meetings and executive sessions throughout the year, as needed. The committees of the Board similarly met throughout the year. The Board also held the April Meeting to consider specific information regarding the renewal of the Agreements. In considering the renewal of the Agreements, the Board assessed, among other things, the nature, extent and quality of the services provided to the Fund by BlackRock, BlackRock's personnel and affiliates, including (as applicable): investment management services; accounting oversight; administrative and shareholder services; oversight of the Fund's service providers; risk management and oversight; and legal, regulatory and compliance services. Throughout the year, including during the contract renewal process, the Independent Board Members were advised by independent legal counsel, and met with independent legal counsel in various executive sessions outside of the presence of BlackRock's management.

During the year, the Board, acting directly and through its committees, considered information that was relevant to its annual consideration of the renewal of the Agreements, including the services and support provided by BlackRock to the Fund and its shareholders. BlackRock also furnished additional information to the Board in response to specific questions from the Board. Among the matters the Board considered were: (a) investment performance for one-year,three-year, five-year, and/or since inception periods, as applicable, against peer funds, relevant benchmarks, and other performance metrics, as applicable, as well as BlackRock senior management's and portfolio managers' investment performance analyses, and the reasons for any outperformance or underperformance relative to its peers, benchmarks, and other performance metrics, as applicable; (b) fees, including advisory, administration, if applicable, and other amounts paid to BlackRock and its affiliates by the Fund for services; (c) Fund operating expenses and how BlackRock allocates expenses to the Fund; (d) the resources devoted to, risk oversight of, and compliance reports relating to, implementation of the Fund's investment objective, policies and restrictions, and meeting regulatory requirements; (e) BlackRock's and the Fund's adherence to applicable compliance policies and procedures; (f) the nature, character and scope of non-investmentmanagement services provided by BlackRock and its affiliates and the estimated cost of such services, as applicable; (g) BlackRock's and other service providers' internal controls and risk and compliance oversight mechanisms; (h) BlackRock's implementation of the proxy voting policies approved by the Board; (i) the use of brokerage commissions and execution quality of portfolio transactions; (j) BlackRock's implementation of the Fund's valuation and liquidity procedures; (k) an analysis of management fees paid to BlackRock for products with similar investment mandates across the open-endfund, exchange-traded fund ("ETF"), closed-endfund, sub-advisedmutual fund, separately managed account, collective investment trust, and institutional separate account product channels, as applicable, and the similarities and differences between these products and the services provided as compared to the Fund; (l) BlackRock's compensation methodology for its investment professionals and the incentives and accountability it creates, along with investment professionals' investments in the fund(s) they manage; and (m) periodic updates on BlackRock's business.

Prior to and in preparation for the April Meeting, the Board received and reviewed materials specifically relating to the renewal of the Agreements. The Independent Board Members continuously engaged in a process with their independent legal counsel and BlackRock to review the nature and scope of the information provided to the Board to better assist its deliberations. The materials provided in connection with the April Meeting included, among other things: (a) information independently compiled and prepared by Broadridge Financial Solutions, Inc. ("Broadridge"), based on either a Lipper classification or Morningstar category, regarding the Fund's fees and expenses as compared with a peer group of funds as determined by Broadridge ("Expense Peers") and the investment performance of the Fund as compared with a peer group of funds ("Performance Peers"); (b) information on the composition of the Expense Peers and Performance Peers and a description of Broadridge's methodology; (c) information on the estimated profits realized by BlackRock and its affiliates pursuant to the Agreements and a discussion of fall-outbenefits to BlackRock and its affiliates; (d) a general analysis provided by BlackRock concerning investment management fees received in connection with other types of investment products, such as institutional accounts, sub-advisedmutual funds, ETFs, closed-endfunds, open-endfunds, and separately managed accounts, under similar investment mandates, as well as the performance of such other products, as applicable; (e) a review of non-managementfees; (f) the existence, impact and sharing of potential economies of scale, if any, with the Fund; (g) a summary of aggregate amounts paid by the Fund to BlackRock; (h) sales and redemption data regarding the Fund's shares; and (i) various additional information requested by the Board as appropriate regarding BlackRock's and the Fund's operations.

At the April Meeting, the Board reviewed materials relating to its consideration of the Agreements and the Independent Board Members presented BlackRock with questions and requests for additional information. BlackRock responded to these questions and requests with additional written information in advance of the May Meeting, and such responses were reviewed by the Board Members.

