BLACKROCK FUNDS

497 1 d497.htm BLACKROCK FUNDS BLACKROCK FUNDS

World class institutional asset management at a personal level

BlackRock Funds

Equity Portfolios

Investor Shares

Prospectus

January 28, 2003

BlackRock Funds^SMis a mutual

fund family with 43 investment

portfolios, 16 of which are

described in this prospectus.

BlackRock Funds are sold

principally through licensed

investment professionals.

The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.

NOT FDIC		May Lose Value
INSURED		No Bank Guarantee

Table of

Contents

*How to find the information you need*
*How to find the information you need*		1

THE BLACKROCK EQUITY PORTFOLIOS

*Large Cap Value*		2

*Large Cap Growth*		10

*Mid-Cap Value*		18

*Mid-Cap Growth*		25

*Small Cap Value*		33

*Small Cap Core*		41

*Small Cap Growth*		47

*Global Science & Technology Opportunities*		55

*European Equity*		64

*Asia Pacific Equity*		73

*International Equity*		82

*International Opportunities*		91

*Select Equity*		*100*

*Index Equity*		*108*

*Balanced*		*115*

*U.S. Opportunities*		*124*

*How to Buy/Sell Shares*		*132*

*Dividends/Distributions/Taxes*		*147*

*Services for Shareholders*		*149*

How to Find the

Information You Need

About BlackRock Funds

This is the BlackRock Equity Portfolios Prospectus. It has been written to provide you with the information you need to make an informed decision about whether to invest in BlackRock Funds (the Company).

This prospectus contains information on 16 of the BlackRock Equity funds. The prospectus is organized so that each fund has its own short section. Simply turn to the section for any particular fund to read about important fund facts. Also included are sections that tell you about buying and selling shares, certain fees and expenses, shareholder features of the funds and your rights as a shareholder. These sections apply to all the funds.

If you have questions after reading the prospectus, ask your registered representative for assistance. Your investment professional has been trained to help you decide which investments are right for you.

BlackRock

Large Cap Value Equity Portfolio

IMPORTANT DEFINITIONS

Equity Security: A security, such as stock, representing ownership of a company. Bonds, in comparison, are referred to as fixed income or debt securities because they represent indebtedness to the bondholders, not ownership (although convertible bonds are fixed income securities that are convertible to equity according to their terms).

Fundamental Analysis: A method of stock market analysis that concentrates on “fundamental” information about the company (such as its income statement, balance sheet, earnings and sales history, products and management) to attempt to forecast future stock value.

Investment Style: Refers to the guiding principles of a mutual fund’s investment choices. The investment style of this fund is large cap value, referring to the type of securities the manager will choose for this fund.

Large Capitalization Companies: The fund defines these companies as those with market capitalizations equal to those within the universe of the Russell 1000 Value Index stocks. Capitalization refers to the market value of the company and is calculated by multiplying the number of shares outstanding by the current price per share. Larger companies may be more likely to have the staying power to get them through all economic cycles; however, their size may also make them less flexible and innovative than smaller companies.

Value Companies: All stocks are generally divided into the categories of “growth” or “value,” although there are times when a growth fund and value fund may own the same stock. Value stocks are companies that appear to the manager to be undervalued by the market as measured by certain financial formulas. Growth stocks are companies whose earnings growth potential appears to the manager to be greater than the market in general and whose growth in revenue is expected to continue for an extended period.

Investment Goal

The fund seeks long-term capital appreciation—current income is the secondary objective.

Primary Investment Strategies

In pursuit of this goal, the fund normally invests at least 80% of its net assets in equity securities issued by U.S. large capitalization value companies (defined as those with market capitalizations equal to those within the universe of Russell 1000 Value Index stocks). The fund primarily buys common stock but also can invest in preferred stock and securities convertible into common and preferred stock.

The fund management team is seeking large capitalization stocks which they believe are worth more than is indicated by current market price. The management team initially screens for “value” stocks from the universe of companies with market capitalizations above $1 billion, emphasizing those companies with market capitalizations over $10 billion. The management team uses fundamental analysis to examine each company before deciding to purchase the stock.

The fund generally will sell a stock when it reaches a target price, which is when the management team believes it is fully valued or when, in the management team’s opinion, fundamental conditions change such that the risk of continuing to hold the stock is unacceptable when compared to return potential.

As part of its normal operations, the fund may hold these securities pending investments or when it expects to need cash to pay redeeming shareholders. The fund will not deviate from its normal strategies if it holds high quality money market securities pending investments.

The management team may, when consistent with the fund’s investment objective, use options or futures (commonly known as derivatives). An option is the right to buy or sell a security or an

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

While the management team chooses stocks they believe to be undervalued, there is no guarantee that the shares will increase in value or that they won’t move even lower.

The fund’s use of derivatives may reduce returns and/or increase volatility. Volatility is defined as the characteristic of a security, an index or a market to fluctuate significantly in price within a short time period. A risk of the fund’s use of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets. Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. In addition, some derivatives are more sensitive to interest rate changes, market price fluctuations and general market liquidity than others.

short-term capital gain of individuals is taxable at the same rates as ordinary income. These effects of higher than normal portfolio turnover may adversely affect fund performance.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

The performance for the period before Investor A Shares were launched is based upon performance for Institutional Shares of the fund, which were first issued in April 1992. Investor A Shares were launched in May 1992, Investor B Shares were launched in January 1996 and Investor C Shares were launched in August 1996. The performance for Investor B Shares for the period before they were launched is based upon performance for Institutional and Investor A Shares, and the performance for Investor C Shares for the period before they were launched is based upon performance for Institutional, Investor A and Investor B Shares. The actual return of Investor A Shares would have been lower than shown for the period before they were launched because Investor A Shares have higher expenses than Institutional Shares. Also, the actual returns of Investor B and C Shares would have been lower compared to Investor A Shares because Investor B and C Shares have higher expenses than Investor A Shares. Investor A Shares of the fund have expenses of 1.26% of average daily net assets (after waivers and reimbursements) for the current fiscal year and Investor B Shares and Investor C Shares of the fund each have expenses of 2.01% of average daily net assets (after waivers and reimbursements) for the current fiscal year. Institutional Shares of the fund have expenses of 0.79% of average daily net assets (after waivers and reimbursements) for the current fiscal year.

As of 12/31

Investor A Shares

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

These returns assume payment of applicable sales charges.

	1 Year	3 Years	5 Years	10 Years	Inception Date
Large Cap Value; Inv A
Return Before Taxes	-27.73%	-10.81%	-4.22%	7.37%	04/20/92
Return After Taxes on Distributions	-27.84%	-11.67%	-5.54%	5.05%
Return After Taxes on Distributions and Sale of Shares	-17.03%	-8.34%	-3.26%	5.58%
Large Cap Value; Inv B
Return Before Taxes	-28.26%	-11.03%	-4.38%	7.30%	04/20/92
Large Cap Value; Inv C
Return Before Taxes	-25.63%	-10.09%	-4.09%	7.29%	04/20/92
Russell 1000 Value (Reflects no deduction for fees, expenses or taxes)	-15.52%	-5.14%	1.16%	10.81%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Investor A Shares only, and the after-tax returns for Investor B and C Shares will vary.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Distribution Fees: A method of charging distribution-related expenses against fund assets.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

The tables below explain your pricing options and describe the fees and expenses that you may pay if you buy and hold Investor A, B and C Shares of the fund. The “Annual Fund Operating Expenses” table is based on expenses for the most recent fiscal year.

Shareholder Fees

(Fees paid directly from your investment)

	A Shares		B Shares		C Shares
Maximum Sales Charge (Load) Imposed on Purchases*	4.5	%	0.0	%	0.0	%
(as percentage of offering price)
Maximum Deferred Sales Charge (Load)	0.0	%	4.5	%**	1.00	%***
(as percentage of offering price)

*	Reduced front-end sales charges may be available. A CDSC of up to 1.00% is assessed on certain redemptions of Investor A Shares that are purchased with no initial sales charge as part of an investment of $1,000,000 or more.

**	The CDSC is 4.5% if shares are redeemed in less than one year. The CDSC for Investor B Shares decreases for redemptions made in subsequent years. After six years there is no CDSC on B Shares. (See page 137 for complete schedule of CDSCs.)

***	There is no CDSC on C Shares after one year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

	A Shares		B Shares		C Shares
Advisory fees	.54	%	.54	%	.54	%
Distribution (12b-1) fees	.10	%	.75	%	.75	%
Other expenses	.77	%	.77	%	.77	%
Service fees	.25%		.25%		.25%
Processing fees	.15%		.15%		.15%
Other	.37%		.37%		.37%
Total annual fund operating expenses	1.41	%	2.06	%	2.06	%
Fee waivers and expense reimbursements*	.15	%	.05	%	.05	%
Net expenses*	1.26	%	2.01	%	2.01	%

BlackRock and BlackRock Distributors, Inc., the fund’s distributor, have contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.26% (for Investor A Shares) and 2.01% (for Investor B and C Shares) of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 144 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses, redemption at the end of each time period and, with respect to B Shares and C Shares only, no redemption at the end of each time period. Although your actual cost may be higher or lower, based on these assumptions your costs would be:

	1 Year	3 Years	5 Years	10 Years
A Shares*	$573	$862	$1,173	$2,052
B Shares**
Redemption	$654	$991	$1,304	$2,219***
B Shares
No Redemption	$204	$641	$1,104	$2,219***
C Shares**
Redemption	$304	$641	$1,104	$2,386
C Shares
No Redemption	$204	$641	$1,104	$2,386

*	Reflects imposition of sales charge.

**	Reflects deduction of CDSC.

***	Based on the conversion of the Investor B Shares to Investor A Shares after eight years.

As a shareholder you pay certain fees and expenses. Shareholder transaction fees are paid out of your investment and annual fund operating expenses are paid out of fund assets.

This prospectus offers shareholders different ways to invest with three separate pricing options. You need to understand your choices so that you can choose the pricing option that is most suitable for you. As shown above, with one option (Investor A Shares) you pay a one-time front-end transaction fee each time you buy shares. The other options (Investor B and Investor C Shares) have no front-end charges but have higher on-going fees, which are paid over the life of the investment, and have a contingent deferred sales charge (CDSC) that you may pay when you redeem your shares. Which option should you choose? It depends on your individual circumstances. You should know that the lowest sales charge won’t necessarily be the least expensive option over time. For example, if you intend to hold your shares long term it may cost less to buy A Shares than B or C Shares.

Fund Management

September 2001; and John M. Chambers, Vice President and investment manager at BlackRock since August 2000. Prior to joining BlackRock, Mr. Kaufman was a Senior Vice President and Portfolio Manager at Retirement System Investors Inc. (“RSI”) since 1995 and Director of Research at RSI since 1997, and Ms. Ivol served as an equity analyst with Provident Capital Management from 1988 to 1995. Prior to joining BlackRock, Mr. Sloate was an assistant portfolio manager at Schneider Capital Management Company from 1997 to 2001 and was a senior investment analyst and Vice President with Wellington Management Company, LLP in 1995 and 1996. Mr. Chambers formerly was an equity analyst covering technology stocks for the large cap growth and value products at RSI, prior to which he served as an equity analyst in the private client area at Schroder & Co. from 1996 to 2000. Mr. Kaufman has been lead manager of the portfolio since July 2000, Mr. Chambers has been a portfolio co-manager since September 2000, Ms. Ivol since June 2000 and Mr. Sloate since January 2002.

Financial Highlights

The financial information in the table on the next page shows the fund’s financial performance for the periods indicated. Certain information reflects results for a single fund share. The term “Total Return” indicates how much your investment would have increased or decreased during this period of time and assumes that you have reinvested all dividends and distributions. These figures have been audited by PricewaterhouseCoopers LLP, the fund’s independent accountants. The auditor’s report, along with the fund’s financial statements, are included in the Company’s annual report, which is available upon request (see back cover for ordering instructions).

FINANCIAL HIGHLIGHTS

(For an Investor A, B or C Share Outstanding Throughout Each Period)

Large Cap Value Equity Portfolio

	INVESTOR A SHARES															INVESTOR B SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98			Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	12.59		$	15.11		$	15.74		$	14.68		$	17.52		$	12.43		$	14.97		$	15.61		$	14.59		$	17.44

Income from investment operations
Net investment income (loss)		0.02			0.07			0.10			0.16			0.17			(0.07	)		(0.03	)		(0.01	)		0.02			0.05
Net gain (loss) on investments (both realized and unrealized)		(3.39	)		(1.27	)		0.77			2.01			(0.60	)		(3.33	)		(1.26	)		0.77			1.99			(0.61	)

Total from investment operations		(3.37	)		(1.20	)		0.87			2.17			(0.43	)		(3.40	)		(1.29	)		0.76			2.01			(0.56	)

Less distributions
Distributions from net investment income		(0.02	)		(0.07	)		(0.09	)		(0.16	)		(0.16	)		– –			– –			– –			(0.04	)		(0.04	)
Distributions from net realized gains		(0.37	)		(1.25	)		(1.41	)		(0.95	)		(2.25	)		(0.37	)		(1.25	)		(1.40	)		(0.95	)		(2.25	)

Total distributions		(0.39	)		(1.32	)		(1.50	)		(1.11	)		(2.41	)		(0.37	)		(1.25	)		(1.40	)		(0.99	)		(2.29	)

Net asset value at end of period	$	8.83		$	12.59		$	15.11		$	15.74		$	14.68		$	8.66		$	12.43		$	14.97		$	15.61		$	14.59

Total return¹		(27.70	)%		(8.64	)%		5.71	%		14.85	%		(2.63	)%		(28.32	)%		(9.36	)%		4.93	%		13.93	%		(3.45	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	76,044		$	57,672		$	56,689		$	61,657		$	51,151		$	17,312		$	29,178		$	31,208		$	33,206		$	29,450
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.27	%		1.27	%		1.23	%		1.19	%		1.27	%		2.01	%		2.01	%		2.00	%		2.00	%		2.06	%
Before advisory/administration fee waivers		1.32	%		1.27	%		1.23	%		1.19	%		1.28	%		2.07	%		2.02	%		2.00	%		2.00	%		2.07	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		0.22	%		0.53	%		0.66	%		0.96	%		0.99	%		(0.51	)%		(0.23	)%		(0.11	)%		0.15	%		0.20	%
Before advisory/administration fee waivers		0.17	%		0.52	%		0.66	%		0.96	%		0.98	%		(0.56	)%		(0.24	)%		(0.11	)%		0.15	%		0.19	%
Portfolio turnover rate		128	%		114	%		121	%		42	%		33	%		128	%		114	%		121	%		42	%		33	%

	INVESTOR C SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	12.44		$	14.97		$	15.61		$	14.59		$	17.44

Income from investment operations
Net investment income (loss)		(0.07	)		(0.03	)		0.01			0.03			0.06
Net gain (loss) on investments (both realized and unrealized)		(3.33	)		(1.25	)		0.75			1.98			(0.62	)

Total from investment operations		(3.40	)		(1.28	)		0.76			2.01			(0.56	)

Less distributions
Distributions from net investment income		– –			– –			– –			(0.04	)		(0.04	)
Distributions from net realized gains		(0.37	)		(1.25	)		(1.40	)		(0.95	)		(2.25	)

Total distributions		(0.37	)		(1.25	)		(1.40	)		(0.99	)		(2.29	)

Net asset value at end of period	$	8.67		$	12.44		$	14.97		$	15.61		$	14.59

Total return¹		(28.29	)%		(9.29	)%		4.93	%		13.93	%		(3.45	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	5,868		$	9,738		$	7,608		$	4,172		$	3,146
Ratios of expenses to average net assets
After advisory/administration fee waivers		2.01	%		2.01	%		2.00	%		2.00	%		2.04	%
Before advisory/administration fee waivers		2.06	%		2.02	%		2.00	%		2.00	%		2.05	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(0.50	)%		(0.24	)%		(0.13	)%		0.15	%		0.22	%
Before advisory/administration fee waivers		(0.55	)%		(0.25	)%		(0.13	)%		0.15	%		0.21	%
Portfolio turnover rate		128	%		114	%		121	%		42	%		33	%

¹	Neither front-end sales load nor contingent deferred sales load is reflected in total return.

BlackRock

Large Cap Growth Equity Portfolio

IMPORTANT DEFINITIONS

Earnings Growth: The rate of growth in a company’s earnings per share from period to period. Security analysts attempt to identify companies with earnings growth potential because a pattern of earnings growth may cause share prices to increase.

Growth Companies: All stocks are generally divided into the categories of “growth” or “value,” although there are times when a growth fund and value fund may own the same stock. Growth stocks are companies whose earnings growth potential appears to the manager to be greater than the market in general and whose revenue growth is expected to continue for an extended period. These stocks typically pay relatively low dividends and sell at relatively high valuations. Value stocks are companies that appear to the manager to be undervalued by the market as measured by certain financial formulas.

Investment Style: Refers to the guiding principles of a mutual fund’s investment choices. The investment style of this fund is large cap growth, referring to the type of securities the manager will choose for this fund.

Large Capitalization Companies: The fund defines these companies as those with market capitalizations equal to those within the universe of the Russell 1000 Growth Index stocks. Capitalization refers to the market value of the company and is calculated by multiplying the number of shares outstanding by the current price per share. Larger companies may be more likely to have the staying power to get them through all economic cycles; however, their size may also make them less flexible and innovative than smaller companies.

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

In pursuit of this goal, the fund normally invests at least 80% of its net assets in equity securities issued by U.S. large capitalization growth companies (defined as those with market capitalizations equal to those within the universe of Russell 1000 Growth Index stocks) which the fund management team believes have above-average earnings growth potential. The fund primarily buys common stock but also can invest in preferred stock and securities convertible into common and preferred stock.

The management team initially screens for “growth” stocks from the universe of companies with market capitalizations above $1 billion, emphasizing those companies with market capitalizations over $10 billion. The management team uses fundamental analysis to examine each company for financial strength before deciding to purchase the stock.

The fund generally will sell a stock when, in the management team’s opinion, there is a deterioration in the company’s fundamentals, or if the company fails to meet performance expectations.

purpose of using derivatives is to attempt to reduce risk to the fund as a whole (hedge) but they may also be used to maintain liquidity and commit cash pending investment. The management team also may, but under normal market conditions generally does not intend to, use derivatives for speculation to increase returns.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

While the management team chooses stocks they believe have above-average earnings growth potential, there is no guarantee that the shares will increase in value or that they won’t move even lower.

Higher than normal portfolio turnover may result in increased transaction costs to the fund, including brokerage commissions, dealer mark-ups and other transaction costs on the sale of the securities and on reinvestment in other securities. The sale of fund securities may result in the recognition of capital gain or loss. Given the frequency of sales, such gain or loss will likely be short-term capital gain or loss. Unlike long-term capital gain, short-term capital gain of individuals is taxable at the same rates as ordinary income. These effects of higher than normal portfolio turnover may adversely affect fund performance.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

The performance for the period before Investor A Shares were launched is based upon performance for Institutional Shares of the fund, which were first issued in November 1989. Investor A Shares were launched in March 1992, Investor B Shares were launched in January 1996 and Investor C Shares were launched in January 1997. The performance for Investor B Shares for the period before they were launched is based upon performance for Institutional and Investor A Shares, and the performance for Investor C Shares for the period before they were launched is based upon performance for Institutional, Investor A and Investor B Shares. The actual return of Investor A Shares would have been lower than shown for the period before they were launched because Investor A Shares have higher expenses than Institutional Shares. Also, the actual returns of Investor B and C Shares would have been lower compared to Investor A Shares because Investor B and C Shares have higher expenses than Investor A Shares. Investor A Shares of the fund have expenses of 1.29% of average daily net assets (after waivers and reimbursements) for the current fiscal year and Investor B Shares and Investor C Shares of the fund each have expenses of 2.04% of average daily net assets (after waivers and reimbursements) for the current fiscal year. Institutional Shares of the fund have expenses of 0.82% of average daily net assets (after waivers and reimbursements) for the current fiscal year.

As of 12/31

Investor A Shares

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

These returns assume payment of applicable sales charges.

	1 Year	3 Years	5 Years	10 Years	Inception Date
Large Cap Growth; Inv A
Return Before Taxes	-34.28%	-31.77%	-9.48%	2.39%	11/01/89
Return After Taxes on Distributions	-34.28%	-32.62%	-11.04%	0.81%
Return After Taxes on Distributions and Sale of Shares	-21.05%	-22.76%	-6.20%	2.51%
Large Cap Growth; Inv B
Return Before Taxes	-34.73%	-31.90%	-9.58%	2.33%	11/01/89
Large Cap Growth; Inv C
Return Before Taxes	-32.30%	-31.23%	-9.36%	2.32%	11/01/89
Russell 1000 Growth (Reflects no deduction for fees, expenses or taxes)	-27.89%	-23.64%	-3.84%	6.71%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Distribution Fees: A method of charging distribution-related expenses against fund assets.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

Shareholder Fees
(Fees paid directly from your investment)

	A Shares		B Shares		C Shares
Maximum Sales Charge (Load) Imposed on Purchases*	4.5	%	0.0	%	0.0	%
(as percentage of offering price)
Maximum Deferred Sales Charge (Load)	0.0	%	4.5	%**	1.00	%***
(as percentage of offering price)

*	Reduced front-end sales charges may be available. A CDSC of up to 1.00% is assessed on certain redemptions of Investor A Shares that are purchased with no initial sales charge as part of an investment of $1,000,000 or more.

**	The CDSC is 4.5% if shares are redeemed in less than one year. The CDSC for Investor B Shares decreases for redemptions made in subsequent years. After six years there is no CDSC on B Shares. (See page 137 for complete schedule of CDSCs.)

***	There is no CDSC on C Shares after one year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

	A Shares		B Shares		C Shares
Advisory fees	.55	%	.55	%	.55	%
Distribution (12b-1) fees	.10	%	.75	%	.75	%
Other expenses	.79	%	.79	%	.79	%
Service fees	.25%		.25%		.25%
Processing fees	.15%		.15%		.15%
Other	.39%		.39%		.39%
Total annual fund operating expenses	1.44	%	2.09	%	2.09	%
Fee waivers and expense reimbursements*	.15	%	.05	%	.05	%
Net expenses*	1.29	%	2.04	%	2.04	%

BlackRock and BlackRock Distributors, Inc., the fund’s distributor, have contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.29% (for Investor A Shares) and 2.04% (for Investor B and C Shares) of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 144 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses, redemption at the end of each time period and, with respect to B Shares and C Shares only, no redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

	1 Year	3 Years	5 Years	10 Years
A Shares*	$575	$ 871	$1,188	$2,084
B Shares**
Redemption	$657	$1,000	$1,319	$2,251***
B Shares
No Redemption	$207	$ 650	$1,119	$2,251***
C Shares**
Redemption	$307	$ 650	$1,119	$2,417
C Shares
No Redemption	$207	$ 650	$1,119	$2,417

*	Reflects imposition of sales charge.

**	Reflects deduction of CDSC.

***	Based on the conversion of Investor B Shares to Investor A Shares after eight years.

As a shareholder you pay certain fees and expenses. Shareholder transaction fees are paid out of your investment and annual fund operating expenses are paid out of fund assets.

Fund Management

from 1995 to 1998. Prior to joining BlackRock in 1998, Mr. Ralston was an equity analyst with General Accident and previously Director of Research at First National Bank of Maryland. Mr. Considine has been a portfolio co-manager since June 2000 and Mr. Ralston since January 2001.

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Investor A, B or C Share Outstanding Throughout Each Period)

Large Cap Growth Equity Portfolio

	INVESTOR A SHARES															INVESTOR B SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98			Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	8.90		$	23.36		$	22.37		$	18.06		$	18.91		$	8.39		$	22.34		$	21.68		$	17.68		$	18.69

Income from investment operations
Net investment income (loss)		(0.05	)		(0.09	)		(0.16	)		(0.09	)		(0.05	)		(0.12	)		(0.19	)		(0.28	)		(0.20	)		(0.15	)
Net gain (loss) on investments (both realized and unrealized)		(2.32	)		(11.59	)		4.77			6.03			1.84			(2.16	)		(10.98	)		4.56			5.83			1.78

Total from investment operations		(2.37	)		(11.68	)		4.61			5.94			1.79			(2.28	)		(11.17	)		4.28			5.63			1.63

Less distributions
Distributions from net investment income		– –			– –			– –			– –			– –			– –			– –			– –			– –			– –
Distributions from net realized gains		– –			(2.78	)		(3.62	)		(1.63	)		(2.64	)		– –			(2.78	)		(3.62	)		(1.63	)		(2.64	)

Total distributions		– –			(2.78	)		(3.62	)		(1.63	)		(2.64	)		– –			(2.78	)		(3.62	)		(1.63	)		(2.64	)

Net asset value at end of period	$	6.53		$	8.90		$	23.36		$	22.37		$	18.06		$	6.11		$	8.39		$	22.34		$	21.68		$	17.68

Total return¹		(26.63	)%		(55.78	)%		22.31	%		34.91	%		11.16	%		(27.18	)%		(56.08	)%		21.37	%		33.83	%		10.33	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	34,513		$	35,609		$	87,375		$	61,211		$	33,340		$	14,332		$	25,986		$	65,977		$	37,032		$	14,713
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.29	%		1.29	%		1.25	%		1.22	%		1.33	%		2.04	%		2.04	%		2.01	%		2.03	%		2.07	%
Before advisory/administration fee waivers		1.34	%		1.30	%		1.25	%		1.22	%		1.33	%		2.09	%		2.05	%		2.01	%		2.03	%		2.07	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(0.48	)%		(0.59	)%		(0.70	)%		(0.42	)%		(0.30	)%		(1.23	)%		(1.33	)%		(1.46	)%		(1.23	)%		(1.03	)%
Before advisory/administration fee waivers		(0.52	)%		(0.60	)%		(0.70	)%		(0.42	)%		(0.30	)%		(1.28	)%		(1.34	)%		(1.46	)%		(1.23	)%		(1.03	)%
Portfolio turnover rate		130	%		164	%		121	%		60	%		54	%		130	%		164	%		121	%		60	%		54	%

	INVESTOR C SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	8.37		$	22.31		$	21.68		$	17.68		$	18.69

Income from investment operations
Net investment (loss)		(0.13	)		(0.19	)		(0.25	)		(0.18	)		(0.15	)
Net gain (loss) on investments (both realized and unrealized)		(2.14	)		(10.97	)		4.50			5.81			1.78

Total from investment operations		(2.27	)		(11.16	)		4.25			5.63			1.63

Less distributions
Distributions from net investment income		– –			– –			– –			– –			– –
Distributions from net realized gains		– –			(2.78	)		(3.62	)		(1.63	)		(2.64	)

Total distributions		– –			(2.78	)		(3.62	)		(1.63	)		(2.64	)

Net asset value at end of period	$	6.10		$	8.37		$	22.31		$	21.68		$	17.68

Total return¹		(27.12	)%		(56.11	)%		21.21	%		33.83	%		10.33	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	2,424		$	4,711		$	11,799		$	4,181		$	1,037
Ratios of expenses to average net assets
After advisory/administration fee waivers		2.04	%		2.04	%		2.01	%		2.03	%		2.06	%
Before advisory/administration fee waivers		2.09	%		2.05	%		2.01	%		2.03	%		2.06	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(1.23	)%		(1.33	)%		(1.47	)%		(1.23	)%		(1.01	)%
Before advisory/administration fee waivers		(1.28	)%		(1.34	)%		(1.47	)%		(1.23	)%		(1.01	)%
Portfolio turnover rate		130	%		164	%		121	%		60	%		54	%

¹	Neither front-end sales load nor contingent deferred sales load is reflected in total return.

BlackRock

Mid-Cap Value Equity Portfolio

IMPORTANT DEFINITIONS

Equity Security: A security, such as stock, representing ownership of a company. Bonds, in comparison, are referred to as fixed income or debt securities because they represent indebtedness to the bondholder, not ownership (although convertible bonds are fixed income securities that are convertible to equity according to their terms).

Investment Style: Refers to the guiding principles of a mutual fund’s investment choices. The investment style of this fund is mid-cap value, referring to the type of securities the managers will choose for this fund.

Mid-Capitalization Companies: The fund defines these companies as those with market capitalizations between $1 billion and $10 billion. Capitalization refers to the market value of the company and is calculated by multiplying the number of shares outstanding by the current price per share.

Investment Goal

The fund seeks long-term capital appreciation—current income is the secondary objective.

Primary Investment Strategies

In pursuit of this goal, the fund normally invests at least 80% of its net assets in equity securities issued by U.S. mid-capitalization value companies (market capitalizations between $1 billion and $10 billion). The fund primarily buys common stock but also can invest in preferred stock and securities convertible into common and preferred stock.

The fund manager is seeking mid-capitalization stocks which he believes are worth more than is indicated by current market price. The manager initially screens for “value” stocks from the universe of companies with market capitalizations between $1 billion and $10 billion. The manager uses fundamental analysis to examine each company for financial strength before deciding to purchase the stock.

The fund generally will sell a stock when it reaches a target price, which is when the manager believes it is fully valued or when, in the manager’s opinion, conditions change such that the risk of continuing to hold the stock is unacceptable when compared to its growth potential.

purpose of using derivatives is to attempt to reduce risk to the fund as a whole (hedge) but they may also be used to maintain liquidity and commit cash pending investment. The fund manager also may, but under normal market conditions generally does not intend to, use derivatives for speculation to increase returns.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

There is more business risk in investing in mid-capitalization companies than in larger, better capitalized companies. These organizations will normally have more limited product lines, markets and financial resources and will be dependent upon a more limited management group than larger capitalized companies.

While the fund manager chooses stocks he believes to be undervalued, there is no guarantee that the shares will increase in value or that they won’t move even lower.

Given the frequency of sales, such gain or loss will likely be short-term capital gain or loss. Unlike long-term capital gain, short-term capital gain of individuals is taxable at the same rates as ordinary income. These effects of higher than normal portfolio turnover may adversely affect fund performance.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

The chart and table below give you a picture of the fund’s long-term performance for Investor A Shares (in the chart) and for Investor A, B and C Shares (in the table). The information shows you how the fund’s performance has varied year by year and provides some indication of the risks of investing in the fund. The table compares the fund’s performance to that of the Russell Midcap Value Index, a recognized unmanaged index of stock market performance. As with all such investments, past performance is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown.

As of 12/31

Investor A Shares

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

These returns assume payment of applicable sales charges.

	1 Year	3 Years	5 Years	Since Inception	Inception Date
Mid-Cap Value; Inv A
Return Before Taxes	-20.80%	-4.85%	-3.19%	1.41%	12/27/96
Return After Taxes on Distributions	-21.95%	-5.46%	-3.70%	0.72%
Return After Taxes on Distributions and Sale of Shares	-11.68%	-3.83%	-2.54%	1.01%
Mid-Cap Value; Inv B
Return Before Taxes	-21.19%	-5.12%	-3.37%	1.48%	12/27/96
Mid-Cap Value; Inv C
Return Before Taxes	-18.53%	-4.10%	-3.03%	1.48%	12/27/96
Russell Midcap Value (Reflects no deduction for fees, expenses or taxes)	-9.65%	3.29%	2.96%	7.49%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

Expenses and Fees

Shareholder Fees

(Fees paid directly from your investment)

	A Shares		B Shares		C Shares
Maximum Sales Charge (Load) Imposed on Purchases*	4.5	%	0.0	%	0.0	%
(as percentage of offering price)
Maximum Deferred Sales Charge (Load)	0.0	%	4.5	%**	1.00	%***
(as percentage of offering price)
Redemption/Exchange Fee****	2.0	%	2.0	%	2.0	%
(as a percentage of amount redeemed)

*	Reduced front-end sales charges may be available.

**	The CDSC is 4.5% if shares are redeemed in less than one year. The CDSC for Investor B Shares decreases for redemptions made in subsequent years. After six years there is no CDSC on B Shares. (See page 137 for complete schedule of CDSCs.)

***	There is no CDSC on C Shares after one year.

****	Subject to the approval of the Company’s Board of Trustees, fee applies only to shares purchased on or after March 1, 2003 that are redeemed or exchanged within 90 days of purchase.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Distribution Fees: A method of charging distribution-related expenses against fund assets.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

	A Shares		B Shares		C Shares
Advisory fees	.80	%	.80	%	.80	%
Distribution (12b-1) fees	.10	%	.75	%	.75	%
Other expenses	.82	%	.82	%	.82	%
Service fee	.25%		.25%		.25%
Processing fee	.15%		.15%		.15%
Other	.42%		.42%		.42%
Total annual fund operating expenses	1.72	%	2.37	%	2.37	%
Fee waivers and expense reimbursements*	.10	%	– –		– –
Net expenses*	1.62	%	2.37	%	2.37	%

BlackRock and BlackRock Distributors, Inc., the fund’s distributor, have contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.73% (for Investor A Shares) and 2.48% (for Investor B and C Shares) of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 144 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses, redemption at the end of each time period and, with respect to B Shares and C Shares only, no redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

	1 Year	3 Years	5 Years	10 Years
A Shares*	$607	$ 958	$1,332	$2,381
B Shares**
Redemption	$690	$1,089	$1,465	$2,545***
B Shares
No Redemption	$240	$ 739	$1,265	$2,545***
C Shares**
Redemption	$340	$ 739	$1,265	$2,706
C Shares
No Redemption	$240	$ 739	$1,265	$2,706

*	Reflects imposition of sales charge.

**	Reflects deduction of CDSC.

***	Based on the conversion of Investor B Shares to Investor A Shares after eight years.

As a shareholder you pay certain fees and expenses. Shareholder transaction fees are paid out of your investment and annual fund operating expenses are paid out of fund assets.

This prospectus offers shareholders three different ways to invest with three separate pricing options. You need to understand your choices so that you can choose the pricing option that is most suitable for you. As shown above, with one option (Investor A Shares) you pay a one-time front-end transaction fee each time you buy shares. The other options (Investor B and Investor C

Shares) have no front-end charges but have higher on-going fees, which are paid over the life of the investment, and have a contingent deferred sales charge (CDSC) that you may pay when you redeem your shares. Which option should you choose? It depends on your individual circumstances. You should know that the lowest sales charge won’t necessarily be the least expensive option over time. For example, if you intend to hold your shares long term it may cost less to buy A Shares than B or C Shares.

Fund Management

The manager of the fund is Wayne J. Archambo, Managing Director of BlackRock Advisors, Inc. (BlackRock) since January 2002. Before joining BlackRock, Mr. Archambo was a founding partner and Manager of Boston Partners Asset Management, L.P.’s small and mid cap value equity products since the firm’s inception in 1995. He has been the fund’s manager since January 2002.

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Investor A, B or C Share Outstanding Throughout Each Period)

Mid-Cap Value Equity Portfolio

	INVESTOR A SHARES															INVESTOR B SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98			Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	11.31		$	12.64		$	11.33		$	10.61		$	12.77		$	11.10		$	12.49		$	11.26		$	10.58		$	12.78

Income from investment operations
Net investment income (loss)		(0.06	)		0.03			0.02			0.05			0.05			(0.15	)		(0.06	)		(0.07	)		(0.04	)		(0.03	)
Net gain (loss) on investments (both realized and unrealized)		(0.87	)		(1.12	)		1.56			0.72			(1.81	)		(0.84	)		(1.11	)		1.55			0.72			(1.81	)

Total from investment operations		(0.93	)		(1.09	)		1.58			0.77			(1.76	)		(0.99	)		(1.17	)		1.48			0.68			(1.84	)

Less distributions
Distributions from net investment income		– –			(0.03	)		(0.02	)		(0.05	)		(0.04	)		– –			(0.01	)		– –			– –			– –
Distributions from net realized gains		– –			(0.21	)		(0.25	)		– –			(0.36	)		– –			(0.21	)		(0.25	)		– –			(0.36	)

Total distributions		– –			(0.24	)		(0.27	)		(0.05	)		(0.40	)		– –			(0.22	)		(0.25	)		– –			(0.36	)

Net asset value at end of period	$	10.38		$	11.31		$	12.64		$	11.33		$	10.61		$	10.11		$	11.10		$	12.49		$	11.26		$	10.58

Total return¹		(8.22	)%		(8.73	)%		14.17	%		7.14	%		(14.06	)%		(8.92	)%		(9.45	)%		13.35	%		6.33	%		(14.66	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	5,141		$	4,566		$	3,805		$	4,328		$	3,983		$	7,411		$	7,900		$	4,871		$	5,147		$	6,375
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.63	%		1.61	%		1.60	%		1.59	%		1.61	%		2.37	%		2.36	%		2.34	%		2.34	%		2.35	%
Before advisory/administration fee waivers		1.63	%		1.61	%		1.60	%		1.60	%		1.67	%		2.37	%		2.36	%		2.34	%		2.34	%		2.41	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(0.40	)%		0.20	%		0.19	%		0.41	%		0.41	%		(1.20	)%		(0.55	)%		(0.55	)%		(0.34	)%		(0.33	)%
Before advisory/administration fee waivers		(0.40	)%		0.20	%		0.19	%		0.41	%		0.35	%		(1.20	)%		(0.55	)%		(0.55	)%		(0.34	)%		(0.39	)%
Portfolio turnover rate		323	%		243	%		205	%		88	%		71	%		323	%		243	%		205	%		88	%		71	%

	INVESTOR C SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	11.10		$	12.49		$	11.26		$	10.58		$	12.78

Income from investment operations
Net investment income (loss)		(0.15	)		(0.06	)		(0.06	)		(0.03	)		(0.02	)
Net gain (loss) on investments (both realized and unrealized)		(0.84	)		(1.11	)		1.54			0.71			(1.82	)

Total from investment operations		(0.99	)		(1.17	)		1.48			0.68			(1.84	)

Less distributions
Distributions from net investment income		– –			(0.01	)		– –			– –			– –
Distributions from net realized gains		– –			(0.21	)		(0.25	)		– –			(0.36	)

Total distributions		– –			(0.22	)		(0.25	)		– –			(0.36	)

Net asset value at end of period	$	10.11		$	11.10		$	12.49		$	11.26		$	10.58

Total return¹		(8.92	)%		(9.45	)%		13.35	%		6.33	%		(14.66	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	2,262		$	2,697		$	946		$	420		$	259
Ratios of expenses to average net assets
After advisory/administration fee waivers		2.37	%		2.36	%		2.34	%		2.34	%		2.33	%
Before advisory/administration fee waivers		2.37	%		2.36	%		2.34	%		2.34	%		2.39	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(1.20	)%		(0.56	)%		(0.58	)%		(0.34	)%		(0.28	)%
Before advisory/administration fee waivers		(1.20	)%		(0.56	)%		(0.58	)%		(0.34	)%		(0.34	)%
Portfolio turnover rate		323	%		243	%		205	%		88	%		71	%

¹	Neither front-end sales load nor contingent deferred sales load is reflected in total return.

BlackRock

Mid-Cap Growth Equity Portfolio

IMPORTANT DEFINITIONS

Equity Security: A security, such as stock, representing ownership of a company. Bonds, in comparison, are referred to as fixed income or debt securities because they represent indebtedness to the bondholder, not ownership (although convertible bonds are fixed income securities that are convertible to equity according to their terms).

Investment Style: Refers to the guiding principles of a mutual fund’s investment choices. The investment style of this fund is mid-cap growth, referring to the type of securities the managers will choose for this fund.

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

In pursuit of this goal, the fund normally invests at least 80% of its net assets in equity securities issued by U.S. mid-capitalization growth companies (market capitalizations between $1 billion and $10 billion) which the fund management team believes have above-average earnings growth potential. The fund primarily buys common stock but also can invest in preferred stock and securities convertible into common and preferred stock.

The management team focuses on mid-cap emerging growth companies with market capitalizations between $1 billion and $10 billion. The management team would expect these companies to have products, technologies, management, markets and opportunities which will facilitate earnings growth over time that is well above the growth rate of the overall economy and the rate of inflation. The management team uses a bottom up investment style in managing the fund. This means securities are selected based upon fundamental analysis (such as analysis of earnings, cash flows, competitive position and management’s abilities) performed by the management team.

The fund generally will sell a stock when, in the management team’s opinion, there is a deterioration in the company’s fundamentals or the company fails to meet performance expectations.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

From time to time the fund may invest in shares of companies through initial public offerings (IPOs). IPOs and companies that have recently gone public have the potential to produce substantial gains for the fund. However, there is no assurance that the fund will have access to profitable IPOs. Furthermore, stocks of some newly-public companies may decline shortly after the initial public offering.

While the management team chooses stocks they believe to have above-average earnings growth potential, there is no guarantee that the shares will increase in value or that they won’t move even lower.

The fund’s use of derivatives may reduce returns and/or increase volatility. Volatility is defined as the characteristic of a security,

an index or a market to fluctuate significantly in price within a short time period. A risk of the fund’s use of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets. Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. In addition, some derivatives are more sensitive to interest rate changes, market price fluctuations and general market liquidity than others.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk/Return Information

The chart and table below give you a picture of the fund’s long-term performance for Investor A Shares (in the chart) and for Investor A, B and C Shares (in the table). The information shows you how the fund’s performance has varied year by year and provides some indication of the risks of investing in the fund. The table compares the fund’s performance to that of the Russell Midcap Growth Index, a recognized unmanaged index of stock market performance. As with all such investments, past performance is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown.

As of 12/31

Investor A Shares

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

These returns assume payment of applicable sales charges.

	1 Year	3 Years	5 Years	Since Inception	Inception Date
Mid-Cap Growth; Inv A
Return Before Taxes	-32.13%	-25.90%	1.72%	3.76%	12/27/96
Return After Taxes on Distributions	-32.13%	-29.38%	-3.33%	-0.58%
Return After Taxes on Distributions and Sale of Shares	-19.73%	-19.46%	0.83%	2.57%
Mid-Cap Growth; Inv B
Return Before Taxes	-32.57%	-25.81%	1.77%	3.87%	12/27/96
Mid-Cap Growth; Inv C
Return Before Taxes	-30.02%	-25.18%	1.96%	3.87%	12/27/96
Russell Midcap Growth (Reflects no deduction for fees, expenses or taxes)	-27.40%	-20.02%	-1.82%	1.89%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

After tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Distribution Fees: A method of charging distribution-related expenses against fund assets.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Investor A Shares only, and the after-tax returns for Investor B and C Shares will vary.

Expenses and Fees

Shareholder Fees

(Fees paid directly from your investment)

	A Shares		B Shares		C Shares
Maximum Sales Charge (Load) Imposed on Purchases*	4.5	%	0.0	%	0.0	%
(as percentage of offering price)
Maximum Deferred Sales Charge (Load)	0.0	%	4.5	%**	1.00	%***
(as percentage of offering price)
Redemption/Exchange Fee****	2.0	%	2.0	%	2.0	%
(as a percentage of amount redeemed)

*	Reduced front-end sales charges may be available.

**	The CDSC is 4.5% if shares are redeemed in less than one year. The CDSC for Investor B Shares decreases for redemptions made in subsequent years. After six years there is no CDSC on B Shares. (See page 137 for complete schedule of CDSCs.)

***	There is no CDSC on C Shares after one year.

****Subject

to the approval of the Company’s Board of Trustees, fee applies only to shares purchased on or after March 1, 2003 that are redeemed or exchanged within 90 days of purchase.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

	A Shares		B Shares		C Shares
Advisory fees	.80	%	.80	%	.80	%
Distribution (12b-1) fees	.10	%	.75	%	.75	%
Other expenses	.81	%	.81	%	.81	%
Service fee	.25%		.25%		.25%
Processing fee	.15%		.15%		.15%
Other	.41%		.41%		.41%
Total annual fund operating expenses	1.71	%	2.36	%	2.36	%
Fee waivers and expense reimbursements*	.10	%	– –		– –
Net expenses*	1.61	%	2.36	%	2.36	%

BlackRock and BlackRock Distributors, Inc., the fund’s distributor, have contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.70% (for Investor A Shares) and 2.45% (for Investor B and C Shares) of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 144 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses, redemption at the end of each time period and, with respect to B Shares and C Shares only, no redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

	1 Year	3 Years	5 Years	10 Years
A Shares*	$606	$ 955	$1,327	$2,371
B Shares**
Redemption	$689	$1,086	$1,460	$2,535***
B Shares
No Redemption	$239	$ 736	$1,260	$2,535***
C Shares**
Redemption	$339	$ 736	$1,260	$2,696
C Shares
No Redemption	$239	$ 736	$1,260	$2,696

*	Reflects imposition of sales charge.

**	Reflects deduction of CDSC.

***	Based on the conversion of Investor B Shares to Investor A Shares after eight years.

As a shareholder you pay certain fees and expenses. Shareholder transaction fees are paid out of your investment and annual fund operating expenses are paid out of fund assets.

Fund Management

1997 to 1998 and an associate at Berkshire Partners from 1995 to 1997. Prior to joining BlackRock in 2002, Mr. Stack was the co-founder of Cyllenius Capital Management. Prior to founding Cyllenius in 2001, Mr. Stack was a portfolio manager at MFS Investment Management since 1993. Neil Wagner has been a portfolio co-manager of the fund since May 2002 and Brian Stack has been a co-manager of the fund since January 2003.

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Investor A, B or C Share Outstanding Throughout Each Period)

Mid-Cap Growth Equity Portfolio

	INVESTOR A SHARES															INVESTOR B SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98			Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	7.17		$	25.92		$	18.85		$	11.02		$	12.14		$	6.77		$	25.12		$	18.52		$	10.90		$	12.11

Income from investment operations
Net investment (loss)		(0.11	)		(0.04	)		(0.13	)		(0.11	)		(0.07	)		(0.16	)		(0.12	)		(0.22	)		(0.18	)		(0.14	)
Net gain (loss) on investments (both realized and unrealized)		(1.29	)		(11.23	)		13.82			7.94			(0.95	)		(1.20	)		(10.75	)		13.44			7.80			(0.97	)

Total from investment operations		(1.40	)		(11.27	)		13.69			7.83			(1.02	)		(1.36	)		(10.87	)		13.22			7.62			(1.11	)

Less distributions
Distributions from capital		– –			– –			– –			– –			(0.01	)		– –			– –			– –			– –			(0.01	)
Distributions from net realized capital gains		– –			(7.48	)		(6.62	)		– –			(0.09	)		– –			(7.48	)		(6.62	)		– –			(0.09	)

Total distributions		– –			(7.48	)		(6.62	)		– –			(0.10	)		– –			(7.48	)		(6.62	)		– –			(0.10	)

Net asset value at end of period	$	5.77		$	7.17		$	25.92		$	18.85		$	11.02		$	5.41		$	6.77		$	25.12		$	18.52		$	10.90

Total return¹		(19.53	)%		(56.91	)%		90.62	%		71.05	%		(8.42	)%		(20.09	)%		(57.24	)%		89.38	%		69.91	%		(9.19	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	26,242		$	38,225		$	83,152		$	12,795		$	4,090		$	33,822		$	51,186		$	122,726		$	12,698		$	4,088
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.62	%		1.60	%		1.57	%		1.58	%		1.61	%		2.37	%		2.35	%		2.31	%		2.33	%		2.35	%
Before advisory/administration fee waivers		1.62	%		1.60	%		1.57	%		1.59	%		1.67	%		2.37	%		2.35	%		2.31	%		2.34	%		2.41	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(1.24	)%		(0.38	)%		(0.80	)%		(0.95	)%		(0.85	)%		(1.98	)%		(1.12	)%		(1.53	)%		(1.70	)%		(1.60	)%
Before advisory/administration fee waivers		(1.24	)%		(0.38	)%		(0.80	)%		(0.96	)%		(0.91	)%		(1.98	)%		(1.12	)%		(1.53	)%		(1.71	)%		(1.66	)%
Portfolio turnover rate		279	%		584	%		425	%		318	%		204	%		279	%		584	%		425	%		318	%		204	%

	INVESTOR C SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	6.77		$	25.10		$	18.52		$	10.90		$	12.11

Income from investment operations
Net investment (loss)		(0.18	)		(0.13	)		(0.21	)		(0.10	)		(0.14	)
Net gain (loss) on investments (both realized and unrealized)		(1.18	)		(10.72	)		13.41			7.72			(0.97	)

Total from investment operations		(1.36	)		(10.85	)		13.20			7.62			(1.11	)

Less distributions
Distributions from capital		– –			– –			– –			– –			(0.01	)
Distributions from net realized capital gains		– –			(7.48	)		(6.62	)		– –			(0.09	)

Total distributions		– –			(7.48	)		(6.62	)		– –			(0.10	)

Net asset value at end of period	$	5.41		$	6.77		$	25.10		$	18.52		$	10.90

Total return³		(20.09	)%		(57.19	)%		89.23	%		69.91	%		(9.19	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	12,092		$	21,144		$	61,542		$	1,770		$	230
Ratios of expenses to average net assets
After advisory/administration fee waivers		2.37	%		2.35	%		2.30	%		2.33	%		2.34	%
Before advisory/administration fee waivers		2.37	%		2.35	%		2.30	%		2.34	%		2.40	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(1.98	)%		(1.10	)%		(1.51	)%		(1.70	)%		(1.56	)%
Before advisory/administration fee waivers		(1.98	)%		(1.10	)%		(1.51	)%		(1.71	)%		(1.62	)%
Portfolio turnover rate		279	%		584	%		425	%		318	%		204	%

¹	Neither front-end sales load nor contingent deferred sales load is reflected in total return.

