NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
BlackRock Funds(SM) ("the Fund") was organized on December 22, 1988 as a Massachusetts business trust
and is registered under the Investment Company Act of 1940, as amended, as an open-end management
investment company. The Fund currently has 36 publicly-offered portfolios, eight of which are included in these
financial statements (the "Portfolios"). Each Portfolio is authorized to issue an unlimited number of shares with a
par value of $0.001. Each portfolio of the Fund may offer as many as six classes of shares. Shares of all classes
of a Portfolio represent equal pro rata interests in such Portfolio, except that each class bears different expenses
which reflect the difference in the range of services provided to them. The following table provides a list of the
Portfolios included in this report along with their respective class-specific fee arrangements as provided under the
Fund's Amended and Restated Distribution and Service Plan (the "Plan"). Fees are expressed as a percentage of
average daily net asset values of the respective classes.
In addition, Institutional and Service shares bear a Transfer Agent fee at an annual rate not to exceed .03% and
Investor A, Investor B and Investor C shares bear a Transfer Agent fee at an annual rate not to exceed .10% of
the average daily net assets of such respective classes.
Purchases of Class B shares and Class C shares are subject to contingent deferred sales charges ("CDSCs") if
shares are redeemed, declining over 6 years from a high of 4.5% for Class B shares and 1% if shares are
redeemed within 12 months of their purchase for Class C shares. CDSCs collected by the portfolios totaled
$23,375 for Class B shares and $1,741 for Class C shares for the six months ended March 31, 1999.
(A) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the Fund in the preparation of its
------------------------------------------------------------------