At the May Meeting, the Board concluded its assessment of, among other things: (a) the nature, extent and quality of the services provided by BlackRock; (b) the investment performance of the Fund as compared to its Performance Peers and to other metrics, as applicable; (c) the advisory fee and the estimated cost of the services and estimated profits realized by BlackRock and its affiliates from their relationship with the Fund; (d) the Fund's fees and expenses compared to its Expense Peers; (e) the existence and sharing of potential economies of scale; (f) any fall-outbenefits to BlackRock and its affiliates as a result of BlackRock's relationship with the Fund; and (g) other factors deemed relevant by the Board Members.

The Board also considered other matters it deemed important to the approval process, such as other payments made to BlackRock or its affiliates relating to securities lending and cash management, and BlackRock's services related to the valuation and pricing of Fund portfolio holdings. The Board noted the willingness of BlackRock's personnel to engage in open, candid discussions with the Board. The Board evaluated the information available to it on a fund-by-fundbasis. The following paragraphs provide more

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23

Disclosure of Investment Advisory Agreement and Sub-AdvisoryAgreements (continued)

information about some of the primary factors that were relevant to the Board's decision. The Board Members did not identify any particular information, or any single factor as determinative, and each Board Member may have attributed different weights to the various items and factors considered.

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

The Board, including the Independent Board Members, reviewed the nature, extent and quality of services provided by BlackRock, including the investment advisory services, and the resulting performance of the Fund. Throughout the year, the Board compared Fund performance to the performance of a comparable group of mutual funds, relevant benchmarks, and performance metrics, as applicable. The Board met with BlackRock's senior management personnel responsible for investment activities, including the senior investment officers. The Board also reviewed the materials provided by the Fund's portfolio management team discussing the Fund's performance, investment strategies and outlook.

The Board considered, among other factors, with respect to BlackRock: the experience of the Fund's portfolio management team; research capabilities; investments by portfolio managers in the funds they manage; portfolio trading capabilities; use of certain trading, portfolio management, operations and/or information systems owned by BlackRock; commitment to compliance; credit analysis capabilities; risk analysis and oversight capabilities; and the approach to training and retaining portfolio managers and other research, advisory and management personnel. The Board also considered BlackRock's overall risk management program, including the continued efforts of BlackRock and its affiliates to address cybersecurity risks and the role of BlackRock's Risk & Quantitative Analysis Group. The Board engaged in a review of BlackRock's compensation structure with respect to the Fund's portfolio management team and BlackRock's ability to attract and retain high-quality talent and create performance incentives.

In addition to investment advisory services, the Board considered the nature and quality of the administrative and other non-investmentadvisory services provided to the Fund. BlackRock and its affiliates provide the Fund with certain administrative, shareholder and other services (in addition to any such services provided to the Fund by third parties) and officers and other personnel as are necessary for the operations of the Fund. In particular, BlackRock and its affiliates provide the Fund with administrative services including, among others: (i) responsibility for disclosure documents, such as the prospectus, the summary prospectus (as applicable), the statement of additional information and periodic shareholder reports; (ii) oversight of daily accounting and pricing; (iii) responsibility for periodic filings with regulators; (iv) overseeing and coordinating the activities of third-party service providers including, among others, the Fund's custodian, fund accountant, transfer agent, and auditor; (v) organizing Board meetings and preparing the materials for such Board meetings; (vi) providing legal and compliance support; (vii) furnishing analytical and other support to assist the Board in its consideration of strategic issues such as the merger, consolidation or repurposing of certain open-endfunds; and (viii) performing or managing administrative functions necessary for the operation of the Fund, such as tax reporting, expense management, fulfilling regulatory filing requirements, overseeing the Fund's distribution partners, and shareholder call center and other services. The Board reviewed the structure and duties of BlackRock's fund administration, shareholder services, and legal and compliance departments and considered BlackRock's policies and procedures for assuring compliance with applicable laws and regulations. The Board also considered the operation of BlackRock's business continuity plans.

The Board noted that the engagement of the Sub-Advisorswith respect to the Fund facilitates the provision of investment advice and trading by investment personnel out of non-U.S.jurisdictions. The Board considered that this arrangement provides additional flexibility to the portfolio management team, which may benefit the Fund and its shareholders.