BlackRock

Small Cap Value Equity Portfolio

IMPORTANT DEFINITIONS

Equity Security: A security, such as stock, representing ownership of a company. Bonds, in comparison, are referred to as fixed income or debt securities because they represent indebtedness to the bondholder, not ownership (although convertible bonds are fixed income securities that are convertible to equity according to their terms).

Investment Style: Refers to the guiding principles of a mutual fund’s investment choices. The investment style of this fund is small cap value, referring to the type of securities the managers will choose for this fund.

Small Capitalization Companies: The fund defines these companies as those with market capitalizations under $2 billion. Capitalization refers to the market value of the company and is calculated by multiplying the number of shares outstanding by the current price per share.

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

In pursuit of this goal, the fund normally invests at least 80% of its net assets in equity securities issued by U.S. small capitalization value companies (market capitalizations under $2 billion). The fund primarily buys common stock but also can invest in preferred stock and securities convertible into common and preferred stock.

The fund manager is seeking small capitalization stocks which he believes are worth more than is indicated by current market price. The manager initially screens for “value” stocks from the universe of companies with market capitalizations under $2 billion. The manager uses fundamental analysis to examine each company for financial strength before deciding to purchase the stock.

The fund generally will sell a stock when it reaches a target price which is when the manager believes it is fully valued or when, in the manager’s opinion, conditions change such that the risk of continuing to hold the stock is unacceptable when compared to its growth potential.

The fund manager may, when consistent with the fund’s investment objective, use options or futures (commonly known as derivatives). An option is the right to buy or sell a security or an index of securities at a specific price on or before a specific date. A future is an agreement to buy or sell a security or an index of securities at a specific price on a specific date. The primary purpose of using derivatives is to attempt to reduce risk to the fund as a whole (hedge) but they may also be used to maintain

liquidity and commit cash pending investment. The fund manager also may, but under normal market conditions generally does not intend to, use derivatives for speculation to increase returns.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

The fund may invest in companies that have relatively small market capitalizations. These organizations will normally have more limited product lines, markets and financial resources and will be dependent upon a more limited management group than larger capitalized companies. In addition, it is more difficult to get information on smaller companies, which tend to be less well known, have shorter operating histories, do not have significant ownership by large investors and are followed by relatively few securities analysts. The securities of smaller capitalized companies are often traded in the over-the-counter markets and may have fewer market makers and wider price spreads. This may result in greater price movements and less ability to sell the fund’s investment than if the fund held the securities of larger, more established companies.

While the fund manager chooses stocks he believes to be undervalued, there is no guarantee that the shares will increase in value or that they won’t move even lower.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

The performance for the period before Investor A Shares were launched is based upon performance for Institutional Shares of the fund, which were first issued in April 1992. Investor A Shares were launched in June 1992, Investor B Shares were launched in October 1994, and Investor C Shares were launched in October 1996. The performance for Investor B Shares for the period before they were launched is based upon performance for Institutional and Investor A Shares, and the performance for Investor C Shares for the period before they were launched is based upon performance for Institutional, Investor A and Investor B Shares. The actual return of Investor A Shares would have been lower than shown for the period before they were launched because Investor A Shares have higher expenses than Institutional Shares. Also, the actual returns of Investor B and C Shares would have been lower compared to Investor A Shares because Investor B and C Shares have higher expenses than Investor A Shares. Investor A Shares of the fund have expenses of 1.36% of average daily net assets (after waivers and reimbursements) for the current fiscal year and Investor B Shares and Investor C Shares of the fund each have expenses of 2.11% of average daily net assets (after waivers and reimbursements) for the current fiscal year. Institutional Shares of

the fund have expenses of 0.89% of average daily net assets (after waivers and reimbursements) for the current fiscal year.

As of 12/31

Investor A Shares

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

These returns assume payment of applicable sales charges.

	1 Year	3 Years	5 Years	10 Years	Inception Date
Small Cap Value; Inv A
Return Before Taxes	-20.70%	0.05%	-2.41%	7.47%	04/13/92
Return After Taxes on Distributions	-23.07%	-2.64%	-4.29%	5.24%
Return After Taxes on Distributions and Sale of Shares	-10.46%	-0.23%	-2.14%	5.62%
Small Cap Value; Inv B
Return Before Taxes	-20.65%	0.03%	-2.51%	7.34%	04/13/92
Small Cap Value; Inv C
Return Before Taxes	-18.22%	0.84%	-2.26%	7.33%	04/13/92
Russell 2000 Value (Reflects no deductions for fees, expenses or taxes)	-11.42%	7.45%	2.72%	10.86%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions.These returns assume payment of applicable sales charges. Source: BlackRock Advisors, Inc.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Distribution Fees: A method of charging distribution-related expenses against fund assets.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

The BlackRock Small Cap Value Equity Portfolio closed to new investors at 4 p.m. (Eastern time), March 11, 2002. Existing shareholders and programs in the fund as of 4 p.m. (Eastern time), March 11, 2002 may make additional investments in current accounts.

Shareholder Fees

(Fees paid directly from your investment)

	A Shares		B Shares		C Shares
Maximum Sales Charge (Load) Imposed on Purchases*	4.5	%	0.0	%	0.0	%
(as percentage of offering price)
Maximum Deferred Sales Charge (Load)	0.0	%	4.5	%**	1.00	%***
(as percentage of offering price)
Redemption/Exchange Fee****	2.0	%	2.0	%	2.0	%
(as a percentage of amount redeemed)

*	Reduced front-end sales charges may be available.

**	The CDSC is 4.5% if shares are redeemed in less than one year. The CDSC for Investor B Shares decreases for redemptions made in subsequent years. After six years there is no CDSC on B Shares. (See page 137 for complete schedule of CDSCs.)

***	There is no CDSC on C Shares after one year.

****	Subject to the approval of the Company’s Board of Trustees, fee applies only to shares purchased on or after March 1, 2003 that are redeemed or exchanged within 90 days of purchase.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

	A Shares		B Shares		C Shares
Advisory fees	.55	%	.55	%	.55	%
Distribution (12b-1) fees	.10	%	.75	%	.75	%
Other expenses¹	.81	%	.81	%	.81	%
Service fees	.25%		.25%		.25%
Processing fees	.15%		.15%		.15%
Other	.41%		.41%		.41%
Total annual fund operating expenses	1.46	%	2.11	%	2.11	%
Fee waivers and expense reimbursements*	.10	%	– –		– –
Net expenses*	1.36	%	2.11	%	2.11	%

BlackRock and BlackRock Distributors, Inc., the fund’s distributor, have contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.44% (for Investor A Shares) and 2.19% (for Investor B and C Shares) of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 144 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses, redemption at the end of each time period and, with respect to B Shares and C Shares only, no redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

	1 Year	3 Years	5 Years	10 Years
A Shares*	$582	$ 882	$1,202	$2,110
B Shares**
Redemption	$664	$1,011	$1,334	$2,276***
B Shares
No Redemption	$214	$ 661	$1,134	$2,276***
C Shares**
Redemption	$314	$ 661	$1,134	$2,441
C Shares
No Redemption	$214	$ 661	$1,134	$2,441

*	Reflects imposition of sales charge.

**	Reflects deduction of CDSC.

***	Based on the conversion of Investor B Shares to Investor A Shares after eight years.

As a shareholder you pay certain fees and expenses. Shareholder transaction fees are paid out of your investment and annual fund operating expenses are paid out of fund assets.

Fund Management

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Investor A, B or C Share Outstanding Throughout Each Period)

Small Cap Value Equity Portfolio

	INVESTOR A SHARES															INVESTOR B SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98			Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	16.18		$	17.10		$	14.71		$	14.88		$	20.20		$	15.58		$	16.56		$	14.31		$	14.53		$	19.86

Income from investment operations
Net investment income (loss)		(0.10	)		0.06			(0.02	)		0.03			0.06			(0.20	)		(0.06	)		(0.23	)		(0.06	)		(0.02	)
Net gain (loss) on investments (both realized and unrealized)		(0.99	)		(0.07	)		2.46			0.69			(3.20	)		(0.94	)		(0.07	)		2.48			0.66			(3.19	)

Total from investment operations		(1.09	)		(0.01	)		2.44			0.72			(3.14	)		(1.14	)		(0.13	)		2.25			0.60			(3.21	)

Less distributions
Distributions from net investment income		– –			(0.07	)		(0.05	)		(0.22	)		(0.06	)		– –			(0.01	)		– –			(0.15	)		– –
Distributions from net realized gains		(2.33	)		(0.84	)		– –			(0.67	)		(2.12	)		(2.33	)		(0.84	)		– –			(0.67	)		(2.12	)

Total distributions		(2.33	)		(0.91	)		(0.05	)		(0.89	)		(2.18	)		(2.33	)		(0.85	)		– –			(0.82	)		(2.12	)

Net asset value at end of period	$	12.76		$	16.18		$	17.10		$	14.71		$	14.88		$	12.11		$	15.58		$	16.56		$	14.31		$	14.53

Total return¹		(8.71	)%		0.09	%		16.60	%		4.71	%		(17.43	)%		(9.46	)%		(0.66	)%		15.72	%		3.93	%		(18.08	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	43,884		$	28,195		$	25,719		$	31,843		$	34,286		$	14,402		$	16,599		$	11,831		$	19,000		$	20,717
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.35	%		1.34	%		1.32	%		1.30	%		1.32	%		2.10	%		2.09	%		2.08	%		2.08	%		2.08	%
Before advisory/administration fee waivers		1.37	%		1.34	%		1.32	%		1.30	%		1.33	%		2.12	%		2.09	%		2.08	%		2.08	%		2.09	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(0.62	)%		0.38	%		0.31	%		0.44	%		0.32	%		(1.32	)%		(0.37	)%		(0.43	)%		(0.34	)%		(0.43	)%
Before advisory/administration fee waivers		(0.64	)%		0.38	%		0.31	%		0.44	%		0.31	%		(1.34	)%		(0.37	)%		(0.43	)%		(0.34	)%		(0.44	)%
Portfolio turnover rate		260	%		184	%		168	%		48	%		45	%		260	%		184	%		168	%		48	%		45	%

	INVESTOR C SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	15.59		$	16.57		$	14.31		$	14.53		$	19.86

Income from investment operations
Net investment income (loss)		(0.20	)		(0.05	)		(0.28	)		(0.01	)		(0.04	)
Net gain (loss) on investments (both realized and unrealized)		(0.94	)		(0.08	)		2.54			0.61			(3.17	)

Total from investment operations		(1.14	)		(0.13	)		2.26			0.60			(3.21	)

Less distributions
Distributions from net investment income		– –			(0.01	)		– –			(0.15	)		– –
Distributions from net realized gains		(2.33	)		(0.84	)		– –			(0.67	)		(2.12	)

Total distributions		(2.33	)		(0.85	)		– –			(0.82	)		(2.12	)

Net asset value at end of period	$	12.12		$	15.59		$	16.57		$	14.31		$	14.53

Total return¹		(9.45	)%		(0.65	)%		15.79	%		3.93	%		(18.08	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	6,113		$	7,051		$	4,666		$	9,162		$	5,491
Ratios of expenses to average net assets
After advisory/administration fee waivers		2.10	%		2.09	%		2.08	%		2.08	%		2.08	%
Before advisory/administration fee waivers		2.12	%		2.09	%		2.08	%		2.08	%		2.09	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(1.32	)%		(0.37	)%		(0.43	)%		(0.34	)%		(0.42	)%
Before advisory/administration fee waivers		(1.33	)%		(0.37	)%		(0.43	)%		(0.34	)%		(0.43	)%
Portfolio turnover rate		260	%		184	%		168	%		48	%		45	%

¹	Neither front-end sales load nor contingent deferred sales load is reflected in total return.

BlackRock

Small Cap Core Equity Portfolio

IMPORTANT DEFINITIONS

Investment Style: Refers to the guiding principles of a mutual fund’s investment choices. The investment style of this fund is small cap, referring to the type of securities the manager will choose for this fund.

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

In pursuit of this goal, the fund normally invests at least 80% of its net assets in the equity securities of U.S. small capitalization companies (market capitalizations under $2 billion). The fund uses the Russell 2000 Index as a benchmark. The fund primarily buys common stock but can also invest in preferred stock and securities convertible into common and preferred stock.

The fund manager seeks to achieve consistent and sustainable performance through various market cycles by emphasizing stock selection. Stock selection is determined by looking at companies using a range of valuation criteria, including the strength of their management and business franchise. The manager initially screens for stocks from a market universe of companies with market capitalizations under $2 billion. The fund will invest in stocks that the manager believes offer attractive returns through capital appreciation. The manager uses fundamental analysis to examine each company for financial strength before deciding to purchase the stock.

The fund will generally sell a stock when it reaches a target price, which is when the manager believes it is fully valued or when, in her opinion, conditions change such that the risk of continuing to hold the stock is unacceptable when compared to its growth potential.

The manager may, when consistent with the fund’s investment objective, use options or futures (commonly known as derivatives). An option is the right to buy or sell a security or an

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

The fund may invest in companies that have relatively small market capitalizations. These organizations will normally have more limited product lines, markets and financial resources and will be dependent upon a more limited management group than larger capitalized companies. In addition, it is more difficult to get information on smaller companies, which tend to be less well known, have shorter operating histories, do not have significant ownership by large investors and are followed by relatively few securities analysts. Securities of smaller capitalized companies are often traded in the over-the-counter markets and may have fewer market makers and wider price spreads. This may result in greater price movements and less ability to sell the fund’s investment than if the fund held the securities of larger, more established companies.

While the manager chooses stocks she believes have above average earnings growth potential or are undervalued, there is no guarantee that the shares will increase in value or that they won’t move even lower.

fluctuations in their values may not correlate perfectly with the overall securities markets. Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. In addition, some derivatives are more sensitive to interest rate changes, market price fluctuations and general market liquidity than others.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Expenses and Fees

The tables on the next page explain your pricing options and describe the fees and expenses that you may pay if you buy and hold Investor A, B and C Shares of the fund. The “Annual Fund Operating Expenses” table is based on expenses for the most recent fiscal year.

Shareholder Fees

(Fees paid directly from your investment)

	A Shares		B Shares		C Shares
Maximum Sales Charge (Load) Imposed on Purchases*	5.0	%	0.0	%	0.0	%
(as percentage of offering price)
Maximum Deferred Sales Charge (Load)	0.0	%	4.5	%**	1.00	%***
(as percentage of offering price)
Redemption/Exchange Fee****	2.0	%	2.0	%	2.0	%
(as a percentage of amount redeemed)

*	Reduced front-end sales charges may be available.

**	The CDSC is 4.5% if shares are redeemed in less than one year. The CDSC for Investor B Shares decreases for redemptions made in subsequent years. After six years there is no CDSC on B Shares. (See page 137 for complete schedule of CDSCs.)

***	There is no CDSC on C Shares after one year.

****	Subject to the approval of the Company’s Board of Trustees, fee applies only to shares purchased on or after March 1, 2003 that are redeemed or exchanged within 90 days of purchase.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Distribution Fees: A method of charging distribution-related expenses against fund assets.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

	A Shares		B Shares		C Shares
Advisory Fees	1.00	%	1.00	%	1.00	%
Distribution (12b-1) fees	0.10	%	0.75	%	0.75	%
Other expenses	9.21	%	9.21	%	9.21	%
Service fees	0.25%		0.25%		0.25%
Processing fees	0.15%		0.15%		0.15%
Other	8.81%		8.81%		8.81%
Total annual fund operating expenses	10.31	%	10.96	%	10.96	%
Fee waivers and expense reimbursements*	8.54	%	8.44	%	8.44	%
Net Expenses*	1.77	%	2.52	%	2.52	%

BlackRock and BlackRock Distributors, Inc., the fund’s distributor, have contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.77% (for Investor A Shares) and 2.52% (for Investor B and C Shares) of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 144 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses, redemption at the end of each time period and, with respect to B Shares and C Shares only, no redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

	1 Year	3 Years	5 Years	10 Years
A Shares*	$671	$2,587	$4,305	$7,863
B Shares**
Redemption	$705	$2,720	$4,440	$7,949***
B Shares
No Redemption	$255	$2,370	$4,240	$7,949***
C Shares**
Redemption	$355	$2,370	$4,340	$8,022
C Shares
No Redemption	$255	$2,370	$4,240	$8,022

*	Reflects imposition of sales charge.

**	Reflects deduction of CDSC.

***	Based on the conversion of Investor B Shares to Investor A Shares after eight years.

As a shareholder you pay certain fees and expenses. Shareholder fees are paid out of your investment and annual fund operating expenses are paid out of fund assets.

Fund Management

The fund is managed by Kate O’Connor, Director and investment manager at BlackRock since December 2001 and Wayne J. Archambo, Managing Director and investment manager at BlackRock since January 2002. Prior to joining BlackRock in 2001, Ms. O’Connor was an equity analyst of mid and small cap growth and value products at Independence Investment LLC from 2000 to 2001, a principal at Boston Partners Asset Management L.P. from 1997 to 2000 and previously an equity analyst at Morgan Stanley Dean Witter. Prior to joining BlackRock in 2002, Mr. Archambo was founding partner and Manager of Boston Partners Asset Management, L.P.’s small and mid cap value equity products since the firm’s inception in 1995. Kate O’Connor has been a portfolio manager since January 2003 and Wayne J. Archambo has been a portfolio manager since the fund’s inception in January 2002.

Financial Highlights

The financial information in the table below shows the fund’s financial performance for the periods indicated. Certain information reflects results for a single fund share. The term “Total Return” indicates how much your investment would have increased or decreased during this period of time and assumes that you have reinvested all dividends and distributions. These figures have been audited by PricewaterhouseCoopers LLP, the fund’s independent accountants. The auditor’s report, along with the fund’s financial statements, are included in the Company’s annual report, which is available upon request (see back cover for ordering instructions).

FINANCIAL HIGHLIGHTS

(For an Investor A, B or C Share Outstanding Throughout Each Period)

Small Cap Core Equity Portfolio

	INVESTOR A SHARES			INVESTOR B SHARES			INVESTOR C SHARES
	For the Period 1/02/02¹ through 9/30/02			For the Period 1/02/02¹ through 9/30/02			For the Period 1/02/02¹ through 9/30/02
Net asset value at beginning of period	$	10.00		$	10.00		$	10.00

Investment operations
Net investment loss		0.00			0.00			0.00
Net loss on investments
(both realized and unrealized)		(1.65	)		(1.65	)		(1.65	)

Total from Investment Operations		(1.65	)		(1.65	)		(1.65	)

Less: distributions
Distributions from Net Investment Income		0.00			0.00			0.00
Distributions from Net Realized Gain		0.00			0.00			0.00

Total Distributions		0.00			0.00			0.00

Net Asset Value at the end of the period	$	8.35		$	8.35		$	8.35

Total Return³		(16.50	)%		(16.50	)%		(16.50	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	– –		$	– –		$	– –
Ratios of expense to average net assets:
After advisory/adminstration fee waivers		1.77	%²		2.52	%²		2.52	%²
Before advisory/adminstration fee waivers		3.00	%²		3.75	%²		3.75	%²
Ratios of Net investment income to average net assets
After advisory/adminstration fee waivers		(1.07	)%²		(1.82	)%²		(1.82	)%²
Before advisory/adminstration fee waivers		(2.30	)%²		(3.05	)%²		(3.05	)%²
Portfolio turnover rate		233	%		233	%		233	%

¹	Commencement of operations.

²	Annualized.

³	Neither the sales load nor the contingent deferred sales load is reflected in the total return.

BlackRock

Small Cap Growth Equity Portfolio

IMPORTANT DEFINITIONS

Equity Security: A security such as stock, representing ownership in a company. Bonds, in comparison, are referred to as fixed income or debt securities because they represent indebtedness to the bondholder, not ownership (although convertible bonds are fixed income securities that are convertible to equity according to their terms).

Investment Style: Refers to the guiding principles of a mutual fund’s investment choices. The investment style of this fund is small cap growth, referring to the type of securities the managers will choose for this fund.

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

In pursuit of this goal, the fund normally invests at least 80% of its net assets in equity securities issued by U.S. small capitalization growth companies (market capitalizations under $2 billion) which the fund management team believes offer superior prospects for growth. The fund primarily buys common stock but also can invest in preferred stock and securities convertible into common and preferred stock.

The management team focuses on small cap emerging growth companies with market capitalizations under $2 billion. The management team would expect these companies to have products, technologies, management, markets and opportunities which will facilitate earnings growth over time that is well above the growth rate of the overall economy and the rate of inflation. The management team uses a bottom up investment style in managing the fund. This means securities are selected based upon fundamental analysis (such as analysis of earnings, cash flows, competitive position and management’s abilities) performed by the management team. From time to time the fund may invest in shares of companies through initial public offerings (IPOs).

The fund generally will sell a stock when, in the management team’s opinion, there is a deterioration in the company’s fundamentals or the company fails to meet performance expectations.

The management team may, when consistent with the fund’s investment objective, use options or futures (commonly known as

derivatives). An option is the right to buy or sell a security or an index of securities at a specific price on or before a specific date. A future is an agreement to buy or sell a security or an index of securities at a specified price on a specified date. The primary purpose of using derivatives is to attempt to reduce risk to the fund as a whole (hedge) but they may also be used to maintain liquidity and commit cash pending investment. The management team also may, but under normal market conditions generally does not intend to, use derivatives for speculation to increase returns.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

IPOs and companies that have recently gone public have the potential to produce substantial gains for the fund. However, there is no assurance that the fund will have access to profitable IPOs. Furthermore, stocks of some newly-public companies may decline shortly after the initial public offering.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk/Return Information

The performance for the period before Investor B and C Shares were launched is based upon performance for Investor A Shares of the fund. Investor A Shares were launched in September 1993, Investor B Shares were launched in January 1996 and Investor C Shares were launched in September 1996. The actual return of

Investor B and C Shares would have been lower than shown for the period before they were launched because Investor B and C Shares have higher expenses than Investor A Shares. Investor A Shares of the fund have expenses of 1.34% of average daily net assets (after waivers and reimbursements) for the current fiscal year and Investor B Shares and Investor C Shares of the fund each have expenses of 2.09% of average daily net assets (after waivers and reimbursements) for the current fiscal year.

As of 12/31

Investor A Shares

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

These returns assume payment of applicable sales charges.

	1 Year	3 Years	5 Years	Since Inception	Inception Date
Small Cap Growth; Inv A
Return Before Taxes	-30.99%	-27.04%	-6.54%	5.37%	09/14/93
Return After Taxes on Distributions	-30.99%	-29.17%	-9.08%	3.48%
Return After Taxes on Distributions and Sale of Shares	-19.03%	-19.50%	-4.64%	4.76%
Small Cap Growth; Inv B
Return Before Taxes	-31.51%	-26.99%	-6.57%	5.31%	09/14/93
Small Cap Growth; Inv C
Return Before Taxes	-29.00%	-26.38%	-6.34%	5.31%	09/14/93
Russell 2000 Growth (Reflects no deduction for fees, expenses or taxes)	-30.27%	-21.11%	-6.59%	2.11%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Distribution Fees: A method of charging distribution-related expenses against fund assets.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

Shareholder Fees

(Fees paid directly from your investment)

	A Shares		B Shares		C Shares
Maximum Sales Charge (Load) Imposed on Purchases*	4.5	%	0.0	%	0.0	%
(as percentage of offering price)
Maximum Deferred Sales Charge (Load)	0.0	%	4.5	%**	1.00	%***
(as percentage of offering price)
Redemption/Exchange Fee****	2.0	%	2.0	%	2.0	%
(as a percentage of amount redeemed)

*	Reduced front-end sales charges may be available.

**	The CDSC is 4.5% if shares are redeemed in less than one year. The CDSC for Investor B Shares decreases for redemptions made in subsequent years. After six years there is no CDSC on B Shares. (See page 137 for complete schedule of CDSCs.)

***	There is no CDSC on C Shares after one year.

****Subject

to the approval of the Company’s Board of Trustees, fee applies only to shares purchased on or after March 1, 2003 that are redeemed or exchanged within 90 days of purchase.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

	A Shares		B Shares		C Shares
Advisory fees	.55	%	.55	%	.55	%
Distribution (12b-1) fees	.10	%	.75	%	.75	%
Other expenses	.79	%	.79	%	.79	%
Service fee	.25%		.25%		.25%
Processing fee	.15%		.15%		.15%
Other	.39%		.39%		.39%
Total annual fund operating expenses	1.44	%	2.09	%	2.09	%
Fee waivers and expense reimbursements*	.10	%	– –		– –
Net expenses*	1.34	%	2.09	%	2.09	%

BlackRock and BlackRock Distributors, Inc., the fund’s distributor, have contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.46% (for Investor A Shares) and 2.21% (for Investor B and C Shares) of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 144 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses, redemption at the end of each time period and, with respect to B Shares and C Shares only, no redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

	1 Year	3 Years		5 Years	10 Years
A Shares*	$580		$876	$1,192	$2,088
B Shares**
Redemption	$662	$	1,005	$1,324	$2,255***
B Shares
No Redemption	$212		$655	$1,124	$2,255***
C Shares**
Redemption	$312		$655	$1,124	$2,421
C Shares
No Redemption	$212		$655	$1,124	$2,421

*	Reflects imposition of sales charge.

**	Reflects deduction of CDSC.

***	Based on the conversion of Investor B Shares to Investor A Shares after eight years.

As a shareholder you pay certain fees and expenses. Shareholder transaction fees are paid out of your investment and annual fund operating expenses are paid out of fund assets.

Fund Management

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Investor A, B or C Share Outstanding Throughout Each Period)

Small Cap Growth Equity Portfolio

	INVESTOR A SHARES															INVESTOR B SHARES
	Year Ended 9/30/02			Year ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98			Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	11.12		$	34.47		$	24.73		$	17.12		$	23.25		$	10.39		$	33.05		$	23.97		$	16.73		$	22.89

Income from investment operations
Net investment (loss)		(0.14	)		(0.01	)		(0.06	)		(0.13	)		(0.11	)		(0.23	)		(0.12	)		(0.26	)		(0.33	)		(0.22	)
Net gain (loss) on investments (both realized and unrealized)		(2.50	)		(14.65	)		13.94			7.74			(4.88	)		(2.30	)		(13.85	)		13.48			7.57			(4.80	)

Total from investment operations		(2.64	)		(14.66	)		13.88			7.61			(4.99	)		(2.53	)		(13.97	)		13.22			7.24			(5.02	)

Less distributions
Distribution from net investment income		– –			(0.08	)		– –			– –			– –			– –			(0.08	)		– –			– –			– –
Distributions from capital		– –			(0.10	)		– –			– –			(0.02	)		– –			(0.10	)		– –			– –			(0.02	)
Distributions from net realized gains		– –			(8.51	)		(4.14	)		– –			(1.12	)		– –			(8.51	)		(4.14	)		– –			(1.12	)

Total distributions		– –			(8.69	)		(4.14	)		– –			(1.14	)		– –			(8.69	)		(4.14	)		– –			(1.14	)

Net asset value at end of period	$	8.48		$	11.12		$	34.47		$	24.73		$	17.12		$	7.86		$	10.39		$	33.05		$	23.97		$	16.73

Total return¹		(23.74	)%		(53.90	)%		61.96	%		44.37	%		(22.31	)%		(24.35	)%		(54.22	)%		61.07	%		43.28	%		(22.89	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	95,620		$	85,211		$	175,112		$	79,478		$	48,190		$	21,958		$	37,351		$	95,922		$	44,109		$	38,485
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.33	%		1.29	%		1.23	%		1.23	%		1.32	%		2.07	%		2.03	%		1.98	%		2.00	%		2.07	%
Before advisory/administration fee waivers		1.36	%		1.29	%		1.23	%		1.23	%		1.32	%		2.10	%		2.03	%		1.98	%		2.00	%		2.07	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(1.14	)%		0.02	%		(0.21	)%		(0.66	)%		(0.61	)%		(1.89	)%		(0.69	)%		(0.96	)%		(1.43	)%		(1.36	)%
Before advisory/administration fee waivers		(1.17	)%		0.02	%		(0.21	)%		(0.66	)%		(0.61	)%		(1.92	)%		(0.69	)%		(0.96	)%		(1.43	)%		(1.36	)%
Portfolio turnover rate		238	%		363	%		218	%		176	%		159	%		238	%		363	%		218	%		176	%		159	%

	INVESTOR C SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	10.39		$	33.05		$	23.97		$	16.73		$	22.89

Income from investment operations
Net investment (loss)		(0.23	)		(0.12	)		(0.22	)		(0.35	)		(0.26	)
Net gain (loss) on investments (both realized and unrealized)		(2.30	)		(13.85	)		13.44			7.59			(4.76	)

Total from investment operations		(2.53	)		(13.97	)		13.22			7.24			(5.02	)

Less distributions
Distribution from net investment income		– –			(0.08	)		– –			– –			– –
Distributions from capital		– –			(0.10	)		– –			– –			(0.02	)
Distributions from net realized gains		– –			(8.51	)		(4.14	)		– –			(1.12	)

Total distributions		– –			(8.69	)		(4.14	)		– –			(1.14	)

Net asset value at end of period	$	7.86		$	10.39		$	33.05		$	23.97		$	16.73

Total return¹		(24.35	)%		(54.21	)%		61.07	%		43.28	%		(22.89	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	9,665		$	18,170		$	49,276		$	13,541		$	11,931
Ratios of expenses to average net assets
After advisory/administration fee waivers		2.07	%		2.03	%		1.99	%		2.05	%		2.09	%
Before advisory/administration fee waivers		2.10	%		2.03	%		1.99	%		2.05	%		2.09	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(1.89	)%		(0.67	)%		(0.92	)%		(1.48	)%		(1.38	)%
Before advisory/administration fee waivers		(1.92	)%		(0.67	)%		(0.92	)%		(1.48	)%		(1.38	)%
Portfolio turnover rate		238	%		363	%		218	%		176	%		159	%

¹	Neither front-end sales load nor contingent deferred sales load is reflected in total return.

BlackRock

Global Science & Technology Opportunities Portfolio

IMPORTANT DEFINITIONS

Fundamentals: “Fundamental” information about a company (such as its income statement, balance sheet, earnings and sales history, products and management).

Market Capitalization: Market capitalization refers to the market value of a company and is calculated by multiplying the number of shares outstanding by the current price per share.

Technical Analysis: The study and interpretation of securities in order to predict future trends. The technical tools used by the management team include: trending indicators such as moving averages and non-trending indicators such as cash flow and relative strengths.

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

In pursuit of this goal, the fund will invest primarily in equity securities of U.S. and non-U.S. companies in all capitalization ranges selected for their rapid and sustainable growth potential from the development, advancement and use of science and/or technology. The fund normally invests at least 80% of its net assets in equity securities issued by science and technology companies in all market capitalization ranges. The fund may invest up to 25% of its net assets in stocks of issuers in emerging market countries.

The fund primarily buys common stock but also can invest in preferred stock and securities convertible into common and preferred stock. The fund may also invest in Rule 144A securities, which are privately placed securities purchased by qualified institutional buyers. From time to time the fund may invest in shares of companies through initial public offerings (IPOs).

The fund management team will invest in U.S. and non-U.S. companies (including companies located in emerging market countries) that are expected to offer the best opportunities for growth and high investment returns. The fund management team uses a multi-factor screen to identify stocks that have above-average return potential. The factors and the weight assigned to a factor will change depending on market conditions. The most influential factors over time have been revenue and earnings growth, estimate revisions, profitability and relative value.

The management team, in an attempt to reduce portfolio risk, will diversify by investing in at least three countries, one of which may be the U.S. Some of the industries that are likely to be represented in the fund’s portfolio holdings include:

Application Software

IT Consulting & Services

Internet Software and Services

Networking Equipment

Telecom Equipment

Computer Hardware

Computer Storage & Peripherals

Electronic Equipment and Instruments

Semiconductor Equipment

Semiconductors

Aerospace & Defense

Electrical Components & Equipment

Biotechnology

Pharmaceuticals

Healthcare Equipment & Supplies

Healthcare Distribution & Services

Healthcare Facilities

Industrial Gases

Specialty Chemicals

Advanced Materials

Integrated Telecom Services

Alternative Carriers

Wireless Telecommunication Services

The fund generally will sell a stock when, in the management team’s opinion, there is a deterioration in the company’s fundamentals, a change in macroeconomic outlook, technical deterioration, valuation issues, a need to rebalance the portfolio or a better opportunity elsewhere. The team uses a broad set of technical tools to enhance the timing of purchase or sell decisions.

As part of its normal operation, the fund may hold these securities pending investments or when it expects to need cash to pay redeeming shareholders. The fund will not deviate from its normal strategies if it holds high quality money market securities pending investments.

The fund may also use forward foreign currency exchange contracts (obligations to buy or sell a currency at a set rate in the future) to hedge against movements in the value of non-U.S. currencies.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

The fund’s focus on stocks in the science and technology sectors makes it more susceptible to factors affecting those sectors and more volatile than funds that invest in many different sectors. Therefore, a downturn in the science and/or technology sectors could hurt the fund’s performance to a greater extent than a fund that invests in many sectors.

In addition, investing in science and technology companies exposes the fund to special risks. For example, rapid advances in science and technology might cause existing products to become obsolete, and the fund’s returns could suffer to the extent it holds an affected company’s shares. Companies in a number of science and technology industries are also subject to more government regulations and approval processes than many other industries. This fact may affect a company’s overall profitability and cause its stock price to be more volatile. Additionally, science and technology companies are dependent upon consumer and business acceptance as new technologies evolve.

Non-U.S. securities involve risks not typically associated with investing in U.S. securities. These risks include but are not limited to: currency risks (the risk that the value of dividends or interest paid by non-U.S. securities, or the value of the securities themselves, may fall if currency exchange rates change), the risk that a security’s value will be hurt by changes in non-U.S. political or social conditions, including changes in policies restricting non-U.S. investment, the possibility of heavy taxation, nationalization or expropriation of assets and more difficulty obtaining information on non-U.S. securities or companies. In addition, a portfolio of non-U.S. securities may be harder to sell and may be subject to wider price movements than comparable investments in U.S. companies. There is less government regulation of non-U.S. securities markets.

In addition, political and economic structures in emerging markets countries may be undergoing rapid change and these countries may lack the social, political and economic stability of more developed countries. As a result some of the risks described above, including the risks of nationalization or expropriation of assets and the existence of smaller, more volatile and less regulated markets, may be increased. The value of many investments in emerging market countries recently has dropped significantly due to economic and political turmoil in many of these countries.

Because different kinds of stocks go in and out of favor depending on market conditions, this fund’s performance may be better or worse than other funds with different investment styles.

While the management team chooses stocks they believe have above-average earnings growth potential, there is no guarantee that the shares will increase in value or that they won’t move even lower.

The fund’s investment in Rule 144A securities could have the effect of increasing the level of illiquidity in the fund during any period that qualified institutional buyers become uninterested in purchasing these types of securities.

transaction will not fulfill its contractual obligation. In addition, some derivatives are more sensitive to interest rate changes, market price fluctuations and general market liquidity than others.

Forward foreign currency exchange contracts do not eliminate movements in the value of non-U.S. securities but rather allow the fund to establish a fixed rate of exchange for a future point in time. This strategy can have the effect of reducing returns and minimizing opportunities for gain.

The fund may, from time to time, invest more than 25% of its assets in securities whose issuers are located in a single country. These investments would make the fund more dependent upon the political and economic circumstances of that country than a mutual fund that owns stocks of companies in many countries.

The expenses of the fund can be expected to be higher than those of other funds investing primarily in domestic securities because the costs attributable to investing abroad are usually higher.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

As of 12/31 Investor A Shares

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

These returns assume payment of applicable sales charges.

	1 Year	Since Inception	Inception Date
Global Science & Technology Opportunities; Inv A
Return Before Taxes	-38.40%	-32.33%	05/15/00
Return After Taxes on Distributions	-38.40%	-32.33%
Return After Taxes on Distributions and Sale of Shares	-23.58%	-23.97%
Global Science & Technology Opportunities; Inv B
Return Before Taxes	-38.44%	-32.40%	05/15/00
Global Science & Technology Opportunities; Inv C
Return Before Taxes	-36.19%	-31.48%	05/15/00
S&P 500^® (Reflects no deduction for fees, expenses or taxes)	-22.10%	-16.23%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Distribution Fees: A method of charging distribution-related expenses against fund assets.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide for shareholder account service and maintenance.

Expenses and Fees

Shareholder Fees

(Fees paid directly from your investment)

	A Shares		B Shares		C Shares
Maximum Sales Charge (Load) Imposed on Purchases*	5.0	%	0.0	%	0.0	%
(as percentage of offering price)
Maximum Deferred Sales Charge (Load)	0.0	%	4.5	%**	1.00	%***
(as percentage of offering price)

*	Reduced front-end sales charges may be available. A CDSC of up to 1.00% is assessed on certain redemptions of Investor A Shares that are purchased with no initial sales charge as part of an investment of $1,000,000 or more.

**	The CDSC is 4.5% if shares are redeemed in less than one year. The CDSC for Investor B Shares decreases for redemptions made in subsequent years. After six years there is no CDSC on B Shares. (See page 137 for complete schedule of CDSCs.)

***	There is no CDSC on C Shares after one year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

	A Shares		B Shares		C Shares
Advisory fees	.90	%	.90	%	.90	%
Distribution (12b-1) fees	.10	%	.75	%	.75	%
Other expenses	.89	%	.89	%	.89	%
Service fees	.25%		.25%		.25%
Processing fees	.15%		.15%		.15%
Other	.49%		.49%		.49%
Total annual fund operating expenses	1.89	%	2.54	%	2.54	%
Fee waivers and expense reimbursements*	.10	%	– –		– –
Net expenses*	1.79	%	2.54	%	2.54	%

BlackRock and BlackRock Distributors, Inc., the fund’s distributor, have contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.90% (for Investor A Shares) and 2.65% (for Investor B and C Shares) of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 144 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses, redemption at the end of each time period and, with respect to B Shares and C Shares only, no redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

	1 Year	3 Years	5 Years	10 Years
A Shares*	$673	$1,055	$1,461	$2,593
B Shares**
Redemption	$707	$1,141	$1,550	$2,717***
B Shares
No Redemption	$257	$791	$1,350	$2,717***
C Shares**
Redemption	$357	$791	$1,350	$2,875
C Shares
No Redemption	$257	$791	$1,350	$2,875

*	Reflects imposition of sales charge.

**	Reflects deduction of CDSC.

***	Based on the conversion of the Investor B Shares to Investor A Shares after eight years.

As a shareholder you pay certain fees and expenses. Shareholder transaction fees are paid out of your investment and annual fund operating expenses are paid out of fund assets.

Fund Management

The fund is managed by a team of investment professionals at BlackRock Advisors, Inc. (BlackRock), including Thomas Callan, Managing Director with BlackRock since 1996, and Dan Rea, Vice President with BlackRock since 2000. Prior to joining BlackRock, Mr. Rea was a portfolio manager at Driehaus Capital Management since 1997 and previously with GE Capital Aviation Services. Thomas Callan has been a co-manager of the fund since its inception and Dan Rea has been a co-manager since January 2003.

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Investor A, B or C Share Outstanding Throughout Each Period)

Global Science & Technology Opportunities Portfolio

	INVESTOR A SHARES									INVESTOR B SHARES									INVESTOR C SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			For the Period 5/15/00¹ through 9/30/00			Year Ended 9/30/02			Year Ended 9/30/01			For the Period 5/15/00¹ through 9/30/00			Year Ended 9/30/02			Year Ended 9/30/01			For the Period 5/15/00¹ through 9/30/00
Net asset value at beginning of period	$	4.38		$	12.47		$	10.00		$	4.33		$	12.44		$	10.00		$	4.33		$	12.44		$	10.00

Income from investment operations
Net investment (loss)		(0.09	)		(0.03	)		(0.02	)		(0.14	)		(0.09	)		(0.03	)		(0.15	)		(0.10	)		(0.03	)
Net gain (loss) on investments (both realized and unrealized)		(0.74	)		(8.06	)		2.49			(0.70	)		(8.02	)		2.47			(0.69	)		(8.01	)		2.47

Total from investment operations		(0.83	)		(8.09	)		2.47			(0.84	)		(8.11	)		2.44			(0.84	)		(8.11	)		2.44

Less distributions
Distributions from net investment income		– –			– –			– –			– –			– –			– –			– –			– –			– –
Distributions from net realized gains		– –			– –			– –			– –			– –			– –			– –			– –			– –

Total distributions		– –			– –			– –			– –			– –			– –			– –			– –			– –

Net asset value at end of period	$	3.55		$	4.38		$	12.47		$	3.49		$	4.33		$	12.44		$	3.49		$	4.33		$	12.44

Total return³		(18.95	)%		(64.88	)%		24.70	%		(19.40	)%		(65.19	)%		24.40	%		(19.40	)%		(65.19	)%		24.40	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	9,104		$	14,551		$	41,474		$	12,944		$	22,062		$	60,094		$	3,010		$	5,708		$	13,057
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.67	%		1.67	%		1.67	%²		2.38	%		2.42	%		2.42	%²		2.59	%		2.42	%		2.42	%²
Before advisory/administration fee waivers		1.79	%		1.91	%		2.66	%²		2.50	%		2.65	%		3.41	%²		2.72	%		2.65	%		3.41	%²
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(1.47	)%		(0.36	)%		(0.68	)%²		(2.18	)%		(1.12	)%		(1.43	)%²		(2.37	)%		(1.09	)%		(1.43	)%²
Before advisory/administration fee waivers		(1.59	)%		(0.60	)%		(1.67	)%²		(2.29	)%		(1.35	)%		(2.42	)%²		(2.50	)%		(1.32	)%		(2.42	)%²
Portfolio turnover rate		587	%		748	%		175	%		587	%		748	%		175	%		587	%		748	%		175	%

¹	Commencement of operations of share class.

²	Annualized.

³	Neither front-end sales load nor contingent deferred sales load is reflected in total return.

BlackRock

European Equity Portfolio

IMPORTANT DEFINITIONS

Investment Style: Refers to the guiding principles of a mutual fund’s investment choices. The investment style of this fund is European equity, referring to the type of securities the managers will choose for this fund.

Market Capitalization: Market capitalization refers to the market value of a company and is calculated by multiplying the number of shares outstanding by the current price per share.

Morgan Stanley Capital International (MSCI) Europe Index: An unmanaged index comprised of a sample of companies representative of the market structure of the following European countries: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom.

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

In pursuit of this goal, the fund normally invests at least 80% of its net assets in equity securities issued by European companies. For purposes of these investment strategies, the fund will consider a company a “European company” if it meets one or more of the following tests:

its country of organization, primary business office and principal trading market for its stock are located in Europe;

50% or more of its assets are located in Europe; or

50% or more of its revenues are derived from Europe.

The fund also invests in multinational companies and companies that benefit from European economic activity. The fund primarily buys common stock but also can invest in preferred stock and securities convertible into common and preferred stock.

The fund management team generally invests in stocks of European companies with market capitalizations of at least $1 billion. The management team will use the MSCI Europe Index as a benchmark and seeks to invest in stocks and market sectors represented in that index. The management team may also invest in stocks outside the index which meet the management team’s investment criteria. The fund invests mainly in stocks listed on European stock exchanges.

The management team seeks to achieve consistent and sustainable performance through various market cycles by emphasizing stock selection. Stock selection is determined by looking at companies using a range of valuation criteria, including the strength of their management and business franchise. The management team will invest primarily in “growth” stocks; however, they may take advantage of opportunities in “value” stocks at appropriate points in the market or economic cycle. The management team will also consider factors such as prospects for relative economic growth among certain European countries, expected levels of inflation, government policies influencing business conditions and outlook for currency relationships.

The fund generally will sell a stock when, in the management team’s opinion, there is a deterioration in the company’s fundamentals, the company fails to meet performance expectations, the stock achieves a target price, the underlying market is overvalued or the stock’s relative price momentum declines meaningfully.

The management team may, when consistent with the fund’s investment objective, use options or futures (commonly known as derivatives). An option is the right to buy or sell an instrument (which can be a security, an index of securities, a currency, or a basket of currencies) at a specific price on or before a specific date. A future is an agreement to buy or sell instruments of these types at a specified price on a specified date. The primary purpose of using derivatives is to attempt to reduce risk to the fund as a whole (hedge) but they may also be used to maintain liquidity, commit cash pending investment or for speculation to increase returns. The fund may also use forward foreign currency exchange contracts (obligations to buy or sell a currency at a set rate in the future) to hedge against movements in the value of non-U.S. currencies.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

Furthermore, because the fund invests in issuers located in a specific geographic region, market changes or other factors affecting that region, including political instability and unpredictable economic conditions, may have a particularly significant effect on the fund compared to mutual funds that invest in many geographic regions.

Because different kinds of stocks go in and out of favor depending on market conditions, this fund’s performance may be better or worse than other funds with different investment styles.

While the management team chooses stocks they believe have above-average earnings growth potential, there is no guarantee that the shares will increase in value or that they won’t move even lower.

The expenses of the fund can be expected to be higher than those of other funds investing primarily in domestic securities because the costs attributable to investing abroad are usually higher.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

The chart and table below give you a picture of the fund’s long-term performance for Investor A Shares (in the chart) and for Investor A, B and C Shares (in the table). The information shows you how the fund’s performance has varied year by year and provides some indication of the risks of investing in the fund. The table compares the fund’s performance to that of the MSCI Europe Index, a recognized unmanaged index of stock market performance. As with all such investments, past performance is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown.

As of 12/31 Investor A Shares

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

These returns assume payments of applicable sales charges.

	1 Year	Since Inception	Inception Date
European Equity; Inv A
Return Before Taxes	-26.07%	-20.14%	06/23/00
Return After Taxes on Distributions	-26.07%	-20.31%
Return After Taxes on Distributions and Sale of Shares	-16.01%	-15.56%
European Equity; Inv B
Return Before Taxes	-26.25%	-20.25%	06/23/00
European Equity; Inv C
Return Before Taxes	-23.54%	-19.12%	06/23/00
MSCI Europe (Reflects no deduction for fees, expenses or taxes)	-18.38%	-17.18%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Distribution Fees: A method of charging distribution-related expenses against fund assets.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

Shareholder Fees

(Fees paid directly from your investment)

	A Shares		B Shares		C Shares
Maximum Sales Charge (Load) Imposed on Purchases*	5.0	%	0.0	%	0.0	%
(as percentage of offering price)
Maximum Deferred Sales Charge (Load)	0.0	%	4.5	%**	1.00	%***
(as percentage of offering price)
Redemption/Exchange Fee****	2.0	%	2.0	%	2.0	%
(as a percentage of amount redeemed)

*	Reduced front-end sales charges may be available.

**	The CDSC is 4.5% if shares are redeemed in less than one year. The CDSC for Investor B Shares decreases for redemptions made in subsequent years. After six years there is no CDSC on B Shares. (See page 137 for complete schedule of CDSCs.)

***	There is no CDSC on C Shares after one year.

****	Fee applies only to shares purchased on or after 12/5/2001 that are redeemed or exchanged within 90 days of purchase.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

	A Shares		B Shares		C Shares
Advisory fees	.90	%	.90	%	.90	%
Distribution (12b-1) fees	.10	%	.75	%	.75	%
Other expenses	1.40	%	1.40	%	1.40	%
Service fees	.25%		.25%		.25%
Processing fees	.15%		.15%		.15%
Other	1.00%		1.00%		1.00%
Total annual fund operating expenses	2.40	%	3.05	%	3.05	%
Fee waivers and expense reimbursements*	.48	%	.38	%	.38	%
Net expenses*	1.92	%	2.67	%	2.67	%

BIL and BlackRock Distributors, Inc., the fund’s distributor, have contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.92% (for Investor A Shares) and 2.67% (for Investor B and C Shares) of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BIL in the following two years. See the “Management” section on page 144 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses, redemption at the end of each time period and, with respect to B Shares and C Shares only, no redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

	1 Year	3 Years	5 Years	10 Years
A Shares*	$685	$1,168	$1,675	$3,065
B Shares**
Redemption	$720	$1,257	$1,768	$3,186***
B Shares
No Redemption	$270	$907	$1,568	$3,186***
C Shares**
Redemption	$370	$907	$1,568	$3,338
C Shares
No Redemption	$270	$907	$1,568	$3,338

*	Reflects imposition of sales charge.

**	Reflects deduction of CDSC.

***	Based on the conversion of Investor B Shares to Investor A Shares after eight years.

As a shareholder you pay certain fees and expenses. Shareholder transaction fees are paid out of your investment and annual fund operating expenses are paid out of fund assets.

Fund Management

Albert Morillo, Kenneth Anderson, Alan Clark, Lorna Mackay, Neil Pirie and David Stanistreet have co-managed the fund since its inception.

2000, Mr. Morillo was an investment director of Scottish Widows Investment Management, head of its European equity team, and a member of the Investment Policy Group. He is a member of the International Board of the Paris Stock Exchange.

Kenneth Anderson, Director and international equity investment manager at BIL, is primarily responsible for European equity research and portfolio management. Prior to joining BIL in 2000, Mr. Anderson was an investment director and the deputy head of the Scottish Widows Investment Management European equity team.

Alan Clark, Director and investment manager at BIL, is a member of the international equities team. He has primary responsibility for European equity research and portfolio management. Prior to joining BIL in 1996, Mr. Clark was an investment manager on the U.K. desk with Dunedin Fund Managers Ltd. where he managed the Dunedin Income Growth Investment Trust and the U.K. portfolio within the Dunedin Worldwide Investment Trust. He is a member of the Institute of Investment Management and Research.

Lorna Mackay, Director and investment manager at BIL, is a member of the international equity team. She has primary responsibility for European equity research and portfolio management. Prior to joining BIL in 1996, Ms. Mackay was an investment manager on the Continental European desk at Dunedin Fund Managers Ltd., where she had both research and portfolio management responsibilities. She is a member of the Institute of Investment Management and Research.

Neil Pirie, Director and investment manager at BIL, is a member of the international equity team. He has primary responsibility for European equity research and portfolio management. Prior to joining BIL in 1996, Mr. Pirie was an investment manager on the U.K. desk at Dunedin Fund Managers Ltd. and was a Director of Dunedin Ventures Ltd. He was also the portfolio manager of the Dunedin Smaller Companies Trust. He is a member of the Institute of Chartered Accountants in Scotland.

David Stanistreet, Director and international equity investment manager at BIL, is primarily responsible for European equity research and portfolio management. Prior to joining BIL in 2000, Mr. Stanistreet had been an investment director of the Scottish Widows Investment Management European equity team since 1997. From 1995 to 1997, Mr. Stanistreet was head of European equities at Royal Insurance Asset Management (which merged in 1996 to become Royal & Sun Alliance).

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Investor A, B or C Share Outstanding Throughout Each Period)

European Equity Portfolio

	INVESTOR A SHARES						INVESTOR B SHARES						INVESTOR C SHARES
	Year Ended 9/30/02		Year Ended 9/30/01		For the Period 6/23/00¹ through 9/30/00		Year Ended 9/30/02		Year Ended 9/30/01		For the Period 6/23/00¹ through 9/30/00		Year Ended 9/30/02		Year Ended 9/30/01		For the Period 6/23/00¹through 9/30/00
Net asset value at beginning of period	$7.20		$9.50		$10.00		$7.12		$9.48		$10.00		$7.13		$9.48		$10.00

Income from investment operations
Net investment income (loss)	0.15		(0.02	)	– –		0.10		(0.07	)	(0.01	)	0.09		(0.07	)	(0.02	)
Net (loss) on investments (both realized and unrealized)	(1.73	)	(2.28	)	(0.50	)	(1.70	)	(2.29	)	(0.51	)	(1.69	)	(2.28	)	(0.50	)

Total from investment operations	(1.58	)	(2.30	)	(0.50	)	(1.60	)	(2.36	)	(0.52	)	(1.60	)	(2.35	)	(0.52	)

Less distributions
Distributions from net investment income	(0.12	)	– –		– –		(0.07	)	– –		– –		(0.07	)	– –		– –

Total distributions	(0.12	)	– –		– –		(0.07	)	– –		– –		(0.07	)	– –		– –

Net asset value at end of period	$5.50		$7.20		$9.50		$5.45		$7.12		$9.48		$5.46		$7.13		$9.48

Total return³	(22.32	)%⁴	(24.21	)%	(5.00	)%	(22.75	)%⁴	(24.89	)%	(5.20	)%	(22.72	)%⁴	(24.79	)%	(5.20	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$547		$959		$472		$1,416		$2,060		$381		$556		$750		$101
Ratios of expenses to average net assets
After advisory/administration fee waivers	1.92	%	1.92	%	1.92	%²	2.65	%	2.65	%	2.67	%²	2.72	%	2.65	%	2.67	%²
Before advisory/administration fee waivers	2.28	%	2.86	%	6.59	%²	3.01	%	3.56	%	7.34	%²	3.11	%	3.56	%	7.34	%²
Ratios of net investment income to average net assets
After advisory/administration fee waivers	2.25	%	(0.23	)%	(0.39	)%²	1.36	%	(0.97	)%	(1.14	)%²	1.31	%	(0.94	)%	(1.14	)%²
Before advisory/administration fee waivers	1.89	%	(1.17	)%	(5.06	)%²	1.00	%	(1.87	)%	(5.81	)%²	0.93	%	(1.84	)%	(5.81	)%²
Portfolio turnover rate	88	%	218	%	177	%	88	%	218	%	177	%	88	%	218	%	177	%

¹	Commencement of operations of share class.

²	Annualized.

³	Neither front-end sales load nor contingent deferred sales load is reflected in total return.

⁴	Redemption fee of 2.00% effective December 5, 2001 is not reflected in total return calculations.

BlackRock

Asia Pacific Equity Portfolio

IMPORTANT DEFINITIONS

Investment Style: Refers to the guiding principles of a mutual fund’s investment choices. The investment style of this fund is Asia Pacific equity, referring to the type of securities the managers will choose for this fund.

Market Capitalization: Market capitalization refers to the market value of a company and is calculated by multiplying the number of shares outstanding by the current price per share.

Morgan Stanley Capital International (MSCI) All Country Asia Pacific Index: An unmanaged index comprised of a sample of companies representative of the market structure of the following developed and emerging market regions of the Asia Pacific: Australia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, New Zealand, Pakistan, the Philippines, Singapore, Taiwan and Thailand.

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

In pursuit of this goal, the fund normally invests at least 80% of its net assets in equity securities issued by Asia Pacific region companies. For purposes of these investment strategies, the fund will consider a company an “Asia Pacific region company” if it meets one or more of the following tests:

its country of organization, primary business office and principal trading market for its stock are located in the Asia Pacific region;

50% or more of its assets are located in the Asia Pacific region; or

50% or more of its revenues are derived from the Asia Pacific region.

The fund invests primarily, but not exclusively, in companies that benefit from Asia Pacific region economic activity. The fund primarily buys common stock but also can invest in preferred stock and securities convertible into common and preferred stock.

The fund management team generally invests in stocks of Asia Pacific region companies (including companies located in emerging market countries) with market capitalizations generally over $500 million whose earnings, the management team believes, are in a strong growth trend or whose stock the management team believes is undervalued. The management team will use the MSCI All Country Asia Pacific Index as a benchmark and seeks to invest in stocks and market sectors represented in that index. The management team may also invest in stocks outside the index which meet the management team’s investment criteria. The fund invests mainly in stocks listed on Asia Pacific region stock exchanges.

The management team, in an attempt to reduce portfolio risks, will diversify investments across countries, industry groups and companies with investments ordinarily in at least three Asia Pacific region countries. While there is no minimum or maximum limitation on assets that may be invested in a single country, it is anticipated that investments in Japan will represent more than 40% of the fund’s assets. Excluding Japan, the fund may, from time to time, invest more than 25% of its assets in securities whose issuers are located in a single Asia Pacific country.

The management team seeks to achieve consistent and sustainable performance by managing risk and by taking advantage of market inefficiencies through a long term, disciplined and objective investment process. Economic, statistical and valuation data is analyzed to screen and rank securities. Major sector and country/regional themes, prevailing economic cycles and well-defined risk parameters are also considered in the portfolio construction process.

The fund generally will sell a stock when it reaches a target price, which is when the management team believes it is fully valued or when, in the management team’s opinion, conditions change such that the risk of continuing to hold the stock is unacceptable when compared to its growth potential.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

Non-U.S. securities involve risks not typically associated with investing in U.S. securities. These risks include but are not limited to: currency risks (the risk that the value of dividends or interest paid by non-U.S. securities, or the value of the securities themselves, may fall if currency exchange rates change), the risk that a security’s value will be hurt by changes in non-U.S. political or social conditions, including changes in policies restricting non-U.S. investment, of heavy taxation, nationalization or expropriation of assets and more difficulty obtaining information on non-U.S. securities or companies. In addition, a portfolio of non-U.S. securities may be harder to sell and may be subject to wider price movements than comparable investments in U.S. companies. There is less government regulation of non-U.S. securities markets.

In addition, political and economic structures in emerging market countries may be undergoing rapid change and these countries may lack the social, political and economic stability of more developed countries. As a result some of the risks described above, including the risks of nationalization or expropriation of assets and the existence of smaller, more volatile and less regulated markets, may be increased. The value of many investments in emerging market countries recently has dropped significantly due to economic and political turmoil in many of these countries.

In addition, the fund may, from time to time, invest a substantial amount of its assets in securities whose issuers are located in Japan. These investments would make the fund more dependent upon the political and economic circumstances of Japan than a mutual fund that owns stocks of companies in many countries. For example, the Japanese economy (especially Japanese banks, securities firms and insurance companies) has experienced considerable difficulty recently. In addition, the Japanese Yen has gone up and down in value versus the U.S. Dollar. Japan may also be affected by recent turmoil in other Asian countries.

invest in many geographic regions. At times, the markets in certain Asia Pacific region countries have suffered significant downturns and volatility. Increased social or political unrest in some or all of these countries could cause further economic and market uncertainty.

Because different kinds of stocks go in and out of favor depending on market conditions, this fund’s performance may be better or worse than other funds with different investment styles.

While the management team chooses stocks they believe have above-average earnings growth potential, there is no guarantee that the shares will increase in value or that they won’t move even lower.

The expenses of the fund can be expected to be higher than those of other funds investing primarily in domestic securities because the costs attributable to investing abroad are usually higher.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

The chart and table below give you a picture of the fund’s long-term performance for Investor A Shares (in the chart) and for Investor A, B and C Shares (in the table). The information shows you how the fund’s performance has varied year by year and provides some indication of the risks of investing in the fund. The table compares the fund’s performance to that of the MSCI All Country Asia Pacific Index, a recognized unmanaged index of stock market performance. As with all such investments, past performance is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown.

As of 12/31 Investor A Shares

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

These returns assume payment of applicable sales charges.

	1 Year	Since Inception	Inception Date
Asia Pacific Equity; Inv A
Return Before Taxes	-13.58%	-21.38%	06/23/00
Return After Taxes on Distributions	-13.58%	-21.68%
Return After Taxes on Distributions and Sales of Shares	-8.34%	-16.51%
Asia Pacific Equity; Inv B
Return Before Taxes	-14.00%	-20.80%	06/23/00
Asia Pacific Equity; Inv C
Return Before Taxes	-10.85%	-19.70%	06/23/00
MSCI All Country Asia Pacific (Reflects no deduction for fees, expenses or taxes)	-8.62%	-20.55%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

Expenses and Fees

Shareholder Fees

(Fees paid directly from your investment)

	A Shares		B Shares		C Shares
Maximum Sales Charge (Load) Imposed on Purchases*	5.0	%	0.0	%	0.0	%
(as percentage of offering price)
Maximum Deferred Sales Charge (Load)	0.0	%	4.5	%**	1.00	%***
(as percentage of offering price)
Redemption/Exchange Fee****
(as a percentage of amount redeemed)	2.0	%	2.0	%	2.0	%

*	Reduced front-end sales charges may be available.

**	The CDSC is 4.5% if shares are redeemed in less than one year. The CDSC for Investor B Shares decreases for redemptions made in subsequent years. After six years there is no CDSC on B Shares. (See page 137 for complete schedule of CDSCs.)

***	There is no CDSC on C Shares after one year.

****	Fee applies only to shares purchased on or after 12/5/2001 that are redeemed or exchanged within 90 days of purchase.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Distribution Fees: A method of charging distribution-related expenses against fund assets.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

	A Shares		B Shares		C Shares
Advisory fees	.90	%	.90	%	.90	%
Distribution (12b-1) fees	.10	%	.75	%	.75	%
Other expenses	5.02	%	5.02	%	5.02	%
Service fee	.25%		.25%		.25%
Processing fee	.15%		.15%		.15%
Other	4.62%		4.62%		4.62%
Total annual fund operating expenses	6.02	%	6.67	%	6.67	%
Fee waivers and expense reimbursements*	4.10	%	4.00	%	4.00	%
Net expenses*	1.92	%	2.67	%	2.67	%

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses, redemption at the end of each time period and, with respect to B Shares and C Shares only, no redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

	1 Year	3 Years	5 Years	10 Years
A Shares*	$685	$1,852	$2,996	$5,753
B Shares**
Redemption	$720	$1,962	$3,110	$5,861***
B Shares
No Redemption	$270	$1,612	$2,910	$5,861***
C Shares**
Redemption	$370	$1,612	$2,910	$5,970
C Shares
No Redemption	$270	$1,612	$2,910	$5,970

*	Reflects imposition of sales charge.

**	Reflects deduction of CDSC.

***	Based on the conversion of Investor B Shares to Investor A Shares after eight years.

As a shareholder you pay certain fees and expenses. Shareholder transaction fees are paid out of your investment and annual fund operating expenses are paid out of fund assets.

you buy shares. The other options (Investor B and Investor C Shares) have no front-end charges but have higher on-going fees, which are paid over the life of the investment, and have a contingent deferred sales charge (CDSC) that you may pay when you redeem your shares. Which option should you choose? It depends on your individual circumstances. You should know that the lowest sales charge won’t necessarily be the least expensive option over time. For example, if you intend to hold your shares long term it may cost less to buy A Shares than B or C Shares.

Fund Management

The fund is managed by a team of professionals at BlackRock International, Ltd. (BIL), including Nigel Barry, Managing Director and portfolio manager of BIL since 1996, William Low, Director and investment manager of BIL since 1996, Donald Gilfillan, Director and investment manager of BIL since 1996, and Alistair Veitch, Vice President and investment manager of BIL since 1998.

Mr. Barry has primary responsibility for Pacific Basin equity research and portfolio management. Prior to joining BIL in 1996, Mr. Barry was Director and head of the Pacific Basin desk at Dunedin Fund Managers Ltd. Mr. Low has primary responsibility for the developed and emerging equity markets of Asia. Prior to joining BIL in 1996, Mr. Low was with Dunedin Fund Managers Ltd., first as an investment analyst on the U.K. desk and then as a specialist in Pacific Basin equity markets. Mr. Gilfillan is responsible for Japanese equity research and portfolio management. Prior to joining BIL in 1996, Mr. Gilfillan was an investment manager with British Linen Fund Managers. Mr. Veitch is responsible for selected Asian equity markets, both developed and emerging. Prior to joining BIL in 1998, Mr. Veitch followed Asian equity markets for Edinburgh Fund Managers. Messrs. Barry, Low, Gilfillan and Veitch have co-managed the fund since its inception.

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Investor A, B or C Share Outstanding Throughout Each Period)

Asia Pacific Equity Portfolio

	INVESTOR A SHARES									INVESTOR B SHARES									INVESTOR C SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			For the Period 6/23/00¹ through 9/30/00			Year Ended 9/30/02			Year Ended 9/30/01			For the Period 6/23/00¹ through 9/30/00			Year Ended 9/30/02			Year Ended 9/30/01			For the Period 6/23/00¹ through 9/30/00
Net asset value at beginning of period	$	6.06		$	9.20		$	10.00		$	6.05		$	9.22		$	10.00		$	6.05		$	9.24		$	10.00

Income from investment operations
Net investment income (loss)		(0.07	)		(0.04	)		0.01			(0.09	)		(0.06	)		– –			(0.25	)		(0.08	)		– –
Net (loss) on investments (both realized and unrealized)		(0.25	)		(2.89	)		(0.81	)		(0.20	)		(2.90	)		(0.78	)		(0.04	)		(2.90	)		(0.76	)

Total from investment operations		(0.32	)		(2.93	)		(0.80	)		(0.29	)		(2.96	)		(0.78	)		(0.29	)		(2.98	)		(0.76	)

Less distributions
Distributions from net investment income		– –			(0.01	)		– –			– –			(0.01	)		– –			– –			(0.01	)		– –
Distributions from net realized gains		– –			(0.20	)		– –			– –			(0.20	)		– –			– –			(0.20	)		– –

Total distributions		– –			(0.21	)		– –			– –			(0.21	)		– –			– –			(0.21	)		– –
Redemption fees added to paid in capital		0.01			– –			– –			0.01			– –			– –			0.01			– –			– –

Net asset value at end of period	$	5.75		$	6.06		$	9.20		$	5.77		$	6.05		$	9.22		$	5.77		$	6.05		$	9.24

Total return³		(5.12	)%⁴		(32.50	)%		(8.00	)%		(4.63	)%⁴		(32.75	)%		(7.80	)%		(4.63	)%⁴		(32.90	)%		(7.60	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	52		$	29		$	35		$	15		$	9		$	10		$	1		$	2		$	2
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.92	%		1.93	%		1.92	%²		2.65	%		2.65	%		2.67	%²		2.67	%		2.66	%		2.67	%²
Before advisory/administration fee waivers		3.05	%		5.70	%		9.63	%²		6.57	%		6.47	%		10.38	%²		3.81	%		6.32	%		10.38	%²
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(0.70	)%		(0.39	)%		0.15	%²		(1.46	)%		(0.85	)%		(0.60	)%²		(0.82	)%		(1.08	)%		(0.60	)%²
Before advisory/administration fee waivers		(1.83	)%		(4.16	)%		(7.56	)%²		(5.38	)%		(4.67	)%		(8.31	)%²		(1.95	)%		(4.73	)%		(8.31	)%²
Portfolio turnover rate		107	%		206	%		145	%		107	%		206	%		145	%		107	%		206	%		145	%

¹	Commencement of operations of share class.

²	Annualized.

³	Neither front-end sales load nor contingent deferred sales load is reflected in total return.

⁴	Redemption fee of 2.00% effective December 5, 2001 is not reflected in total return calculations.

BlackRock

International Equity Portfolio

IMPORTANT DEFINITIONS

Investment Style: Refers to the guiding principles of a mutual fund’s investment choices. The investment style of this fund is international value, referring to the type of securities the managers will choose for this fund.

Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE): An unmanaged index comprised of a sample of companies representative of the market structure of the following European and Pacific Basin countries: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and the U.K.

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

In pursuit of this goal, the fund normally invests at least 80% of its net assets in equity securities of issuers located in countries included in the Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE). The fund primarily buys common stock but also can invest in preferred stock and securities convertible into common and preferred stock.

The management team seeks to achieve consistent and sustainable performance through various market cycles by emphasizing stock selection. Stock selection is determined by looking at companies using a range of valuation criteria, including the strength of their management and business franchise. The management team will generally invest with a bias towards “growth” stocks; however, they may take advantage of opportunities in “value” stocks at appropriate points in the market or economic cycle. The management team will also consider factors such as prospects for relative economic growth, expected levels of inflation, government policies influencing business conditions and outlook for currency relationships.

The management team, in an attempt to reduce portfolio risk, will diversify investments across countries, industry groups and companies with investment at all times in at least three non-U.S. countries. In addition, the fund can invest more than 25% of its assets in Japanese stocks or in U.K. stocks. From time to time the fund may invest in the securities of issuers located in emerging market countries.

The fund generally will sell a stock when the management team believes it is fully valued or when, in the management team’s opinion, conditions change such that the risk of continuing to hold the stock is unacceptable when compared to the growth potential.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

Because different kinds of stocks go in and out of favor depending on market conditions, this fund’s performance may be better or worse than other funds with different investment styles.

In addition, political and economic structures in emerging market countries may be undergoing rapid change and these countries may lack the social, political and economic stability of more developed countries. As a result some of the risks described above, including the risks of nationalization or expropriation of assets and the existence of smaller, more volatile and less regulated markets may be increased. The value of many investments in emerging market countries recently has dropped significantly due to economic and political turmoil in many of these countries.

While the management team chooses stocks they believe to be undervalued, there is no guarantee that the shares will increase in value or that they won’t move even lower.

The fund’s use of derivatives may reduce returns and/or increase volatility. Volatility is defined as the characteristic of a security, an index, a currency or a market to fluctuate significantly in price within a short time period. A risk of the fund’s use of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets. Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. In addition, some derivatives are more sensitive to interest rate changes, market price fluctuations and general market liquidity than others.

The fund may, from time to time, invest more than 25% of its assets in securities whose issuers are located in Japan or in the U.K. These investments would make the fund more dependent upon the political and economic circumstances of those countries than a mutual fund that owns stocks of companies in many countries. For example, the Japanese economy (especially Japanese banks, securities firms and insurance companies) has experienced considerable difficulty recently. In addition, the Japanese Yen has gone up and down in value versus the U.S. Dollar. Japan may also be affected by recent turmoil in other Asian countries. Similarly, the ability to concentrate in the U.K. may make the fund’s performance more dependent on developments affecting that country.

The expenses of the fund can be expected to be higher than those of other funds investing primarily in domestic securities because the costs attributable to investing abroad is usually higher.

Higher than normal portfolio turnover may result in increased transaction costs to the fund, including brokerage commissions,

dealer mark-ups and other transaction costs on the sale of the securities and on reinvestment in other securities. The sale of fund securities may result in the recognition of capital gain or loss. Given the frequency of sales, such gain or loss will likely be short-term capital gain or loss. Unlike long-term capital gain, short-term capital gain of individuals is taxable at the same rates as ordinary income. These effects of higher than normal portfolio turnover may adversely affect fund performance.

The fund may sometimes engage in short term trading which could produce greater brokerage costs and taxable distributions to shareholders.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

The performance for the period before Investor A Shares were launched is based upon performance for Institutional Shares of the fund, which were first issued in April 1992. Investor A Shares were launched in June 1992, Investor B Shares were launched in October 1994, and Investor C Shares were launched in December 1996. The performance for Investor B Shares for the period before they were launched is based upon performance for Institutional and Investor A Shares, and the performance for Investor C Shares for the period before they were launched is based upon performance for Institutional, Investor A and Investor B Shares. The actual return of Investor A Shares would have been lower than shown for the period before they were launched because Investor A Shares have higher expenses than Institutional Shares. Also, the actual returns of Investor B and C Shares would have been lower compared to Investor A Shares because Investor B and C Shares have higher expenses than Investor A Shares. Investor A Shares of the fund have expenses of 1.59% of average daily net assets (after waivers and reimbursements) for the current fiscal year and Investor B Shares and Investor C Shares of the fund each have expenses of 2.34% of average daily net assets (after waivers

and reimbursements) for the current fiscal year. Institutional Shares of the fund have expenses of 1.12% of average daily net assets (after waivers and reimbursements) for the current fiscal year.

As of 12/31

Investor A Shares

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

These returns assume payment of applicable sales charges.

	1 Year	3 Years	5 Years	10 Years	Inception Date
International Equity; Inv A
Return Before Taxes	-22.26%	-21.73%	-6.42%	1.95%	04/27/92
Return After Taxes on Distributions	-22.26%	-22.61%	-7.78%	0.60%
Return After Taxes on Distributions and Sale of Shares	-13.67%	-16.08%	-4.43%	1.74%
International Equity; Inv B
Return Before Taxes	-22.41%	-21.66%	-6.34%	1.92%	04/27/92
International Equity; Inv C
Return Before Taxes	-18.80%	-20.58%	-5.86%	2.04%	04/27/92
MSCI EAFE (Reflects no deduction for fees, expenses or taxes)	-15.94%	-17.24%	-2.89%	4.00%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Distribution Fees: A method of charging distribution-related expenses against fund assets.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

Shareholder Fees

(Fees paid directly from your investment)

	A Shares		B Shares		C Shares
Maximum Sales Charge (Load) Imposed on Purchases*	5.0	%	0.0	%	0.0	%
(as percentage of offering price)
Maximum Deferred Sales Charge (Load)	0.0	%	4.5	%**	1.00	%***
(as percentage of offering price)
Redemption/Exchange Fee****
(a percentage of amount redeemed)	2.0	%	2.0	%	2.0	%

*	Reduced front-end sales charges may be available.

**	The CDSC is 4.5% if shares are redeemed in less than one year. The CDSC for Investor B Shares decreases for redemptions made in subsequent years. After six years there is no CDSC on B Shares. (See page 137 for complete schedule of CDSCs.)

***	There is no CDSC on C Shares after one year.

****	Fee applies only to shares purchased on or after 12/5/2001 that are redeemed or exchanged within 90 days of purchase.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

	A Shares		B Shares		C Shares
Advisory fees	.75	%	.75	%	.75	%
Distribution (12b-1) fees	.10	%	.75	%	.75	%
Other expenses	.84	%	.84	%	.84	%
Service fee	.25%		.25%		.25%
Processing fee	.15%		.15%		.15%
Other	.44%		.44%		.44%
Total annual fund operating expenses	1.69	%	2.34	%	2.34	%
Fee waivers and expense reimbursements*	.10	%	– –		– –
Net expenses*	1.59	%	2.34	%	2.34	%

BlackRock and BlackRock Distributors, Inc., the fund’s distributor, have contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.64% (for Investor A Shares) and 2.39% (for Investor B and C Shares) of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 144 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses, redemption at the end of each time period and, with respect to B Shares and C Shares only, no redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

	1 Year	3 Years	5 Years	10 Years
A Shares*	$654	$ 997	$1,363	$2,390
B Shares**
Redemption	$687	$1,080	$1,450	$2,514***
B Shares
No Redemption	$237	$ 730	$1,250	$2,514***
C Shares**
Redemption	$337	$ 730	$1,250	$2,676
C Shares
No Redemption	$237	$ 730	$1,250	$2,676

*	Reflects imposition of sales charge.

**	Reflects deduction of CDSC.

***	Based on the conversion of Investor B Shares to Investor A Shares after eight years.

As a shareholder you pay certain fees and expenses. Shareholder transaction fees are paid out of your investment and annual fund operating expenses are paid out of fund assets.

Fund Management

BIL in 1996, Mr. Low was with Dunedin Fund Managers Ltd., first as an investment analyst on the U.K. desk and then as a specialist in Pacific Basin equity markets. Kenneth Anderson and William Low have served as portfolio co-managers since January 2001.

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Investor A, B or C Share Outstanding Throughout Each Period)

International Equity Portfolio

	INVESTOR A SHARES															INVESTOR B SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98			Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	8.04		$	13.76		$	15.79		$	13.14		$	14.57		$	7.79		$	13.45		$	15.55		$	12.94		$	14.38

Income from investment operations
Net investment income (loss)		0.20	¹		0.01			– –			(0.05	)		0.10			0.16			(0.08	)		(0.10	)		(0.10	)		(0.01	)
Net gain (loss) on investments (both realized and unrealized)		(1.36	)		(3.59	)		0.08			3.58			(1.20	)		(1.34	)		(3.44	)		0.08			3.51			(1.16	)

Total from investment operations		(1.16	)		(3.58	)		0.08			3.53			(1.10	)		(1.18	)		(3.52	)		(0.02	)		3.41			(1.17	)

Less distributions
Distributions from net investment income		– –			– –			– –			(0.08	)		(0.13	)		– –			– –			– –			– –			(0.07	)
Distributions from net realized gains		(0.05	)		(2.14	)		(2.11	)		(0.80	)		(0.20	)		(0.05	)		(2.14	)		(2.08	)		(0.80	)		(0.20	)

Total distributions		(0.05	)		(2.14	)		(2.11	)		(0.88	)		(0.33	)		(0.05	)		(2.14	)		(2.08	)		(0.80	)		(0.27	)

Net asset value at end of period	$	6.83		$	8.04		$	13.76		$	15.79		$	13.14		$	6.56		$	7.79		$	13.45		$	15.55		$	12.94

Total return²		(14.59	)%		(30.24	)%		(0.32	)%		27.82	%		(7.56	)%		(15.31	)%		(30.53	)%		(1.10	)%		26.98	%		(8.19	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	16,088		$	48,813		$	29,881		$	33,106		$	26,637		$	2,743		$	4,226		$	8,399		$	7,822		$	6,509
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.55	%		1.54	%		1.53	%		1.48	%		1.52	%		2.27	%		2.28	%		2.28	%		2.26	%		2.28	%
Before advisory/administration fee waivers		1.60	%		1.55	%		1.53	%		1.48	%		1.57	%		2.33	%		2.29	%		2.29	%		2.26	%		2.33	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		2.41	%		0.10	%		(0.08	)%		0.23	%		0.31	%		1.83	%		(0.73	)%		(0.85	)%		(0.66	)%		(0.38	)%
Before advisory/administration fee waivers		2.35	%		0.08	%		(0.08	)%		0.23	%		0.26	%		1.77	%		(0.74	)%		(0.86	)%		(0.66	)%		(0.43	)%
Portfolio turnover rate		275	%		306	%		153	%		62	%		57	%		275	%		306	%		153	%		62	%		57	%

	INVESTOR C SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	7.80		$	13.45		$	15.55		$	12.94		$	14.38

Income from investment operations
Net investment income (loss)		0.05			(0.06	)		(0.06	)		(0.02	)		– –
Net gain (loss) on investments (both realized and unrealized)		(1.26	)		(3.45	)		0.04			3.43			(1.17	)

Total from investment operations		(1.21	)		(3.51	)		(0.02	)		3.41			(1.17	)

Less distributions
Distributions from net investment income		– –			– –			– –			– –			(0.07	)
Distributions from net realized gains		(0.05	)		(2.14	)		(2.08	)		(0.80	)		(0.20	)

Total distributions		(0.05	)		(2.14	)		(2.08	)		(0.80	)		(0.27	)

Net asset value at end of period	$	6.54		$	7.80		$	13.45		$	15.55		$	12.94

Total return²		(15.68	)%		(30.44	)%		(1.10	)%		26.98	%		(8.19	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	1,344		$	2,105		$	1,723		$	1,018		$	294
Ratios of expenses to average net assets
After advisory/administration fee waivers		2.31	%		2.27	%		2.28	%		2.26	%		2.27	%
		2.37	%		2.28	%		2.28	%		2.26	%		2.32	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		0.50	%		(0.62	)%		(0.71	)%		(0.27	)%		(0.31	)%
Before advisory/administration fee waivers		0.44	%		(0.64	)%		(0.71	)%		(0.27	)%		(0.36	)%
Portfolio turnover rate		275	%		306	%		153	%		62	%		57	%

¹	Calculated using the average shares method.

²	Neither front-end sales load nor contingent deferred sales load is reflected in total return. Redemption fee of 2.00% effective December 5, 2001 is not reflected in total return calculations.

BlackRock

International Opportunities Portfolio

IMPORTANT DEFINITIONS

Emerging Market Stocks: Stocks issued by companies located in countries with emerging economies or securities markets. The list of emerging market countries includes, among others: Argentina, Brazil, Bulgaria, Chile, China, Colombia, The Czech Republic, Ecuador, Egypt, Greece, Hungary, India, Indonesia, Israel, Lebanon, Malaysia, Mexico, Morocco, Peru, The Philippines, Poland, Romania, Russia, South Africa, South Korea, Taiwan, Thailand, Tunisia, Turkey, Venezuela, Vietnam and Zimbabwe.

Fundamentals: “Fundamental” information about a company (such as its income statement, balance sheet, earnings and sales history, products and management).

Salomon Smith Barney Extended Market Index Global Ex-U.S.: An unmanaged index comprised of smaller-capitalization stocks of both developed and emerging market countries. Index stocks represent the bottom 20% of available market capital for each individual country, with a minimum market capitalization of at least the local equivalent of US$100 million.

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

In pursuit of this goal, the fund normally invests at least 80% of its net assets in equity securities issued by international emerging capitalization companies (defined as those with market capitalizations equal to those within the universe of Salomon Smith Barney Extended Market Index Global Ex-U.S. stocks). The fund may invest up to 25% of its net assets in stocks of issuers in emerging market countries. The fund primarily buys common stock but can also invest in preferred stock and securities convertible into common and preferred securities. From time to time the fund may invest in shares of companies through initial public offerings (IPOs).

The fund management team uses a multi-factor screen to identify stocks that have above-average return potential. The factors and the weight assigned to a factor will change depending on market conditions. The most influential factors over time have been revenue and earnings growth, estimate revisions, profitability and relative value.

As part of its normal operations, the fund may also hold these securities pending investments or when it expects to need cash to pay redeeming shareholders. The fund will not deviate from its normal strategies if it holds high quality money market securities pending investments.

The management team may, when consistent with the fund’s investment objective, use options or futures (commonly known as derivatives). An option is the right to buy or sell an instrument (which can be a security, an index of securities, a currency, or a basket of currencies) at a specific price on or before a specific date. A future is an agreement to buy or sell instruments of these types at a specific price on a specific date. The primary purpose of using derivatives is to attempt to reduce risk to the fund as a whole (hedge) but they may also be used to maintain liquidity and commit cash pending investment. The management team also may, but under normal market conditions generally does not intend to, use derivatives for speculation to increase returns. The fund may also use forward foreign currency exchange contracts (obligations to buy or sell a currency at a set rate in the future) to hedge against movements in the value of non-U.S. currencies.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

Because different kinds of stocks go in and out of favor depending on market conditions, this fund’s performance may be better or worse than other funds with different investment styles.

paid by non-U.S. securities, or the value of the securities themselves, may fall if currency exchange rates change), the risk that a security’s value will be hurt by changes in non-U.S. political or social conditions, including changes in policies restricting non-U.S. investment, the possibility of heavy taxation, nationalization or expropriation of assets and more difficulty obtaining information on non-U.S. securities or companies. In addition, a portfolio of non-U.S. securities may be harder to sell and may be subject to wider price movements than comparable investments in U.S. companies. There is less government regulation of non-U.S. securities markets.

IPOs and companies that have recently gone public have the potential to produce substantial gains for the fund. However, there is no assurance that the fund will have access to profitable IPOs and therefore investors should not rely on these past gains as an indication of future performance. Furthermore, stocks of some newly-public companies may decline shortly after the initial public offering.

While the management team chooses stocks they believe have above average earnings growth potential, there is no guarantee that the shares will increase in value or that they won’t move even lower.

The expenses of the fund can be expected to be higher than those of other funds investing primarily in domestic securities because the costs attributable to investing abroad is usually higher.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

The chart and table below give you a picture of the fund’s long-term performance for Investor A Shares (in the chart) and for Investor A, B and C Shares (in the table). The information shows you how the fund’s performance has varied year by year and provides some indication of the risks of investing in the fund. The table compares the fund’s performance to that of the Salomon Smith Barney Extended Market Index Global Ex-U.S., a recognized unmanaged index of stock market performance (the new benchmark). Prior to December 2, 2002, the fund’s benchmark was the Salomon Smith Barney Extended Market Index World Ex-U.S. The new benchmark more accurately reflects the universe of securities in which the fund will invest. As with all such investments, past performance is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown.

As of 12/31

Investor A Shares

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	Since Inception	Inception Date
International Opportunities; Inv A
Return Before Taxes	-8.27%	-11.60%	13.82%	11.93%	09/26/97
Return After Taxes on Distribution	-8.27%	-11.63%	12.04%	10.23%
Return After Taxes on Distribution and Sale of Shares	-5.08%	-9.05%	10.46%	8.91%
International Opportunities; Inv B
Return Before Taxes	-8.53%	-11.78%	13.97%	12.12%	09/26/97
International Opportunities; Inv C
Return Before Taxes	-5.18%	-10.73%	14.21%	12.23%	09/26/97
Salomon Smith Barney EMI Global Ex-U.S. (Reflects no deduction for fees, expenses or taxes)	-6.89%	-11.43%	-1.08%	-3.19%	N/A
Salomon Smith Barney EMI World Ex-U.S. (Reflects no deduction for fees, expenses or taxes)	-7.29%	-11.16%	-0.59%	-2.54%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

One factor impacting the fund’s total return to date was its investment in IPOs and companies that had recently gone public. There is no assurance that the fund’s investments in IPOs or newly-public companies will have the same impact on performance in the future as they did in the past.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Distribution Fees: A method of charging distribution-related expenses against fund assets.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

Shareholder Fees

(Fees paid directly from your investment)

	A Shares		B Shares		C Shares
Maximum Sales Charge (Load) Imposed on Purchases*	5.0	%	0.0	%	0.0	%
(as percentage of offering price)
Maximum Deferred Sales Charge (Load)	0.0	%	4.5	%**	1.00	%***
(as percentage of offering price)
Redemption/Exchange Fee****	2.0	%	2.0	%	2.0	%
(as a percentage of amount redeemed)

*	Reduced front-end sales charges may be available.

**	The CDSC is 4.5% if shares are redeemed in less than one year. The CDSC for Investor B Shares decreases for redemptions made in subsequent years. After six years there is no CDSC on B Shares. (See page 137 for complete schedule of CDSCs.)

***	There is no CDSC on C Shares after one year.

****	Fee applies only to shares purchased on or after 12/5/2001 that are redeemed or exchanged within 90 days of purchase.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

	A Shares		B Shares		C Shares
Advisory fees	1.00	%	1.00	%	1.00	%
Distribution (12b-1) fees	.10	%	.75	%	.75	%
Other expenses	.90	%	.90	%	.90	%
Service fee	.25%		.25%		.25%
Processing fee	.15%		.15%		.15%
Other	0.50%		0.50%		0.50%
Total annual fund operating expenses	2.00	%	2.65	%	2.65	%
Fee waivers and expense reimbursements*	.10	%	– –		– –
Net expenses*	1.90	%	2.65	%	2.65	%

BlackRock and BlackRock Distributors, Inc., the fund’s distributor, have contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.92% (for Investor A Shares) and 2.67% (for Investor B and C Shares) of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 144 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses, redemption at the end of each time period and, with respect to B Shares and C Shares only, no redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

	1 Year	3 Years	5 Years	10 Years
A Shares*	$683	$1,087	$1,515	$2,703
B Shares**
Redemption	$718	$1,173	$1,605	$2,826***
B Shares
No Redemption	$268	$ 823	$1,405	$2,826***
C Shares**
Redemption	$368	$ 823	$1,405	$2,983
C Shares
No Redemption	$268	$ 823	$1,405	$2,983

*	Reflects imposition of sales charge.

**	Reflects deduction of CDSC.

***	Based on the conversion of Investor B Shares to Investor A Shares after eight years.

As a shareholder you pay certain fees and expenses. Shareholder transaction fees are paid out of your investment and annual fund operating expenses are paid out of fund assets.

Fund Management

The fund is managed by a team of investment professionals at BlackRock Advisors, Inc. (BlackRock), including Thomas Callan and Michael Carey.

Thomas Callan has been a Managing Director with BlackRock since 1996 and served as an equity analyst for PNC Bank from 1993 to 1996. He has co-managed the fund since April 1999.

Michael Carey has been a Vice President with BlackRock since 2000, an equity analyst with BlackRock since 1996 and served as a fixed income analyst with PNC Bank from 1993 to 1996. He has co-managed the fund since January 2002.

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Investor A, B or C Share Outstanding Throughout Each Period)

International Opportunities Portfolio

	INVESTOR A SHARES															INVESTOR B SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98			Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	14.65		$	22.34		$	12.84		$	9.54		$	9.94		$	14.37		$	22.06		$	12.78		$	9.48		$	9.94

Income from investment operations
Net investment income (loss)		(0.03	)		0.13			0.08			(0.01	)		0.02			(0.16	)		0.01			(0.04	)		(0.10	)		(0.05	)
Net gain (loss) on investments (both realized and unrealized)		0.28			(7.77	)		10.82			4.42			(0.39	)		0.29			(7.65	)		10.72			4.51			(0.39	)

Total from investment operations		0.25			(7.64	)		10.90			4.41			(0.37	)		0.13			(7.64	)		10.68			4.41			(0.44	)

Less distributions
Distributions from net investment income		– –			– –			– –			– –			(0.03	)		– –			– –			– –			– –			(0.02	)
Distributions from net realized gains		– –			(0.05	)		(1.40	)		(1.11	)		– –			– –			(0.05	)		(1.40	)		(1.11	)		– –

Total distributions		– –			(0.05	)		(1.40	)		(1.11	)		(0.03	)		– –			(0.05	)		(1.40	)		(1.11	)		(0.02	)

Redemption fees added to paid in capital		0.04			– –			– –			– –			– –			0.04			– –			– –			– –			– –

Net asset value at end of period	$	14.94		$	14.65		$	22.34		$	12.84		$	9.54		$	14.54		$	14.37		$	22.06		$	12.78		$	9.48

Total return²		1.98	%¹		(34.27	)%		91.04	%		50.71	%		(3.98	)%		1.18	%		(34.71	)%		89.64	%		49.83	%		(4.73	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	25,969		$	28,781		$	40,545		$	1,092		$	849		$	25,917		$	27,895		$	56,136		$	2,208		$	1,725
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.80	%		1.80	%		1.79	%		1.80	%		1.78	%		2.54	%		2.55	%		2.52	%		2.55	%		2.53	%
Before advisory/administration fee waivers		1.91	%		1.89	%		1.85	%		2.47	%		2.63	%		2.64	%		2.64	%		2.60	%		3.22	%		3.38	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(0.17	)%		0.80	%		0.45	%		(0.23	)%		0.20	%		(0.93	)%		0.06	%		(0.27	)%		(0.99	)%		(0.54	)%
Before advisory/administration fee waivers		(0.27	)%		0.72	%		0.39	%		(0.90	)%		(0.65	)%		(1.03	)%		(0.03	)%		(0.33	)%		(1.66	)%		(1.39	)%
Portfolio turnover rate		104	%		207	%		296	%		224	%		76	%		104	%		207	%		296	%		224	%		76	%

	INVESTOR C SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	14.36		$	22.06		$	12.78		$	9.48		$	9.94

Income from investment operations
Net investment income (loss)		(0.15	)		0.01			(0.04	)		(0.03	)		(0.04	)
Net gain (loss) on investments (both realized and unrealized)		0.29			(7.66	)		10.72			4.44			(0.40	)

Total from investment operations		0.14			(7.65	)		10.68			4.41			(0.44	)

Less distributions
Distributions from net investment income		– –			– –			– –			– –			(0.02	)
Distributions from net realized gains		– –			(0.05	)		(1.40	)		(1.11	)		– –

Total distributions		– –			(0.05	)		(1.40	)		(1.11	)		(0.02	)

Redemption fees added to paid in capital		0.04			– –			– –			– –			– –

Net asset value at end of period	$	14.54		$	14.36		$	22.06		$	12.78		$	9.48

Total return²		1.25	%		(34.71	)%		89.64	%		49.83	%		(4.73	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	18,599		$	21,019		$	43,722		$	1,019		$	423
Ratios of expenses to average net assets
After advisory/administration fee waivers		2.55	%		2.55	%		2.52	%		2.55	%		2.53	%
Before advisory/administration fee waivers		2.66	%		2.66	%		2.58	%		3.22	%		3.38	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(0.95	)%		0.07	%		(0.27	)%		(0.99	)%		(0.54	)%
Before advisory/administration fee waivers		(1.05	)%		(0.03	)%		(0.32	)%		(1.66	)%		(1.39	)%
Portfolio turnover rate		104	%		207	%		296	%		224	%		76	%

¹	Calculated using the average shares outstanding method.

²	Neither front-end sales load nor contingent deferred sales load is reflected in total return. Redemption fee of 2.00% effective December 5, 2001 is not reflected in total return calculations.

BlackRock

Select Equity Portfolio

IMPORTANT DEFINITIONS

Fundamental Analysis: A method of stock market analysis that concentrates on “fundamental” information about the company such (as its income statement, balance sheet, earnings and sales history, products and management) to attempt to forecast future stock value.

Investment Style: Refers to the guiding principles of a mutual fund’s investment choices. The investment style of this fund is a blend of growth stocks and value stocks, referring to the type of securities the managers will choose for this fund.

Market Capitalization: Refers to the market value of the company and is calculated by multiplying the number of shares outstanding by the current price per share.

Sector: All stocks are classified into a category or sector such as utilities, consumer services, basic materials, capital equipment, consumer cyclicals, energy, consumer non-cyclicals, healthcare, technology, transportation, finance and cash.

S&P 500^® Index: The Standard & Poor’s Composite Stock Price Index, an unmanaged index of 500 stocks, most of which are listed on the New York Stock Exchange. The index is heavily weighted toward stocks with large market capitalization and represents approximately two-thirds of the total market value of all domestic common stocks.

Investment Goal

The fund seeks long-term capital appreciation—current income is the secondary objective.

Primary Investment Strategies

In pursuit of this goal, the fund management team uses the S&P 500^® Index as a benchmark and seeks to invest in stocks and market sectors in similar proportion to that index. The management team seeks to own securities in all sectors, but can overweight or underweight securities within sectors as they identify market opportunities. The fund normally invests at least 80% of its total assets in equity securities. The fund primarily buys common stock but can also invest in preferred stock and securities convertible into common and preferred stock.

The management team initially screens for “value” and “growth” stocks from the universe of companies with market capitalization above $1 billion. The fund will invest in stocks that the management team believes offer attractive returns through capital appreciation. The fund will typically have a P/E multiple that is in line with the S&P 500^® Index. The management team uses fundamental analysis to examine each company for financial strength before deciding to purchase the stock.

The management team may, when consistent with the fund’s investment objective, use options or futures (commonly known as

100

IMPORTANT DEFINITIONS

Value and Growth Companies: All stocks are generally divided into the categories of “growth” or “value,” although there are times when a growth fund and value fund may own the same stock. Value stocks are companies that appear to the manager to be undervalued by the market as measured by certain financial formulas. Growth stocks are companies whose earnings growth potential appears to the manager to be greater than the market in general and whose growth in revenue is expected to continue for an extended period.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

While the management team chooses stocks they believe to be undervalued, or which have above average growth potential, there is no guarantee that the shares will increase in value or that they won’t move even lower.