B. The Investment Performance of the Fund

The Board, including the Independent Board Members, reviewed and considered the performance history of the Fund throughout the year and at the April Meeting. The Board was provided with Fund performance reporting and analysis, relative to applicable performance metrics, by BlackRock throughout the year and at the April meeting. In preparation for the April Meeting, the Board was also provided with reports independently prepared by Broadridge, which included an analysis of the Fund's performance as of December 31, 2024, as compared to its Performance Peers. Broadridge ranks funds in quartiles, ranging from first to fourth, where first is the most desirable quartile position and fourth is the least desirable. In connection with its review, the Board received and reviewed information regarding the investment performance of the Fund as compared to its Performance Peers. The Board and its Performance Oversight Committee regularly review and meet with Fund management to discuss the performance of the Fund throughout the year.

The Board also noted that while it found the data provided by Broadridge generally useful, it recognized the limitations of such data, including in particular, that notable differences may exist between a fund and its Performance Peers (for example, the investment objectives and strategies). Further, the Board recognized that the performance data reflects a snapshot of a period as of a particular date and that selecting a different performance period could produce significantly different results. The Board also acknowledged that long-term performance could be impacted by even one period of significant outperformance or underperformance, and that a single investment theme could have the ability to disproportionately affect long-term performance.

The Board noted that for the one-,three- and five-year periods reported, the Fund ranked in the fourth, fourth and second quartiles, respectively, against its Performance Peers. The Board and BlackRock reviewed the Fund's underperformance relative to its Performance Peers during the applicable periods.

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

The Board, including the Independent Board Members, reviewed the Fund's contractual management fee rate compared with those of its Expense Peers. The contractual management fee rate represents a combination of the advisory fee and any administrative fees, before taking into account any reimbursements or fee waivers. The Board also compared the Fund's total expense ratio, as well as its actual management fee rate, to those of its Expense Peers. The total expense ratio represents a fund's total net operating expenses, including any 12b-1or non-12b-1service fees. The total expense ratio gives effect to any expense reimbursements or fee waivers, and the actual management fee rate gives effect to any management fee reimbursements or waivers. The Board considered that the fee and expense information in the Broadridge report for the Fund reflected information for a specific period and that historical asset levels and expenses may differ from current levels, particularly in a period of market volatility. The Board also noted that while it found the expense comparison provided by Broadridge generally useful, it recognized that the comparison is subject to Broadridge's defined peer

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Disclosure of Investment Advisory Agreement and Sub-AdvisoryAgreements (continued)

selection criteria and methodology. The Board considered the services provided and the fees charged by BlackRock and its affiliates to other types of clients with similar investment mandates, as applicable, including institutional accounts and sub-advisedmutual funds (including mutual funds sponsored by third parties).

The Board reviewed BlackRock's profitability methodology and was also provided with an estimated profitability analysis that detailed the revenues earned and the expenses incurred by BlackRock for services provided to the Fund. The Board reviewed BlackRock's estimated profitability with respect to the Fund and other funds the Board currently oversees for the year ended December 31, 2024 compared to available aggregate estimated profitability data provided for the prior two years. The Board reviewed BlackRock's estimated profitability with respect to certain other U.S. fund complexes managed by the Manager and/or its affiliates. The Board reviewed BlackRock's assumptions and methodology of allocating expenses in the estimated profitability analysis, noting the inherent limitations in allocating costs among various advisory products. The Board recognized that profitability may be affected by numerous factors including, among other things, fee waivers and expense reimbursements by the Manager, the types of funds managed, precision of expense allocations and business mix. The Board thus recognized the limitations of calculating and comparing profitability at the individual fund level.

The Board received and reviewed statements relating to BlackRock's financial condition. The Board reviewed BlackRock's overall operating margin, in general, compared to that of certain other publicly traded asset management firms. The Board considered the differences between BlackRock and these other firms, including the contribution of BlackRock's technology business, BlackRock's expense management, and the relative product mix. The Board noted that, in general, individual fund or product line profitability of other advisors is not publicly available.

The Board considered whether BlackRock has the financial resources necessary to attract and retain high quality investment management personnel to perform its obligations under the Agreements and to continue to provide the high quality of services that is expected by the Board. The Board further considered factors including but not limited to BlackRock's commitment of time and resources, assumption of risk, and liability profile in servicing the Fund, including in contrast to what is required of BlackRock with respect to other products with similar investment mandates across the open-endfund, ETF, closed-endfund, sub-advisedmutual fund, separately managed account, collective investment trust, and institutional separate account product channels, as applicable.