101

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

The performance for the period before Investor A Shares were launched is based upon performance for Institutional Shares of the fund, which were first issued in September 1993. Investor A Shares were launched in October 1993, Investor B Shares were launched in March 1996 and Investor C Shares were launched in September 1996. The performance for Investor B Shares for the period before they were launched is based upon performance for Institutional and Investor A Shares, and the performance for Investor C Shares for the period before they were launched is based upon performance for Institutional, Investor A and Investor

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B Shares. The actual return of Investor A Shares would have been lower than shown for the period before they were launched because Investor A Shares have higher expenses than Institutional Shares. Also, the actual returns of Investor B and C Shares would have been lower compared to Investor A Shares because Investor B and C Shares have higher expenses than Investor A Shares. Investor A Shares of the fund have expenses of 1.28% of average daily net assets (after waivers and reimbursements) for the current fiscal year and Investor B Shares and Investor C Shares of the fund each have expenses of 2.03% of average daily net assets (after waivers and reimbursements) for the current fiscal year. Institutional Shares of the fund have expenses of 0.81% of average daily net assets (after waivers and reimbursements) for the current fiscal year.

As of 12/31

Investor A Shares

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

These returns assume payment of applicable sales charges.

	I Year	3 Years	5 Years	Since Inception	Inception Date
Select Equity; Inv A
Return Before Taxes	-29.72%	-22.46%	-7.00%	4.31%	09/13/93
Return After Taxes on Distributions	-29.96%	-23.39%	-8.38%	2.61%
Return After Taxes on Distributions and Sale of Shares	-18.25%	-16.54%	-5.20%	3.37%
Select Equity; Inv B
Return Before Taxes	-30.23%	-22.61%	-7.13%	4.25%	09/13/93
Select Equity; Inv C
Return Before Taxes	-27.67%	-21.82%	-6.85%	4.25%	09/13/93
S&P 500^® (Reflects no deduction for fees, expenses or taxes)	-22.10%	-14.55%	-0.59%	9.14%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on

103

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Distribution Fees: A method of charging distribution-related expenses against fund assets.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

the investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Investor A Shares only, and the after-tax returns for Investor B and C Shares will vary.

Expenses and Fees

Shareholder Fees

(Fees paid directly from your investment)

	A Shares		B Shares		C Shares
Maximum Sales Charge (Load) Imposed on Purchases*	4.5	%	0.0	%	0.0	%
(as percentage of offering price)
Maximum Deferred Sales Charge (Load)	0.0	%	4.5	%**	1.00	%***
(as percentage of offering price)

*	Reduced front-end sales charges may be available. A CDSC of up to 1.00% is assessed on certain redemptions of Investor A Shares that are purchased with no initial sales charge as part of an investment of $1,000,000 or more.

**	The CDSC is 4.5% if shares are redeemed in less than one year. The CDSC for Investor B Shares decreases for redemptions made in subsequent years. After six years there is no CDSC on B Shares. (See page 137 for complete schedule of CDSCs.)

***	There is no CDSC on C Shares after one year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

	A Shares		B Shares		C Shares
Advisory fees	.55	%	.55	%	.55	%
Distribution (12b-1) fees	.10	%	.75	%	.75	%
Other expenses	.79	%	.79	%	.79	%
Service fee	.25%		.25%		.25%
Processing fee	.15%		.15%		.15%
Other	.39%		.39%		.39%
Total annual fund operating expenses	1.44	%	2.09	%	2.09	%
Fee waivers and expense reimbursements*	.16	%	.06	%	.06	%
Net expenses*	1.28	%	2.03	%	2.03	%

BlackRock and BlackRock Distributors, Inc., the fund’s distributor, have contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.28% (for Investor A Shares) and 2.03% (for Investor B and C Shares) of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 144 for a discussion of these waivers and reimbursements.

104

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses, redemption at the end of each time period and, with respect to B Shares and C Shares only, no redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

	1 Year	3 Years	5 Years	10 Years
A Shares*	$575	$870	$1,187	$2,083
B Shares**
Redemption	$656	$999	$1,318	$2,250***
B Shares
No Redemption	$206	$649	$1,118	$2,250***
C Shares**
Redemption	$306	$649	$1,118	$2,416
C Shares
No Redemption	$206	$649	$1,118	$2,416

*	Reflects imposition of sales charge.

**	Reflects deduction of CDSC.

***	Based on conversion of the Investor B Shares to Investor A Shares after eight years.

As a shareholder you pay certain fees and expenses. Shareholder transaction fees are paid out of your investment and annual fund operating expenses are paid out of fund assets.

Fund Management

The fund is managed by a team of investment professionals at BlackRock Advisors, Inc. (BlackRock), including Robert S. Kapito and R. Andrew Damm.

105

responsible for the portfolio management of the Fixed Income, Domestic Equity and International Equity, Liquidity, and Alternative Investment Groups of BlackRock.

R. Andrew Damm, a Managing Director since 1997, is the Equity Product Strategist and a member of the Equity Portfolio Management Group. From September 1997 through first quarter 2001, Mr. Damm was lead manager for the Large Cap Growth and Core Equity Portfolios. Before joining BlackRock in 1995, Mr. Damm had been with PNC Asset Management Group.

Financial Highlights

106

FINANCIAL HIGHLIGHTS

(For an Investor A, B or C Share Outstanding Throughout Each Period)

Select Equity Portfolio

	INVESTOR A SHARES															INVESTOR B SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98			Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	11.17		$	20.69		$	20.75		$	17.00		$	17.50		$	10.79		$	20.21		$	20.44		$	16.85		$	17.40

Income from investment operations
Net investment income (loss)		(0.01	)		(0.02	)		(0.02	)		0.05			0.08			(0.10	)		(0.13	)		(0.18	)		(0.10	)		(0.03	)
Net gain (loss) on investments (both realized and unrealized)		(2.75	)		(6.42	)		1.60			4.36			0.50			(2.63	)		(6.22	)		1.58			4.30			0.48

Total from investment operations		(2.76	)		(6.44	)		1.58			4.41			0.58			(2.73	)		(6.35	)		1.40			4.20			0.45

Less distributions
Distributions from net investment income		– –			(0.01	)		(0.01	)		(0.05	)		(0.08	)		– –			– –			– –			– –			– –
Distributions from capital		– –			(0.02	)		– –			– –			– –			– –			(0.02	)		– –			– –			– –
Distributions from net realized gains		– –			(3.05	)		(1.63	)		(0.61	)		(1.00	)		– –			(3.05	)		(1.63	)		(0.61	)		(1.00	)

Total distributions		– –			(3.08	)		(1.64	)		(0.66	)		(1.08	)		– –			(3.07	)		(1.63	)		(0.61	)		(1.00	)

Net asset value at end of period	$	8.41		$	11.17		$	20.69		$	20.75		$	17.00		$	8.06		$	10.79		$	20.21		$	20.44		$	16.85

Total return¹		(24.71	)%		(35.65	)%		7.64	%		26.44	%		3.62	%		(25.30	)%		(36.11	)%		6.82	%		25.38	%		2.90	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	24,816		$	37,267		$	76,438		$	66,646		$	35,359		$	22,119		$	40,403		$	81,562		$	66,854		$	39,971
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.28	%		1.28	%		1.25	%		1.21	%		1.32	%		2.03	%		2.03	%		2.01	%		2.02	%		2.07	%
Before advisory/administration fee waivers		1.36	%		1.30	%		1.25	%		1.21	%		1.32	%		2.11	%		2.05	%		2.01	%		2.02	%		2.07	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(0.04	)%		(0.09	)%		(0.11	)%		0.26	%		0.44	%		(0.78	)%		(0.84	)%		(0.87	)%		(0.55	)%		(0.29	)%
Before advisory/administration fee waivers		(0.11	)%		(0.10	)%		(0.11	)%		0.26	%		0.44	%		(0.86	)%		(0.85	)%		(0.87	)%		(0.55	)%		(0.29	)%
Portfolio turnover rate		124	%		114	%		103	%		22	%		27	%		124	%		114	%		103	%		22	%		27	%

	INVESTOR C SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	10.79		$	20.20		$	20.44		$	16.85		$	17.40

Income from investment operations
Net investment income (loss)		(0.11	)		(0.15	)		(0.16	)		(0.08	)		(0.02	)
Net gain (loss) on investments (both realized and unrealized)		(2.62	)		(6.19	)		1.55			4.28			0.47

Total from investment operations		(2.73	)		(6.34	)		1.39			4.20			0.45

Less distributions
Distributions from net investment income		– –			– –			– –			– –			– –
Distributions from capital		– –			(0.02	)		– –			– –			– –
Distributions from net realized capital gains		– –			(3.05	)		(1.63	)		(0.61	)		(1.00	)

Total distributions		– –			(3.07	)		(1.63	)		(0.61	)		(1.00	)

Net asset value at end of period	$	8.06		$	10.79		$	20.20		$	20.44		$	16.85

Total return¹		(25.30	)%		(36.07	)%		6.77	%		25.38	%		2.90	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	1,923		$	3,955		$	11,108		$	6,543		$	2,450
Ratios of expenses to average net assets
After advisory/administration fee waivers		2.03	%		2.03	%		2.01	%		2.02	%		2.06	%
Before advisory/administration fee waivers		2.11	%		2.04	%		2.01	%		2.02	%		2.06	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(0.80	)%		(0.09	)%		(0.87	)%		(0.55	)%		(0.30	)%
Before advisory/administration fee waivers		(0.87	)%		(0.09	)%		(0.87	)%		(0.55	)%		(0.30	)%
Portfolio turnover rate		124	%		114	%		103	%		22	%		27	%

¹	Neither front-end sales load nor contingent deferred sales load is reflected in total return.

107

BlackRock

Index Equity Portfolio

IMPORTANT DEFINITIONS

Index Investing: An investment strategy involving the creation of a portfolio tailored to closely match the composition and investment performance of a specific stock or bond market index. Index funds offer investors diversification among securities, low portfolio turnover and relative predictability of portfolio composition. The Index Master Portfolio engages in index investing.

Large Capitalization Companies: Capitalization refers to the market value of the company and is calculated by multiplying the number of shares outstanding by the current price per share. Larger companies may be more likely to have the staying power to get them through all economic cycles; however their size may also make them less flexible and innovative than smaller companies.

S&P 500^® Index: The Standard & Poor’s Composite Stock Price Index, an unmanaged index of 500 stocks, most of which are listed on the New York Stock Exchange. The index is heavily weighted toward stocks with large market capitalizations and represents approximately two-thirds of the total market value of all domestic common stocks.

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

In pursuit of this goal, the fund invests all of its assets indirectly, through The U.S. Large Company Series (the Index Master Portfolio) of The DFA Investment Trust Company, in the stocks of the S&P 500^® Index using a passive investment style that seeks to approximate the returns of the S&P 500^® Index. The Index Master Portfolio, under normal market conditions, invests at least 95% of its total assets in substantially all the stocks of the S&P 500^® Index in approximately the same proportion as they are represented in the Index.

The Index Master Portfolio may invest some of its assets (generally not more than 5% of net assets) in certain short-term fixed income securities pending investment or to pay redeeming shareholders.

The Index Master Portfolio may, to the extent consistent with its investment objective, invest in index futures contracts and options on index futures contracts, commonly known as derivatives, to commit funds pending investment or to maintain liquidity. The Index Master Portfolio can buy additional securities when borrowings are outstanding. This practice can have the effects of increasing the fund’s losses or gains.

108

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money. There is no guarantee that the shares will increase in value or that they won’t move even lower.

Because different kinds of stocks go in and out of favor depending on market conditions, this fund’s performance may be better or worse than other funds with different investment styles. The Index Master Portfolio is not actively managed and poor performance of a stock will ordinarily not result in its elimination from the Index Master Portfolio. The Index Master Portfolio will remain fully invested in stocks even when stock prices are generally falling. Ordinarily, portfolio securities will not be sold except to reflect additions or deletions of the stocks that comprise the S&P 500^® Index (including additions or deletions resulting from mergers, reorganizations and similar transactions), and, to the extent necessary, to provide cash to pay redeeming shareholders. The investment performance of the Index Master Portfolio and the fund (not taking into account fund expenses) is expected to approximate the investment performance of the S&P 500^® Index, which tends to be cyclical in nature, reflecting periods when stock prices generally rise or fall.

The Index Master Portfolio’s use of derivatives may reduce returns and/or increase volatility. Volatility is defined as the characteristic of a security or a market to fluctuate significantly in price within a short time period. The Index Master Portfolio can borrow money to buy additional securities. This practice can have the effect of increasing the fund’s losses or gains.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

109

The performance for the period before Investor A Shares were launched is based upon performance for Institutional Shares of the fund, which were first issued in April 1992. Investor A Shares were launched in June 1992, Investor B Shares were launched in February 1996 and Investor C Shares were launched in August 1996. The performance for Investor B Shares for the period before they were launched is based upon performance for Institutional and Investor A Shares, and the performance for Investor C Shares for the period before they were launched is based upon performance for Institutional, Investor A and Investor B Shares. The actual return of Investor A Shares would have been lower than shown for the period before they were launched because Investor A Shares have higher expenses than Institutional Shares. Also, the actual returns of Investor B and C Shares would have been lower compared to Investor A Shares because Investor B and C Shares have higher expenses than Investor A Shares. Investor A Shares of the fund have expenses of 0.785% of average daily net assets (after waivers and reimbursements) for the current fiscal year and Investor B Shares and Investor C Shares of the fund each have expenses of 1.535% of average daily net assets (after waivers and reimbursements) for the current fiscal year. Institutional Shares of the fund have expenses of 0.18% of average daily net assets (after waivers and reimbursements) for the current fiscal year.

As of 12/31

Investor A Shares

ANNUAL TOTAL RETURNS*

110

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

These returns assume payment of applicable sales charges.

	1 Year	3 Years	5 Years	10 Years	Inception Date
Index Equity; Inv A
Return Before Taxes	-25.01%	-16.09%	-1.93%	8.17%	04/20/92
Return After Taxes on Distributions	-25.30%	-16.27%	-2.19%	6.99%
Return After Taxes on Distributions and Sale of Shares	-15.35%	-12.45%	-1.61%	6.27%
Index Equity; Inv B
Return Before Taxes	-26.71%	-16.85%	-2.45%	7.96%	04/20/92
Index Equity; Inv C
Return Before Taxes	-24.07%	-15.87%	-2.07%	7.95%	04/20/92
S&P 500^® (Reflects no deduction for fees, expenses or taxes)	-22.10%	-14.55%	-0.59%	9.35%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

Expenses and Fees

Shareholder Fees

(Fees paid directly from your investment)

	A Shares	B Shares		C Shares
Maximum Sales Charge (Load) Imposed on Purchases*	3.0%	0.0%		0.0%
(as percentage of offering price)
Maximum Deferred Sales Charge (Load)	0.0%	4.5%	**	1.00%	***
(as percentage of offering price)

*	Reduced front-end sales charges may be available.

**	The CDSC is 4.5% if shares are redeemed in less than one year. The CDSC for Investor B Shares decreases for redemptions made in subsequent years. After six years there is no CDSC on B Shares. (See page 137 for complete schedule of CDSCs.)

***	There is no CDSC on C Shares after one year.

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IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Distribution Fees: A method of charging distribution-related expenses against fund assets.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Annual Fund Operating Expenses*

(Expenses that are deducted from fund assets)

	A Shares		B Shares		C Shares
Advisory fees	.025	%	.025	%	.025	%
Distribution (12b-1) fees	.10	%	.75	%	.75	%
Other expenses	.77	%	.77	%	.77	%
Service fee	.25%		.25%		.25%
Processing fee	.15%		.15%		.15%
Other	.37%		.37%		.37%
Total annual fund operating expenses	.895	%	1.545	%	1.545	%
Fee waivers and expense reimbursements**	.11	%	.01	%	.01	%
Net expenses**	.785	%	1.535	%	1.535	%

*	The Annual Fund Operating Expenses table and the Example reflect the expenses of both the Index Equity and Index Master Portfolios.

BlackRock and BlackRock Distributors, Inc., the fund’s distributor, have contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to .785% (for Investor A Shares) and 1.535% (for Investor B and C Shares) of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 144 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses, redemption at the end of each time period and, with respect to B Shares and C Shares only, no redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

	1 Year	3 Years	5 Years	10 Years
A Shares*	$378	$566	$ 770	$1,359
B Shares**
Redemption	$606	$837	$1,041	$1,664***
B Shares
No Redemption	$156	$487	$ 841	$1,664***
C Shares**
Redemption	$256	$487	$ 841	$1,839
C Shares
No Redemption	$156	$487	$ 841	$1,839

*	Reflects imposition of sales charge.

**	Reflects deduction of CDSC.

***	Based on the conversion of Investor B Shares to Investor A Shares after eight years.

As a shareholder you pay certain fees and expenses. Shareholder transaction fees are paid out of your investment and annual fund operating expenses are paid out of fund assets.

112

Shares) you pay a one-time front-end transaction fee each time you buy shares. The other options (Investor B and Investor C Shares) have no front-end charges but have higher on-going fees, which are paid over the life of the investment, and have a contingent deferred sales charge (CDSC) that you may pay when you redeem your shares. Which option should you choose? It depends on your individual circumstances. You should know that the lowest sales charge won’t necessarily be the least expensive option over time. For example, if you intend to hold your shares long term it may cost less to buy A Shares than B or C Shares.

Index Master Portfolio Management

Dimensional Fund Advisors Inc. (DFA) serves as investment adviser to the Index Master Portfolio. Investment decisions for the Index Master Portfolio are made by the Investment Committee of DFA, which meets on a regular basis and also as needed to consider investment issues. The Investment Committee is composed of certain officers and directors of DFA who are elected annually. DFA provides the Index Master Portfolio with a trading department and selects brokers and dealers to effect securities transactions.

Financial Highlights

113

FINANCIAL HIGHLIGHTS

(For an Investor A, B or C Share Outstanding Throughout Each Period)

Index Equity Portfolio

	INVESTOR A SHARES															INVESTOR B SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98			Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	19.95		$	27.51		$	24.66		$	19.64		$	18.32		$	19.61		$	27.15		$	24.44		$	19.52		$	18.22

Income from investment operations
Net investment income (loss)		0.13			0.12			0.11			0.17			0.18			(0.01	)		(0.06	)		– –			(0.02	)		0.05
Net gain (loss) on investments (both realized and unrealized)		(4.31	)		(7.60	)		2.96			5.10			1.35			(4.25	)		(7.48	)		2.84			5.05			1.34

Total from investment operations		(4.18	)		(7.48	)		3.07			5.27			1.53			(4.26	)		(7.54	)		2.84			5.03			1.39

Less distributions
Distributions from net investment income		(0.15	)		(0.08	)		(0.06	)		(0.19	)		(0.17	)		– –			– –			– –			(0.05	)		(0.05	)
Distributions from net realized gains		– –			– –			(0.16	)		(0.06	)		(0.04	)		– –			– –			(0.13	)		(0.06	)		(0.04	)

Total distributions		(0.15	)		(0.08	)		(0.22	)		(0.25	)		(0.21	)		– –			– –			(0.13	)		(0.11	)		(0.09	)

Net asset value at end of period	$	15.62		$	19.95		$	27.51		$	24.66		$	19.64		$	15.35		$	19.61		$	27.15		$	24.44		$	19.52

Total return¹		(21.09	)%		(27.23	)%		12.43	%		26.74	%		8.37	%		(21.72	)%		(27.77	)%		11.61	%		25.78	%		7.63	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	222,736		$	76,363		$	93,935		$	85,174		$	42,891		$	175,100		$	262,027		$	360,792		$	302,071		$	109,019
Ratios of expenses to average net assets
After advisory/administration fee waivers		0.79	%²		0.79	%²		0.78	%²		0.75	%²		0.65	%²		1.53	%²		1.53	%²		1.51	%²		1.49	%²		1.38	%²
Before advisory/administration fee waivers		0.78	%²		0.81	%²		0.81	%²		0.81	%²		0.81	%²		1.55	%²		1.55	%²		1.54	%²		1.55	%²		1.54	%²
Ratios of net investment income to average net assets
After advisory/administration fee waivers		0.72	%		0.50	%		0.38	%		0.62	%		0.92	%		(0.04	)%		(0.25	)%		(0.35	)%		(0.13	)		0.19	%
Before advisory/administration fee waivers		0.72	%		0.48	%		0.35	%		0.56	%		0.76	%		(0.05	)%		(0.26	)%		(0.38	)%		(0.18	)%		0.03	%
Portfolio turnover rate		6	%⁷		8	%⁶		8	%⁵		5	%⁴		9	%³		6	%⁷		8	%⁶		8	%⁵		5	%⁴		9	%³

	INVESTOR C SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	19.61		$	27.15		$	24.44		$	19.52		$	18.22

Income from investment operations
Net investment income (loss)		(0.01	)		(0.06	)		– –			– –			0.05
Net gain (loss) on investments (both realized and unrealized)		(4.25	)		(7.48	)		2.84			5.03			1.34

Total from investment operations		(4.26	)		(7.54	)		2.84			5.03			1.39

Less distributions
Distributions from net investment income		– –			– –			– –			(0.05	)		(0.05	)
Distributions from net realized gains		– –			– –			(0.13	)		(0.06	)		(0.04	)

Total distributions		– –			– –			(0.13	)		(0.11	)		(0.09	)

Net asset value at end of period	$	15.35		$	19.61		$	27.15		$	24.44		$	19.52

Total return¹		(21.72	)%		(27.77	)%		11.61	%		25.78	%		7.63	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	270,958		$	382,356		$	530,586		$	391,152		$	81,529
Ratios of expenses to average net assets
After advisory/ administration fee waivers		1.53	%²		1.53	%²		1.53	%²		1.51	%²		1.38	%²
Before advisory/ administration fee waivers		1.55	%²		1.55	%²		1.56	%²		1.55	%²		1.54	%²
Ratios of net investment income to average net assets
After advisory/ administration fee waivers		(0.04	)%		(0.25	)%		(0.37	)%		(0.15	)%		0.19	%
Before advisory/ administration fee waivers		(0.05	)%		(0.26	)%		(0.40	)%		(0.19	)%		0.03	%
Portfolio turnover rate		6	%⁷		8	%⁶		8	%⁵		5	%⁴		9	%³

¹	Neither front-end sales load nor contingent deferred sales load is reflected in total return.

²	Including expenses allocated from The U.S. Large Company Series of The DFA Investment Trust Company of 0.06% for the years ended 9/30/98 through 9/30/02.

³	For period December 1, 1997 through November 30, 1998.

⁴	For period December 1, 1998 through November 30, 1999.

⁵	For period December 1, 1999 through November 30, 2000.

⁶	For period December 1, 2000 through September 30, 2001.

⁷	For period December 1, 2001 through September 30, 2002.

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BlackRock

Balanced Portfolio

IMPORTANT DEFINITIONS

Asset-Backed Securities: Bonds that are backed by a pool of assets, usually loans such as installment sale contracts or credit card receivables.

Bonds: Debt obligations such as bonds and debentures, U.S. Government securities, debt obligations of domestic and foreign corporations, debt obligations of foreign governments and their political subdivisions, asset-backed securities, various mortgage-backed securities (both residential and commercial), other floating or variable rate obligations, municipal obligations and zero coupon debt securities.

Investment Grade: Securities which are rated in the four highest categories by at least one of the major rating agencies or determined by the fund manager to be of similar quality. Generally, the higher the rating of a bond, the higher the likelihood that interest and principal payments will be made on time.

Investment Style: Refers to the guiding principle of a mutual fund’s investment choices. The investment style of this fund is balanced, meaning that the managers will choose both equity and fixed income securities for this fund.

Mortgage-Backed Securities: Asset-backed securities based on a particular type of asset, a mortgage. There are a wide variety of mortgage backed securities involving commercial or residential, fixed rate or adjustable rate mortgages and mortgages issued by banks or government agencies.

Investment Goal

The fund seeks long-term capital appreciation—current income from fixed income securities is the secondary objective.

Primary Investment Strategies

In pursuit of this goal, the management team invests primarily in a blend of equity and fixed income securities selected to deliver returns through the combination of capital appreciation and current income. The equity and fixed income managers work together to determine an appropriate asset allocation strategy.

Equity Portion

The manager initially screens for “value” and “growth” stocks from the universe of companies with market capitalization above $1 billion. In pursuit of this goal, the fund manager uses the S&P 500^® Index as a benchmark and seeks to invest in stocks and market sectors in similar proportion to that index. The manager seeks to own securities in all sectors, but can overweight or underweight securities within sectors as he identifies market opportunities. The portfolio manager will adjust the blend of value/growth stocks based on performance expectations. The fund will invest primarily in common stock, but can also invest in preferred stock and securities convertible into common and preferred stock.

Fixed Income Portion

The fixed income portion of the fund consists of a broad range of U.S. investment grade bonds including U.S. Government bonds, mortgage-backed, asset-backed and corporate debt securities. The fund normally will invest at least 25% of its total assets in bonds. The fund may invest up to 10% of its total assets in non-dollar denominated bonds of issuers located outside of the United States. The fund’s investment in non-dollar denominated bonds may be on a currency hedged or unhedged basis. The fixed income team seeks bonds that will add value while controlling risk.

If a security falls below investment grade, the manager will decide whether to continue to hold the security. A security will be sold if, in the opinion of the management team, the risk of continuing to hold the security is unacceptable when compared to the total return potential.

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IMPORTANT DEFINITIONS

S&P 500^® Index: The Standard & Poor’s Composite Stock Price Index, an unmanaged index of 500 stocks, most of which are listed on the New York Stock Exchange. The Index is heavily weighted toward stocks with large market capitalization and represents approximately two-thirds of the total market value of all domestic common stocks.

Total Return: A way of measuring fund performance. Total return is based on a calculation that takes into account income dividends, capital gain distributions and the increase or decrease in share price.

Value and Growth Companies: All stocks are generally divided into the categories of “growth” or “value,” although there are times when a growth fund and a value fund may own the same stock. Value stocks are companies that appear to the manager to be undervalued by the market as measured by certain financial formulas. Growth stocks are companies whose earnings growth potential appears to the manager to be greater than the market in general and whose growth in revenue is expected to continue for an extended period.

As part of its normal operations, the fund may hold these securities pending investments or when it expects to need cash to pay redeeming shareholders. The fund also may invest in money market securities in order to achieve its investment objective.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The value of your investment can go up or down depending upon market conditions, which means you could lose money.

The main risk of any investment in stocks is that values fluctuate in price.

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Two of the main risks of investing in the fund are interest rate risk and credit risk. Typically, when interest rates rise, there is a corresponding decline in the market value of bonds such as those held by the fund. Credit risk refers to the possibility that the issuer of the bond will not be able to make principal and interest payments.

Because market conditions can vary, this fund’s performance may be better or worse than other funds with different investment styles. For example, in some markets a fund holding exclusively equity or fixed income securities may outperform this fund.

While the fund managers choose stocks with a focus on attempting to minimize risk and choose bonds of investment grade quality, there is no guarantee that the shares will increase in value or that they won’t move lower.

The fund may invest up to 10% of its total assets in non-dollar denominated bonds of issuers located outside of the United States. Non-U.S. securities involve risks not typically associated with investing in U.S. securities. These risks include but are not limited to: currency risks (the risk that the value of interest paid on non-U.S. securities, or the value of the securities themselves, may fall if currency exchange rates change), the risk that a security’s value will be hurt by changes in non-U.S. political or social conditions, including changes in policies restricting non-U.S. investment, the possibility of heavy taxation, nationalization or expropriation of assets and more difficulty obtaining information on non-U.S. securities or companies. In addition, a portfolio of non-U.S. securities may be harder to sell and may be subjected to wider price movements than comparable investments in U.S. companies. There is also less regulation of non-U.S. securities markets.

Securities rated in the fourth highest category by the rating agencies are considered investment grade but they may also have some speculative characteristics, meaning that they carry more risk than higher rated securities and may have problems making principal and interest payments in difficult economic climates. Investment grade ratings do not guarantee that bonds will not lose value.

117

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

The chart and table on the next page give you a picture of the fund’s long-term performance for Investor A Shares (in the chart) and for Investor A, B and C Shares (in the table). The chart shows you how the fund’s performance has varied year by year and provides some indication of the risks of investing in the fund. The table compares the fund’s performance to that of a customized weighted index comprised of the returns of the S&P 500^® Index (65%) and the Lehman Aggregate Index (35%), recognized unmanaged indices of stock and bond market performance, respectively. As with all such investments, past performance is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown.

The performance for the period before Investor B and C Shares were launched is based upon performance for Investor A Shares of the fund. Investor A Shares were launched in May 1990, Investor B Shares were launched in October 1994 and Investor C Shares were launched in December 1996. The actual return of Investor B and C Shares would have been lower than shown for the period before they were launched because Investor B and C Shares have higher expenses than Investor A Shares. Investor A Shares of the fund have expenses of 1.40% of average daily net assets (after waivers and reimbursements) for the current fiscal year and Investor B Shares and Investor C Shares of the fund each have expenses of 2.15% of average daily net assets (after waivers and reimbursements) for the current fiscal year.

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As of 12/31

Investor A Shares

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

These returns assume payment of applicable sales charges.

	1 Year	3 Years	5 Years	10 Years	Inception Date
Balanced; Inv A
Return Before Taxes	-18.47%	-12.44%	-2.07%	5.77%	05/14/90
Return After Taxes on Distributions	-19.40%	-14.09%	-3.78%	3.93%
Return After Taxes on Distributions and Sale of Shares	-11.32%	-9.78%	-1.79%	4.27%
Balanced; Inv B
Return Before Taxes	-18.97%	-12.58%	-2.19%	5.60%	05/14/90
Balanced; Inv C
Return Before Taxes	-16.06%	-11.74%	-1.90%	5.60%	05/14/90
65% S&P 500^®/35% Leh. Agg. (Reflects no deduction for fees, expenses or taxes)	-11.41%	-6.14%	2.67%	9.01%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

After-tax returns are calculated using the historical highest individual federal marginal tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Investor A Shares only, and the after-tax returns for Investor B and C Shares will vary.

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IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Distribution Fees: A method of charging distribution-related expenses against fund assets.

Other Expenses: Include fees paid by the fund for other expenses such as administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

Shareholder Fees

(Fees paid directly from your investment)

	A Shares		B Shares		C Shares
Maximum Sales Charge (Load) Imposed on Purchases*	4.5	%	0.0	%	0.0	%
(as percentage of offering price)
Maximum Deferred Sales Charge (Load)	0.0	%	4.5	%**	1.00	%***
(as percentage of offering price)

*	Reduced front-end sales charges may be available. A CDSC of up to 1.00% is assessed on certain redemptions of Investor A Shares that are purchased with no initial sales charge as part of an investment of $1,000,000 or more.

**	The CDSC is 4.5% if shares are redeemed in less than one year. The CDSC for Investor B Shares decreases for redemptions made in subsequent years. After six years there is no CDSC on B Shares. (See page 137 for complete schedule of CDSCs.)

***	There is no CDSC on C Shares after one year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

	A Shares	B Shares	C Shares
Advisory fees	.55%	.55%	.55%
Distribution (12b-1) fees	.10%	.75%	.75%
Interest expense	.07%	.07%	.07%
Other expenses	.81%	.81%	.81%
Service fee	.25%	.25%	.25%
Processing fee	.15%	.15%	.15%
Other	.41%	.41%	.41%
Total annual fund operating expenses	1.53%	2.18%	2.18%
Fee waivers and expense reimbursements*	.13%	.03%	.03%
Net expenses*	1.40%	2.15%	2.15%

BlackRock and BlackRock Distributors, Inc., the fund’s distributor, have contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.33% (excluding interest expense) (for Investor A Shares) and 2.08% (excluding interest expense) (for Investor B and C Shares) of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 144 for a discussion of these waivers and reimbursements.

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Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses, redemption at the end of each time period and, with respect to B Shares and C Shares only, no redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

	1 Year	3 Years	5 Years	10 Years
A Shares*	$586	$ 899	$1,235	$2,181
B Shares**
Redemption	$668	$1,029	$1,367	$2,347***
B Shares
No Redemption	$218	$ 679	$1,167	$2,347***
C Shares**
Redemption	$318	$ 679	$1,167	$2,511
C Shares
No Redemption	$218	$ 679	$1,167	$2,511

*	Reflects imposition of sales charge.

**	Reflects deduction of CDSC.

***	Based on the conversion of Investor B Shares to Investor A shares after eight years.

As a shareholder you pay certain fees and expenses. Shareholder transaction fees are paid out of your investment and annual fund operating expenses are paid out of fund assets.

Fund Management

The fund is managed by a team of investment professionals at BlackRock Advisors, Inc. (Blackrock), including Robert S. Kapito, R. Andrew Damm and Keith T. Anderson.

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responsible for the portfolio management of the Fixed Income, Domestic Equity and International Equity, Liquidity and Alternative Investment Groups of BlackRock. Mr. Kapito, who has served as co-manager since 1995, has responsibility for both the equity and fixed income portions of the fund.

R. Andrew Damm, a Managing Director since 1997, is the Equity Product Strategist and a member of the Equity Portfolio Management Group. From September 1997 through first quarter 2001, Mr. Damm was lead manager for the Large Cap Growth and Core Equity Portfolios. Before joining BlackRock in 1997, Mr. Damm had been with PNC Asset Management Group. Mr. Damm, who has served as co-manager since May 2002, has responsibility for the equity portion of the fund.

Keith T. Anderson, a Managing Director since 1988, has responsibility for the fixed income portion of the fund. Mr. Anderson has served as co-manager of the fund since 1995.

Financial Highlights

122

FINANCIAL HIGHLIGHTS

(For an Investor A, B or C Share Outstanding Throughout Each Period)

Balanced Portfolio

	INVESTOR A SHARES															INVESTOR B SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98			Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	13.25		$	20.13		$	19.72		$	18.33		$	18.22		$	13.14		$	19.98		$	19.59		$	18.22		$	18.13

Income from investment operations
Net investment income		0.28			0.26			0.38			0.41			0.39			0.20			0.15			0.22			0.24			0.25
Net gain (loss) on investments (both realized and unrealized)		(2.10	)		(4.03	)		1.11			2.18			1.33			(2.10	)		(4.00	)		1.09			2.18			1.31

Total from investment operations		(1.82	)		(3.77	)		1.49			2.59			1.72			(1.90	)		(3.85	)		1.31			2.42			1.56

Less distributions
Distributions from net investment income		(0.33	)		(0.30	)		(0.38	)		(0.41	)		(0.36	)		(0.23	)		(0.18	)		(0.22	)		(0.26	)		(0.22	)
Distributions from net realized gains		– –			(2.81	)		(0.70	)		(0.79	)		(1.25	)		– –			(2.81	)		(0.70	)		(0.79	)		(1.25	)

Total distributions		(0.33	)		(3.11	)		(1.08	)		(1.20	)		(1.61	)		(0.23	)		(2.99	)		(0.92	)		(1.05	)		(1.47	)

Net asset value at end of period	$	11.10		$	13.25		$	20.13		$	19.72		$	18.33		$	11.01		$	13.14		$	19.98		$	19.59		$	18.22

Total return¹		(14.01	)%		(21.26	)%		7.59	%		14.40	%		10.19	%		(14.67	)%		(21.84	)%		6.72	%		13.46	%		9.40	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	115,667		$	108,795		$	149,594		$	132,833		$	96,795		$	40,717		$	67,732		$	102,530		$	96,253		$	46,303
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.42	%		1.34	%		1.30	%		1.25	%		1.30	%		2.16	%		2.08	%		2.07	%		2.07	%		2.11	%
After advisory/administration fee waivers (excluding interest expense)		1.34	%		1.34	%		1.29	%		1.25	%		1.30	%		2.08	%		2.09	%		2.07	%		2.07	%		2.11	%
Before advisory/administration fee waivers		1.44	%		1.36	%		1.30	%		1.25	%		1.30	%		2.19	%		2.10	%		2.07	%		2.07	%		2.11	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		2.25	%		1.75	%		1.86	%		2.05	%		2.13	%		1.48	%		1.01	%		1.09	%		1.23	%		1.30	%
Before advisory/administration fee waivers		2.22	%		1.74	%		1.86	%		2.05	%		2.13	%		1.45	%		1.00	%		1.09	%		1.23	%		1.30	%
Portfolio turnover rate		232	%		210	%		176	%		122	%		134	%		232	%		210	%		176	%		122	%		134	%

	INVESTOR C SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	13.14		$	19.98		$	19.59		$	18.22		$	18.13

Income from investment operations
Net investment income		0.21			0.13			0.22			0.23			0.24
Net gain (loss) on investments (both realized and unrealized)		(2.11	)		(3.98	)		1.09			2.19			1.32

Total from investment operations		(1.90	)		(3.85	)		1.31			2.42			1.56

Less distributions
Distributions from net investment income		(0.23	)		(0.18	)		(0.22	)		(0.26	)		(0.22	)
Distributions from net realized gains		– –			(2.81	)		(0.70	)		(0.79	)		(1.25	)

Total distributions		(0.23	)		(2.99	)		(0.92	)		(1.05	)		(1.47	)

Net asset value at end of period	$	11.01		$	13.14		$	19.98		$	19.59		$	18.22

Total return¹		(14.67	)%		(21.84	)%		6.73	%		13.46	%		9.40	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	4,911		$	9,425		$	11,967		$	10,095		$	699
Ratios of expenses to average net assets
After advisory/administration fee waivers		2.16	%		2.09	%		2.07	%		2.07	%		1.92	%
After advisory/administration fee waivers (excluding interest expense)		2.08	%		2.09	%		2.06	%		2.07	%		1.92	%
Before advisory/administration fee waivers		2.19	%		2.11	%		2.07	%		2.07	%		1.92	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		1.47	%		0.97	%		1.09	%		1.23	%		1.46	%
Before advisory/administration fee waivers		1.44	%		0.96	%		1.09	%		1.23	%		1.46	%
Portfolio turnover rate		232	%		210	%		176	%		122	%		134	%

¹	Neither front-end sales load nor contingent deferred sales load is reflected in total return.

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BlackRock

U.S. Opportunities Portfolio

IMPORTANT DEFINITIONS

Earnings Visibility: Earnings visibility means positive earnings in the foreseeable future (generally defined as 2-3 years). Earnings growth potential means the rate of earnings growth of which a company is capable. Earnings growth visibility of 20% or more means earnings are forecasted to grow at a rate of 20% or higher in the foreseeable future.

Fundamentals: “Fundamental” information about a company (such as its income statement, balance sheet, earnings and sales history, products and management).

Salomon Smith Barney Extended Market Index U.S.: An unmanaged index comprised of smaller-capitalization U.S. stocks representing the bottom 20% of available market capital, with a minimum market capitalization of at least $100 million.

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

In pursuit of this goal, the fund normally invests at least 80% of its net assets in equity securities issued by U.S. emerging capitalization companies (defined as those with market capitalizations equal to those within the universe of Salomon Smith Barney Extended Market Index U.S. stocks) with earnings visibility and earnings growth potential. The fund primarily buys common stock but can also invest in preferred stock and securities convertible into common and preferred stock. From time to time the fund may invest in shares of companies through initial public offerings (IPOs).

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The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

The fund opened to new investors as of December 2, 2002. The fund may suspend sales to new investors at any time in the future.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

Because different kinds of stocks go in and out of favor depending on market conditions, this fund’s performance may be better or worse than other funds with different investment styles.

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While the management team chooses stocks they believe to have above average earnings growth potential, there is no guarantee that the shares will increase in value or that they won’t move lower.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

The chart and table on the next page give you a picture of the fund’s long-term performance for Investor A Shares (in the chart) and for Investor A, B and C Shares (in the table). The information shows you how the fund’s performance has varied year by year and provides some indication of the risks of investing in the fund. The table compares the fund’s performance to that of the Salomon Smith Barney Extended Market Index U.S., a recognized unmanaged index of stock market performance (the new benchmark). Prior to December 2, 2002, the fund’s benchmark was the Wilshire Microcap Index. The new benchmark more accurately reflects the universe of securities in which the fund will invest. As with all such investments, past performance is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown.

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As of 12/31

Investor A Shares

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

These returns assume payment of applicable sales charges.

	1 Year	3 Year	Since Inception	Inception Date
U.S. Opportunities; Inv A
Return Before Taxes	-42.08%	-23.05%	14.68%	05/01/98
Return After Taxes on Distributions	-42.08%	-26.01%	10.90%
Return After Taxes on Distributions and Sale of Shares	-25.84%	-17.75%	11.53%
U.S. Opportunities; Inv B
Return Before Taxes	-42.22%	-22.98%	14.87%	05/01/98
U.S. Opportunities; Inv C
Return Before Taxes	-40.12%	-22.33%	15.11%	05/01/98
Salomon Smith Barney EMI U.S. (Reflects no deduction for fees, expenses or taxes)	-31.46%	-10.74%	-4.93%	N/A
Wilshire Microcap (Reflects no deduction for fees, expenses or taxes)	-9.03%	1.30%	4.00%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

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IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Distribution Fees: A method of charging distribution-related expenses against fund assets.

Other Expenses: Include fees paid by the fund for other expenses such as administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

Shareholder Fees

(Fees paid directly from your investment)

	A Shares		B Shares		C Shares
Maximum Sales Charge (Load) Imposed on Purchases*	5.0	%	0.0	%	0.0	%
(as percentage of offering price)
Maximum Deferred Sales Charge (Load)	0.0	%	4.5	%**	1.00	%***
(as percentage of offering price)

*	Reduced front-end sales charges may be available. A CDSC of up to 1.00% is assessed on certain redemptions of Investor A Shares that are purchased with no initial sales charge as part of an investment of $1,000,000 or more.

**	The CDSC is 4.5% if shares are redeemed in less than one year. The CDSC for Investor B Shares decreases for redemptions made in subsequent years. After six years there is no CDSC on B Shares. (See page 137 for complete schedule of CDSCs.)

***	There is no CDSC on C shares after one year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

	A Shares		B Shares		C Shares
Advisory fees	1.10	%	1.10	%	1.10	%
Distribution (12b-1) fees	.10	%	.75	%	.75	%
Other expenses	.87	%	.87	%	.87	%
Service fee	.25%		.25%		.25%
Processing fee	.15%		.15%		.15%
Other	.47%		.47%		.47%
Total annual fund operating expenses	2.07	%	2.72	%	2.72	%
Fee waivers and expense reimbursements*	.10	%	– –		– –
Net expenses*	1.97	%	2.72	%	2.72	%

BlackRock and BlackRock Distributors, Inc., the fund’s distributor, have contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 2.07% (for Investor A Shares) and 2.82% (for Investor B and C Shares) of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 144 for a discussion of these waivers and reimbursements.

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Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses, redemption at the end of each time period and, with respect to B Shares and C Shares only, no redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

	1 Year	3 Years	5 Years	10 Years
A Shares*	$690	$1,107	$1,549	$2,773
B Shares**
Redemption	$725	$1,194	$1,640	$2,895***
B Shares
No Redemption	$275	$ 844	$1,440	$2,895***
C Shares**
Redemption	$375	$ 844	$1,440	$3,051
C Shares
No Redemption	$275	$ 844	$1,440	$3,051

*	Reflects imposition of sales charge.

**	Reflects deduction of contingent deferred sales charge.

***	Based on the conversion of Investor B Shares to Investor A Shares after eight years.

As a shareholder you pay certain fees and expenses. Shareholder transaction fees are paid out of your investment and annual fund operating expenses are paid out of fund assets.

This prospectus offers shareholders different ways to invest with three separate pricing options. You need to understand your choices so that you can choose the pricing option that is most suitable for you. As shown above, with one option (Investor A Shares) you pay a one-time front-end transaction fee each time you buy shares. The other options (Investor B and Investor C Shares) have no front-end charges but have higher on-going fees, which are paid over the life of the investment, and have a contingent deferred sales charge (CDSC) that you may pay when you redeem your shares. Which option schedule should you choose? It depends on your individual circumstances. You should know that the lowest sales charge won’t necessarily be the least expensive option over time. For example, if you intend to hold your shares long term it may cost less to buy A Shares than B or C Shares.

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Fund Management

The fund is managed by a team of investment professionals at BlackRock Advisors, Inc. (BlackRock), including Thomas Callan, Managing Director with BlackRock since 1996 and equity analyst for PNC Bank from 1993 to 1996, and Jean Rosenbaum, Vice President with BlackRock since 2000. Ms. Rosenbaum was an equity analyst with BlackRock Financial Management, Inc. since 1997 and served as an equity analyst for PNC Bank from 1994 to 1997. Thomas Callan and Jean Rosenbaum have been co-managers of the fund since September 2002.

Financial Highlights

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FINANCIAL HIGHLIGHTS

(For an Investor A, B or C Share Outstanding Throughout Each Period)

U.S. Opportunities Portfolio

	INVESTOR A SHARES															INVESTOR B SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			For the Period 5/01/98¹ through 9/30/98			Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			For the Period 5/01/98¹ through 9/30/98
Net asset value at beginning of period	$	17.41		$	44.93		$	24.60		$	9.38		$	10.00		$	16.86		$	44.15		$	24.38		$	9.36		$	10.00

Income from investment operations
Net investment (loss)		(0.42	)		(0.09	)		(0.17	)		(0.11	)		(0.02	)		(0.54	)		(0.28	)		(0.45	)		(0.18	)		(0.04	)
Net gain (loss) on investments (both realized and unrealized)		(3.89	)		(17.35	)		23.80			15.33			(0.60	)		(3.78	)		(16.93	)		23.52			15.20			(0.60	)

Total from investment operations		(4.31	)		(17.44	)		23.63			15.22			(0.62	)		(4.32	)		(17.21	)		23.07			15.02			(0.64	)

Less distributions
Distributions from capital		(0.29	)		– –			– –			– –			– –			(0.13	)		– –			– –			– –			– –
Distributions from net realized gains		– –			(10.08	)		(3.30	)		– –			– –			– –			(10.08	)		(3.30	)		– –			– –

Total distributions		(0.29	)		(10.08	)		(3.30	)		– –			– –			(0.13	)		(10.08	)		(3.30	)		– –			– –

Net asset value at end of period	$	12.81		$	17.41		$	44.93		$	24.60		$	9.38		$	12.41		$	16.86		$	44.15		$	24.38		$	9.36

Total return³		(25.39	)%		(46.61	)%		102.68	%		162.26	%		(6.20	)%		(25.92	)%		(47.01	)%		101.17	%		160.19	%		(6.30	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	28,733		$	51,232		$	151,588		$	45,429		$	6,100		$	43,883		$	79,401		$	213,237		$	53,476		$	8,560
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.92	%		1.93	%		1.91	%		1.90	%		1.84	%²		2.67	%		2.67	%		2.66	%		2.65	%		2.55	%²
Before advisory/administration fee waivers		1.97	%		1.94	%		1.91	%		2.23	%		3.17	%²		2.72	%		2.69	%		2.66	%		3.01	%		3.88	%²
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(1.68	)%		(0.30	)%		(0.41	)%		(1.17	)%		(0.70	)%²		(2.43	)		(1.06	)%%		(1.14	)%		(1.91	)%		(1.44	)%²
Before advisory/administration fee waivers		(1.73	)%		(0.32	)%		(0.41	)%		(1.50	)%		(2.03	)%²		(2.47	)		(1.08	)%%		(1.14	)%		(2.27	)%		(2.77	)%²
Portfolio turnover rate		361	%		402	%		445	%		346	%		119	%		361	%		402	%		445	%		346	%		119	%

	INVESTOR C SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			For the Period 5/01/98¹ through 9/30/98
Net asset value at beginning of period	$	16.85		$	44.14		$	24.38		$	9.36		$	10.00

Income from investment operations
Net investment (loss)		(0.55	)		(0.29	)		(0.44	)		(0.16	)		(0.04	)
Net gain (loss) on investments (both realized and unrealized)		(3.77	)		(16.92	)		23.50			15.18			(0.60	)

Total from investment operations		(4.32	)		(17.21	)		23.06			15.02			(0.64	)

Less distributions
Distributions from capital		(0.13	)		– –			– –			– –			– –
Distributions from net realized gains		– –			(10.08	)		(3.30	)		– –			– –

Total distributions		(0.13	)		(10.08	)		(3.30	)		– –			– –

Net asset value at end of period	$	12.40		$	16.85		$	44.14		$	24.38		$	9.36

Total return³		(25.93	)%		(47.02	)%		101.12	%		160.19	%		(6.30	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	22,020		$	42,007			133,540		$	19,993		$	1,809
Ratios of expenses to average net assets
After advisory/administration fee waivers		2.67	%		2.67	%		2.65	%		2.63	%		2.53	%²
Before advisory/administration fee waivers		2.72	%		2.69	%		2.65	%		2.93	%		3.86	%²
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(2.43	)%		(1.02	)%		(1.12	)%		(1.91	)%		(1.45	)%²
Before advisory/administration fee waivers		(2.48	)%		(1.04	)%		(1.12	)%		(2.21	)%		(2.78	)%²
Portfolio turnover rate		361	%		402	%		445	%		346	%		119	%

¹	Commencement of operations of share class.

²	Annualized.

³	Neither front-end sales load nor contingent deferred sales load is reflected in total return.

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About Your Investment

Buying Shares from a Registered Investment Professional

BlackRock Funds believes that investors can benefit from the advice and ongoing assistance of a registered investment professional. Accordingly, when you buy or sell BlackRock Funds Investor Shares, you may pay a sales charge, which is used to compensate your investment professional for services provided to you.

As a shareholder you pay certain fees and expenses. Shareholder fees are paid directly from your investment and annual fund operating expenses are paid out of fund assets and are reflected in the fund’s price.

Your registered representative can help you to buy shares by telephone. Before you place your order make sure that you have read the prospectus and have a discussion with your registered representative about the details of your investment.

What Price Per Share Will You Pay?

The price of mutual fund shares generally changes every business day. A mutual fund is a pool of investors’ money that is used to purchase a portfolio of securities, which in turn is owned in common by the investors. Investors put money into a mutual fund by buying shares. If a mutual fund has a portfolio worth $50 million and has 5 million shares outstanding, the net asset value (NAV) per share is $10. When you buy Investor Shares you pay the NAV/share plus the sales charge if you are purchasing Investor A Shares.

The funds’ investments are valued based on market value, or where market quotations are not readily available, based on fair value as determined in good faith by or under the direction of the Company’s Board of Trustees. Under some circumstances certain short-term debt securities will be valued using the amortized cost method.

Since the NAV changes daily, the price you pay for your shares depends on the time that your order is received by the BlackRock Funds’ transfer agent, whose job it is to keep track of shareholder records.

PFPC, the Company’s transfer agent, will probably receive your order from your registered representative, who takes your order. However, you can also fill out a purchase application and mail it to the transfer agent with your check. Please call (800) 441-7762 for a purchase application. Purchase orders received by the

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transfer agent before the close of regular trading on the New York Stock Exchange (NYSE) (currently 4 p.m. (Eastern time)) on each day the NYSE is open will be priced based on the NAV calculated at the close of trading on that day plus any applicable sales charge. NAV is calculated separately for each class of shares of each fund at 4 p.m. (Eastern time) each day the NYSE is open. Shares will not be priced on days the NYSE is closed. Purchase orders received after the close of trading will be priced based on the next calculation of NAV. The non-U.S. securities and certain other securities held by a fund may trade on days when the NYSE is closed. In these cases, net asset value of shares may change when fund shares cannot be bought or sold.

When you place a purchase order, you need to specify whether you want Investor A, B or C Shares. If you do not specify a class, you will receive Investor A Shares.

When Must You Pay?

Payment for an order must be made by your registered representative in Federal funds or other immediately available funds by 4 p.m. (Eastern time) on the third business day following PFPC’s receipt of the order. If payment is not received by this time, the order will be canceled and you and your registered representative will be responsible for any loss to a fund. For shares purchased directly from the transfer agent, a check payable to BlackRock Funds and bearing the name of the fund you are purchasing must accompany a completed purchase application. The Company does not accept third-party checks. You may also wire Federal funds to the transfer agent to purchase shares, but you must call PFPC at (800) 441-7762 before doing so to confirm the wiring instructions.

How Much is the Minimum Investment?

The minimum investment for the initial purchase of Investor Shares is $500. There is a $50 minimum for all later investments. The Company permits a lower initial investment if you are an employee of the Company or one of its service providers or if you participate in the Automatic Investment Plan in which you make regular, periodic investments through a savings or checking account. Your investment professional can advise you on how to begin an Automatic Investment Plan. The Company won’t accept a purchase order of $1 million or more for Investor B or Investor C Shares. The Company may reject any

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purchase order, modify or waive the minimum investment requirements and suspend and resume the sale of any share class of any fund at any time.

Which Pricing Option Should You Choose?

BlackRock Funds offers different pricing options to investors in the form of different share classes. Your registered representative can help you decide which option works best for you. Through this prospectus, you can choose from Investor A, B, or C Shares.

A Shares (Front-End Load)

One time sales charge paid at time of purchase

Lower ongoing distribution fees

Free exchange with other A Shares in BlackRock Funds family

Advantage: Makes sense for investors who have long-term investment horizon because ongoing distribution fees are less than for other Investor Share classes.

Disadvantage: You pay sales charge up-front, and therefore you start off owning fewer shares.

B Shares (Back-End Load)

No front-end sales charge when you buy shares

You pay sales charge when you redeem shares. It is called a contingent deferred sales charge (CDSC) and it declines over 6 years to zero from a high of 4.5%.

Higher ongoing distribution fees than A Shares

Free exchange with other B Shares in BlackRock Funds family

Automatically convert to A Shares eight years from purchase

Advantage: No up-front sales charge so you start off owning more shares.

Disadvantage: You pay higher ongoing distribution fees than on A Shares each year you own shares, which means that you can expect lower total performance per share.

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C Shares (Level Load)

No front-end sales charge when you buy shares

Contingent deferred sales charge (CDSC) of 1.00% if shares are redeemed within 12 months of purchase

Higher ongoing distribution fees than A Shares

Free exchange with other C Shares in BlackRock Funds family

Advantage: No up-front sales charge so you start off owning more shares. These shares may make sense for investors who have a shorter investment horizon relative to A or B Shares.

Disadvantage: You pay higher ongoing distribution fees than on A shares each year you own shares, which means that you can expect lower total performance per share. Shares do not convert to A Shares.

Investor B Shares received through the reinvestment of dividends and distributions convert to A Shares 8 years after the reinvestment or at the same time as the conversion of the investor’s most recently purchased B Shares that were not received through reinvestment (whichever is earlier).

How Much is the Sales Charge?

The tables on the next page show the schedule of front-end sales charges that you may pay if you buy and sell Investor A, B and C Shares of a fund.

135

Purchase of Investor A Shares

The following tables show the front-end sales charges that you may pay if you buy Investor A Shares. The offering price for Investor A Shares includes any front-end sales charge.

The following schedule of front-end sales charges and quantity discounts applies to the Large Cap Value Equity, Large Cap Growth Equity, Mid-Cap Value Equity, Mid-Cap Growth Equity, Small Cap Value Equity, Small Cap Growth Equity, Select Equity and Balanced Portfolios.

AMOUNT OF TRANSACTION AT OFFERING PRICE	SALES CHARGE AS % OF OFFERING PRICE*	SALES CHARGE AS % OF NET ASSET VALUE*
Less than $50,000	4.50%	4.71%
$50,000 but less than $100,000	4.25%	4.44%
$100,000 but less than $250,000	4.00%	4.17%
$250,000 but less than $500,000	3.00%	3.09%
$500,000 but less than $1,000,000	2.00%	2.04%
$1 million or more	0.00%	0.00%

The following schedule of front-end sales charges and quantity discounts applies to the Small Cap Core Equity, U.S. Opportunities, International Equity, European Equity, Asia Pacific Equity, Global Science & Technology Opportunities and International Opportunities Portfolios.

AMOUNT OF TRANSACTION AT OFFERING PRICE	SALES CHARGE AS % OF OFFERING PRICE*	SALES CHARGE AS % OF NET ASSET VALUE*
Less than $50,000	5.00%	5.26%
$50,000 but less than $100,000	4.75%	4.99%
$100,000 but less than $250,000	4.50%	4.71%
$250,000 but less than $500,000	3.50%	3.83%
$500,000 but less than $1,000,000	2.50%	2.56%
$1 million or more	0.00%	0.00%

There is no initial sales charge on purchases of $1,000,000 or more of Investor A Shares; however, you will pay a CDSC of 1.00% of the offering price or the net asset value of the shares on the redemption date (whichever is less) for shares redeemed within 18 months after purchase. The CDSC of 1% does not apply to shares of the European Equity, Asia Pacific Equity, International Equity and International Opportunities Portfolios purchased on or after December 5, 2001 and, subject to approval of the Company’s Board of Trustees, to shares of the Mid-Cap Value Equity, Mid-Cap Growth Equity, Small Cap Value Equity, Small Cap Core Equity and Small Cap Growth Equity Portfolios purchased on or after March 1, 2003.

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The following schedule of front-end sales charges and quantity discounts applies to the Index Equity Portfolio.

AMOUNT OF TRANSACTION AT OFFERING PRICE	SALES CHARGE AS % OF OFFERING PRICE	SALES CHARGE AS % OF NET ASSET VALUE
Less than $50,000	3.00%	3.09%
$50,000 but less than $100,000	2.75%	2.83%
$100,000 but less than $250,000	2.50%	2.56%
$250,000 but less than $500,000	1.75%	1.78%
$500,000 but less than $1,000,000	1.25%	1.26%
$1 million or more	0.00%	0.00%

Purchase of Investor B Shares

Investor B Shares are subject to a CDSC at the rates shown in the chart below if they are redeemed within six years of purchase. The CDSC is based on the offering price or the net asset value of the B Shares on the redemption date (whichever is less). The amount of any CDSC an investor must pay depends on the number of years that elapse between the date of purchase and the date of redemption.

NUMBER OF YEARS ELAPSED SINCE PURCHASE		CONTINGENT DEFERRED SALES CHARGE (AS % OF DOLLAR AMOUNT SUBJECT TO THE CHARGE)
Up to one year		4.50%
More than one but less than two years		4.00%
More than two but less than three years		3.50%
More than three but less than four years		3.00%
More than four but less than five years		2.00%
More than five but less than six years		1.00%
More than six years		0.00%

Purchase of Investor C Shares

Investor C Shares are subject to a CDSC of 1.00% if they are redeemed within 12 months after purchase. The 1.00% is based on the offering price or the net asset value of the C Shares on the redemption date (whichever is less). There is no CDSC on C Shares redeemed after 12 months.

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When an investor redeems Investor B Shares or Investor C Shares, the redemption order is processed so that the lowest CDSC is charged. Investor B Shares and Investor C Shares that are not subject to the CDSC are redeemed first. After that, the Company redeems the Shares that have been held the longest.

Can the Sales Charge be Reduced or Eliminated?

There are several ways in which the sales charge can be reduced or eliminated. Purchases of Investor A Shares at certain fixed dollar levels, known as “breakpoints,” cause a reduction in the front-end sale charge. The CDSC on Investor B Shares can be reduced depending on how long you own the shares. (Schedules of these reductions are listed above in the “Purchase of Investor A Shares” and “Purchase of Investor B Shares” sections.) Purchases by certain individuals and groups may be combined in determining the sales charge on Investor A Shares. The following are also ways the sales charge can be reduced or eliminated.

Right of Accumulation (Investor A Shares)

Investors have a “right of accumulation” under which the current value of an investor’s existing Investor A Shares in any fund that is subject to a front-end sales charge, or the total amount of an initial investment in such shares less redemptions (whichever is greater), may be combined with the amount of the current purchase in the same fund in determining the amount of the sales charge. In order to use this right, the investor must alert the Company’s transfer agent, PFPC, of the existence of previously purchased shares.

Letter of Intent (Investor A Shares)

An investor may qualify for a reduced front-end sales charge immediately by signing a “Letter of Intent” stating the investor’s intention to buy a specified amount of Investor A Shares within the next 13 months that would, if bought all at once, qualify the investor for a reduced sales charge. The Letter of Intent may be signed anytime within 90 days after the first investment to be covered by the letter. The initial investment must meet the minimum initial purchase requirement and represent at least 5% of the total intended purchase. The investor must tell PFPC that later purchases are subject to the Letter of Intent. During the term of the Letter of Intent, PFPC will hold Investor A Shares representing 5% of the indicated amount in an escrow

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account for payment of a higher sales load if the full amount indicated in the Letter of Intent is not purchased. Any redemptions made during the term of the Letter of Intent will be subtracted from the amount of the total purchase indicated in the letter. If the full amount indicated is not purchased within the 13-month period, and the investor does not pay the higher sales load within 20 days, PFPC will redeem enough of the Investor A Shares held in escrow to pay the difference.

Reinvestment Privilege (Investor A, Investor B and Investor C Shares)

Upon redemption of Investor Shares, a shareholder has a right, to be exercised once a year and within 60 days of the redemption, to reinvest the redemption proceeds in the SAME fund. Shares will be purchased at the net asset value (NAV) calculated at the close of trading on the day the request is received. To exercise this privilege, PFPC must be notified, in writing, by the shareowner of record or the registered representative of record. Investors should consult a tax adviser concerning the tax consequences of exercising this reinstatement privilege.

Quantity Discounts (Investor A Shares)

In addition to quantity discounts for individuals which we discussed above, there are ways for you to reduce the front-end sales charge by combining your order with the orders of certain members of your family and members of certain groups you may belong to. For more information on these discounts, please contact PFPC at (800) 441-7762 or see the SAI.

Waiving the Sales Charge (Investor A Shares)

Certain investors, including some people associated with the Company and its service providers, may buy Investor A Shares without paying a sales charge. For more information on the waivers, please contact PFPC at (800) 441-7762 or see the SAI.

Waiving the Contingent Deferred Sales Charge (Investor B and Investor C Shares)

The CDSC on Investor B and Investor C Shares is not charged in certain circumstances, including share exchanges (see page 149) and redemptions made in connection with certain retirement plans and in connection with certain shareholder services offered by the Company. For more information on these waivers, please contact PFPC at (800) 441-7762 or see the SAI.

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Distribution and Service Plan

The Company has adopted a plan under Rule 12b-1 of the Investment Company Act of 1940 (the Plan) that allows the Company to pay distribution fees for the sale of its shares and shareholder servicing and processing fees for certain services provided to its shareholders.

Under the Plan, Investor Shares pay a fee (distribution fees) to BlackRock Distributors, Inc. (the Distributor) or affiliates of PNC Bank (including BlackRock) for distribution and sales support services. The distribution fees may be used to pay the Distributor for distribution services and to pay the Distributor and PNC Bank affiliates for sales support services provided in connection with the sale of Investor Shares. The distribution fees may also be used to pay brokers, dealers, financial institutions and industry professionals (Service Organizations) for sales support services and related expenses. All Investor A Shares pay a maximum distribution fee of .10% per year of the average daily net asset value of each fund. All Investor B and C Shares pay a maximum of .75% per year. The Plan also allows the Distributor, PNC Bank affiliates (including BlackRock) and other companies that receive fees from the Company to make payments relating to distribution and sales support activities out of their past profits or other sources.

Under the Plan, the Company may also enter into arrangements with Service Organizations (including PNC Bank, BlackRock and their affiliates). Under these arrangements, Service Organizations will provide certain support services to their customers who own Investor Shares. The Company may pay a shareholder servicing fee of up to .25% per year of the average daily net asset value of Investor Shares owned by each Service Organization’s customers. All Investor Shares pay this shareholder servicing fee.

In return for the fee, Service Organizations may provide one or more of the following services to their customers who own Investor Shares:

(1)

Responding to customer questions on the services performed by the Service Organization and investments in Investor Shares;

(2)

Assisting customers in choosing and changing dividend options, account designations and addresses; and

(3)

Providing other similar shareholder liaison services.

For a separate shareholder processing fee paid by all Investor Shares of up to .15% per year of the average daily net asset value

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of Investor Shares owned by each Service Organization’s customers, Service Organizations may provide one or more of these additional services:

(1)

Processing purchase and redemption requests from customers and placing orders with the Company’s transfer agent or the Distributor;

(2)

Processing dividend payments from the Company on behalf of customers;

(3)

Providing sub-accounting for Investor Shares beneficially owned by customers or the information necessary for sub-accounting; and

(4)

Providing other similar services.

BlackRock may receive a significant portion of these shareholder processing fees.

The shareholder servicing fees and shareholder processing fees payable pursuant to the Plan are fees payable for the administration and servicing of shareholder accounts and not costs which are primarily intended to result in the sale of a fund’s shares.

Because the fees paid by the Company under the Plan are paid out of Company assets on an on-going basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges.

Master-Feeder Structure

The Index Equity Portfolio, unlike many other investment companies which directly acquire and manage their own portfolio of securities, invests all of its assets in the Index Master Portfolio. The Index Equity Portfolio may withdraw its investment in the Index Master Portfolio at any time on 30 days notice to the Index Master Portfolio if the Board of Trustees of the Company determines that it is in the best interest of the Index Equity Portfolio to do so. Upon withdrawal, the Board of Trustees would consider what action to take. It might, for example, invest all the assets of the Index Equity Portfolio in another mutual fund having the same investment objective as the Index Equity Portfolio or hire an investment adviser to manage the Index Equity Portfolio’s assets.

How to Sell Shares

You can redeem shares at any time (although certain verification may be required for redemptions in excess of

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$25,000 or in certain other cases). The Company will redeem your shares at the next net asset value (NAV) calculated after your order is received by the fund’s transfer agent minus any applicable CDSC and/or redemption/exchange fee. Each of the Mid-Cap Value, Mid-Cap Growth, Small Cap Value, Small Cap Core, Small Cap Growth, European Equity, Asia Pacific Equity, International Equity and International Opportunities Portfolios will deduct a fee of 2% from the redemption amount if you sell your shares after holding them 90 days or less (other than shares acquired through reinvestment of dividends or other distributions). This fee applies only to (i) shares of the European Equity, Asia Pacific Equity, International Equity and International Opportunities Portfolios purchased on or after December 5, 2001 and (ii) subject to the approval of the Company’s Board of Trustees, shares of the Mid-Cap Value, Mid-Cap Growth, Small Cap Value, Small Cap Core and Small Cap Growth Portfolios purchased on or after March 1, 2003 and is designed to offset the costs and expenses associated with early redemptions. Shares may be redeemed by sending a written redemption request to BlackRock Funds c/o PFPC, P.O. Box 9819, Providence, Rhode Island 02940-8019.

You can also make redemption requests through your registered investment professional, who may charge for this service. Shareholders should indicate whether they are redeeming Investor A, Investor B or Investor C Shares. If a shareholder owns more than one class of a fund and does not indicate which class he or she is redeeming, the fund will redeem shares so as to minimize the CDSC charged.

Unless another option is requested, payment for redeemed shares is normally made by check mailed within seven days after PFPC receives the redemption request. If the shares to be redeemed have been recently purchased by check, PFPC may delay the payment of redemption proceeds for up to 15 days after the purchase date until the check has cleared.

Expedited Redemptions

If a shareholder has given authorization for expedited redemption, shares can be redeemed by telephone and the proceeds sent by check to the shareholder or by Federal wire transfer to a single previously designated bank account. You are responsible for any charges imposed by your bank for this service. Once authorization is on file, PFPC will honor requests by

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telephone at (800) 441-7762. The Company is not responsible for the efficiency of the Federal wire system or the shareholder’s firm or bank. The Company may refuse a telephone redemption request if it believes it is advisable to do so and may use reasonable procedures to make sure telephone instructions are genuine. The Company and its service providers will not be liable for any loss that results from acting upon telephone instructions

that they reasonably believed to be genuine in accordance with those procedures. The Company may alter the terms of or terminate this expedited redemption privilege at any time. Any redemption request of $25,000 or more must be in writing.

The Company's Rights

The Company may:

Suspend the right of redemption if trading is halted or restricted on the NYSE or under other emergency conditions described in the Investment Company Act of 1940,

Postpone date of payment upon redemption if trading is halted or restricted on the NYSE or under other emergency conditions described in the Investment Company Act of 1940 or as described in the third paragraph in the section “How to Sell Shares” above,

Redeem shares involuntarily in certain cases, such as when the value of a shareholder account falls below a specified level, as described below, and

Redeem shares for property other than cash if conditions exist which make cash payments undesirable in accordance with its rights under the Investment Company Act of 1940.

Accounts with Low Balances

The Company may redeem a shareholder’s account in any fund at any time the net asset value of the account in such fund falls below the required minimum initial investment (usually $500 for Investor Shares) as the result of a redemption or an exchange request. The shareholder will be notified in writing that the value of the account is less than the required amount and the shareholder will be allowed 30 days to make additional investments before the redemption is processed.

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IMPORTANT DEFINITIONS

Adviser: The adviser of a mutual fund is responsible for the overall investment management of the fund. The advisers for BlackRock Funds are BlackRock Advisors, Inc. and BlackRock International, Ltd. The adviser for the Index Equity Portfolio is Dimensional Fund Advisors Inc.

Sub-Adviser: The sub-adviser of a fund is responsible for its day-to-day management and will generally make all buy and sell decisions. Sub-advisers also provide research and credit analysis. The sub-adviser for the International Equity and International Opportunities Portfolios is BlackRock International, Ltd. The sub-adviser for the Balanced Portfolio is BlackRock Financial Management, Inc.

Management

BlackRock Funds’ adviser is BlackRock Advisors, Inc. (BlackRock). BlackRock was organized in 1994 to perform advisory services for investment companies and is located at 100 Bellevue Parkway, Wilmington, DE 19809. BlackRock is a wholly-owned subsidiary of BlackRock, Inc., one of the largest publicly traded investment management firms in the United States with $273 billion of assets under management as of December 31, 2002. BlackRock, Inc. is a majority-owned indirect subsidiary of The PNC Financial Services Group, Inc., one of the largest diversified financial services companies in the United States. BlackRock International, Ltd. (BIL), an affiliate of BlackRock located at 40 Torphichen Street, Edinburgh, Scotland EH3 8JB, acts as co-adviser and sub-adviser to the Company. BlackRock Financial Management, Inc. (BFM), an affiliate of BlackRock located at 40 E. 52nd Street, New York, NY 10022, acts as sub-adviser to the Company. The only fund not managed by BlackRock or BIL is the Index Equity Portfolio, which invests all of its assets in the Index Master Portfolio. The Index Master Portfolio is advised by Dimensional Fund Advisors Inc. (DFA), located at 1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401. DFA was organized in May 1981 and provides investment management services to institutional investors. As of November 30, 2002, DFA had over $34 billion in assets under management.

For their investment advisory and sub-advisory services, BlackRock, BFM, BIL and DFA, as applicable, are entitled to fees computed daily on a fund-by-fund basis and payable monthly. For the fiscal year ended September 30, 2002, the aggregate advisory fees paid by the funds to BlackRock or BIL, as applicable as a percentage of average daily net assets were:

Large Cap Value Equity	0.49	%
Large Cap Growth Equity	0.50	%
Mid-Cap Value Equity	0.80	%
Mid-Cap Growth Equity	0.80	%
Small Cap Value Equity	0.54	%
Small Cap Core Equity	0.00	%
Small Cap Growth Equity	0.53	%
Global Science & Technology Opportunities	0.78	%
European Equity	0.52	%
Asia Pacific Equity	0.00	%
International Equity	0.69	%
International Opportunities	0.90	%
Select Equity	0.49	%
Balanced	0.52	%
U.S. Opportunities	1.05	%

For the fiscal year ended November 30, 2002, the Index Master Portfolio paid DFA an aggregate advisory fee of .025% of average daily net assets.

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The total annual advisory fees that can be paid to BlackRock or BIL, as applicable, (as a percentage of average daily net assets), are as follows:

Total Annual Advisory Fee for the Large Cap Value Equity, Large Cap Growth Equity, Small Cap Value Equity, Small Cap Growth Equity, Select Equity and Balanced Portfolios (Before Waivers)

AVERAGE DAILY NET ASSETS		INVESTMENT ADVISORY FEE
First $1 billion		.550%
$1 billion-$2 billion		.500%
$2 billion-$3 billion		.475%
more than $3 billion		.450%

Total Annual Advisory Fee for the Mid-Cap Value Equity and Mid-Cap Growth Equity Portfolios (Before Waivers)

AVERAGE DAILY NET ASSETS		INVESTMENT ADVISORY FEE
First $1 billion		.800%
$1 billion-$2 billion		.700%
$2 billion-$3 billion		.675%
more than $3 billion		.625%

Total Annual Advisory Fee for the Global Science & Technology Opportunities, European Equity and Asia Pacific Equity Portfolios (Before Waivers)

AVERAGE DAILY NET ASSETS		INVESTMENT ADVISORY FEE
First $1 billion		.900%
$1 billion-$2 billion		.850%
$2 billion-$3 billion		.800%
more than $3 billion		.750%

Total Annual Advisory Fee for the International Equity Portfolio (Before Waivers)

AVERAGE DAILY NET ASSETS		INVESTMENT ADVISORY FEE
First $1 billion		.750%
$1 billion-$2 billion		.700%
$2 billion-$3 billion		.675%
more than $3 billion		.650%

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Total Annual Advisory Fee for the International Opportunities Portfolio (Before Waivers)

AVERAGE DAILY NET ASSETS		INVESTMENT ADVISORY FEE
First $1 billion		1.00%
$1 billion-$2 billion		.950%
$2 billion-$3 billion		.900%
more than $3 billion		.850%

Total Annual Advisory Fee for the U.S. Opportunities Portfolio (Before Waivers)

AVERAGE DAILY NET ASSETS		INVESTMENT ADVISORY FEE
First $1 billion		1.10%
$1 billion-$2 billion		1.05%
$2 billion-$3 billion		1.025%
more than $3 billion		1.00%

The Small Cap Core Equity Portfolio pays BlackRock a maximum annual advisory fee of 1.00% of its average daily net assets.

The Index Master Portfolio pays DFA a maximum annual advisory fee of .025% of its average daily net assets.

Information about the portfolio manager for each of the funds is presented in the appropriate fund section.

As discussed above, BlackRock, BIL and the Distributor have agreed to cap each fund’s net expenses at the levels shown in that fund’s expense table.

To achieve this cap, BlackRock or BIL, as applicable, and the Company have entered into expense limitation agreements. The agreements set a limit on certain of the operating expenses of each fund through February 1, 2004 and require BlackRock or BIL, as applicable, to waive or reimburse fees or expenses if these operating expenses exceed that limit. These expense limits (which apply to expenses charged on fund assets as a whole, but not

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expenses separately charged to the different share classes of a fund) as a percentage of average daily net assets are:

Large Cap Value Equity	.630	%
Large Cap Growth Equity	.650	%
Mid-Cap Value Equity	1.085	%
Mid-Cap Growth Equity	1.055	%
Small Cap Value Equity	.795	%
Small Cap Core Equity	1.125	%
Small Cap Growth Equity	.815	%
Global Science & Technology Opportunities	1.255	%
European Equity	1.275	%
Asia Pacific Equity	1.275	%
International Equity	.995	%
International Opportunities	1.275	%
Select Equity	.645	%
Index Equity	.150	%
Balanced	.690	%
U.S. Opportunities	1.425	%

If within two years following a waiver or reimbursement, the operating expenses of a fund that previously received a waiver or reimbursement from BlackRock or BIL, as applicable, are less than the expense limit for that fund, the fund is required to repay BlackRock or BIL, as applicable, up to the amount of fees waived or expenses reimbursed under the agreement if: (1) the fund has more than $50 million in assets, (2) BlackRock or BIL, as applicable, continues to be the fund’s investment adviser and (3) the Board of Trustees of the Company has approved in advance the payments to BlackRock or BIL, as applicable, at the previous quarterly meeting of the Board.

In addition, through February 1, 2004, BlackRock or BIL, as applicable, and the Distributor have contractually agreed to waive distribution and service fees on Investor A Shares in the amount of .095% of average daily net assets for each fund.

Dividends and Distributions

BlackRock Funds makes two kinds of distributions to share- holders: net investment income and net realized capital gains.

Distributions of net investment income derived by a fund are paid within 10 days after the end of each quarter. The Company’s Board of Trustees may change the timing of such dividend payments.

Net realized capital gains (including net short-term capital gains), if any, will be distributed by a fund at least annually at a date determined by the Company’s Board of Trustees.

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Your distributions will be reinvested at net asset value in new shares of the same class of the fund unless you instruct PFPC in writing to pay them in cash. There are no sales charges on these reinvestments.

The Index Equity Portfolio seeks to achieve its investment objective by investing all of its assets in the Index Master Portfolio (which is taxable as a partnership for federal income tax purposes). The Index Equity Portfolio is allocated its distributive share of the income, gains (including capital gains), losses, deductions and credits of the Index Master Portfolio. The Index Equity Portfolio’s distributive share of such items, plus gain (or minus loss), if any, on the redemption of shares of the Index Master Portfolio, less the Index Equity Portfolio’s expenses incurred in operations, will constitute the Index Equity Portfolio’s net income from which dividends are distributed as described above.

Taxation of Distributions

Distributions paid out of a fund’s “net capital gain” will be taxed to shareholders as long-term capital gain, regardless of how long a shareholder has owned shares. Distributions of net investment income and net short-term capital gains will be taxed to shareholders as ordinary income.

Your annual tax statement from the Company will present in detail the tax status of your distributions for each year.

If more than half of the total asset value of a fund is invested in non-U.S. stock or securities, the fund may elect to “pass through” to its shareholders the amount of non-U.S. income taxes paid by it. In such case, each shareholder would be required to include his proportionate share of such taxes in his income and may be entitled to deduct or credit such taxes in computing his taxable income.

Distributions paid by a fund with respect to certain qualifying dividends received by the fund from domestic corporations may be eligible for the corporate dividends received deduction.

Use of the exchange privilege will be treated as a taxable event because it will be deemed a redemption and subsequent purchase of the shares involved. Therefore, use of the exchange privilege may be subject to federal, state and local income tax.

Because every investor has an individual tax situation, and also because the tax laws are subject to periodic changes, you should always consult your tax professional about federal, state and local tax consequences of owning shares of the Company.

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Services for Shareholders

BlackRock Funds offers shareholders many special features which can enable investors to have greater investment flexibility as well as more access to information about the Company.

Additional information about these features is available by calling PFPC at (800) 441-7762.

Exchange Privilege

BlackRock Funds offers 43 different funds, enough to meet virtually any investment need. Once you are a shareholder, you have the right to exchange Investor A, B, or C Shares from one fund to Investor A, B or C Shares of another to meet your changing financial needs. For example, if you own Investor A Shares of a fund that has an investment objective of long term capital growth and you are nearing retirement, you may want to switch into Investor A Shares of another fund that has current income as an investment objective.

You can exchange $500 (or any other applicable minimum) or more from one BlackRock Fund into another. Investor A, Investor B and Investor C Shares of each fund may be exchanged for shares of the same class of other funds which offer that class of shares, based on their respective net asset values. (You can exchange less than $500 if you already have an account in the fund into which you are exchanging.) Because different funds have different sales charges, the exchange of Investor A Shares may be subject to the difference between the sales charge already paid and the higher sales charge (if any) payable on the shares acquired as a result of the exchange. For Federal income tax purposes a share exchange is a taxable event and a capital gain or loss may be realized. Please consult your tax or other financial adviser before making an exchange request.

The exchange of Investor B and Investor C Shares will not be subject to a CDSC, although exchanges of Investor B and Investor C Shares of the Mid-Cap Value, Mid-Cap Growth, Small Cap Value, Small Cap Core, Small Cap Growth, European Equity, Asia Pacific Equity, International Equity and International Opportunities Portfolios may be subject to the 2% redemption/exchange fee. The CDSC will continue to be measured from the date of the original purchase and will not be affected by the exchange.

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To make an exchange, you must send a written request to PFPC at P.O. Box 9819, Providence, Rhode Island, 02940-8019. You can also make exchanges via telephone automatically, unless you previously indicated that you did not want this option. If so, you may not use telephone exchange privileges until completing a Telephone Exchange Authorization Form. To receive a copy of the form contact PFPC. The Company has the right to reject any telephone request.

In general, there are no limits on the number of exchanges you can make. However, the Company may suspend or terminate your exchange privilege at any time and generally will do so if you make more than five exchanges out of any fund in any twelve month period.

The Company reserves the right to modify, limit the use of, or terminate the exchange privilege at any time.

Automatic Investment Plan (AIP)

If you would like to establish a regular, affordable investment program, BlackRock Funds makes it easy to set up. As an investor in any BlackRock Fund portfolio, you can arrange for periodic investments in that fund through automatic deductions from a checking or savings account by completing the AIP Application Form. The minimum investment amount for an automatic investment plan is $50. AIP Application Forms are available from PFPC.

Retirement Plans

Shares may be purchased in conjunction with individual retirement accounts (IRAs) and rollover IRAs where PNC Bank or any of its affiliates acts as custodian. For more information about applications or annual fees, please contact the Fund Agent, PFPC Inc., at P.O. Box 9819, Providence, Rhode Island 02940-8019, or call (800) 441-7762. To determine if you are eligible for an IRA and whether an IRA will benefit you, you should consult with a tax adviser.

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Market Timing

The funds are not designed for market timing organizations or other entities using programmed or frequent exchanges. The exchange privilege is not intended as a vehicle for short-term trading. Excessive exchange activity may interfere with portfolio management and may have an adverse effect on all shareholders. If the Company determines, in its sole discretion, that your short-term trading is excessive or that you are engaging in market-timing activity, it reserves the right to reject any specific purchase or exchange order. If the Company rejects your purchase or exchange order, you will not be able to execute that transaction, and the Company will not be responsible for any losses you therefore may suffer. In addition, any redemptions that you make as a result of the activity described above will be subject to any and all redemption fees.

Each of the Mid-Cap Value, Mid-Cap Growth, Small Cap Value, Small Cap Core, Small Cap Growth, European Equity, Asia Pacific Equity, International Equity and International Opportunities Portfolios will assess and retain a fee of 2% of the current NAV of shares being redeemed or exchanged within 90 days of purchase (other than those acquired through reinvestment of dividends or other distributions). This fee applies only to (i) shares of the European Equity, Asia Pacific Equity, International Equity and International Opportunities Portfolios purchased on or after December 5, 2001 and (ii) subject to the approval of the Company’s Board of Trustees, shares of the Mid-Cap Value, Mid-Cap Growth, Small Cap Value, Small Cap Core and Small Cap Growth Portfolios purchased on or after March 1, 2003, and is for the benefit of the remaining shareholders. The fee is intended to encourage long-term investment, to compensate for transaction and other expenses caused by early redemptions, and to facilitate portfolio management. The “first-in, first-out” method is used to determine the holding period. Under this method, the date of redemption or exchange will be compared with the earliest purchase date of shares held in the account. The redemption fee will not be assessed on redemptions or exchanges by (i) accounts managed by PNC Advisors, (ii) certain 401(k) plans, bank or trust company accounts, asset allocation programs or wrap programs approved by the Company, (iii) accounts in the event of shareholder death or disability and (iv) certain other accounts in the absolute discretion of the Company when a shareholder can demonstrate hardship.

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Statements

Every shareholder automatically receives regular account statements. In addition, for tax purposes, shareholders also receive a yearly statement describing the characteristics of any dividends or other distributions received.

Systematic Withdrawal Plan (SWP)

This feature can be used by investors who want to receive regular distributions from their accounts. To start a SWP a shareholder must have a current investment of $10,000 or more in a fund. Shareholders can elect to receive cash payments of $50 or more monthly, every other month, quarterly, semi-annually or annually. Shareholders may sign up by completing the SWP Application Form which may be obtained from PFPC. Shareholders should realize that if withdrawals exceed income the invested principal in their account will be depleted.

To participate in the SWP, shareholders must have their dividends automatically reinvested and may not hold share certificates. Shareholders may change or cancel the SWP at any time, upon written notice to PFPC. If an investor purchases additional Investor A Shares of a fund at the same time he or she redeems shares through the SWP, that investor may lose money because of the sales charge involved. No CDSC will be assessed on redemptions of Investor B or Investor C Shares made through the SWP that do not exceed 12% of the account’s net asset value on an annualized basis. For example, monthly, quarterly, and semi-annual SWP redemptions of Investor B or Investor C Shares will not be subject to the CDSC if they do not exceed 1%, 3% and 6%, respectively, of an account’s net asset value on the redemption date. SWP redemptions of Investor B or Investor C Shares in excess of this limit will still pay the applicable CDSC.

Important Notice Regarding Delivery of Shareholder Documents

The funds deliver only one copy of shareholder documents, including prospectuses, shareholder reports and proxy statements to shareholders with multiple accounts at the same address. This practice is known as “householding” and is intended to eliminate duplicate mailings and reduce expenses. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact the Company at (800) 441-7762.

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Internet Transactions

Investors in the funds may view their account balance and activity through the BlackRock website. To use this service, you will need a browser that supports Microsoft Internet Explorer version 4.5 or higher or Netscape Navigator 4.0 or higher.

The total purchase amount will be debited directly from your bank account via the Automated Clearing House (ACH) system. Purchases made on the Internet using the ACH system will have a trade date that is the day after the purchase is made. Proceeds from Internet redemptions may be sent via check, ACH or wire to the bank account of record. The Company will limit Internet purchases and redemptions in Investor Class shares to $25,000.00. Applications may be downloaded from www.blackrock.com. Please read the Internet Services Disclosure Agreement and the User Agreement before attempting to transact online.

The Company employs reasonable procedures to confirm that transactions entered over the Internet are genuine. The procedures include the use of a protected password, Secure Socket Layering (SSL), 128-bit encryption and other precautions designed to protect the integrity, confidentiality and security of shareholder information. By entering into the User Agreement with the Company in order to open an account through the website, the shareholder waives any right to reclaim any losses from the Company or any of its affiliates, incurred through fraudulent activity.

Electronic Access to Shareholder Documents

Electronic copies of most financial reports and prospectuses are now available on the BlackRock website. Shareholders can receive e-mail notifications that the Company’s annual and semi-annual reports and prospectuses have been posted on the Company’s website on the Internet if they enroll in the Company’s electronic access program.

To enroll:

Shareholders Who Hold Accounts With Investment Advisers, Banks or Brokerages:

1) Have your enrollment number ready. If you do not have one, please contact your financial adviser.

2) Log on to www.investordelivery.com.

3) Enter your assigned enrollment number plus the four-digit personal identification number (PIN) of your choice. The PIN

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should be the same for all accounts using the same e-mail address, and will be required if you decide to change your delivery preference. Note: If you have additional BlackRock Fund shares in more than one account, you may receive additional copies of this notice with a separate enrollment number for each account. In that case, provide the information that applies to each enrollment number. If you have any questions, please contact your financial adviser.

Shareholders Who Hold Accounts Directly With the Fund:

1) Log on to http://funds.blackrock.com.

2) Click on Electronic Delivery icon on either side of your screen.

3) Complete the on-line form by entering your social security number, e-mail address and by selecting your electronic delivery preference.

BlackRock is currently building a database containing the e-mail addresses of shareholders in order to better service clients. If you would like your personal e-mail address maintained on your account, kindly send an e-mail to funds@blackrock.com. Your request should include your name, account number and e-mail address.

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For more information:

This prospectus contains important information you should know before you invest. Read it carefully and keep it for future reference. More information about the BlackRock Funds is available free, upon request, including:

Annual/Semi-Annual Reports

These reports contain additional information about each of the funds’ investments. The annual report describes the funds’ performance, lists portfolio holdings, and discusses recent market conditions, economic trends and fund investment strategies that significantly affected the funds’ performance for the last fiscal year.

Statement of Additional Information (SAI)

A Statement of Additional Information, dated January 28, 2003, has been filed with the Securities and Exchange Commission (SEC). The SAI, which includes additional information about the BlackRock Funds, may be obtained free of charge, along with the Company’s annual and semi-annual reports, by calling (800) 441-7762. The SAI, as supplemented from time to time, is incorporated by reference into this Prospectus.

Shareholder Account Service Representatives

Representatives are available to discuss account balance information, mutual fund prospectuses, literature, programs and services available. Hours: 8:00 a.m. to 6:00 p.m. (Eastern time), Monday-Friday. Call: (800) 441-7762.

Purchases and Redemptions

Call your registered representative or (800) 441-7762.

World Wide Web

Access general fund information and specific fund

performance. Request mutual fund prospectuses and literature. Forward mutual fund inquiries. www.blackrock.com

Email

Request prospectuses, SAI, Annual or Semi-Annual

Reports and literature. Forward mutual fund inquiries.

Mail to: funds@blackrock.com

Written Correspondence

Post Office Address: BlackRock Funds, c/o PFPC Inc.,

P.O. Box 9819, Providence, RI 02940-8019

Street Address: BlackRock Funds, c/o PFPC Inc.,

400 Bellevue Parkway, Wilmington, DE 19809

Internal Wholesalers/Broker Dealer Support

Available to support investment professionals

9 a.m. to 6 p.m. (Eastern time), Monday-Friday.

Call: (888) 8BLACKROCK

Securities and Exchange Commission (SEC)

You may also view and copy public information about the BlackRock Funds, including the SAI, by visiting the EDGAR database on the SEC Web site (http://www.sec.gov) or the SEC’s Public Reference Room in Washington, D.C. Information about the operation of the public reference room can be obtained by calling the SEC directly at (202) 942-8090. Copies of this information can be obtained, for a duplicating fee, by electronic request at the following E-mail address: publicinfo@sec.gov, or by writing to the Public Reference Section of the SEC, Washington, D.C. 20549-0102.

INVESTMENT COMPANY ACT FILE NO. 811-05742

EQINVAPROS2/03

World class institutional asset management at a personal level

BlackRock Funds

Equity Portfolios

Service Shares

Prospectus

January 28, 2003

BlackRock Funds^SMis a mutual

fund family with 43 investment

portfolios, 16 of which are

described in this prospectus.

The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.

NOT FDIC		May Lose Value
INSURED		No Bank Guarantee

Table of

Contents

How to find the information you need

*How to find the information you need*		1

THE BLACKROCK EQUITY PORTFOLIOS

*Large Cap Value*		2

*Large Cap Growth*		7

*Mid-Cap Value*		12

*Mid-Cap Growth*		17

*Small Cap Value*		23

*Small Cap Core*		29

*Small Cap Growth*		34

*Global Science & Technology Opportunities*		40

*European Equity*		48

*Asia Pacific Equity*		56

*International Equity*		64

*International Opportunities*		72

*Select Equity*		79

*Index Equity*		85

*Balanced*		90

*U.S. Opportunities*		98

*About Your Investment* *How to Buy/Sell Shares*		*104*

*Dividends/Distributions/Taxes*		*115*

How to Find the

Information You Need

About BlackRock Funds

BlackRock

Large Cap Value Equity Portfolio

IMPORTANT DEFINITIONS

Value Companies: All stocks are generally divided into the categories of “growth” or “value,” although there are times when a growth fund and value fund may own the same stock. Value stocks are companies that appear to the manager to be undervalued by the market as measured by certain financial formulas. Growth stocks are companies whose earnings growth potential appears to the manager to be greater than the market in general, and whose growth in revenue is expected to continue for an extended period.

Investment Goal

The fund seeks long-term capital appreciation—current income is the secondary objective.

Primary Investment Strategies

securities at a specific price on a specific date. The primary purpose of using derivatives is to attempt to reduce risk to the fund as a whole (hedge) but they may also be used to maintain liquidity and commit cash pending investment. The management team also may, but under normal market conditions generally does not intend to, use derivatives for speculation to increase returns.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

While the management team chooses stocks they believe to be undervalued, there is no guarantee that the shares will increase in value or that they won’t move even lower.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

The performance for the period before Service Shares were launched in July 1993 is based upon performance for Institutional Shares of the fund, which were first issued in April 1992. The actual return of Service Shares would have been lower than shown for the period before they were launched because Service Shares have higher expenses than Institutional Shares. Service Shares of the fund have expenses of 1.09% of average daily net assets (after waivers and reimbursements) for the current fiscal year and Institutional Shares of the fund have expenses of 0.79% of average daily net assets (after waivers and reimbursements) for the current fiscal year.

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	10 Years	Inception Date
Large Cap Value
Return Before Taxes	-24.19%	-9.26%	-3.17%	8.01%	4/20/92
Return After Taxes on Distributions	-24.35%	-10.20%	-4.55%	5.63%
Return After Taxes on Distributions and Sale of Shares	-14.85%	-7.19%	-2.47%	6.10%
Russell 1000 Value (Reflects no deduction for fees, expenses or taxes)	-15.52%	-5.14%	1.16%	10.81%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: Blackrock Advisors, Inc.

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Service Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees			.54	%
Other expenses			.60	%
Service fees	.15	%
Processing fees	.15	%
Other	.30	%
Total annual fund operating expenses			1.14	%
Fee waivers and expense reimbursements			.05	%
Net expenses*			1.09	%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.09% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 111 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual cost may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Service Shares		$111		$357		$623		$1,382

Fund Management

Management from 1988 to 1995. Prior to joining BlackRock, Mr. Sloate was an assistant portfolio manager at Schneider Capital Management Company from 1997 to 2001 and was a senior investment analyst and Vice President with Wellington Management Company, LLP in 1995 and 1996. Mr. Chambers formerly was an equity analyst covering technology stocks for the large cap growth and value products at RSI, prior to which he served as an equity analyst in the private client area at Schroder & Co. from 1996 to 2000. Mr. Kaufman has been lead manager of the portfolio since July 2000 and Mr. Chambers has been a portfolio co-manager since September 2000, Mrs. Ivol since June 2000 and Mr. Sloate since January 2002.

Financial Highlights

FINANCIAL HIGHLIGHTS

(For a Service Share Outstanding Throughout Each Period)

Large Cap Value Equity Portfolio


	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	12.61		$	15.13		$	15.75		$	14.69		$	17.52

Income from investment operations
Net investment income		0.06			0.10			0.11			0.16			0.21
Net gain (loss) on investments (both realized and unrealized)		(3.42	)		(1.27	)		0.79			2.02			(0.61	)

Total from investment operations		(3.36	)		(1.17	)		0.90			2.18			(0.40	)

Less distributions
Distributions from net investment income		(0.05	)		(0.10	)		(0.11	)		(0.17	)		(0.18	)
Distributions from net realized gains		(0.37	)		(1.25	)		(1.41	)		(0.95	)		(2.25	)

Total distributions		(0.42	)		(1.35	)		(1.52	)		(1.12	)		(2.43	)

Net asset value at end of period	$	8.83		$	12.61		$	15.13		$	15.75		$	14.69

Total return		(27.66	)%		(8.44	)%		5.91	%		15.03	%		(2.50	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	133,903		$	254,166		$	337,993		$	374,907		$	387,323
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.09	%		1.09	%		1.08	%		1.08	%		1.13	%
Before advisory/administration fee waivers		1.15	%		1.10	%		1.08	%		1.08	%		1.14	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		0.45	%		0.69	%		0.82	%		1.07	%		1.14	%
Before advisory/administration fee waivers		0.40	%		0.69	%		0.82	%		1.07	%		1.13	%
Portfolio turnover rate		128	%		114	%		121	%		42	%		33	%

BlackRock

Large Cap Growth Equity Portfolio

IMPORTANT DEFINITIONS

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

The fund generally will sell a stock when, in the management team’s opinion, there is a deterioration in the company’s fundamentals, or if the company fails to meet performance expectations.

fund as a whole (hedge) but they may also be used to maintain liquidity and commit cash pending investment. The management team also may, but under normal market conditions generally does not intend to, use derivatives for speculation to increase returns.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

While the management team chooses stocks they believe have above-average earnings growth potential, there is no guarantee that the shares will increase in value or that they won’t move even lower.