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

D. Economies of Scale

The Board, including the Independent Board Members, considered the extent to which any economies of scale might benefit the Fund in a variety of ways as the assets of the Fund increase. The Board considered multiple factors, including the advisory fee rate and breakpoints, unitary fee structure, fee waivers, and/or expense caps, as applicable. The Board considered the Fund's asset levels and whether the current fee schedule was appropriate.

E. Other Factors Deemed Relevant by the Board Members

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

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

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

Conclusion

At the May Meeting, in a continuation of the discussions that occurred during the April Meeting, and as a culmination of the Board's year-long deliberative process, the Board, including the Independent Board Members, unanimously approved the continuation of the Advisory Agreement between the Manager and the Trust, on behalf of the Fund, for a one-yearterm ending June 30, 2026, and the Sub-AdvisoryAgreements between the Manager and the Sub-Advisors,with respect to the Fund, for a one-yearterm ending June 30, 2026. Based upon its evaluation of all of the aforementioned factors in their totality, as well as other information, the Board, including the Independent Board Members, was satisfied that the terms of the Agreements were fair and reasonable and in the best interest of the Fund and its shareholders. In arriving at its decision to approve the Agreements, the Board did not identify any single factor or group of factors as all-importantor controlling, but considered all factors together, and different Board Members may have attributed different weights to the various factors considered. The Independent Board Members were advised by independent legal counsel throughout the deliberative process.

D I S C L O S U R E  O F  I N V E S T M E N T  A D V I S O R Y  A G R E E M E N T  A N D  S U B -A D V I S O R Y  A G R E E M E N T S

25

Glossary of Terms Used in these Financial Statements

Portfolio Abbreviation

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

Item 8 -

Changes in and Disagreements with Accountants for Open-EndManagement Investment Companies - See Item 7

Item 9 -

Proxy Disclosures for Open-EndManagement Investment Companies - See Item 7

Item 10 -

Remuneration Paid to Directors, Officers, and Others of Open-EndManagement Investment Companies - See Item 7

Item 11 -

Statement Regarding Basis for Approval of Investment Advisory Contract - See Item 7

Item 12 -

Disclosure of Proxy Voting Policies and Procedures for Closed-EndManagement Investment Companies - Not Applicable

Item 13 -

Portfolio Managers of Closed-EndManagement Investment Companies - Not Applicable

Item 14 -

Purchases of Equity Securities by Closed-EndManagement Investment Company and Affiliated Purchasers - Not Applicable

Item 15 -

Submission of Matters to a Vote of Security Holders - There have been no material changes to these procedures.

Item 16 -

Controls and Procedures

(a) The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c)under the Investment Company Act of 1940, as amended (the "1940 Act")) are effective as of a date within 90 days of the filing date of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b)under the 1940 Act and Rule 13a-15(b) or 15d-15(b)under the Securities Exchange Act of 1934, as amended.

(b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d)under the 1940 Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting.

Item 17 -

Disclosure of Securities Lending Activities for Closed-EndManagement Investment Companies - Not Applicable

Item 18 -

Recovery of Erroneously Awarded Compensation - Not Applicable

Item 19 -

Exhibits attached hereto

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

(a)(2) Any policy required by the listing standards adopted pursuant to Rule 10D-1under the Exchange Act (17 CFR 240.10D-1)by the registered national securities exchange or registered national securities association upon which the registrant's securities are listed - Not Applicable

(a)(3) Section 302 Certifications are attached.

(a)(4) Any written solicitation to purchase securities under Rule 23c-1- Not Applicable

(a)(5) Change in Registrant's independent public accountant - Not Applicable

(b) Section 906 Certifications are attached.

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BlackRock FundsSM

By:

/s/John M. Perlowski       

John M. Perlowski

Chief Executive Officer (principal executive officer) of

BlackRock FundsSM

Date: September 23, 2025

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:

/s/John M. Perlowski       

John M. Perlowski

Chief Executive Officer (principal executive officer) of

BlackRock FundsSM

Date: September 23, 2025

By:

/s/Trent Walker       

Trent Walker

Chief Financial Officer (principal financial officer) of

BlackRock FundsSM

Date: September 23, 2025

Blackrock Funds published this content on October 03, 2025, and is solely responsible for the information contained herein. Distributed via SEC EDGAR on October 03, 2025 at 14:22 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]