The fund’s use of derivatives may reduce returns and/or increase volatility. Volatility is defined as the characteristic of a security, an index or a market to fluctuate significantly in price within a short time period. A risk of the fund’s use of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities market. Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. In addition, some derivatives are more sensitive to interest rate changes, market price fluctuations and general market liquidity than others.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

The performance for the period before Service Shares were launched in July 1993 is based upon performance for Institutional Shares of the fund, which were first issued in November 1989. The actual return of Service Shares would have been lower than shown for the period before they were launched because Service Shares have higher expenses than Institutional Shares. Service Shares of the fund have expenses of 1.12% of average daily net assets (after waivers and reimbursements) for the current fiscal year and Institutional Shares of the fund have expenses of 0.82% of average daily net assets (after waivers and reimbursements) for the current fiscal year.

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	10 Years	Inception Date
Large Cap Growth
Return Before Taxes	-31.12%	-30.60%	-8.51%	3.02%	11/01/89
Return After Taxes on Distributions	-31.12%	-31.46%	-10.08%	1.41%
Return After Taxes on Distributions and Sale of Shares	-19.11%	-22.02%	-5.49%	3.02%
Russell 1000 Growth (Reflects no deduction for fees, expenses or taxes)	-27.89%	-23.64%	-3.84%	6.71%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Service Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees			.55	%
Other expenses			.62	%
Service fees	.15	%
Processing fees	.15	%
Other	.32	%
Total annual fund operating expenses			1.17	%
Fee waivers and expense reimbursements			.05	%
Net expenses*			1.12	%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.12% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 111 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Service Shares		$114		$367		$639		$1,416

Fund Management

The fund is managed by a team of investment professionals at BlackRock Advisors, Inc. (BlackRock), including Matthew Considine, Vice President and investment manager at BlackRock since 1998, and Steven P. Ralston, Vice President and investment manager at BlackRock since 1998. Mr. Considine served as a portfolio manager and equity analyst at Phoenix Duff & Phelps from 1995 to 1998. Prior to joining BlackRock in 1998, Mr. Ralston was an equity analyst with General Accident and

previously Director of Research at First National Bank of Maryland. Mr. Considine has been a portfolio co-manager since June 2000 and Mr. Ralston since January 2001.

Financial Highlights

FINANCIAL HIGHLIGHTS

(For a Service Share Outstanding Throughout Each Period)

Large Cap Growth Equity Portfolio


	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	8.99		$	23.52		$	22.47		$	18.11		$	18.93

Income from investment operations
Net investment income (loss)		(0.02	)		(0.05	)		(0.13	)		(0.07	)		(0.03	)
Net gain (loss) on investments (both realized and unrealized)		(2.37	)		(11.70	)		4.80			6.06			1.85

Total from investment operations		(2.39	)		(11.75	)		4.67			5.99			1.82

Less distributions
Distributions from net investment income		– –			– –			– –			– –			– –
Distributions from net realized gains		– –			(2.78	)		(3.62	)		(1.63	)		(2.64	)

Total distributions		– –			(2.78	)		(3.62	)		(1.63	)		(2.64	)

Net asset value at end of period	$	6.60		$	8.99		$	23.52		$	22.47		$	18.11

Total return		(26.59	)%		(55.68	)%		22.50	%		35.10	%		11.33	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	130,932		$	158,367		$	288,904		$	248,901		$	187,738
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.12	%		1.12	%		1.10	%		1.11	%		1.16	%
Before advisory/administration fee waivers		1.17	%		1.13	%		1.10	%		1.11	%		1.16	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(0.30	)%		(0.41	)%		(0.54	)%		(0.31	)%		(0.13	)%
Before advisory/administration fee waivers		(0.34	)%		(0.42	)%		(0.54	)%		(0.31	)%		(0.13	)%
Portfolio turnover rate		130	%		164	%		121	%		60	%		54	%

BlackRock

Mid-Cap Value Equity Portfolio

IMPORTANT DEFINITIONS

Equity Security: A security, such as stock, representing ownership of a company. Bonds, in comparison, are referred to as fixed income or debt securities because they represent indebtedness to the bondholder, not ownership (although convertible bonds are fixed income securities that are convertible to equity according to their terms).

Value Companies: All stocks are generally divided into the categories of “growth” or “value,” although there are times when a growth fund and value fund may own the same stock. Value stocks are companies that appear to the manager to be undervalued by the market as measured by certain financial formulas. Growth stocks are companies whose earnings growth potential appears to the manager to be greater than the market in general, and whose growth in revenue is expected to continue for an extended period.

Investment Goal

The fund seeks long-term capital appreciation—current income is the secondary objective.

Primary Investment Strategies

It is possible that in extreme market conditions the fund may invest some or all of its assets in high quality money market securities. The reason for acquiring money market securities would be to avoid market losses. However, if market conditions improve, this strategy could result in reducing the potential gain from the market upswing, thus reducing the fund’s opportunity to achieve its investment objective.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

While the fund manager chooses stocks he believes to be undervalued, there is no guarantee that the shares will increase in value or that they won’t move even lower.

term capital gain or loss. Unlike long-term capital gain, short-term capital gain of individuals is taxable at the same rates as ordinary income. These effects of higher than normal portfolio turnover may adversely affect fund performance.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	Since Inception	Inception Date
Mid-Cap Value
Return Before Taxes	-16.98%	-3.21%	-2.12%	2.37%	12/27/96
Return After Taxes on Distributions	-18.18%	-3.87%	-2.69%	1.63%
Return After Taxes on Distributions and Sale of Shares	-9.29%	-2.56%	-1.73%	1.76%
Russell Midcap Value (Reflects no deduction for fees, expenses or taxes)	-9.65%	3.29%	2.96%	7.49%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The tables below describe the fees and expenses that you may pay if you buy and hold Service Shares of the fund. The “Annual Fund Operating Expenses” table is based on expenses for the most recent fiscal year.

Shareholder Fees

(Fees paid directly from your investment)


Redemption/Exchange Fee* (as a percentage of amount redeemed)		2	%

*	Subject to the approval of the Company’s Board of Trustees, fee applies only to shares purchased on or after March 1, 2003 that are redeemed or exchanged within 90 days of purchase.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees			.80	%
Other expenses			.65	%
Service fees	.15	%
Processing fees	.15	%
Other	.35	%
Total annual fund operating expenses			1.45	%
Fee waivers and expense reimbursements*			—
Net expenses*			1.45	%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.56% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 111 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Service Shares		$148		$459		$792		$1,735

Fund Management

Financial Highlights

FINANCIAL HIGHLIGHTS

(For a Service Share Outstanding Throughout Each Period)

Mid-Cap Value Equity Portfolio


	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	11.32		$	12.66		$	11.34		$	10.62		$	12.79

Income from investment operations
Net investment income		(0.05	)		0.03			0.06			0.07			0.08
Net gain (loss) on investments (both realized and unrealized)		(0.87	)		(1.11	)		1.54			0.73			(1.82	)

Total from investment operations		(0.92	)		(1.08	)		1.60			0.80			(1.74	)

Less distributions
Distributions from net investment income		– –			(0.05	)		(0.03	)		(0.08	)		(0.07	)
Distributions from net realized gains		– –			(0.21	)		(0.25	)		– –			(0.36	)

Total distributions		– –			(0.26	)		(0.28	)		(0.08	)		(0.43	)

Net asset value at end of period	$	10.40		$	11.32		$	12.66		$	11.34		$	10.62

Total return		(8.13	)%		(8.60	)%		14.45	%		7.29	%		(13.94	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	13,767		$	26,046		$	18,373		$	40,852		$	28,879
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.45	%		1.44	%		1.42	%		1.42	%		1.44	%
Before advisory/administration fee waivers		1.45	%		1.44	%		1.42	%		1.42	%		1.50	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(0.28	)%		0.36	%		0.34	%		0.58	%		0.60	%
Before advisory/administration fee waivers		(0.28	)%		0.36	%		0.34	%		0.58	%		0.54	%
Portfolio turnover rate		323	%		243	%		205	%		88	%		71	%

BlackRock

Mid-Cap Growth Equity Portfolio

IMPORTANT DEFINITIONS

Equity Security: A security, such as stock, representing ownership of a company. Bonds, in comparison, are referred to as fixed income or debt securities because they represent indebtedness to the bondholder, not ownership (although convertible bonds are fixed income securities that are convertible to equity according to their terms).

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

The fund generally will sell a stock when, in the management team’s opinion, there is a deterioration in the company’s fundamentals or the company fails to meet performance expectations.

The management team may, when consistent with the fund’s investment objective, use options or futures (commonly known as

derivatives). An option is the right to buy or sell a security or an index of securities at a specific price on or before a specific date. A future is an agreement to buy or sell a security or an index of securities at a specific price on a specific date. The primary purpose of using derivatives is to attempt to reduce risk to the fund as a whole (hedge) but they may also be used to maintain liquidity and commit cash pending investment. The management team also may, but under normal market conditions generally does not intend to, use derivatives for speculation to increase returns.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

From time to time the fund may invest in shares of companies through initial public offerings (IPO’s). IPOs and companies that have recently gone public have the potential to produce substantial gains for the fund. However, there is no assurance that the fund will have access to profitable IPOs. Furthermore, stocks of some newly-public companies may decline shortly after the initial public offering.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	Since Inception	Inception Date
Mid-Cap Growth
Return Before Taxes	-28.80%	-24.57%	2.90%	4.79%	12/27/96
Return After Taxes on Distributions	-28.80%	-28.08%	-2.16%	0.44%
Return After Taxes on Distributions and Sale of Shares	-17.69%	-18.57%	1.77%	3.40%
Russell Midcap Growth (Reflects no deduction for fees, expenses or taxes)	-27.40%	-20.02%	-1.82%	1.89%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

Shareholder Fees

(Fees paid directly from your investment)


Redemption/Exchange Fee* (as a percentage of amount redeemed)		2	%

*	Subject to the approval of the Company’s Board of Trustees, fee applies only to shares purchased on or after March 1, 2003 that are redeemed or exchanged within 90 days of purchase.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees			.80	%
Other expenses			.64	%
Service fees	.15	%
Processing fees	.15	%
Other	.34	%
Total annual fund operating expenses			1.44	%
Fee waivers and expense reimbursements*			—
Net expenses*			1.44	%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.53% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 111 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Service Shares		$147		$456		$787		$1,724

Fund Management

co-founder of Cyllenius Capital Management. Prior to founding Cyllenius in 2001, Mr. Stack was a portfolio manager at MFS Investment Management since 1993. Neil Wagner has been a portfolio co-manager of the fund since May 2002 and Brian Stack has been a co-manager of the fund since January 2003.

Financial Highlights

FINANCIAL HIGHLIGHTS

(For a Service Share Outstanding Throughout Each Period)

Mid-Cap Growth Equity Portfolio


	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	7.31		$	26.19		$	18.96		$	11.06		$	12.17

Income from investment operations
Net investment (loss)		(0.11	)		(0.03	)		(0.19	)		(0.13	)		(0.09	)
Net gain (loss) on investments (both realized and unrealized)		(1.31	)		(11.37	)		14.04			8.03			(0.92	)

Total from investment operations		(1.42	)		(11.40	)		13.85			7.90			(1.01	)

Less distributions
Distributions from capital		– –			– –			– –			– –			(0.01	)
Distributions from net realized gains		– –			(7.48	)		(6.62	)		– –			(0.09	)

Total distributions		– –			(7.48	)		(6.62	)		– –			(0.10	)

Net asset value at end of period	$	5.89		$	7.31		$	26.19		$	18.96		$	11.06

Total return		(19.43	)%		(56.78	)%		91.13	%		71.43	%		(8.32	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	24,082		$	37,691		$	51,912		$	46,639		$	28,601
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.45	%		1.44	%		1.40	%		1.41	%		1.44	%
Before advisory/administration fee waivers		1.45	%		1.44	%		1.40	%		1.42	%		1.50	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(1.07	)%		(0.28	)%		(0.69	)%		(0.78	)%		(0.68	)%
Before advisory/administration fee waivers		(1.07	)%		(0.28	)%		(0.69	)%		(0.79	)%		(0.74	)%
Portfolio turnover rate		279	%		584	%		425	%		318	%		204	%

BlackRock

Small Cap Value Equity Portfolio

IMPORTANT DEFINITIONS

Equity Security: A security, such as stock, representing ownership of a company. Bonds, in comparison, are referred to as fixed income or debt securities because they represent indebtedness to the bondholder, not ownership (although convertible bonds are fixed income securities that are convertible to equity according to their terms).

Value Companies: All stocks are generally divided into the categories of “growth” or “value,” although there are times when a growth fund and value fund may own the same stock. Value stocks are companies that appear to the manager to be undervalued by the market as measured by certain financial formulas. Growth stocks are companies whose earnings growth potential appears to the manager to be greater than the market in general, and whose growth in revenue is expected to continue for an extended period.

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

liquidity and commit cash pending investment. The fund manager also may, but under normal market conditions generally does not intend to, use derivatives for speculation to increase returns.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

While the fund manager chooses stocks he believes to be undervalued, there is no guarantee that the shares will increase in value or that they won’t move even lower.

The fund’s use of derivatives may reduce returns and/or increase volatility. Volatility is defined as the characteristic of a security, an index or a market to fluctuate significantly in price within a short time period. A risk of the fund’s use of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities market. Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. In addition, some derivatives are more sensitive to interest rate changes, market price fluctuations and general market liquidity than others.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

The chart and table on the next page give you a picture of the fund’s long-term performance for Service Shares. The information shows you how the fund’s performance has varied year by year and provides some indication of the risks of investing in the fund. The table compares the fund’s performance to that of the Russell 2000 Value Index, a recognized unmanaged index of stock market performance. As with all such investments, past performance is not an indication of future results.

The performance for the period before Service Shares were launched in July 1993 is based upon performance for Institutional Shares of the fund, which were first issued in April 1992. The actual return of Service Shares would have been lower than shown for the period before they were launched because Service Shares have higher expenses than Institutional Shares. Service Shares of the fund have expenses of 1.19% of average daily net assets (after waivers and reimbursements) for the current fiscal year and Institutional Shares of the fund have expenses of 0.89%of average daily net assets (after waivers and reimbursements) for the current fiscal year.

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	10 Years	Inception Date
Small Cap Value
Return Before Taxes	-16.86%	1.74%	-1.36%	8.12%	04/13/92
Return After Taxes on Distributions	-19.34%	-1.04%	-3.30%	5.82%
Return After Taxes on Distributions and Sale of Shares	-7.99%	-1.10%	-1.33%	6.15%
Russell 2000 Value (Reflects no deduction for fees, expenses or taxes)	-11.42%	7.45%	2.72%	10.86%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

Shareholder Fees

(Fees paid directly from your investment)


Redemption/Exchange Fee* (as a percentage of amount redeemed)		2	%

*	Subject to the approval of the Company’s Board of Trustees, fee applies only to shares purchased on or after March 1, 2003 that are redeemed or exchanged within 90 days of purchase.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees			.55	%
Other expenses			.64	%
Service fees	.15	%
Processing fees	.15	%
Other	.34	%
Total annual fund operating expenses			1.19	%
Fee waivers and expense reimbursements*			– –
Net expenses*			1.19	%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.27% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 111 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Service Shares		$121		$378		$654		$1,443

Fund Management

Financial Highlights

FINANCIAL HIGHLIGHTS

(For a Service Share Outstanding Throughout Each Period)

Small Cap Value Equity Portfolio


	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	16.18		$	17.10		$	14.71		$	14.88		$	20.20

Income from investment operations
Net investment income		(0.04	)		0.10			– –			0.07			0.09
Net gain (loss) on investments (both realized and unrealized)		(1.04	)		(0.08	)		2.47			0.68			(3.21	)

Total from investment operations		(1.08	)		0.02			2.47			0.75			(3.12	)

Less distributions
Distributions from net investment income		– –			(0.10	)		(0.08	)		(0.25	)		(0.08	)
Distributions from net realized gains		(2.33	)		(0.84	)		– –			(0.67	)		(2.12	)

Total distributions		(2.33	)		(0.94	)		(0.08	)		(0.92	)		(2.20	)

Net asset value at end of period	$	12.77		$	16.18		$	17.10		$	14.71		$	14.88

Total return		(8.64	)%		0.28	%		16.80	%		4.88	%		(17.33	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	7,242		$	47,095		$	50,980		$	66,728		$	77,893
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.18	%		1.17	%		1.16	%		1.16	%		1.17	%
Before advisory/administration fee waivers		1.19	%		1.17	%		1.16	%		1.16	%		1.18	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(0.24	)%		0.56	%		0.49	%		0.58	%		0.44	%
Before advisory/administration fee waivers		(0.25	)%		0.56	%		0.49	%		0.58	%		0.43	%
Portfolio turnover rate		260	%		184	%		168	%		48	%		45	%

BlackRock

Small Cap Core Equity Portfolio

IMPORTANT DEFINITIONS

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

The manager may, when consistent with the fund’s investment objective, use options or futures (commonly known as derivatives). An option is the right to buy or sell a security or an index of securities at a specific price on or before a specific date. A future is an agreement to buy or sell a security or an index of securities at a specific price on a specific date. The primary purpose of using derivatives is to attempt to reduce risk to the fund as a whole (hedge) but they may also be used to maintain liquidity and commit cash pending investment. The manager also may, but under normal market conditions generally does not intend to, use derivatives for speculation to increase returns.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

The fund may invest in companies that have relatively small market capitalizations. These organizations will normally have more limited product lines, markets and financial resources and will be dependent upon a more limited management group than larger capitalized companies. In addition, it is more difficult to get information on smaller companies, which tend to be less well known, have shorter operating histories, do not have significant ownership by large investors and are followed by relatively few securities analysts. Securities of smaller capitalized companies are often traded in the over-the-counter markets and may have fewer market makers and wider price spreads. This may result in greater price movements and less ability to sell the fund’s investment than if the fund held the securities of larger, more established companies.

While the manager chooses stocks she believes have above-average earnings growth potential or are undervalued, there is no guarantee that the shares will increase in value or that they won’t move even lower.

Higher than normal portfolio turnover may result in increased transaction costs to the fund, including brokerage commissions, dealer mark-ups and other transaction costs on the sale of the securities and on reinvestment in other securities. The sale of fund securities may result in the recognition of capital gain or loss. Given the frequency of sales, such gain or loss will likely be short-term capital gain or loss. Unlike long-term capital gain, short-term capital gain of individuals is taxable at the same rates as ordinary income. These effects of higher then normal portfolio turnover may adversely affect fund performance.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

Shareholder Fees

(Fees paid directly from your investment)


Redemption/Exchange Fee* (as a percentage of amount redeemed)		2	%

*	Subject to the approval of the Company’s Board of Trustees, fee applies only to shares purchased on or after March 1, 2003 that are redeemed or exchanged within 90 days of purchase.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory Fees			1.00	%
Other expenses			9.04	%
Service fees	0.15	%
Processing fees	0.15	%
Other	8.74	%
Total annual fund operating expenses			10.04	%
Fee waivers and expense reimbursements*			8.44	%
Net Expenses*			1.60	%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.60% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 111 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Service Shares		$163		$2,136		$3,915		$7,635

Fund Management

the firm’s inception in 1995. Kate O’Connor has been a portfolio manager since January 2003 and Wayne J. Archambo has been a portfolio manager since the fund’s inception in January 2002.

Financial Highlights

FINANCIAL HIGHLIGHTS

(For a Service Share Outstanding Throughout Each Period)

Small Cap Core Equity Portfolio


	For the Period 1/02/02¹through 9/30/02
Net asset value at beginning of period	$	10.00

Investment operations
Net investment loss		0.00
Net loss on investments (both realized and unrealized)		(1.65	)

Total from investment operations		(1.65	)

Less distributions
Distributions from net investment income		0.00
Distributions from net realized gain		0.00

Total distributions		0.00

Net asset value at the end of the period	$	8.35

Total return		(16.50	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	– –
Ratios of expense to average net assets:
After advisory/adminstration fee waivers		1.60	%²
Before advisory/adminstration fee waivers		2.83	%²
Ratios of net investment income to average net assets
After advisory/adminstration fee waivers		(0.90	)%²
Before advisory/adminstration fee waivers		(2.13	)%²
Portfolio turnover rate		233	%

¹	Commencement of operations of share class.

²	Annualized

BlackRock

Small Cap Growth Equity Portfolio

IMPORTANT DEFINITIONS

Equity Security: A security, such as stock, representing ownership of a company. Bonds, in comparison, are referred to as fixed-income or debt securities because they represent indebtedness to the bondholder, not ownership (although convertible bonds are fixed income securities that are convertible to equity according to their terms).

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

The fund generally will sell a stock when, in the management team’s opinion, there is a deterioration in the company’s fundamentals or the company fails to meet performance expectations.

The management team may, when consistent with the fund’s investment objective, use options or futures (commonly known as

derivatives). An option is the right to buy or sell a security or an index of securities at a specific price on or before a specific date. A future is an agreement to buy or sell a security or an index of securities at a specific price on a specific date. The primary purpose of using derivatives is to attempt to reduce risk to the fund as a whole (hedge) but they may also be used to maintain liquidity and commit cash pending investment. The management team also may, but under normal market conditions generally does not intend to, use derivatives for speculation to increase returns.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	Since Inception	Inception Date
Small Cap Growth
Return Before Taxes	-27.54%	-25.68%	-5.50%	6.08%	9/14/93
Return After Taxes on Distributions	-27.54%	-27.82%	-8.03%	4.20%
Return After Taxes on Distributions and Sale of Shares	-16.91%	-18.58%	-3.86%	5.36%
Russell 2000 Growth (Reflects no deduction for fees, expenses or taxes)	-30.27%	-21.11%	-6.59%	2.11%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

Shareholder Fees

(Fees paid directly from your investment)


Redemption/Exchange Fee* (as a percentage of amount redeemed)		2	%

*	Subject to the approval of the Company’s Board of Trustees, fee applies only to shares purchased on or after March 1, 2003 that are redeemed or exchanged within 90 days of purchase.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees			.55	%
Other expenses			.62	%
Service fees	.15	%
Processing fees	.15	%
Other	.32	%
Total annual fund operating expenses			1.17	%
Fee waivers and expense reimbursements*			—
Net expenses*			1.17	%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.29% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 111 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Service Shares		$119		$372		$644		$1,420

Fund Management

1997. Prior to joining BlackRock in 2002, Mr. Stack was the co- founder of Cyllenius Capital Management. Prior to founding Cyllenius in 2001, Mr. Stack was a portfolio manager at MFS Investment Management since 1993. Neil Wagner has been a portfolio co-manager of the fund since May 2002 and Brian Stack has been a co-manager of the fund since January 2003.

Financial Highlights

FINANCIAL HIGHLIGHTS

(For a Service Share Outstanding Throughout Each Period)

Small Cap Growth Equity Portfolio


	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	11.36		$	34.91		$	24.93		$	17.24		$	23.43

Income from investment operations
Net investment (loss)		(0.19	)		0.03			(0.03	)		(0.13	)		(0.14	)
Net gain (loss) on investments (both realized and unrealized)		(2.50	)		(14.89	)		14.15			7.82			(4.91	)

Total from investment operations		(2.69	)		(14.86	)		14.12			7.69			(5.05	)

Less distributions
Distributions from net investment income		– –			(0.08	)		– –			– –			– –
Distributions from capital		– –			(0.10	)		– –			– –			(0.02	)
Distributions from net realized gains		– –			(8.51	)		(4.14	)		– –			(1.12	)

Total distributions		– –			(8.69	)		(4.14	)		– –			(1.14	)

Net asset value at end of period	$	8.67		$	11.36		$	34.91		$	24.93		$	17.24

Total return		(23.68	)%		(53.76	)%		62.51	%		44.52	%		(22.40	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	29,023		$	141,001		$	315,647		$	170,900		$	141,470
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.15	%		1.11	%		1.08	%		1.12	%		1.17	%
Before advisory/administration fee waivers		1.17	%		1.11	%		1.08	%		1.12	%		1.17	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(0.97	)%		0.20	%		(0.09	)%		(0.55	)%		(0.46	)%
Before advisory/administration fee waivers		(0.99	)%		0.20	%		(0.09	)%		(0.55	)%		(0.46	)%
Portfolio turnover rate		238	%		363	%		218	%		176	%		159	%

BlackRock

Global Science & Technology Opportunities Portfolio

IMPORTANT DEFINITIONS

Fundamentals: “Fundamental” information about a company (such as its income statement, balance sheet, earnings and sales history, products and management).

Market Capitalization: Market capitalization refers to the market value of a company and is calculated by multiplying the number of shares outstanding by the current price per share.

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

Application Software

IT Consulting & Services

Internet Software and Services

Networking Equipment

Telecom Equipment

Computer Hardware

Computer Storage & Peripherals

Electronic Equipment and Instruments

Semiconductor Equipment

Semiconductors

Aerospace & Defense

Electrical Components & Equipment

Biotechnology

Pharmaceuticals

Healthcare Equipment & Supplies

Healthcare Distribution & Services

Healthcare Facilities

Industrial Gases

Specialty Chemicals

Advanced Materials

Integrated Telecom Services

Alternative Carriers

Wireless Telecommunication Services

The fund may also use forward foreign currency exchange contracts (obligations to buy or sell a currency at a set rate in the future) to hedge against movements in the value of non-U.S. currencies.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

that a security’s value will be hurt by changes in non-U.S. political or social conditions, including changes in policies restricting non-U.S. investment, the possibility of heavy taxation, nationalization or expropriation of assets and more difficulty obtaining information on non-U.S. securities or companies. In addition, a portfolio of non-U.S. securities may be harder to sell and may be subject to wider price movements than comparable investments in U.S. companies. There is less government regulation of non-U.S. securities markets.

Because different kinds of stocks go in and out of favor depending on market conditions, this fund’s performance may be better or worse than other funds with different investment styles.

While the management team chooses stocks they believe have above-average earnings growth potential, there is no guarantee that the shares will increase in value or that they won’t move even lower.

The expenses of the fund can be expected to be higher than those of other funds investing primarily in domestic securities because the costs attributable to investing abroad are usually higher.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	Since Inception	Inception Date
Global Science & Technology Opportunities
Return Before Taxes	-34.99%	-30.85%	5/15/00
Return After Taxes on Distributions	-34.99%	-30.85%
Return After Taxes on Distributions and Sale of Shares	-21.48%	-22.98%
S&P 500^® (Reflects no deduction for fees, expenses or taxes)	-22.10%	-16.23%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

As a shareholder, you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Service Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees		.90%
Other expenses		.72%
Service fees	.15%
Processing fees	.15%
Other	.42%
Total annual fund operating expenses		1.62%
Fee waivers and expense reimbursements*		– –
Net expenses*		1.62%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.73% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 111 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Service Shares		$165		$511		$881		$1,922

Fund Management

Financial Highlights

FINANCIAL HIGHLIGHTS

(For a Service Share Outstanding Throughout Each Period)

Global Science & Technology Opportunities Portfolio


	Year Ended 9/30/02			Year Ended 9/30/01			For the Period 5/15/00¹ through 9/30/00
Net asset value at beginning of period	$	4.39		$	12.47		$	10.00

Income from investment operations
Net investment (loss)		(0.06	)³		– –			(0.01	)
Net gain (loss) on investments (both realized and unrealized)		(0.76	)		(8.08	)		2.48

Total from investment operations		(0.82	)		(8.08	)		2.47

Less distributions
Distributions from net investment income		– –			– –			– –
Distributions from net realized gains		– –			– –			– –

Total distributions		– –			– –			– –

Net asset value at end of period	$	3.57		$	4.39		$	12.47

Total return		(18.68	)%		(64.80	)%		24.70	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	30		$	19		$	17
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.50	%		1.50	%		1.50	%²
Before advisory/administration fee waivers		1.63	%		1.73	%		2.49	%²
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(1.30	)%		0.00	%		(0.51	)%²
Before advisory/administration fee waivers		(1.43	)%		(0.24	)%		(1.50	)%²
Portfolio turnover rate		587	%		748	%		175	%

¹	Commencement of operations of share class.

²	Annualized.

³	Calculated using the average shares outstanding method.

BlackRock

European Equity Portfolio

IMPORTANT DEFINITIONS

Market Capitalization: Market capitalization refers to the market value of a company and is calculated by multiplying the number of shares outstanding by the current price per share.

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

its country of organization, primary business office and principal trading market for its stock are located in Europe;

50% or more of its assets are located in Europe; or

50% or more of its revenues are derived from Europe.

The management team may, when consistent with the fund’s investment objective, use options or futures (commonly known as derivatives). An option is the right to buy or sell an instrument (which can be a security, an Index of Securities, a currency, or a basket of currencies) at a specific price on or before a specific date. A future is an agreement to buy or sell instruments of these types at a specific price on a specific date. The primary purpose of using derivatives is to attempt to reduce risk to the fund as a whole (hedge) but they may also be used to maintain liquidity, commit cash pending investment or for speculation to increase returns. The fund may also use forward foreign currency exchange contracts (obligations to buy or sell a currency at a set rate in the future) to hedge against movements in the value of non-U.S. currencies.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

Because different kinds of stocks go in and out of favor depending on market conditions, this fund’s performance may be better or worse than other funds with different investment styles.

While the management team chooses stocks they believe have above-average earnings growth potential, there is no guarantee that the shares will increase in value or that they won’t move even lower.

The expenses of the fund can be expected to be higher than those of other funds investing primarily in domestic securities because the costs attributable to investing abroad are usually higher.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	Since Inception	Inception Date
European Equity
Return Before Taxes	-22.21%	-18.49%	6/23/00
Return After Taxes on Distributions	-22.21%	-18.71%
Return After Taxes on Distributions and Sale of Shares	-13.64%	-14.36%
MSCI Europe (Reflects no deduction for fees, expenses or taxes)	-18.38%	-17.18%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

Shareholder Fees

(Fees paid directly from your investment)


Redemption/Exchange Fee* (as a percentage of amount redeemed)		2	%

*	Fee applies only to shares purchased on or after 12/5/2001 that are redeemed or exchanged within 90 days of purchase.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees			.90	%
Other expenses			1.23	%
Service fees	.15	%
Processing fees	.15	%
Other	.93	%
Total annual fund operating expenses			2.13	%
Fee waivers and expense reimbursements*			.38	%
Net expenses*			1.75	%

BIL has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.75% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BIL in the following two years. See the “Management” section on page 111 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Service Shares		$178		$630		$1,109		$2,432

Fund Management

Albert Morillo, Kenneth Anderson, Alan Clark, Lorna Mackay, Neil Pirie and David Stanistreet have co-managed the fund since its inception.

Albert Morillo, Managing Director and Head of European Equity at BlackRock International, Ltd. (BIL), is a member of BIL’s Management Committee. His primary responsibility is European equity research and portfolio management. Prior to joining BIL in 2000, Mr. Morillo was an investment director of Scottish Widows Investment Management, head of its European equity team, and a member of the Investment Policy Group. He is a member of the International Board of the Paris Stock Exchange.

Financial Highlights

FINANCIAL HIGHLIGHTS

(For a Service Share Outstanding Throughout Each Period)

European Equity Portfolio


	Year Ended 9/30/02			Year Ended 9/30/01			For the Period 6/23/00¹ through 9/30/00
Net asset value at beginning of period	$	7.22		$	9.50		$	10.00

Income from investment operations
Net investment income (loss)		0.02	³		0.02			(0.06	)
Net (loss) on investments (both realized and unrealized)		(1.58	)		(2.30	)		(0.44	)

Total from investment operations		(1.56	)		(2.28	)		(0.50	)

Less distributions
Distributions from net investment income		(0.15	)		– –			– –
Distributions from net realized gains		– –			– –			– –

Total distributions		(0.15	)		– –			– –

Net asset value at end of period	$	5.51		$	7.22		$	9.50

Total return		(22.12	)%		(24.00	)%		(5.00	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	– –		$	64		$	– –
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.75	%		1.60	%		1.75	%²
Before advisory/administration fee waivers		2.11	%		2.69	%		6.42	%²
Ratios of net investment income to average net assets
After advisory/administration fee waivers		0.30	%		1.31	%		(0.22	)%²
Before advisory/administration fee waivers		(0.06	)%		0.22	%		(4.89	)%²
Portfolio turnover rate		88	%		218	%		177	%

¹	Commencement of operations of share class.

²	Annualized.

³	Calculated using the average shares outstanding method.

BlackRock

Asia Pacific Equity Portfolio

IMPORTANT DEFINITIONS

Market Capitalization: Market capitalization refers to the market value of a company and is calculated by multiplying the number of shares outstanding by the current price per share.

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

its country of organization, primary business office and principal trading market for its stock are located in the Asia Pacific region;

50% or more of its assets are located in the Asia Pacific region; or

50% or more of its revenues are derived from the Asia Pacific region.

The management team seeks to achieve consistent and sustainable performance by managing risk and by taking advantage of market inefficiencies through a long term, disciplined and objective investment process. Economic, statistical and valuation data is analyzed to screen and rank securities. Major sector and country/ regional themes, prevailing economic cycles and well-defined risk parameters are also considered in the portfolio construction process.

The management team may, when consistent with the fund’s investment objective, use options or futures (commonly known as derivatives). An option is the right to buy or sell an instrument (which can be a security, an Index of Securities, a currency, or a basket of currencies) at a specific price on or before a specific date. A future is an agreement to buy or sell instruments of these types at a specific price on a specific date. The primary purpose of using derivatives is to attempt to reduce risk to the fund as a whole (hedge) but they may also be used to maintain liquidity, commit cash pending investment or for speculation to increase returns. The fund may also use forward foreign currency exchange contracts (obligations to buy or sell a currency at a set rate in the future) to hedge against movements in the value of non-U.S. currencies.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

significant effect on the fund compared to mutual funds that invest in many geographic regions. At times, the markets in certain Asia Pacific region countries have suffered significant downturns and volatility. Increased social or political unrest in some or all of these countries could cause further economic and market uncertainty.

Because different kinds of stocks go in and out of favor depending on market conditions, this fund’s performance may be better or worse than other funds with different investment styles.

While the management team chooses stocks they believe have above-average earnings growth potential, there is no guarantee that the shares will increase in value or that they won’t move even lower.

The expenses of the fund can be expected to be higher than those of other funds investing primarily in domestic securities because the costs attributable to investing abroad are usually higher.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	Since Inception	Inception Date
Asia Pacific
Return Before Taxes	-9.25%	-19.14%	6/23/00
Return After Taxes on Distributions	-9.30%	-19.47%
Return After Taxes on Distributions and Sale of Shares	-5.68%	-14.88%
MSCI All Country Asia Pacific (Reflects no deduction for fees, expenses or taxes)	-8.62%	-20.55%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

Shareholder Fees

(Fees paid directly from your investment)

Redemption/Exchange Fee*

(as a percentage of amount redeemed)

*	Fee applies only to shares purchased on or after 12/5/2001 that are redeemed or exchanged within 90 days of purchase.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees			.90	%
Other expenses			4.85	%
Service fees	.15	%
Processing fees	.15	%
Other	4.55	%
Total annual fund operating expenses			5.75	%
Fee waivers and expense reimbursements*			4.00	%
Net expenses*			1.75	%

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Service Shares		$178		$1,356		$2,517		$5,344

Fund Management

Financial Highlights

FINANCIAL HIGHLIGHTS

(For a Service Share Outstanding Throughout Each Period)

Asia Pacific Equity Portfolio



	Year Ended 9/30/02			Year Ended 9/30/01			For the Period 6/23/00¹ through 9/30/00
Net asset value at beginning of period	$	6.16		$	9.20		$	10.00

Income from investment operations
Net investment (loss)		(0.07	)		(0.05	)		(0.02	)
Net (loss) on investments (both realized and unrealized)		(0.24	)		(2.78	)		(0.78	)

Total from investment operations		(0.31	)		(2.83	)		(0.80	)

Less distributions
Distributions from net investment income		– –			(0.01	)		– –
Distributions from net realized gains		– –			(0.20	)		– –

Total distributions		– –			(0.21	)		– –

Redemption fees added to paid in capital		0.01			– –			– –

Net asset value at end of period	$	5.86		$	6.16		$	9.20

Total return		(4.87	)%		(31.38	)%		(8.00	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	– –		$	– –		$	– –
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.75	%		1.75	%		1.75	%²
Before advisory/administration fee waivers		8.73	%		4.59	%		9.46	%²
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(0.56	)%		(0.94	)%		0.32	%²
Before advisory/administration fee waivers		(6.90	)%		(3.76	)%		(7.39	)%²
Portfolio turnover rate		107	%		206	%		145	%

¹	Commencement of operations of share class.

²	Annualized.

BlackRock

International Equity Portfolio

IMPORTANT DEFINITIONS

Morgan Stanley Capital International Europe, Australia, and the Far East Index (MSCI EAFE): An unmanaged index comprised of a sample of companies representative of the market structure of the following European and Pacific Basin countries: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and the U.K.

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

The management team seeks to achieve consistent and sustainable performance through various market cycles by emphasizing stock selection. Stock selection is determined by looking at companies using a range of valuation criteria, including the strength of their management and business franchise. The management team will generally invest with a bias towards “growth” stocks; however, they may take advantage of opportunities in “value” stocks at appropriate points in the market or economic cycle. The management team will also consider factors such as prospects for relative economic growth, expected levels of inflation, government policies influencing business conditions and outlook for currency relationships.

The management team may, when consistent with the fund’s investment objective, use options or futures (commonly known as derivatives). An option is the right to buy or sell an instrument (which can be a security, an Index of Securities, a currency, or a basket of currencies) at a specific price on or before a specific date. A future is an agreement to buy or sell instruments of these types at a specific price on a specific date. The primary purpose of using derivatives is to attempt to reduce risk to the fund as a whole (hedge) but they may also be used to maintain liquidity, commit cash pending investment or for speculation to increase returns. The fund may also use forward foreign currency exchange contracts (obligations to buy or sell a currency at a set rate in the future) to hedge against movements in the value of non-U.S. currencies.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

Because different kinds of stocks go in and out of favor depending on market conditions, this fund’s performance may be better or worse than other funds with different investment styles.

subject to wider price movements than comparable investments in U.S. companies. There is less government regulation of non-U.S. securities markets.

In addition, political and economic structures in emerging market countries may be undergoing rapid change and these countries may lack the social, political and economic stability of more developed countries. As a result some of the risks described above, including the risks of nationalization or expropriation of assets and the existence of smaller, more volatile and less regulated markets may be increased. The value of many investments in emerging market countries recently has dropped significantly due to economic and political turmoil in many of these countries.

While the management team chooses stocks they believe to be undervalued, there is no guarantee that the shares will increase in value or that they won’t move even lower.

The fund’s use of derivatives may reduce returns and/or increase volatility. Volatility is defined as the characteristic of a security, an index, a currency or a market to fluctuate significantly in price within a short time period. A risk of the fund’s use of derivatives is that fluctuations in their values may not correlate perfectly with the overall securities markets. Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. In addition, some derivatives are more sensitive to interest rate changes, market price fluctuations and general liquidity than others.

The expenses of the fund can be expected to be higher than those of other funds investing primarily in domestic securities because the costs attributable to investing abroad is usually higher.

The fund may sometimes engage in short term trading which could produce greater brokerage costs and taxable distributions to shareholders.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

The performance for the period before Service Shares were launched in July 1993 is based upon performance for Institutional Shares of the fund, which were first issued in April 1992. The actual return of Service Shares would have been lower than shown for the period before they were launched because Service Shares have higher expenses than Institutional Shares. Service Shares of the fund have expenses of 1.42% of average daily net assets (after waivers and reimbursements) for the current fiscal year and Institutional Shares of the fund have expenses of 1.12% of average daily net assets (after waivers and reimbursements) for the current fiscal year.

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	10 Years	Inception Date
International Equity
Return Before Taxes	-17.97%	-20.16%	-5.22%	2.67%	04/27/92
Return After Taxes on Distributions	-17.97%	-21.06%	-6.60%	1.28%
Return After Taxes on Distributions and Sale of Shares	-11.03%	-14.98%	-3.52%	2.32%
MSCI EAFE (Reflects no deduction for fees, expenses or taxes)	-15.94%	-17.24%	-2.89%	4.00%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

Shareholder Fees

(Fees paid directly from your investment)

Redemption/Exchange Fee*

(as a percentage of amount redeemed)

*	Fee applies only to shares purchased on or after 12/5/2001 that are redeemed or exchanged within 90 days of purchase.

The table describes the fees and expenses that you may pay if you buy and hold Service Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees			.75	%
Other expenses			.67	%
Service fees	.15	%
Processing fees	.15	%
Other	.37	%
Total annual fund operating expenses			1.42	%
Fee waivers and expense reimbursements*			– –
Net expenses*			1.42	%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.47% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 111 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Service Shares		$145		$449		$776		$1,702

Fund Management

The fund is managed by a team of professionals at BlackRock International, Ltd. (BIL), including Kenneth Anderson, Director and international equity investment manager at BIL since 2000, and William Low, Director and investment manager since 1996. Prior to joining BIL in 2000, Kenneth Anderson was an investment director and the deputy head of the Scottish Widows Investment Management European equity team. Prior to joining BIL in 1996, Mr. Low was with Dunedin Fund Managers Ltd., first as an investment analyst on the U.K. desk and then as a specialist in Pacific Basin equity markets. Kenneth Anderson and William Low have served as portfolio co-managers since January 2001.

Financial Highlights

FINANCIAL HIGHLIGHTS

(For a Service Share Outstanding Throughout Each Period)

International Equity Portfolio


	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	8.12		$	13.82		$	15.84		$	13.15		$	14.58

Income from investment operations
Net investment income (loss)		0.21¹			0.03			0.04			(0.02	)		0.02
Net gain (loss) on investments (both realized and unrealized)		(1.38	)		(3.59	)		0.08			3.59			(1.09	)

Total from investment operations		(1.17	)		(3.56	)		0.12			3.57			(1.07	)

Less distributions
Distributions from net investment income		– –			– –			(0.01	)		(0.08	)		(0.16	)
Distributions from net realized gains		(0.05	)		(2.14	)		(2.13	)		(0.80	)		(0.20	)

Total distributions		(0.05	)		(2.14	)		(2.14	)		(0.88	)		(0.36	)

Net asset value at end of period	$	6.90		$	8.12		$	13.82		$	15.84		$	13.15

Total return		(14.57	)%		(29.91	)%		(0.15	)%		28.14	%		(7.34	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	62,149		$	78,595		$	134,447		$	118,323		$	143,526
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.36	%		1.36	%		1.36	%		1.34	%		1.36	%
Before advisory/administration fee waivers		1.42	%		1.37	%		1.37	%		1.34	%		1.41	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		2.51	%		0.28	%		0.06	%		0.21	%		0.49	%
Before advisory/administration fee waivers		2.44	%		0.26	%		0.05	%		0.21	%		0.44	%
Portfolio turnover rate		275	%		306	%		153	%		62	%		57	%

¹	Calculated using the average shares outstanding method.

BlackRock

International Opportunities Portfolio

IMPORTANT DEFINITIONS

Fundamentals: “Fundamental” information about a company (such as its income statement, balance sheet, earnings and sales history, products and management).

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

The management team may, when consistent with the fund’s investment objective, use options or futures (commonly known as derivatives). An option is the right to buy or sell an instrument (which can be a security, an index of securities, a currency, or a basket of currencies) at a specific price on or before a specific date. A future is an agreement to buy or sell instruments of these types at a specific price on a specific date. The primary purpose of using derivatives is to attempt to reduce risk to the fund as a whole (hedge) but they may also be used to maintain liquidity and commit cash pending investment. The management team also may, but under normal market conditions generally does not intend to, use derivatives for speculation to increase returns. The fund may also use forward foreign currency exchange contracts (obligations to buy or sell a currency at a set rate in the future) to hedge against movements in the value of non-U.S. currencies.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

Because different kinds of stocks go in and out of favor depending on market conditions, this fund’s performance may be better or worse than other funds with different investment styles.

IPOs and companies that have recently gone public have the potential to produce substantial gains for the fund. However, there is no assurance that the fund will have access to profitable IPOs and therefore investors should not rely on these past gains as an indication of future performance. Furthermore, stocks of newly-public companies may decline shortly after the initial public offering.

While the management team chooses stocks they believe have above-average earnings growth potential, there is no guarantee that the shares will increase in value or that they won’t move even lower.

The expenses of the fund can be expected to be higher than those of other funds investing primarily in domestic securities because the costs attributable to investing abroad is usually higher.

Higher than normal portfolio turnover may result in increased transaction costs to the fund, including brokerage commissions, dealer mark-ups and other transaction costs on the sale of the

securities and on reinvestment in other securities. The sale of fund securities may result in the recognition of capital gain or loss. Given the frequency of sales, such gain or loss will likely be short-term capital gain or loss. Unlike long-term capital gain, short-term capital gain of individuals is taxable at the same rates as ordinary income. These effects of higher than normal portfolio turnover may adversely affect fund performance.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

The chart and table below give you a picture of the fund’s long-term performance for Service Shares. The information shows you how the fund’s performance has varied year by year and provides some indication of the risks of investing in the fund. The table compares the fund’s performance to that of the Salomon Smith Barney Extended Market Index Global Ex-U.S., a recognized unmanaged index of stock market performance (the new benchmark). Prior to December 2, 2002, the fund’s benchmark was the Salomon Smith Barney Extended Market Index World Ex-U.S. The new benchmark more accurately reflects the universe of securities in which the fund will invest. As with all such investments, past performance is not an indication of future results.

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	Since Inception	Inception Date
International Opportunities
Return Before Taxes	-3.32%	-9.98%	15.24%	13.24%	09/26/97
Return After Taxes on Distributions	-3.32%	-10.01%	13.39%	11.47%
Return After Taxes on Distributions and Sale of Shares	-2.04%	-7.82%	11.64%	9.99%
Salomon Smith Barney EMI Global Ex-U.S. (Reflects no deduction for fees, expenses or taxes)	-6.89%	-11.43%	-1.08%	-3.19%	N/A
Salomon Smith Barney EMI World Ex-U.S. (Reflects no deduction for fees, expenses or taxes)	-7.29%	-11.16%	-0.59%	-2.54%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

Shareholder Fees

(Fees paid directly from your investment)


Redemption/Exchange Fee* (as a percentage of amount redeemed)		2	%

*	Fee applies only to shares purchased on or after 12/5/2001 that are redeemed or exchanged within 90 days of purchase.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees			1.00	%
Other expenses			.73	%
Service fees	.15	%
Processing fees	.15	%
Other	.43	%
Total annual fund operating expenses			1.73	%
Fee waivers and expense reimbursements*			– –
Net expenses*			1.73	%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.75% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 111 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Service Shares		$176		$545		$939		$2,041

Fund Management

The fund is managed by a team of investment professionals at BlackRock Advisors, Inc. (BlackRock), including Thomas Callan and Michael Carey.

Thomas Callan has been a Managing Director with BlackRock since 1996 and served as an equity analyst for PNC Bank from 1993 to 1996. He has co-managed the fund since April 1999.

Financial Highlights

FINANCIAL HIGHLIGHTS

(For a Service Share Outstanding Throughout Each Period)

International Opportunities Portfolio



	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	14.66		$	22.36		$	12.84		$	9.56		$	9.94

Income from investment operations
Net investment income		(0.02	)		0.29			0.08			0.02			0.02
Net gain (loss) on investments (both realized and unrealized)		0.30			(7.94	)		10.84			4.39			(0.35	)

Total from investment operations		0.28			(7.65	)		10.92			4.41			(0.33	)

Less distributions
Distributions from net investment income		– –			– –			– –			(0.02	)		(0.05	)
Distributions from net realized gains		– –			(0.05	)		(1.40	)		(1.11	)		– –

Total distributions		– –			(0.05	)		(1.40	)		(1.13	)		(0.05	)

Redemption fees added to paid-in capital		0.04			– –			– –			– –			– –

Net asset value at end of period	$	14.98		$	14.66		$	22.36		$	12.84		$	9.56

Total return		2.18	%		(34.29	)%		91.21	%		51.14	%		(3.62	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	670		$	500		$	457		$	– –		$	5
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.60	%		1.63	%		1.63	%		1.63	%		1.62	%
Before advisory/administration fee waivers		1.70	%		1.84	%		1.69	%		2.30	%		2.47	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(0.17	)%		1.50	%		0.60	%		(0.11	)%		0.28	%
Before advisory/administration fee waivers		(0.27	)%		1.29	%		0.54	%		(0.78	)%		(0.57	)%
Portfolio turnover rate		104	%		207	%		296	%		224	%		76	%

BlackRock

Select Equity Portfolio

IMPORTANT DEFINITIONS

Market Capitalization: Refers to the market value of the company and is calculated by multiplying the number of shares outstanding by the current price per share.

Value and Growth Companies: All stocks are generally divided into the categories of “growth” or “value,” although there are times when a growth fund and value fund may own the same stock. Value stocks are companies that appear to the manager to be undervalued by the market as measured by certain financial formulas. Growth stocks are companies whose earnings growth potential appears to the manager to be greater than the market in general, and whose growth in revenue is expected to continue for an extended period.

Investment Goal

The fund seeks long-term capital appreciation—current income is the secondary objective.

Primary Investment Strategies

In pursuit of this goal, the fund management team uses the S&P 500^® Index as a benchmark and seeks to invest in stocks and market sectors in similar proportion to that index. The management team seeks to own securities in all sectors, but can overweight or underweight securities within sectors as they identify market opportunities. The fund normally invests at least 80% of its total net assets in equity securities. The fund primarily buys common stock but can also invest in preferred stock and securities convertible into common and preferred stock.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

The fund’s use of derivatives may reduce returns and/or increase volatiity. Volatility is defined as the characteristic of a security, an index or a market to fluctuate significantly in price within a short time period. A risk of the fund’s use of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets. Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. In addition, some derivatives are more sensitive to interest rate changes, market price fluctuations and general market liquidity than others.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	Since Inception	Inception Date
Select Equity
Return Before Taxes	-26.36%	-21.13%	-6.00%	4.97%	09/13/93
Return After Taxes on Distributions	-26.36%	-21.99%	-7.10%	3.41%
Return After Taxes on Distributions and Sale of Shares	-16.18%	-15.56%	-4.15%	4.10%
S&P 500^® (Reflects no deduction for fees, expenses or taxes)	-22.10%	-14.55%	-0.59%	9.14%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Service Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees			.55	%
Other expenses			.62	%
Service fees	.15	%
Processing fees	.15	%
Other	.32	%
Total annual fund operating expenses			1.17	%
Fee waivers and expense reimbursements*			.06	%
Net expenses*			1.11	%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.11% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 111 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Service Shares		$113		$365		$638		$1,414

Fund Management

The fund is managed by a team of investment professionals at BlackRock Advisors, Inc. (BlackRock), including Robert S. Kapito and R. Andrew Damm.

Robert S. Kapito, Vice Chairman of BlackRock, Inc. since 1988, is also the Head of the Portfolio Management Group, a member of the Management Committee, the Investment Strategy Group, and BlackRock’s Global Equity Operating Committee. Mr. Kapito is responsible for the portfolio management of the Fixed Income, Domestic Equity and International Equity, Liquidity and Alternative Investment Groups of BlackRock.

Financial Highlights

FINANCIAL HIGHLIGHTS

(For a Service Share Outstanding Throughout Each Period)

Select Equity Portfolio


	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	11.21		$	20.73		$	20.76		$	17.00		$	17.50

Income from investment operations
Net investment income		0.01	¹		0.01			0.01			0.07			0.12
Net gain (loss) on investments (both realized and unrealized)		(2.78	)		(6.43	)		1.61			4.37			0.48

Total from investment operations		(2.77	)		(6.42	)		1.62			4.44			0.60

Less distributions
Distributions from net investment income		– –			(0.03	)		(0.02	)		(0.07	)		(0.10	)
Distributions from capital		– –			(0.02	)		– –			– –			– –
Distributions from net realized gains		– –			(3.05	)		(1.63	)		(0.61	)		(1.00	)

Total distributions		– –			(3.10	)		(1.65	)		(0.68	)		(1.10	)

Net asset value at end of period	$	8.44		$	11.21		$	20.73		$	20.76		$	17.00

Total return		(24.71	)%		(35.49	)%		7.81	%		26.61	%		3.77	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	3,797		$	143,283		$	232,287		$	223,215		$	203,754
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.11	%		1.11	%		1.10	%		1.10	%		1.16	%
Before advisory/administration fee waivers		1.16	%		1.12			1.10	%		1.10	%		1.16	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		0.06	%		0.07	%		0.03	%		0.37	%		0.63	%
Before advisory/administration fee waivers		0.02	%		0.06	%		0.03	%		0.37	%		0.63	%
Portfolio turnover rate		124	%		114	%		103	%		22	%		27	%

¹	Calculated using the average shares outstanding method.

BlackRock

Index Equity Portfolio

IMPORTANT DEFINITIONS

S&P 500^® Index: The Standard & Poor’s Composite Stock Price Index, an unmanaged index of 500 stocks, most of which are listed on the New York Stock Exchange. The index is heavily weighted toward stocks with large market capitalizations and represents approximately two-thirds of the total market value of all domestic common stocks.

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

The Index Master Portfolio may invest some of its assets (generally not more than 5% of net assets) in certain short-term fixed income securities pending investment or to pay redeeming shareholders.

Key Risks

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

The chart and table on the next page give you a picture of the fund’s long-term performance for Services Shares. The information shows you how the fund’s performance has varied year by year and provides some indication of the risks of investing in the fund. The table compares the fund’s performance to that of the S&P 500^® Index, a recognized unmanaged index of stock market performance. As with all such investments, past performance is not an indication of future results.

The performance for the period before Service Shares were launched in July 1993 is based upon performance for Institutional Shares of the fund, which were first issued in April 1992. The actual return of Service Shares would have been lower than shown for the period before they were launched because Service Shares have higher expenses than Institutional Shares. Service Shares of the fund have expenses of 0.615% of average daily net assets (after waivers and reimbursements) for the current fiscal year and Institutional Shares of the fund have expenses of 0.18% of average daily net assets (after waivers and reimbursements) for the current fiscal year.

As of 12/31

ANNUAL TOTAL RETURN S*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	10 Years	Inception Date
Index Equity
Return Before Taxes	-22.58%	-15.09%	-1.17%	8.65%	04/20/92
Return After Taxes on Distributions	-22.92%	-15.32%	-1.49%	7.40%
Return After Taxes on Distributions and Sale of Shares	-13.85%	-11.73%	-1.04%	6.66%
S&P 500^® (Reflects no deduction for fees, expenses or taxes)	-22.10%	-14.55%	-0.59%	9.35%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown, and the after-tax returns are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Service Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses*

(Expenses that are deducted from fund assets)

Advisory fees			.025	%
Other expenses			.60	%
Service fees	.15	%
Processing fees	.15	%
Other	.30	%
Total annual fund operating expenses			.625	%
Fee waivers and expense reimbursements**			.01	%
Net expenses**			.615	%

*	The Annual Fund Operating Expenses table and the Example reflect the expenses of both the Index Equity and Index Master Portfolios.

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to .615% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 111 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Service Shares		$63		$199		$348		$779

Index Master Portfolio Management

Financial Highlights

FINANCIAL HIGHLIGHTS

(For a Service Share Outstanding Throughout Each Period)

Index Equity Portfolio


	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	19.97		$	27.54		$	24.67		$	19.64		$	18.32

Income from investment operations
Net investment income		0.25			0.16			0.16			0.19			0.22
Net gain (loss) on investments (both realized and unrealized)		(4.41	)		(7.61	)		2.97			5.10			1.34

Total from investment operations		(4.16	)		(7.45	)		3.13			5.29			1.56

Less distributions
Distributions from net investment income		(0.19	)		(0.12	)		(0.10	)		(0.20	)		(0.20	)
Distributions from net realized gains		– –			– –			(0.16	)		(0.06	)		(0.04	)

Total distributions		(0.19	)		(0.12	)		(0.26	)		(0.26	)		(0.24	)

Net asset value at end of period	$	15.62		$	19.97		$	27.54		$	24.67		$	19.64

Total return		(21.02	)%		(27.10	)%		12.66	%		26.96	%		8.54	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	63,468		$	292,389		$	378,997		$	354,283		$	233,696
Ratios of expenses to average net assets
After advisory/administration fee waivers		0.61	%¹		0.61	%¹		0.59	%¹		0.56	%¹		0.48	%¹
Before advisory/administration fee waivers		0.67	%¹		0.63	%¹		0.63	%¹		0.63	%¹		0.64	%¹
Ratios of net investment income to average net assets
After advisory/administration fee waivers		0.87	%		0.68	%		0.57	%		0.80	%		1.09	%
Before advisory/administration fee waivers		0.81	%		0.66	%		0.54	%		0.74	%		0.93	%
Portfolio turnover rate		6	%⁶		8	%⁵		8	%⁴		5	%³		9	%²

¹	Including expenses allocated from The U.S. Large Company Series of The DFA Investment Trust Company of 0.06% for the year ended 9/30/01, 0.06% for the year ended 9/30/00, 0.06% for the year ended 9/30/99, 0.06% for the year ended 9/30/98 and 0.07% for the year ended 9/30/97.

²	For period December 1, 1997 through November 30, 1998.

³	For period December 1, 1998 through November 30, 1999.

⁴	For period December 1, 1999 through November 30, 2000.

⁵	For period December 1, 2000 through September 30, 2001.

⁶	For period December 1, 2001 through September 30, 2002.

BlackRock

Balanced Portfolio

IMPORTANT DEFINITIONS

Asset-Backed Securities: Bonds that are backed by a pool of assets, usually loans such as installment sale contracts or credit card receivables.

Investment Goal

The fund seeks long-term capital appreciation—current income from fixed income securities is the secondary objective.

Primary Investment Strategies

Equity Portion

The manager initially screens for “value” and “growth” stocks from the universe of companies with market capitalization above $1 billion. In pursuit of this goal, the fund manager uses the S&P 500^® Index as a benchmark and seeks to invest in stocks and market sectors in similar proportion to that index. The manager seeks to own securities in all sectors, but can overweight or underweight securities within sectors as he identifies market opportunities. The portfolio manager will adjust the blend of value/growth stocks based on performance expectations. The fund will invest primarily in common stock but can also invest in preferred stock and securities convertible into common stock.

Fixed Income Portion

IMPORTANT DEFINITIONS

S&P 500 Index: The Standard & Poor’s Composite Stock Price Index, an unmanaged index of 500 stocks, most of which are listed on the New York Stock Exchange. The Index is heavily weighted toward stocks with large market capitalization and represents approximately two-thirds of the total market value of all domestic common stocks.

Value and Growth Companies: All stocks are generally divided into the categories of “growth” or “value,” although there are times when a growth fund and a value fund may own the same stock. Value stocks are companies that appear to the manager to be undervalued by the market as measured by certain financial formulas. Growth stocks are companies whose earnings growth potential appears to the manager to be greater than the market in general, and whose growth in revenue is expected to continue for an extended period.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The value of your investment can go up or down depending upon market conditions, which means you could lose money.

The main risk of any investment in stocks is that values fluctuate in price.

The fund may invest in companies that have relatively small market capitalizations. These organizations will normally have more limited product lines, markets and financial resources and will be dependent upon a more limited management group than larger capitalized companies. In addition, it is more difficult to get information on smaller companies, which tend to be less well known, have shorter histories, do not have significant ownership by large investors and are followed by relatively few securities analysts. The securities of small capitalized companies are often traded in the over-the-counter markets and may have fewer market makers and wider price spreads. This may result in greater price movements and less ability to sell the fund’s investment than

if the fund held the securities of larger, more established companies.

Two of the main risks of investing in the fund are interest rate risk and credit risk. Typically, when interest rates rise, there is a corresponding decline in the market value of bonds such as those held by the fund. Credit risk refers to the possibility that the issuer of the bond will not be able to make principal and interest payments.

The fund may invest up to 10% of its total assets in non-dollar denominated bonds of issuers located outside of the United States. Non-U.S. securities involve risks not typically associated with investing in U.S. securities. These risks include but are not limited to: currency risks (the risk that the value of interest paid on non-U.S. securities, or the value of the securities themselves, may fall if currency exchange rates change), the risk that a security’s value will be hurt by changes in non-U.S. political or social conditions, including changes in policies restricting non-U.S. investment, the possibility of heavy taxation, nationalization or expropriation of assets and more difficulty obtaining information on non-U.S. securities or companies. In addition, a portfolio of non-U.S. securities may be harder to sell and may be subject to wider price movements than comparable investments in U.S. companies. There is also less regulation of non-U.S. securities markets.

some derivatives are more sensitive to interest rate changes, market price fluctuations and general market liquidity than others.

Higher than normal portfolio turnover may result in increased transaction costs to the fund, including brokerage commissions, dealer mark-ups and other transaction costs on the sale of the securities and on reinvestment in other securities. The sale of fund securities may result in the recognition of capital gain or loss. Given the frequency of sales, such gain or loss will likely be short-term capital gain or loss. Unlike long-term capital gain, short-term capital gain of individuals it taxable at the same rates as ordinary income. These effects of higher than normal portfolio turnover may adversely affect fund performance.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

The chart and table below give you a picture of the fund’s long-term performance for Service Shares. The chart shows you how the fund’s performance has varied year by year and provides some indication of the risks of investing in the fund. The table compares the fund’s performance to that of a customized weighted index comprised of the returns of the S&P 500^® Index (65%) and the Lehman Aggregate Index (35%), recognized unmanaged indices of stock and bond market performance, respectively. As with all such investments, past performance is not an indication of future results.

The performance for the period before Service Shares were launched in July 1993 is based upon performance for Investor A Shares of the fund, which were first issued in May 1990 and Institutional Shares of the fund, which were first issued in May 1992. Service Shares of the fund have expenses of 1.23% of average daily net assets (after waivers and reimbursements) for the current fiscal year and Investor A Shares and Institutional Shares of the fund have expenses of 1.40% and 0.93%, respectively, of average daily net assets (after waivers and reimbursements) for the current fiscal year.

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	10 Years	Inception Date
Balanced
Return Before Taxes	-14.46%	-10.92%	-0.99%	6.40%	05/14/90
Return After Taxes on Distributions	-15.50%	-12.65%	-2.78%	4.49%
Return After Taxes on Distributions and Sale of Shares	-8.85%	-8.66%	-0.97%	4.78%
65% S&P 500^®/35% Leh. Agg. (Reflects no deduction for fees, expenses or taxes)	-11.41%	-6.14%	2.67%	9.01%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Service Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees			.55	%
Interest expense			.07	%
Other expenses			.64	%
Service fees	.15	%
Processing fees	.15	%
Other	.34	%
Total annual fund operating expenses			1.26	%
Fee waivers and expense reimbursements*			.03	%
Net expenses*			1.23	%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.16% (excluding interest expense) of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 111 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Service Shares		$125		$397		$689		$1,520

Fund Management

The fund is managed by a team of investment professionals at BlackRock Advisors, Inc. (Blackrock), including Robert S. Kapito, R. Andrew Damm and Keith T. Anderson.

R. Andrew Damm, a Managing Director since 1997, is the Equity Product Strategist and a member of the Equity Portfolio Management Group. From September 1997 through first quarter 2001, Mr. Damm was lead manager for the Large Cap Growth and Core Equity Portfolios. Before joining BlackRock in 1997, Mr. Damm had been with PNC Asset Management Group. Mr. Damm, who has served as co-manager since May 2002, has responsibility for the equity portion of the fund.

Keith T. Anderson, a Managing Director since 1988, has responsibility for the fixed income portion of the fund. Mr. Anderson has served as co-manager of the fund since 1995.

Financial Highlights

FINANCIAL HIGHLIGHTS

(For a Service Share Outstanding Throughout Each Period)

Balanced Portfolio


	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	13.26		$	20.15		$	19.73		$	18.34		$	18.21

Income from investment operations
Net investment income		0.27			0.29			0.42			0.42			0.42
Net gain (loss) on investments (both realized and unrealized)		(2.07	)		(4.04	)		1.11			2.18			1.34

Total from investment operations		(1.80	)		(3.75	)		1.53			2.60			1.76

Less distributions
Distributions from net investment income		(0.35	)		(0.33	)		(0.41	)		(0.42	)		(0.38	)
Distributions from net realized gains		– –			(2.81	)		(0.70	)		(0.79	)		(1.25	)

Total distributions		(0.35	)		(3.14	)		(1.11	)		(1.21	)		(1.63	)

Net asset value at end of period	$	11.11		$	13.26		$	20.15		$	19.73		$	18.34

Total return		(13.83	)%		(21.15	)%		7.78	%		14.49	%		10.43	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	3,379		$	147,535		$	197,633		$	219,018		$	176,557
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.21	%		1.16	%		1.15	%		1.16	%		1.20	%
After advisory/administration fee waivers (excluding interest expense)		1.16	%		1.16	%		1.15	%		1.16	%		1.20	%
Before advisory/administration fee waivers		1.26	%		1.18	%		1.15	%		1.16	%		1.20	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		2.00	%		1.93	%		2.00	%		2.14	%		2.22	%
Before advisory/administration fee waivers		1.96	%		1.91	%		2.00	%		2.14	%		2.22	%
Portfolio turnover rate		232	%		210	%		176	%		122	%		134	%

BlackRock

U.S. Opportunities Portfolio

IMPORTANT DEFINITIONS

Earnings Growth: The rate of growth in a companies earnings per share from period to period. Security analysts attempt to identify companies with earnings growth potential because a pattern of earnings growth may cause share prices to increase.

Fundamentals: “Fundamental” information about a company (such as its income statement, balance sheet, earnings and sales history, products and management).

Salomon Smith Barney Extended Market Index U.S.: An unmanaged index comprised of smaller- capitalization U.S. stocks representing the bottom 20% of available market capital, with a minimum market capitalization of at least $100 million.

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

The fund opened to new investors as of December 2, 2002. The fund may suspend sales to new investors at any time in the future.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

Because different kinds of stocks go in and out of favor depending on market conditions, this fund’s performance may be better or worse than other funds with different investment styles.

While the management team chooses stocks they believe to have above average earnings growth potential, there is no guarantee that the shares will increase in value or that they won’t move even lower.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

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Risk / Return Information

The chart and table below give you a picture of the fund’s long-term performance for Service Shares. The information shows you how the fund’s performance has varied year by year and provides some indication of the risks of investing in the fund. The table compares the fund’s performance to that of the Salomon Smith Barney Extended Market Index U.S., a recognized unmanaged index of stock market performance (the new benchmark). Prior to December 2, 2002, the Fund’s benchmark was the Wilshire Microcap Index. The new benchmark more accurately reflects the universe of securities in which the Fund will invest. As with all such investments, past performance is not an indication of future results.

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*


	1 Year	3 Years	Since Inception	Inception Date
U.S. Opportunities
Return Before Taxes	-38.92%	-21.62%	16.12%	5/01/98
Return After Taxes on Distributions	-38.92%	-24.64%	12.28%
Return After Taxes on Distributions and Sale of Shares	-23.89%	-16.77%	12.76%
Salomon Smith Barney EMI U.S. (Reflects no deduction for fees, expenses or taxes)	-31.46%	-10.74%	-4.93%	N/A
Wilshire Microcap (Reflects no deduction for fees, expenses or taxes)	-9.03%	1.30%	4.00%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

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IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Service Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees			1.10	%
Other expenses			.70	%
Service fees	.15	%
Processing fees	.15	%
Other	.40	%
Total annual fund operating expenses			1.80	%
Fee waivers and expense reimbursements*			– –
Net expenses*			1.80	%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.90% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 111 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Service Shares		$183		$566		$975		$2,116

Fund Management

102

Financial Highlights

FINANCIAL HIGHLIGHTS

(For a Service Share Outstanding Throughout Each Period)

U.S. Opportunities Portfolio


	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			For the Period 5/01/98¹ through 9/30/98
Net asset value at beginning of period	$	17.51		$	45.08		$	24.64		$	9.38		$	10.00

Income from investment operations
Net investment (loss)		(0.51	)		(0.05	)		(0.07	)		(0.07	)		(0.02	)
Net gain (loss) on investments (both realized and unrealized)		(3.79	)		(17.44	)		23.81			15.33			(0.60	)

Total from investment operations		(4.30	)		(17.49	)		23.74			15.26			(0.62	)

Less distributions
Distribution from capital		(0.33	)		– –			– –			– –			– –
Distributions from net realized gains		– –			(10.08	)		(3.30	)		– –			– –

Total distributions		(0.33	)		(10.08	)		(3.30	)		– –			– –

Net asset value at end of period	$	12.88		$	17.51		$	45.08		$	24.64		$	9.38

Total return		(25.26	)%		(46.55	)%		102.98	%		162.41	%		(6.10	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	483		$	1,059		$	2,824		$	690		$	69
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.75	%		1.75	%		1.75	%		1.73	%		1.68	%²
Before advisory/administration fee waivers		1.79	%		1.77	%		1.75	%		1.92	%		3.01	%²
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(1.51	)%		(0.19	)%		(0.20	)%		(1.00	)%		(0.61	)%²
Before advisory/administration fee waivers		(1.56	)%		(0.21	)%		(0.20	)%		(1.19	)%		(1.94	)%²
Portfolio turnover rate		361	%		402	%		445	%		346	%		119	%

¹	Commencement of operations of share class.

²	Annualized.

103

About Your Investment

Buying Shares

Service Shares are offered without a sales charge to financial institutions (such as banks and brokerage firms) acting on behalf of their customers, certain persons who were shareholders of the Compass Capital Group of Funds at the time of its combination with The PNC^® Fund in 1996 and investors that participate in the Capital Directions^SM asset allocation program. Service Shares will normally be held by institutions or in the name of nominees of institutions on behalf of their customers. Service Shares are normally purchased through a customer’s account at an institution through procedures established by the institution. In these cases, confirmation of share purchases and redemptions will be sent to the institutions. A customer’s ownership of shares will be recorded by the institution and reflected in the account statements provided by the institutions to their customers. Investors wishing to purchase Service Shares should contract their institutions.

Purchase orders may be placed by calling (800) 441-7450.

What Price Per Share Will You Pay?

Since the NAV changes daily, the price you pay for your shares depends on the time that your order is received.

104

Shares will not be priced on days the NYSE is closed. Purchase orders received after the close of trading will be priced based on the next calculation of NAV. Non-U.S. securities and certain other securities held by a fund may trade on days when the NYSE is closed. In these cases, net asset value of shares may change when fund shares cannot be bought or sold.

Paying for Shares

Payment for Service Shares must normally be made in Federal funds or other funds immediately available by 4 p.m. (Eastern time) on the first business day following receipt of the order. Payment may also, at the discretion of the Company, be made in the form of securities that are permissible investments for the respective fund.

How Much is the Minimum Investment?

The minimum investment for the initial purchase of Service Shares is $5,000; however, institutions may set a higher minimum for their customers. There is no minimum requirement for later investments. The Company does not accept third party checks as payment for shares.

The Company may reject any purchase order, modify or waive the minimum initial or subsequent investment requirements and suspend and resume the sale of any share class of any fund at any time.

Distribution and Service Plan

Under the Plan, the Company also may enter into arrangements with brokers, dealers, financial institutions and industry professionals (Service Organizations) (including PNC Bank, BlackRock and their affiliates).

105

Under these arrangements, Service Organizations will provide certain support services to their customers who own Service Shares. The Company may pay a shareholder servicing fee of up to .15% per year of the average daily net asset value of Service Shares owned by each Service Organization’s customers.

In return for the fee, Service Organizations may provide one or more of the following services to their customers who own Service Shares:

(1)

Responding to customer questions on the services performed by the Service Organization and investments in Service Shares;

(2)

Assisting customers in choosing and changing dividend options, account designations and addresses; and

(3)

Providing other similar shareholder liaison services.

For a separate shareholder processing fee paid by all Service Shares of up to .15% per year of the average daily net asset value of Service Shares owned by each Service Organization’s customers, Service Organizations may provide one or more of these additional services:

(1)

Processing purchase and redemption requests from customers and placing orders with the Company’s transfer agent or the Company’s distributor;

(2)

Processing dividend payments from the Company on behalf of customers;

(3)

Providing sub-accounting for Service Shares beneficially owned by customers or the information necessary for sub-accounting; and

(4)

Providing other similar services.

BlackRock may receive a significant portion of these shareholder processing fees.

106

Master-Feeder Structure

Selling Shares

Customers of institutions may redeem Service Shares in accordance with the procedures applicable to their accounts with the institutions. These procedures will vary according to the type of account and the institution involved and customers should consult their account managers in this regard. Institutions are responsible for transmitting redemption orders to PFPC and crediting their customers’ accounts with redemption proceeds on a timely basis. In the case of shareholders holding share certificates the certificates must accompany the redemption request.

Institutions may place redemption orders by telephoning (800) 441-7450. Shares are redeemed at their net asset value per share next determined after receipt of the redemption order, minus any applicable redemption/exchange fee. Each of the Mid-Cap Value, Mid-Cap Growth, Small Cap Value, Small Cap Core, Small Cap Growth, European Equity, Asia Pacific Equity, International Equity and International Opportunities Portfolios will deduct a fee of 2% from the redemption amount if the shares being redeemed have been held 90 days or less (other than shares acquired through reinvestment of dividends or other distributions). This fee applies only to (i) shares of the European Equity, Asia Pacific Equity, International Equity and International Opportunities Portfolios purchased on or after December 5, 2001 and (ii) subject to the approval of the Company’s Board of Trustees, shares of the Mid-Cap Value, Mid-Cap Growth, Small Cap Value, Small Cap Core and Small Cap Growth Portfolios purchased on or after March 1, 2003 and is designed to offset the costs and expenses associated with early redemptions. The Company, the administrators and the distributor will employ

107

reasonable procedures to confirm that instructions communicated by telephone are genuine. The Company and its service providers will not be liable for any loss, liability, cost or expense for acting upon telephone instructions that are reasonably believed to be genuine in accordance with such procedures.

Payment for redeemed shares for which a redemption order is received before 4 p.m. (Eastern time) on a business day is normally made in Federal funds wired to the redeeming institution on the next business day, provided that the funds’ custodian is also open for business. Payment for redemption orders received after 4 p.m. (Eastern time) or on a day when the funds’ custodian is closed is normally wired in Federal funds on the next business day following redemption on which the funds’ custodian is open for business. The Company reserves the right to wire redemption proceeds within seven days after receiving a redemption order if, in the judgement of BlackRock Advisors, Inc., an earlier payment could adversely affect a fund. No charge for wiring redemption payments is imposed by the Company, although institutions may charge their customer accounts for redemption services. Information relating to such redemption services and charges, if any, should be obtained by customers from their institutions.

Persons who were shareholders of the Compass Capital Group of Funds at the time of its combination with the PNC^® Fund may redeem for cash some or all of their shares of a fund at any time by sending a written redemption request in proper form to BlackRock Funds at 100 Bellevue Parkway, Mail Stop WR-R100-04-07, Wilmington, DE 19809. They may also redeem shares by telephone if they have signed up for the expedited redemption privilege.

During periods of substantial economic market change telephone redemptions may be difficult to complete. Redemption requests may also be mailed to BlackRock Funds at 100 Bellevue Parkway, Mail Stop WR-R100-04-07, Wilmington, DE 19809.

The Company is not responsible for the efficiency of the Federal wire system or the shareholder’s firm or bank. The fund does not currently charge for wire transfers. The shareholder is responsible for any charges imposed by the shareholder’s bank. To change the name of the single, designated bank account to receive wire redemption proceeds, it is necessary to send a written request to BlackRock Funds at 100 Bellevue Parkway, Mail Stop WR-R100-04-07, Wilmington, DE 19809.

108

The Company may refuse a telephone redemption request if it believes it is advisable to do so and may use reasonable procedures to make sure telephone instructions are genuine.

Persons who were shareholders of an investment portfolio of the Compass Capital Group of Funds at the time of the portfolio combination with The PNC^® Fund may also purchase and redeem Service Shares of the same fund and for the same account in which they held shares on that date through the procedures described in this section.

If a shareholder acquiring Service Shares on or after May 1, 1998 (other than a former shareholder of The Compass Capital Group) no longer meets the eligibility standards for purchasing Service Shares, then the shareholder’s Service Shares will be converted to Investor A Shares of the same fund having the same total net asset value as the shares converted. Investor A Shares are currently authorized to bear additional service and distribution fees at the total annual rate of .20% of average daily net assets. If a shareholder acquiring Service Shares on or after May 1, 1998 later becomes eligible to purchase Institutional Shares (other than due to changes in market value), then the shareholder’s Service Shares will be converted to Institutional Shares of the same fund having the same total net asset value as the shares converted.

The Company's Rights

The Company may:

Suspend the right of redemption if trading is halted or restricted on the NYSE or under other emergency conditions described in the Investment Company Act of 1940,

Redeem shares involuntarily in certain cases, such as when the value of a shareholder account falls below a specified level, as described below, and

Redeem shares for property other than cash if conditions exist which make cash payments undesirable in accordance with its rights under the Investment Company Act of 1940.

109

Statements

Accounts with Low Balances

The Company may redeem a shareholder’s account in any fund at any time the net asset value of the account in such fund falls below $5,000 as the result of a redemption. The shareholder will be notified in writing that the value of the account is less than the required amount and the shareholder will be allowed 30 days to make additional investments before the redemption is processed. If a customer has agreed with an institution to maintain a minimum balance in his or her account, and the balance in the account falls below the minimum, the customer may be obligated to redeem all or part of his or her shares in the fund to the extent necessary to maintain the minimum balance required.

Market Timing

110

IMPORTANT DEFINITIONS

Adviser: The adviser of a mutual fund is responsible for the overall investment management of the fund. The advisers for BlackRock Funds are BlackRock Advisors, Inc. and BlackRock International Ltd. The adviser for the Index Equity Portfolio is Dimensional Fund Advisors Inc.

Equity and International Opportunities Portfolios purchased on or after December 5, 2001 and (ii) subject to the approval of the Company’s Board of Trustees, shares of the Mid-Cap Value, Mid-Cap Growth, Small Cap Value, Small Cap Core and Small Cap Growth Portfolios purchased on or after March 1, 2003, and is for the benefit of the remaining shareholders. The fee is intended to encourage long-term investment, to compensate for transaction and other expenses caused by early redemptions, and to facilitate portfolio management. The “first-in, first-out” method is used to determine the holding period. Under this method, the date of redemption or exchange will be compared with the earliest purchase date of shares held in the account. The redemption fee will not be assessed on redemptions or exchanges by (i) accounts managed by PNC Advisors, (ii) certain 401(k) plans, bank or trust company accounts, asset allocation programs or wrap programs approved by the Company, (iii) accounts in the event of shareholder death or disability and (iv) certain other accounts in the absolute discretion of the Company when a shareholder can demonstrate hardship.

Management

BlackRock Funds’ adviser is BlackRock Advisors, Inc. (BlackRock). BlackRock was organized in 1994 to perform advisory services for investment companies and is located at 100 Bellevue Parkway, Wilmington, DE 19809. BlackRock is a wholly-owned subsidiary of BlackRock, Inc., one of the largest publicly traded investment management firms in the United States with $273 billion of assets under management as of December 31, 2002. BlackRock, Inc. is a majority-owned subsidiary of the PNC Financial Services Group, Inc., one of the largest diversified financial services companies in the United States. BlackRock International, Ltd. (BIL), an affiliate of BlackRock located at 40 Torphichen Street, Edinburgh, Scotland EH3 8JB, acts as co-adviser and sub-adviser to the Company. BlackRock Financial Management, Inc. (BFM), an affiliate of BlackRock located at 40 E. 52nd Street, New York, NY 10022, acts as sub-adviser to the Company. The only fund not managed by BlackRock or BIL is the Index Equity Portfolio, which invests all of its assets in the Index Master Portfolio. The Index Master Portfolio is advised by Dimensional Fund Advisors Inc. (DFA), located at 1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401. DFA was organized in May 1981 and provides investment management

111

services to institutional investors. As of November 30, 2002, DFA had over $34 billion in assets under management.

For their investment advisory and sub-advisory services, BlackRock, BFM, BIL and DFA, as applicable, are entitled to fees computed daily on a fund-by-fund basis and payable monthly. For the fiscal year ended September 30, 2002, the aggregate advisory fees paid by the funds to BlackRock, or BIL, as applicable, as a percentage of average daily net assets were:

Large Cap Value Equity	0.49	%
Large Cap Growth Equity	0.50	%
Mid-Cap Value Equity	0.80	%
Mid-Cap Growth Equity	0.80	%
Small Cap Value Equity	0.54	%
Small Cap Core Equity	0.00	%
Small Cap Growth Equity	0.53	%
Global Science & Technology Opportunities	0.78	%
European Equity	0.52	%
Asia Pacific Equity	0.00	%
International Equity	0.69	%
International Opportunities	0.90	%
Select Equity	0.49	%
Balanced	0.52	%
U.S. Opportunities	1.05	%

For the fiscal year ended November 30, 2002, the Index Master Portfolio paid DFA an aggregate advisory fee of .025% of average daily net assets.

The total annual advisory fees that can be paid to BlackRock or BIL, as applicable (as a percentage of average daily net assets), are as follows:

Total Annual Advisory Fee for the Large Cap Value Equity, Large Cap Growth Equity, Small Cap Value Equity, Small Cap Growth Equity, Select Equity and Balanced Portfolios (Before Waivers)

AVERAGE DAILY NET ASSETS		INVESTMENT ADVISORY FEE
First $1 billion		.550%
$1 billion-$2 billion		.500%
$2 billion-$3 billion		.475%
more than $3 billion		.450%

112

Total Annual Advisory Rate for the Mid-Cap Value Equity and Mid-Cap Growth Equity Portfolios (Before Waivers)

AVERAGE DAILY NET ASSETS		INVESTMENT ADVISORY FEE
First $1 billion		.800%
$1 billion-$2 billion		.700%
$2 billion-$3 billion		.675%
more than $3 billion		.625%

Total Annual Advisory Fee for the Global Science & Technology Opportunities, European Equity and Asia Pacific Equity Portfolios (Before Waivers)

AVERAGE DAILY NET ASSETS		INVESTMENT ADVISORY FEE
First $1 billion		.900%
$1 billion-$2 billion		.850%
$2 billion-$3 billion		.800%
more than $3 billion		.750%

Total Annual Advisory Fee for the International Equity Portfolio (Before Waivers)

AVERAGE DAILY NET ASSETS		INVESTMENT ADVISORY FEE
First $1 billion		.750%
$1 billion-$2 billion		.700%
$2 billion-$3 billion		.675%
more than $3 billion		.650%

Total Annual Advisory Rate for the International Opportunities Portfolio (Before Waivers)

AVERAGE DAILY NET ASSETS		INVESTMENT ADVISORY FEE
First $1 billion		1.00%
$1 billion-$2 billion		.950%
$2 billion-$3 billion		.900%
more than $3 billion		.850%

113

Total Annual Advisory Fee for the U.S. Opportunities Portfolio (Before Waivers)

AVERAGE DAILY NET ASSETS		INVESTMENT ADVISORY FEE
First $1 billion		1.10%
$1 billion-$2 billion		1.05%
$2 billion-$3 billion		1.025%
more than $3 billion		1.00%

The Small Cap Core Equity Portfolio pays BlackRock a maximum annual advisory fee of 1.00% of its average daily net assets.

The Index Master Portfolio pays DFA a maximum annual advisory fee of .025% of its average daily net assets.

Information about the portfolio manager for each of the funds is presented in the appropriate fund section.

As discussed above, BlackRock has agreed to cap each fund’s net expenses at the levels shown in that fund’s expense table.

Large Cap Value Equity		.630%
Large Cap Growth Equity		.650%
Mid-Cap Value Equity		1.085%
Mid-Cap Growth Equity		1.055%
Small Cap Value Equity		.795%
Small Cap Core Equity		1.125%
Small Cap Growth Equity		.815%
Global Science and Technology Opportunities		1.255%
European Equity		1.275%
Asia Pacific Equity		1.275%
International Equity		.995%
International Opportunities		1.275%
Select Equity		.645%
Index Equity		.150%
Balanced		.690%
U.S. Opportunities		1.425%

114

If within two years following a waiver or reimbursement the operating expenses of a fund that previously receive a waiver or reimbursement from BlackRock or BIL, as applicable, are less than the expense limit for that fund, the fund is required to repay BlackRock or BIL, as applicable, up to the amount of fees waived or expenses reimbursed under the agreement if: (1) the fund has more than $50 million in assets, (2) BlackRock or BIL, as applicable, continues to be the fund’s investment adviser and (3) the Board of Trustees of the Company has approved in advance the payments to BlackRock or BIL, as applicable, at the previous quarterly meeting of the Board.

Dividends and Distributions

BlackRock Funds makes two kinds of distributions to shareholders: net investment income and net realized capital gains.

Distributions of net investment income derived by a fund are paid within 10 days after the end of each quarter. The Company’s Board of Trustees may change the timing of such dividend payments.

Net realized capital gains (including net short-term capital gains), if any, will be distributed by a fund at least annually at a date determined by the Company’s Board of Trustees.

The Index Equity Portfolio seeks to achieve its investment objective by investing all of its assets in the Index Master Portfolio (which is taxable as a partnership for federal income tax purposes). The Index Equity Portfolio is allocated its distributive share of the income, gains (including capital gains), losses, deductions and credits of the Index Master Portfolio. The Index Equity Portfolio’s distributive share of such items, plus gain (or minus loss), if any, on the redemption of shares of the Index Master Portfolio, less the Index Equity Portfolio’s expenses incurred in operations will constitute the Index Equity Portfolio’s net income from which dividends are distributed as described above.

115

Taxation of Distributions

Distributions paid out of a fund’s “net capital gain” will be taxed to shareholders as long-term capital gain, regardless of how long a shareholder has owned shares. Distribution of net investment income and net short-term capital gains will be taxed to shareholders as ordinary income.

Your annual tax statement from the Company will present in detail the tax status of your distributions for each year.

Distributions paid by a fund with respect to certain qualifying dividends received by the fund from domestic corporations may be eligible for the corporate dividends received deduction.

Important Notice Regarding Delivery of Shareholder Documents

Electronic Access to Shareholder Documents

116

To enroll:

Shareholders Who Hold Accounts With Investment Advisers, Banks or Brokerages:

1) Have your enrollment number ready. If you do not have one, please contact your financial adviser.

2) Log on to www.investordelivery.com.

3) Enter your assigned enrollment number plus the four-digit personal identification number (PIN) of your choice. The PIN should be the same for all accounts using the same e-mail address, and will be required if you decide to change your delivery preference. Note: If you have additional BlackRock Fund shares in more than one account, you may receive additional copies of this notice with a separate enrollment number for each account. In that case, provide the information that applies to each enrollment number. If you have any questions, please contact your financial adviser.

Shareholders Who Hold Accounts Directly With the Fund:

1) Log on to http://funds.blackrock.com.

2) Click on Electronic Delivery icon on either side of your screen.

3) Complete the on-line form by entering your social security number, e-mail address and by selecting your electronic delivery preference.

117

For more information:

Annual/Semi-Annual Reports

Statement of Additional Information (SAI)

A Statement of Additional Information, dated January 28, 2003, has been filed with the Securities and Exchange Commission (SEC). The SAI, which includes additional information about the BlackRock Funds, may be obtained free of charge, along with the Company’s annual and semi-annual reports, by calling (800) 441-7450. The SAI, as supplemented from time to time, is incorporated by reference into this Prospectus.

Shareholder Account Service Representatives

Representatives are available to discuss account balance information, mutual fund prospectuses, literature, programs and services available. Hours: 8:30 a.m. to 5:30 p.m. (Eastern time), Monday-Friday. Call: (800) 441-7450.

Purchases and Redemptions

Call your registered representative or (800) 441-7450.

World Wide Web

Access general fund information and specific fund

performance. Request mutual fund prospectuses and literature. Forward mutual fund inquiries. www.blackrock.com

Email

Request prospectuses, SAI, Annual or Semi-Annual

Reports and literature. Forward mutual fund inquiries.

Mail to: funds@blackrock.com

Written Correspondence

BlackRock Funds

100 Bellevue Parkway

Mail Stop WR-R100-04-07

Wilmington, DE 19809

Internal Wholesalers/Broker Dealer Support

Available to support investment professionals

9 a.m. to 6 p.m. (Eastern time), Monday-Friday.

Call: (888) 8BLACKROCK

Securities and Exchange Commission (SEC)

INVESTMENT COMPANY ACT FILE NO. 811-05742

EQSRVCPROS2/03

World class institutional asset management at a personal level

BlackRock Funds

Equity Portfolios

Institutional Shares

Prospectus

January 28, 2003

BlackRock Funds^SMis a mutual

fund family with 43 investment

portfolios, 16 of which are

described in this prospectus.

NOT FDIC		May Lose Value
INSURED		No Bank Guarantee

The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.

Table of

Contents


*How to find the information you need* *How to find the information you need*		1

THE BLACKROCK EQUITY PORTFOLIOS

*Large Cap Value*		2

*Large Cap Growth*		7

*Mid-Cap Value*		12

*Mid-Cap Growth*		17

*Small Cap Value*		22

*Small Cap Core*		27

*Small Cap Growth*		32

*Global Science & Technology Opportunities*		38

*European Equity*		46

*Asia Pacific Equity*		54

*International Equity*		62

*International Opportunities*		69

*Select Equity*		76

*Index Equity*		82

*Balanced*		87

*U.S. Opportunities*		94

*About Your Investment* *How to Buy/Sell Shares*		*100*

*Dividends/Distributions/Taxes*		*109*

How to Find the

Information You Need

About BlackRock Funds

BlackRock

Large Cap Value Equity Portfolio

IMPORTANT DEFINITIONS

Value Companies: All stocks are generally divided into the categories of “growth” or “value,” although there are times when a growth fund and value fund may own the same stock. Value stocks are companies that appear to the manager to be undervalued by the market as measured by certain financial formulas. Growth stocks are companies whose earnings growth potential appears to the manager to be greater than the market in general, and whose growth in revenue is expected to continue for an extended period.

Investment Goal

The fund seeks long-term capital appreciation—current income is the secondary objective.

Primary Investment Strategies

The management team may, when consistent with the fund’s investment objective, use options or futures (commonly known as

derivatives). An option is the right to buy or sell a security or an index of securities at a specific price on or before a specific date. A future is an agreement to buy or sell a security or an index of securities at a specific price on a specific date. The primary purpose of using derivatives is to attempt to reduce risk to the fund as a whole (hedge) but they may also be used to maintain liquidity and commit cash pending investment. The management team also may, but under normal market conditions generally does not intend to, use derivatives for speculation to increase returns.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

While the management team chooses stocks they believe to be undervalued, there is no guarantee that the shares will increase in value or that they won’t move even lower.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	10 Years	Inception Date
Large Cap Value
Return Before Taxes	-23.96%	-8.96%	-2.88%	8.31%	04/20/92
Return After Taxes on Distributions	-24.23%	-10.03%	-4.39%	5.79%
Return After Taxes on Distributions and Sale of Shares	-14.70%	-7.01%	-2.31%	6.28%
Russell 1000 Value (Reflects no deduction for fees, expenses or taxes)	-15.52%	-5.14%	1.16%	10.81%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

The table below describes the fees and expenses that you may pay if you buy and hold Institutional Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees	.54	%
Other expenses	.30	%
Total annual fund operating expenses	.84	%
Fee waivers and expense reimbursements*	.05	%
Net expenses*	.79	%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to .79% of average daily net assets until February 1, 2004. The fund may have to repay these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 105 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual cost may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Institutional Shares		$81		$263		$461		$1,033

Fund Management

The fund is managed by a team of investment professionals at BlackRock Advisors, Inc. (BlackRock), including Chris R. Kaufman, leader of the BlackRock large cap value team and Managing Director at BlackRock since July 2000; Gemma Ivol, Vice President and investment manager at BlackRock since 1995; Paul Sloate, director and investment manager at BlackRock since September 2001; and John M. Chambers, Vice President and investment manager at BlackRock since August 2000. Prior to joining BlackRock, Mr. Kaufman was a Senior Vice President and Portfolio Manager at Retirement System Investors Inc. (“RSI”) since 1995 and Director of Research at RSI since 1997, and Ms. Ivol served as an equity analyst with Provident Capital Management from 1988 to 1995. Prior to joining BlackRock, Mr. Sloate was an assistant portfolio manager at Schneider Capital Management Company from 1997 to 2001 and was a senior investment analyst and Vice President with Wellington Management Company, LLP in 1995 and 1996. Mr. Chambers formerly was an equity analyst covering technology stocks for the large cap growth and value products at RSI, prior to which he served as an equity analyst in the private client area at Schroder & Co. from 1996 to 2000. Mr. Kaufman has been lead manager of the portfolio since July 2000, Mr. Chambers has been a portfolio co-manager since September 2000, Ms. Ivol since June 2000 and Mr. Sloate since January 2002.

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Institutional Share Outstanding Throughout Each Period)

Large Cap Value Equity Portfolio



	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	12.60		$	15.13		$	15.75		$	14.69		$	17.53

Income from investment operations
Net investment income		0.10			0.14			0.16			0.22			0.22
Net gain (loss) on investments (both realized and unrealized)		(3.42	)		(1.28	)		0.79			2.01			(0.58	)

Total from investment operations		(3.32	)		(1.14	)		0.95			2.23			(0.36	)

Less distributions
Distributions from net investment income		(0.09	)		(0.14	)		(0.16	)		(0.22	)		(0.23	)
Distributions from net realized gains		(0.37	)		(1.25	)		(1.41	)		(0.95	)		(2.25	)

Total distributions		(0.46	)		(1.39	)		(1.57	)		(1.17	)		(2.48	)

Net asset value at end of period	$	8.82		$	12.60		$	15.13		$	15.75		$	14.69

Total return		(27.41	)%		(8.22	)%		6.24	%		15.38	%		(2.27	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	369,792		$	1,345,903		$	1,821,839		$	1,909,445		$	1,841,171
Ratios of expenses to average net assets
After advisory/administration fee waivers		0.79	%		0.79	%		0.78	%		0.78	%		0.83	%
Before advisory/administration fee waivers		0.84	%		0.80	%		0.78	%		0.78	%		0.84	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		0.72	%		1.00	%		1.11	%		1.37	%		1.45	%
Before advisory/administration fee waivers		0.68	%		0.99	%		1.11	%		1.37	%		1.44	%
Portfolio turnover rate		128	%		114	%		121	%		42	%		33	%

BlackRock

Large Cap Growth Equity Portfolio

IMPORTANT DEFINITIONS

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

The fund generally will sell a stock when, in the management team’s opinion, there is a deterioration in the company’s fundamentals, or if the company fails to meet performance expectations.

securities at a specific price on a specific date. The primary

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

While the management team chooses stocks they believe have above-average earnings growth potential, there is no guarantee that the shares will increase in value or that they won’t move lower.

Higher than normal portfolio turnover may result in increased transaction costs to the fund, including brokerage commissions, dealer mark-ups and other transaction costs on the sale of the securities and on reinvestment in other securities. The sale of fund securities may result in the recognition of capital gain or loss. Given the frequency of sales, such gain or loss will likely be short-term gain or loss. Unlike long-term capital gain, short-term capital gain of individuals is taxable at the same rates as ordinary income. These effects of higher than normal portfolio turnover may adversely affect fund performance.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	10 Years	Inception Date
Large Cap Growth
Return Before Taxes	-30.82%	-30.37%	-8.22%	3.30%	11/01/89
Return After Taxes on Distributions	-30.82%	-31.23%	-9.79%	1.64%
Return After Taxes on Distributions and Sale of Shares	-18.93%	-21.88%	-5.29%	3.21%
Russell 1000 Growth (Reflects no deduction for fees, expenses or taxes)	-27.89%	-23.64%	-3.84%	6.71%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Institutional Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees	.55	%
Other expenses	.32	%
Total annual fund operating expenses	.87	%
Fee waivers and expense reimbursements*	.05	%
Net expenses*	.82	%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to .82% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 105 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Institutional Shares		$84		$273		$477		$1,068

Fund Management

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Institutional Share Outstanding Throughout Each Period)

Large Cap Growth Equity Portfolio



	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	9.10		$	23.72		$	22.57		$	18.14		$	18.92

Income from investment operations
Net investment income (loss)		(0.01	)		(0.02	)		(0.06	)		– –			0.03
Net gain (loss) on investments (both realized and unrealized)		(2.38	)		(11.82	)		4.83			6.06			1.85

Total from investment operations		(2.39	)		(11.84	)		4.77			6.06			1.88

Less distributions
Distributions from net investment income		– –			– –			– –			– –			(0.02	)
Distributions from net realized gains		– –			(2.78	)		(3.62	)		(1.63	)		(2.64	)

Total distributions		– –			(2.78	)		(3.62	)		(1.63	)		(2.66	)

Net asset value at end of period	$	6.71		$	9.10		$	23.72		$	22.57		$	18.14

Total return		(26.26	)%		(55.58	)%		22.90	%		35.46	%		11.76	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	100,521		$	557,928		$	1,263,796		$	1,115,368		$	922,896
Ratios of expenses to average net assets
After advisory/administration fee waivers		0.82	%		0.82	%		0.80	%		0.81	%		0.86	%
Before advisory/administration fee waivers		0.87	%		0.83	%		0.80	%		0.81	%		0.86	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(0.05	)%		(0.11	)%		(0.24	)%		(0.01	)%		0.18	%
Before advisory/administration fee waivers		(0.09	)%		(0.12	)%		(0.24	)%		(0.01	)%		0.18	%
Portfolio turnover rate		130	%		164	%		121	%		60	%		54	%

BlackRock

Mid-Cap Value Equity Portfolio

IMPORTANT DEFINITIONS

Equity Security: A security, such as stock, representing ownership of a company. Bonds, in comparison, are referred to as fixed income or debt securities because they represent indebtedness to the bondholder, not ownership (although convertible bonds are fixed income securities that are convertible to equity according to their terms).

Value Companies: All stocks are generally divided into the categories of “growth” or “value,”although there are times when a growth fund and value fund may own the same stock. Value stocks are companies that appear to the manager to be undervalued by the market as measured by certain financial formulas. Growth stocks are companies whose earnings growth potential appears to the manager to be greater than the market in general, and whose growth in revenue is expected to continue for an extended period.

Investment Goal

The fund seeks long-term capital appreciation—current income is the secondary objective.

Primary Investment Strategies

The fund manager is seeking mid-capitalization stocks which he believes are worth more than is indicated by current market price. The fund manager initially screens for “value” stocks from the universe of companies with market capitalizations between $1 billion and $10 billion. The fund manager uses fundamental analysis to examine each company for financial strength before deciding to purchase the stock.

The fund generally will sell a stock when it reaches a target price, which is when the fund manager believes it is fully valued or when, in the fund manager’s opinion, conditions change such that the risk of continuing to hold the stock is unacceptable when compared to its growth potential.

The fund manager may, when consistent with the fund’s investment objective, use options or futures (commonly known as derivatives). An option is the right to buy or sell a security or an

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

While the fund manager chooses stocks he believes to be undervalued, there is no guarantee that the shares will increase in value or that they won’t move even lower.

term gain or loss. Unlike long-term capital gain, short-term capital gain of individuals is taxable at the same rates as ordinary income.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	Since Inception	Inception Date
Mid-Cap Value
Return Before Taxes	-16.67%	-2.91%	-1.82%	2.68%	12/27/96
Return After Taxes on Distributions	-17.87%	-3.66%	-2.49%	1.84%
Return After Taxes on Distributions and Sale of Shares	-9.09%	-2.36%	-1.53%	1.97%
Russell Midcap Value (Reflects no deduction for fees, expenses or taxes)	-9.65%	3.29%	2.96%	7.49%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The tables below describe the fees and expenses that you may pay if you buy and hold Institutional Shares of the fund. The “Annual Fund Operating Expenses” table is based on expenses for the most recent fiscal year.

Shareholder Fees

(Fees paid directly from your investment)

Redemption/Exchange Fee*		2	%
(as a percentage of amount redeemed)

*	Subject to the approval of the Company’s Board of Trustees, fee applies only to shares purchased on or after March 1, 2003 that are redeemed or exchanged within 90 days of purchase.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees	.80	%
Other expenses	.35	%
Total annual fund operating expenses	1.15	%
Fee waivers and expense reimbursements*	—
Net expenses*	1.15	%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.26% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 105 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Institutional Shares		$117		$365		$633		$1,398

Fund Management

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Institutional Share Outstanding Throughout Each Period)

Mid-Cap Value Equity Portfolio


	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	11.34		$	12.66		$	11.35		$	10.63		$	12.80

Income from investment operations
Net investment income		0.01			0.08			0.08			0.11			0.10
Net gain (loss) on investments (both realized and unrealized)		(0.89	)		(1.12	)		1.56			0.72			(1.81	)

Total from investment operations		(0.88	)		(1.04	)		1.64			0.83			(1.71	)

Less distributions
Distributions from net investment income		(0.02	)		(0.07	)		(0.08	)		(0.11	)		(0.10	)
Distributions from net realized gains		– –			(0.21	)		(0.25	)		– –			(0.36	)

Total distributions		(0.02	)		(0.28	)		(0.33	)		(0.11	)		(0.46	)

Net asset value at end of period	$	10.44		$	11.34		$	12.66		$	11.35		$	10.63

Total return		(7.79	)%		(8.29	)%		14.35	%		7.68	%		(13.68	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	57,868		$	208,432		$	216,660		$	233,891		$	205,634
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.14	%		1.13	%		1.13	%		1.12	%		1.14	%
Before advisory/administration fee waivers		1.14	%		1.13	%		1.13	%		1.12	%		1.20	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		0.08	%		0.67	%		0.66	%		0.88	%		0.89	%
Before advisory/administration fee waivers		0.08	%		0.67	%		0.66	%		0.88	%		0.83	%
Portfolio turnover rate		323	%		243	%		205	%		88	%		71	%

BlackRock

Mid-Cap Growth Equity Portfolio

IMPORTANT DEFINITIONS

Equity Security: A security, such as stock, representing ownership of a company. Bonds, in comparison, are referred to as fixed income or debt securities because they represent indebtedness to the bondholder, not ownership (although convertible bonds are fixed income securities that are convertible to equity according to their terms).

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

The fund generally will sell a stock when, in the management team’s opinion, there is a deterioration in the company’s fundamentals or the company fails to meet performance expectations.

future is an agreement to buy or sell a security or an index of securities at a specific price on a specific date. The primary purpose of using derivatives is to attempt to reduce risk to the fund as a whole (hedge) but they may also be used to maintain liquidity and commit cash pending investment. The management team also may, but under normal market conditions generally does not intend to, use derivatives for speculation to increase returns.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

From time to time the fund may invest in shares of companies through initial public offerings (IPOs). IPOs and companies that have recently gone public have the potential to produce substantial gains for the fund. However, there is no assurance that the funds will have access to profitable IPOs. Furthermore, stocks of some newly public companies may decline shortly after the initial public offering.

The fund’s use of derivatives may reduce returns and/or increase volatility. Volatility is defined as the characteristic of a security of a market to fluctuate significantly in price within a short time period. A risk of the fund’s use of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets. Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. In addition, some derivatives are more sensitive to interest rate changes, market price fluctuations and general market liquidity than others.

Higher than normal portfolio turnover may result in increased transaction costs to the fund, including brokerage commissions,

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	Since Inception	Inception Date
Mid-Cap Growth
Return Before Taxes	-28.54%	-24.36%	3.19%	5.09%	12/27/96
Return After Taxes on Distributions	-28.54%	-27.82%	-1.82%	0.79%
Return After Taxes on Distributions and Sale of Shares	-17.52%	-18.44%	1.99%	3.64%
Russell Midcap Growth (Reflects no deduction for fees, expenses or taxes)	-27.40%	-20.02%	-1.82%	1.89%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

Shareholder Fees

(Fees paid directly from your investment)

Redemption/Exchange Fee*		2	%
(as a percentage of amount redeemed)

*	Subject to the approval of the Company’s Board of Trustees, fee applies only to shares purchased on or after March 1, 2003 that are redeemed or exchanged within 90 days of purchase.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees	.80	%
Other expenses	.34	%
Total annual fund operating expenses	1.14	%
Fee waivers and expense reimbursements*	—
Net expenses*	1.14	%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.23% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 105 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Institutional Shares		$116		$362		$628		$1,386

Fund Management

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Institutional Share Outstanding Throughout Each Period)

Mid-Cap Growth Equity Portfolio


	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	7.49		$	26.58		$	19.12		$	11.12		$	12.20

Income from investment operations
Net investment income (loss)		(0.06	)¹		0.01			(0.08	)		(0.07	)		(0.02	)
Net gain (loss) on investments (both realized and unrealized)		(1.37	)		(11.62	)		14.16			8.07			(0.96	)

Total from investment operations		(1.43	)		(11.61	)		14.08			8.00			(0.98	)

Less distributions
Distributions from capital		– –			– –			– –			– –			(0.01	)
Distributions from net realized gains		– –			(7.48	)		(6.62	)		– –			(0.09	)

Total distributions		– –			(7.48	)		(6.62	)		– –			(0.10	)

Net asset value at end of period	$	6.06		$	7.49		$	26.58		$	19.12		$	11.12

Total return		(19.09	)%		(56.71	)%		91.06	%		71.94	%		(8.05	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	77,693		$	301,779		$	666,420		$	361,901		$	220,903
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.14	%		1.13	%		1.10	%		1.11	%		1.14	%
Before advisory/administration fee waivers		1.14	%		1.13	%		1.10	%		1.12	%		1.20	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(0.76	)%		0.06	%		(0.37	)%		(0.48	)%		(0.37	)%
Before advisory/administration fee waivers		(0.76	)%		0.06	%		(0.37	)%		(0.49	)%		(0.43	)%
Portfolio turnover rate		279	%		584	%		425	%		318	%		204	%

¹	Calculated using the average shares outstanding method.

BlackRock

Small Cap Value Equity Portfolio

IMPORTANT DEFINITIONS

Equity Security: A security, such as stock, representing ownership of a company. Bonds, in comparison, are referred to as fixed income or debt securities because they represent indebtedness to the bondholder, not ownership (although convertible bonds are fixed income securities that are convertible to equity according to their terms).

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

also may, but under normal market conditions generally does not intend to, use derivatives for speculation to increase returns.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

While the fund manager chooses stocks he believes to be undervalued, there is no guarantee that the shares will increase in value or that they won’t move even lower.

Higher than normal portfolio turnover may result in increased transaction costs to the fund, including brokerage commissions,

dealer mark-ups and other transaction costs on the sale of the securities and on reinvestment in other securities. The sale of fund securities may result in the recognition of capital gain or loss. Given the frequency of sales, such gain or loss will likely be short-term capital gain or loss. Unlike long-term capital gain, short-term capital gain of individuals in taxable at the same rates as ordinary income. These effects of higher than normal portfolio turnover may adversely affect fund performance.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	10 Years	Inception Date
Small Cap Value
Return Before Taxes	-16.61%	2.03%	-1.06%	8.41%	04/13/92
Return After Taxes on Distributions	-19.12%	-0.85%	-3.11%	6.01%
Return After Taxes on Distributions and Sale of Shares	-7.82%	1.29%	-1.15%	6.34%
Russell 2000 Value (Reflects no deduction for fees, expenses or taxes)	-11.42%	7.45%	2.72%	10.86%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

Shareholder Fees

(Fees paid directly from your investment)

Redemption/Exchange Fee*		2	%
(as a percentage of amount redeemed)

*	Subject to the approval of the Company’s Board of Trustees, fee applies only to shares purchased on or after March 1, 2003 that are redeemed or exchanged within 90 days of purchase.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees	.55	%
Other expenses	.34	%
Total annual fund operating expenses	.89	%
Fee waivers and expense reimbursements	—
Net expenses^*	.89	%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to .97% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 105 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Institutional Shares		$91		$284		$493		$1,096

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Fund Management

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Institutional Share Outstanding Throughout Each Period)

Small Cap Value Equity Portfolio


	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	16.18		$	17.12		$	14.73		$	14.89		$	20.20

Income from investment operations
Net investment income		– –			0.16			0.08			0.12			0.13
Net gain (loss) on investments (both realized and unrealized)		(1.02	)		(0.11	)		2.44			0.67			(3.19	)

Total from investment operations		(1.02	)		0.05			2.52			0.79			(3.06	)

Less distributions
Distributions from net investment income		(0.02	)		(0.15	)		(0.13	)		(0.28	)		(0.13	)
Distributions from net realized gains		(2.33	)		(0.84	)		– –			(0.67	)		(2.12	)

Total distributions		(2.35	)		(0.99	)		(0.13	)		(0.95	)		(2.25	)

Net asset value at end of period	$	12.81		$	16.18		$	17.12		$	14.73		$	14.89

Total return		(8.25	)%		0.47	%		17.15	%		5.22	%		(17.03	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	122,732		$	367,167		$	470,830		$	519,388		$	527,374
Ratios of expenses to average net assets
After advisory/administration fee waivers		0.88	%		0.87	%		0.86	%		0.86	%		0.87	%
Before advisory/administration fee waivers		0.89	%		0.87	%		0.86	%		0.86	%		0.88	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		0.00	%		0.87	%		0.79	%		0.88	%		0.79	%
Before advisory/administration fee waivers		(0.01	)%		0.87	%		0.79	%		0.88	%		0.78	%
Portfolio turnover rate		260	%		184	%		168	%		48	%		45	%

BlackRock

Small Cap Core Equity Portfolio

IMPORTANT DEFINITIONS

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

The manager may, when consistent with the fund’s investment objective, use options or futures (commonly known as derivatives). An option is the right to buy or sell a security or an

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

The fund may invest in companies that have relatively small market capitalizations. These organizations will normally have more limited product lines, markets and financial resources and will be dependent upon a more limited management group than larger capitalized companies. In addition, it is more difficult to get information on smaller companies, which tend to be less well known, have shorter operating histories, do not have significant ownership by large investors and are followed by relatively few securities analysts. Securities of smaller capitalized companies are often traded in the over-the-counter markets and may have fewer market makers and wider price spreads. This may result in greater price movements and less ability to sell the fund’s investment than if the fund held the securities of larger, more established companies.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

overall securities markets. Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. In addition, some derivatives are more sensitive to interest rate changes, market price fluctuations and general market liquidity than others.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Expenses and Fees

Shareholder Fees

(Fees paid directly from your investment)

Redemption/Exchange Fee*		2	%
(as a percentage of amount redeemed)

*	Subject to the approval of the Company’s Board of Trustees, fee applies only to shares purchased on or after March 1, 2003 that are redeemed or exchanged within 90 days of purchase.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory Fees		1.00%
Other expenses		8.74%
Total annual fund operating expenses		9.74%
Fee waivers and expense reimbursements*		8.44%
Net Expenses*		1.30%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.30% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock and BIL in the following two years. See the “Management” section on page 105 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Institutional Shares		$132		$2,058		$3,805		$7,498

Fund Management

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Institutional Share Outstanding Throughout Each Period)

Small Cap Core

Equity Portfolio


		For the Period 1/02/02¹ through 9/30/02
Net asset value at beginning of period		$10.00

Investment Operations
Net investment loss		(0.04)
Net loss on investments
(both realized and unrealized)		(1.61)

Total from Investment Operations		(1.65)

Less: Distrubutions
Distributions from Net Investment Income		0.00
Distributions from Net Realized Gain		0.00

Total Distributions		0.00

Net Asset Value at the end of the period		$ 8.35

Total Return		(16.50)%
Ratios/Supplemental data
Net assets at end of period (in thousands)		$ 835
Ratios of expense to average net assets:
After advisory/adminstration fee waivers		1.30%²
Before advisory/adminstration fee waivers		2.53%²
Ratios of Net investment income to average net assets
After advisory/adminstration fee waivers		(0.60)%²
Before advisory/adminstration fee waivers		(1.83)%²
Portfolio turnover rate		233%

¹	Commencement of operations of share class.

²	Annualized.

BlackRock

Small Cap Growth Equity Portfolio

IMPORTANT DEFINITIONS

Equity Security: A security, such as stock, representing ownership of a company. Bonds, in comparison, are referred to as fixed income or debt securities because they represent indebtedness to the bondholder, not ownership (although convertible bonds are fixed income securities that are convertible to equity according to their terms).

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

The fund generally will sell a stock when, in the management team’s opinion, there is a deterioration in the company’s fundamentals or the company fails to meet performance expectations.

The management team may, when consistent with the fund’s investment objective, use options or futures (commonly known as

derivatives). An option is the right to buy or sell a security or an index of securities at a specific price on or before a specific date. A future is an agreement to buy or sell a security or an index of securities at a specific price on a specific date. The primary purpose of using derivatives is to attempt to reduce risk to the fund as a whole (hedge) but they may also be used to maintain liquidity and commit cash pending investment. The management team also may, but under normal market conditions generally does not intend to, use derivatives for speculation to increase returns.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

The fund’s use of derivatives may reduce returns and/or increase volatility. Volatility is defined as the characteristic of a security, an index or a market to fluctuate significantly in price within a short time period. A risk of the fund’s use of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets. Derivatives are also subject to counter-party risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. In addition, some derivatives are more sensitive to interest rate changes, market price fluctuations and general market liquidity than others.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	Since Inception	Inception Date
Small Cap Growth
Return Before Taxes	-27.36%	-25.50%	-5.20%	6.42%	09/14/93
Return After Taxes on Distributions	-27.36%	-27.61%	-7.70%	4.54%
Return After Taxes on Distributions and Sale of Shares	-16.80%	-18.49%	-3.66%	5.62%
Russell 2000 Growth (Reflects no deduction for fees, expenses or taxes)	-30.27%	-21.11%	-6.59%	2.11%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Institutional Shares of the fund. The “Annual Fund Operating Expenses” table is based on expenses for the most recent fiscal year.

Shareholder Fees

(Fees paid directly from your investment)


Redemption/Exchange Fee* (as a percentage of amount redeemed)		2	%

*	Subject to the approval of the Company’s Board of Trustees, fee applies only to shares purchased on or after March 1, 2003 that are redeemed or exchanged within 90 days of purchase.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees	.55	%
Other expenses	.32	%
Total annual fund operating expenses	.87	%
Fee waivers and expense reimbursements	—
Net expenses*	.87	%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to .99% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 105 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Institutional Shares		$89		$278		$482		$1,073

Fund Management

The fund is managed by a team of investment professionals at BlackRock Advisors, Inc. (BlackRock), including Neil Wagner, Director with BlackRock since April 2002, and Brian Stack, Managing Director and portfolio manager since November 2002. Prior to joining BlackRock, Mr. Wagner was a portfolio manager at Massachusetts Financial Services (MFS) since 1998. Prior to that, he was a senior research analyst at DFS Advisors LLC from 1997 to 1998 and an associate at Berkshire Partners from 1995 to 1997. Prior to joining BlackRock in 2002, Mr. Stack was the co-founder of Cyllenius Capital Managment. Prior to founding Cyllenius in 2001, Mr. Stack was a portfolio manager at MFS Investment Management since 1993. Neil Wagner has been a portfolio co-manager of the fund since May 2002 and Brian Stack has been a co-manager of the fund since January 2003.

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Institutional Share Outstanding Throughout Each Period)

Small Cap Growth Equity Portfolio


	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	11.74		$	35.76		$	25.38		$	17.50		$	23.62

Income from investment operations
Net investment income (loss)		(0.17	)		0.09			0.07			(0.06	)		– –
Net gain (loss) on investments (both realized and unrealized)		(2.57	)		(15.38	)		14.45			7.94			(4.98	)

Total from investment operations		(2.74	)		(15.29	)		14.52			7.88			(4.98	)

Less distributions
Distributions from net investment income		– –			(0.12	)		– –			– –			– –
Distributions from capital		– –			(0.10	)		– –			– –			(0.02	)
Distributions from net realized gains		– –			(8.51	)		(4.14	)		– –			(1.12	)

Total distributions		– –			(8.73	)		(4.14	)		– –			(1.14	)

Net asset value at end of period	$	9.00		$	11.74		$	35.76		$	25.38		$	17.50

Total return		(23.34	)%		(53.73	)%		63.03	%		44.95	%		(21.93	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	176,858		$	843,359		$	2,196,700		$	1,426,124		$	1,022,404
Ratios of expenses to average net assets
After advisory/administration fee waivers		0.85	%		0.82	%		0.78	%		0.82	%		0.87	%
Before advisory/administration fee waivers		0.87	%		0.82	%		0.78	%		0.82	%		0.87	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(0.67	)%		0.52	%		0.20	%		(0.25	)%		(0.13	)%
Before advisory/administration fee waivers		(0.69	)%		0.52	%		0.20	%		(0.25	)%		(0.13	)%
Portfolio turnover rate		238	%		363	%		218	%		176	%		159	%

BlackRock

Global Science & Technology Opportunities Portfolio

IMPORTANT DEFINITIONS

Fundamentals: “Fundamental” information about a company (such as its income statement, balance sheet, earnings and sales history, products and management).

Market Capitalization: Market capitalization refers to the market value of a company and is calculated by multiplying the number of shares outstanding by the current price per share.

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

Application Software

n IT Consulting & Services

n Internet Software and Services

n Networking Equipment

n Telecom Equipment

n Computer Hardware

n Computer Storage & Peripherals

n Electronic Equipment and Instruments

n Semiconductor Equipment

n Semiconductors

n Aerospace & Defense

n Electrical Components & Equipment

n Biotechnology

n Pharmaceuticals

n Healthcare Equipment & Supplies

n Healthcare Distribution & Services

n Healthcare Facilities

n Industrial Gases

n Specialty Chemicals

n Advanced Materials

n Integrated Telecom Services

n Alternative Carriers

n Wireless Telecommunication Services

The fund may also use forward foreign currency exchange contracts (obligations to buy or sell a currency at a set rate in the future) to hedge against movements in the value of non-U.S. currencies.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

themselves, may fall if currency exchange rates change), the risk that a security’s value will be hurt by changes in non-U.S. political or social conditions, including changes in policies restricting non-U.S. investment, the possibility of heavy taxation, nationalization or expropriation of assets and more difficulty obtaining information on non-U.S. securities or companies. In addition, a portfolio of non-U.S. securities may be harder to sell and may be subject to wider price movements than comparable investments in U.S. companies. There is less government regulation of non-U.S. securities markets.

Because different kinds of stocks go in and out of favor depending on market conditions, this fund’s performance may be better or worse than other funds with different investment styles.

While the management team chooses stocks they believe have above-average earnings growth potential, there is no guarantee that the shares will increase in value or that they won’t move even lower.

The expenses of the fund can be expected to be higher than those of other funds investing primarily in domestic securities because the costs attributable to investing abroad are usually higher.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	Since Inception	Inception Date
Global Science & Technology Opportunities
Return Before Taxes	-34.70%	-30.64%	5/15/00
Return After Taxes on Distributions	-34.70%	-30.64%
Return After Taxes on Distributions and Sale of Shares	-21.31%	-22.84%
S&P 500^® Index (Reflects no deduction for fees, expenses or taxes)	-22.10%	-16.23%	N/A

*The chart and the table both assume reinvestment of dividends and distributions.

Source: BlackRock Advisors, Inc.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer, agency, custody, professional fees and registration fees.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Institutional Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees	.90	%
Other expenses	.42	%
Total annual fund operating expenses	1.32	%
Fee waivers and expense reimbursements*	– –
Net expenses*	1.32	%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.43% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 105 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Institutional Shares		$134		$418		$723		$1,590

Fund Management

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Institutional Share Outstanding Throughout Each Period)

Global Science

& Technology

Opportunities Portfolio


	Year Ended 9/30/02			Year Ended 9/30/01			For the Period 5/15/00¹ through 9/30/00
Net asset value at beginning of period	$	4.41		$	12.49		$	10.00

Income from investment operations
Net investment income (loss)		(0.06	)³		0.01			(0.01	)
Net gain (loss) on investments (both realized and unrealized)		(0.76	)		(8.09	)		2.50

Total from investment operations		(0.82	)		(8.08	)		2.49

Less distributions
Distributions from net investment income		– –			– –			– –
Distributions from net realized gains		– –			– –			– –

Total distributions		– –			– –			– –

Net asset value at end of period	$	3.59		$	4.41		$	12.49

Total return		(18.59	)%		(64.69	)%		24.90	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	2,385		$	7,189		$	21,383
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.20	%		1.20	%		1.20	%²
Before advisory/administration fee waivers		1.31	%		1.45	%		2.19	%²
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(1.00	)%		0.14	%		(0.21	)%²
Before advisory/administration fee waivers		(1.11	)%		(0.11	)%		(1.20	)%²
Portfolio turnover rate		587	%		748	%		175	%

¹	Commencement of operations of share class.

²	Annualized.

³	Calculated using the average shares outstanding method.

BlackRock

European Equity Portfolio

IMPORTANT DEFINITIONS

Market Capitalization: Market capitalization refers to the market value of a company and is calculated by multiplying the number of shares outstanding by the current price per share.

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

n its country of organization, primary business office and principal trading market for its stock are located in Europe;

n 50% or more of its assets are located in Europe; or

n 50% or more of its revenues are derived from Europe.

The management team in an attempt to reduce portfolio risks, will diversify investments across countries, industry groups and companies with investments ordinarily in at least three European countries.

The management team may, when consistent with the fund’s investment objective, use options or futures (commonly known as derivatives). An option is the right to buy or sell an instrument (which can be a security, an index of securities, a currency, or a basket of currencies) at a specific price on or before a specific date. A future is an agreement to buy or sell instruments of these types at a specific price on a specific date. The primary purpose of using derivatives is to attempt to reduce risk to the fund as a whole (hedge) but they may also be used to maintain liquidity, commit cash pending investment or for speculation to increase returns. The fund may also use forward currency exchange contracts (obligations to buy or sell a currency at a set rate in the future) to hedge against movements in the value of non-U.S. currencies.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

Because different kinds of stocks go in and out of favor depending on market conditions, this fund’s performance may be better or worse than other funds with different investment styles.

While the management team chooses stocks they believe have above-average earnings growth potential, there is no guarantee that the shares will increase in value or that they won’t move even lower.

The expenses of the fund can be expected to be higher than those of other funds investing primarily in domestic securities because the costs attributable to investing abroad are usually higher.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	Since Inception	Inception Date
European Equity
Return Before Taxes	-21.78%	-18.14%	06/23/00
Return After Taxes on Distribution	-21.74%	-18.41%
Return After Taxes on Distributions and Sale of Shares	-13.17%	-14.07%
MSCI Europe (Reflects no deduction for fees, expenses or taxes)	-18.38%	-17.18%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

Shareholder Fees

(Fees paid directly from your investment)

Redemption/Exchange Fee*		2%
(as a percentage of amount redeemed)

*	Fee applies only to shares purchased on or after 12/5/2001 that are redeemed or exchanged within 90 days of purchase.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees		.90%
Other expenses		.93%
Total annual fund operating expenses		1.83%
Fee waivers and expense reimbursements*		.38%
Net expenses*		1.45%

BIL has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.45% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BIL in the following two years. See the “Management” section on page 105 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Institutional Shares		$148		$539		$955		$2,117

Fund Management

Albert Morillo, Kenneth Anderson, Alan Clark, Lorna Mackay, Neil Pirie and David Stanistreet have co-managed the fund since its inception.

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Institutional Share Outstanding Throughout Each Period)

European Equity Portfolio


	Year Ended 9/30/02			Year Ended 9/30/01			For the Period 6/23/00¹ through 9/30/00
Net asset value at beginning of period	$	7.21		$	9.51		$	10.00

Income from investment operations
Net investment income		0.18			0.04			– –
Net (loss) on investments (both realized and unrealized)		(1.71	)		(2.31	)		(0.49	)

Total from investment operations		(1.53	)		(2.27	)		(0.49	)

Less distributions
Distributions from net investment income		(0.17	)		(0.01	)		– –
Distributions from net realized gains		– –			(0.02	)		– –

Total distributions		(0.17	)		(0.03	)		– –

Net asset value at end of period	$	5.51		$	7.21		$	9.51

Total return		(21.81	)%		(24.00	)%		(4.90	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	5,212		$	5,687		$	4,848
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.45	%		1.45	%		1.45	%²
Before advisory/administration fee waivers		1.83	%		2.41	%		6.12	%²
Ratios of net investment income to average net assets
After advisory/administration fee waivers		2.46	%		0.19	%		0.08	%²
Before advisory/administration fee waivers		2.08	%		(0.77	)%		(4.59	)%²
Portfolio turnover rate		88	%		218	%		177	%

¹ Commencement of operations of share class.

² Annualized.

BlackRock

Asia Pacific Equity Portfolio

IMPORTANT DEFINITIONS

Market Capitalization: Market capitalization refers to the market value of a company and is calculated by multiplying the number of shares outstanding by the current price per share.

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

its country of organization, primary business office and principal trading market for its stock are located in the Asia Pacific region;

50% or more of its assets are located in the Asia Pacific region; or

50% or more of its revenues are derived from the Asia Pacific region.

The management team may, when consistent with the fund’s investment objective, use options or futures (commonly known as derivatives). An option is the right to buy or sell an instrument (which can be a security, an index of securities, a currency, or a basket of currencies) at a specific price on or before a specific date. A future is an agreement to buy or sell instruments of these types at a specific price on a specific date. The primary purpose of using derivatives is to attempt to reduce risk to the fund as a whole (hedge) but they may also be used to maintain liquidity, commit cash pending investment or for speculation to increase returns. The fund may also use forward currency exchange contracts (obligations to buy or sell a currency at a set rate in the future) to hedge against movements in the value of non-U.S. currencies.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

In addition, the fund may, from time to time, invest a substantial amount of its assets in securities whose issuers are located in Japan. These investments would make the fund more dependent upon the political and economic circumstances of Japan than a mutual fund that owns stocks of companies in many countries. For example, the Japanese economy (especially Japanese banks, securities firms and insurance companies) has experienced considerable difficultly recently. In addition, the Japanese Yen has gone up and down in value versus the U.S. Dollar. Japan may also be affected by recent turmoil in other Asian countries.

Because different kinds of stocks go in and out of favor depending on market conditions, this fund’s performance may be better or worse than other funds with different investment styles.

While the management team chooses stocks they believe have above-average earnings growth potential, there is no guarantee that the shares will increase in value or that they won’t move even lower.

The expenses of the fund can be expected to be higher than those of other funds investing primarily in domestic securities because the costs attributable to investing abroad are usually higher.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

These returns assume payment of applicable sales charges.

	1 Year	Since Inception	Inception Date
Asia Pacific Equity
Return Before Taxes	-8.57%	-18.85%	6/23/00
Return After Taxes on Distributions	-8.60%	-19.29%
Return After Taxes on Distributions and Sale of Shares	-5.26%	-14.72%
MSCI All Country Asia Pacific (Reflects no deduction for fees, expenses or taxes)	-8.62%	-20.55%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

Shareholder Fees

(Fees paid directly from your investment)

Redemption/Exchange Fee*		2	%
(as a percentage of amount redeemed)

*	Fee applies only to shares purchased on or after 12/5/2001 that are redeemed or exchanged within 90 days of purchase.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees	.90	%
Other expenses	4.55	%
Total annual fund operating expenses	5.45	%
Fee waivers and expense reimbursements*	4.00	%
Net expenses*	1.45	%

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Institutional Shares		$148		$1,271		$2,385		$5,125

Fund Management

Alistair Veitch, Vice President and investment manager of BIL since 1998.

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Institutional Share Outstanding Throughout Each Period)

Asia Pacific Equity Portfolio


	Year Ended 9/30/02			Year Ended 9/30/01			For the Period 6/23/00¹ through 9/30/00
Net asset value at beginning of period	$	6.16		$	9.24		$	10.00

Income from investment operations
Net investment income		(0.02	)		0.01			0.02
Net (loss) on investments (both realized and unrealized)		(0.23	)		(2.88	)		(0.78	)

Total from investment operations		(0.25	)		(2.87	)		(0.76	)

Less distributions
Distributions from net investment income		(0.06	)		(0.01	)		– –
Distributions from net realized gains		– –			(0.20	)		– –

Total distributions		(0.06	)		(0.21	)		– –

Redemption fees added to paid in capital		0.01			– –			– –

Net asset value at end of period	$	5.86		$	6.16		$	9.24

Total return		(3.94	)%		(31.69	)%		(7.60	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	1,756		$	1,931		$	2,810
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.45	%		1.45	%		1.45	%²
Before advisory/administration fee waivers		5.64	%		5.03	%		9.16	%²
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(0.26	)%		0.11	%		0.62	%²
Before advisory/administration fee waivers		(4.45	)%		(3.46	)%		(7.09	)%²
Portfolio turnover rate		107	%		206	%		145	%

¹	Commencement of operations of share class.

²	Annualized.

BlackRock

International Equity Portfolio

IMPORTANT DEFINITIONS

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

The management team seeks to achieve consistent and sustainable performance through various market cycles by emphasizing stock selection. Stock selection is determined by looking at companies using a range of valuation criteria, including the strength of their management and business franchise. The management team will generally invest with a bias towards “growth” stocks; however, they may take advantage of opportunities in “value” stocks at appropriate points in the market or economic cycle. The management team will also consider factors such as prospects for relative economic growth, expected levels of inflation, government policies influencing business conditions and outlook for currency relationships.

The management team may, when consistent with the fund’s investment objective, use options or futures (commonly known as derivatives). An option is the right to buy or sell an instrument (which can be a security, an index of securities, a currency, or a basket of currencies) at a specific price on or before a specific date. A future is an agreement to buy or sell instruments of these types at a specific price on a specific date. The primary purpose of using derivatives is to attempt to reduce risk to the fund as a whole (hedge) but they may also be used to maintain liquidity, commit cash pending investment or for speculation to increase returns. The fund may also use forward currency exchange contracts (obligations to buy or sell a currency at a set rate in the future) to hedge against movements in the value of non-U.S. currencies.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

Because different kinds of stocks go in and out of favor depending on market conditions, this fund’s performance may be better or worse than other funds with different investment styles.

U.S. companies. There is less government regulation of non-U.S. securities markets.

In addition, political and economic structures in emerging market countries may be undergoing rapid change and these countries may lack the social, political and economic stability of more developed countries. As a result some of the risks described above, including the risks of nationalization or expropriation of assets and the existence of smaller, more volatile and less regulated markets may be increased. The value of many investments in emerging market countries recently has dropped significantly due to economic and political turmoil in many of these countries.

While the management team chooses stocks they believe to be undervalued, there is no guarantee that the shares will increase in value or that they won’t move even lower.

The fund may sometimes engage in short-term trading which could produce greater brokerage costs and taxable distributions to shareholders.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

As of 12/31

ANNUAL TOTAL RETURNS*

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	10 Years	Inception Date
International Equity
Return Before Taxes	-17.74%	-19.94%	-4.93%	2.96%	04/27/92
Return After Taxes on Distributions	-17.74%	-20.83%	-6.35%	1.51%
Return After Taxes on Distributions and Sale of Shares	-10.89%	-14.82%	-3.32%	2.51%
MSCI EAFE (Reflects no deduction for fees, expenses or taxes)	-15.94%	-17.24%	-2.89%	4.00%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

Shareholder Fees

(Fees paid directly from your investment)

Redemption/Exchange Fee*		2	%
(as a percentage of amount redeemed)

*	Fee applies only to shares purchased on or after 12/5/2001 that are redeemed or exchanged within 90 days of purchase.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees	.75	%
Other expenses	.37	%
Total annual fund operating expenses	1.12	%
Fee waivers and expense reimbursements*	—
Net expenses*	1.12	%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.17% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 105 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Institutional Shares		$114		$356		$617		$1,363

Fund Management

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Institutional Share Outstanding Throughout Each Period)

International Equity Portfolio


	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	8.21		$	13.92		$	15.94		$	13.23		$	14.65

Income from investment operations
Net investment income		0.31			0.06			0.07			0.07			0.27
Net gain (loss) on investments (both realized and unrealized)		(1.46	)		(3.63	)		0.09			3.57			(1.29	)

Total from investment operations		(1.15	)		(3.57	)		0.16			3.64			(1.02	)

Less distributions
Distributions from net investment income		– –			– –			(0.05	)		(0.13	)		(0.20	)
Distributions from net realized gains		(0.05	)		(2.14	)		(2.13	)		(0.80	)		(0.20	)

Total distributions		(0.05	)		(2.14	)		(2.18	)		(0.93	)		(0.40	)

Net asset value at end of period	$	7.01		$	8.21		$	13.92		$	15.94		$	13.23

Total return		(14.16	)%		(29.74	)%		0.12	%		28.59	%		(7.03	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	228,086		$	410,744		$	1,109,017		$	1,116,766		$	1,012,132
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.06	%		1.06	%		1.06	%		1.04	%		1.06	%
Before advisory/administration fee waivers		1.12	%		1.07	%		1.07	%		1.04	%		1.11	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		3.14	%		0.46	%		0.35	%		0.55	%		1.00	%
Before advisory/administration fee waivers		3.08	%		0.45	%		0.34	%		0.55	%		0.95	%
Portfolio turnover rate		275	%		306	%		153	%		62	%		57	%

BlackRock

International Opportunities Portfolio

IMPORTANT DEFINITIONS

Fundamentals: “Fundamental” information about a company (such as its income statement, balance sheet, earnings and sales history, products and management).

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

IMPORTANT DEFINITIONS

The management team may, when consistent with the fund’s investment objective, use options or futures (commonly known as derivatives). An option is the right to buy or sell an instrument (which can be a security, an index of securities, a currency, or a basket of currencies) at a specific price on or before a specific date. A future is an agreement to buy or sell instruments of these types at a specific price on a specific date. The primary purpose of using derivatives is to attempt to reduce risk to the fund as a whole (hedge) but they may also be used to maintain liquidity and commit cash pending investment. The management team also may, but under normal market conditions generally does not intend to, use derivatives for speculation to increase returns. The fund may also use forward foreign currency exchange contracts (obligations to buy or sell a currency at a set rate in the future) to hedge against movements in the value of non-U.S. currencies.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

Because different kinds of stocks go in and out of favor depending on market conditions, this fund’s performance may be better or worse than other funds with different investment styles.

IPOs and companies that have recently gone public have the potential to produce substantial gains for the fund. However, there is no assurance that the fund will have access to profitable IPOs and therefore investors should not rely on these past gains as an indication of future performance. Furthermore, stocks of some newly-public companies may decline shortly after the initial public offering.

While the management team chooses stocks they believe have above-average earnings growth potential, there is no guarantee that the shares will increase in value or that they won’t move even lower.

The fund’s use of derivatives may reduce returns and/or increase volatility. Volatility is defined as the characteristic of a security, an index, a currency or a market to fluctuate significantly in price within a short time period. A risk of the fund’s use of derivatives is that the fluctuations in their values may no correlate perfectly with the overall securities markets. Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. In addition, some derivatives are more sensitive to interest rate changes, market price fluctuations and general market liquidity than others.

The expenses of the fund can be expected to be higher than those of other funds investing primarily in domestic securities because the costs attributable to investing abroad is usually higher.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

The chart and table below give you a picture of the fund’s long-term performance for Institutional Shares. The information shows you how the fund’s performance has varied year by year and provides some indication of the risks of investing in the fund. The table compares the fund’s performance to that of the Salomon Smith Barney Extended Market Index Global Ex-U.S., a recognized unmanaged index of stock market performance (the new benchmark). Prior to December 2, 2002, the fund’s benchmark was the Salomon Smith Barney Extended Market Index World Ex-U.S. The new benchmark more accurately reflects the universe of securities in which the fund will invest. As with all such investments, past performance is not an indication of future results.

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	Since Inception	Inception Date
International Opportunities
Return Before Taxes	-3.02%	-9.63%	15.59%	13.61%	09/26/97
Return After Taxes on Distributions	-3.02%	-9.66%	13.74%	11.83%
Return After Taxes on Distributions and Sale of Shares	-1.86%	-7.55%	11.94%	10.29%
Salomon Smith Barney EMI Global Ex-U.S. (Reflects no deduction for fees, expenses or taxes)	-6.89%	-11.43%	-1.08%	-3.19%	N/A
Salomon Smith Barney EMI World Ex-U.S. (Reflects no deduction for fees, expenses or taxes)	-7.29%	-11.16%	-0.59%	-2.54%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The tables below describe the fees and expenses that you may pay if you buy and hold Institutional Shares of the fund. The “Annual Fund Operating Expenses” table is based on the most recent fiscal year.

Shareholder Fees

(Fees paid directly from your investment)

Redemption/Exchange Fee*		2%
(as a percentage of amount redeemed)

*	Fee applies only to shares purchased on or after 12/5/2001 that are redeemed or exchanged within 90 days of purchase.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees	1.00	%
Other expenses	.43	%
Total annual fund operating expenses	1.43	%
Fee waivers and expense reimbursements*	—
Net expenses*	1.43	%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.45% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 105 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Institutional Shares		$146		$452		$782		$1,713

Fund Management

The fund is managed by a team of investment professionals at BlackRock Advisors, Inc. (BlackRock), including Thomas Callan and Michael Carey.

Thomas Callan has been a Managing Director with BlackRock since 1996 and served as an equity analyst for PNC Bank from 1993 to 1996. He has co-managed the fund since April 1999.

Financial Highlights

The financial information in the table below shows the fund’s financial performance for the periods indicated. Certain information reflects results for a single fund share. The term “Total Return” indicates how much your investment would have increased or decreased during this period of time and assumes that you have reinvested all dividends and distributions. These figures have been audited by PricewaterhouseCoopers LLP, the fund’s independent accountants. The auditor’s report, along with the fund’s financial statements, are included in the Company’s Fund’s annual report, which is available upon request (see back cover for ordering instructions).

FINANCIAL HIGHLIGHTS

(For an Institutional Share Outstanding Throughout Each Period)

International Opportunities Portfolio



	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	14.86		$	22.54		$	12.90		$	9.56		$	9.94

Income from investment operations
Net investment income		0.05			0.30			0.13			0.03			0.07
Net gain (loss) on investments (both realized and unrealized)		0.27			(7.93	)		10.91			4.44			(0.40	)

Total from investment operations		0.32			(7.63	)		11.04			4.47			(0.33	)

Less distributions
Distributions from net investment income		– –			– –			– –			(0.02	)		(0.05	)
Distributions from net realized gains		– –			(0.05	)		(1.40	)		(1.11	)		– –

Total distributions		– –			(0.05	)		(1.40	)		(1.13	)		(0.05	)

Redemption fees added to paid in capital		0.04			– –			– –			– –			– –
Net asset value at end of period	$	15.22		$	14.86		$	22.54		$	12.90		$	9.56

Total return		2.42	%		(33.93	)%		91.76	%		51.88	%		(3.57	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	54,164		$	60,531		$	85,206		$	23,814		$	16,233
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.33	%		1.33	%		1.33	%		1.33	%		1.32	%
Before advisory/administration fee waivers		1.43	%		1.40	%		1.48	%		2.00	%		2.17	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		0.27	%		1.36	%		0.74	%		0.19	%		0.65	%
Before advisory/administration fee waivers		0.17	%		1.30	%		0.59	%		(0.48	)%		(0.20	)%
Portfolio turnover rate		104	%		207	%		296	%		224	%		76	%

BlackRock

Select Equity Portfolio

IMPORTANT DEFINITIONS

Market Capitalization: Refers to the market value of the company and is calculated by multiplying the number of shares outstanding by the current price per share.

Value and Growth Companies: All stocks are generally divided into the categories of “growth” or “value,” although there are times when a growth fund and value fund may own the same stock. Value stocks are companies that appear to the manager to be undervalued by the market as measured by certain financial formulas. Growth stocks are companies whose earnings growth potential appears to the manager to be greater than the market in general, and whose growth in revenue is expected to continue for an extended period.

Investment Goal

The fund seeks long-term capital appreciation—current income is the secondary objective.

Primary Investment Strategies

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	Since Inception	Inception Date
Select Equity
Return Before Taxes	-26.06%	-20.88%	-5.71%	5.28%	09/13/93
Return After Taxes on Distributions	-26.39%	-21.88%	-6.95%	3.58%
Return After Taxes on Distributions and Sale of Shares	-16.00%	-15.44%	-3.99%	4.29%
S&P 500^® (Reflects no deduction for fees, expenses or taxes)	-22.10%	-14.55%	-0.59%	9.14%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Institutional Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees	.55	%
Other expenses	.32	%
Total annual fund operating expenses	.87	%
Fee waivers and expense reimbursements	.06	%
Net expenses*	.81	%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to .81% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 105 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Institutional Shares		$83		$272		$476		$1,067

Fund Management

The fund is managed by a team of investment professionals at BlackRock Advisors, Inc. (BlackRock), including Robert S. Kapito and R. Andrew Damm.

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Institutional Share Outstanding Throughout Each Period)

Select Equity Portfolio



	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	11.25		$	20.77		$	20.77		$	17.01		$	17.51

Income from investment operations
Net investment income		0.11			0.06			0.07			0.14			0.16
Net gain (loss) on investments (both realized and unrealized)		(2.86	)		(6.46	)		1.61			4.36			0.49

Total from investment operations		(2.75	)		(6.40	)		1.68			4.50			0.65

Less distributions
Distributions from net investment income		– –			(0.05	)		(0.05	)		(0.13	)		(0.15	)
Distributions from capital		– –			(0.02	)		– –			– –			– –
Distributions from net realized gains		– –			(3.05	)		(1.63	)		(0.61	)		(1.00	)

Total distributions		– –			(3.12	)		(1.68	)		(0.74	)		(1.15	)

Net asset value at end of period	$	8.50		$	11.25		$	20.77		$	20.77		$	17.01

Total return		(24.44	)%		(35.29	)%		8.14	%		26.96	%		4.07	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	134,859		$	755,701		$	1,466,964		$	1,443,128		$	1,286,032
Ratios of expenses to average net assets
After advisory/administration fee waivers		0.81	%		0.81	%		0.80	%		0.80	%		0.86	%
Before advisory/administration fee waivers		0.87	%		0.82	%		0.80	%		0.80	%		0.86	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		0.36	%		0.38	%		0.33	%		0.67	%		0.93	%
Before advisory/administration fee waivers		0.30	%		0.37	%		0.33	%		0.67	%		0.93	%
Portfolio turnover rate		124	%		114	%		103	%		22	%		27	%

BlackRock

Index Equity Portfolio

IMPORTANT DEFINITIONS

S&P 500^® Index: The Standard & Poor’s Composite Stock Price Index, an unmanaged index of 500 stocks, most of which are listed on the New York Stock Exchange. The index is heavily weighted toward stocks with large market capitalizations and represents approximately two-thirds of the total market value of all domestic common stocks.

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

The Index Master Portfolio may invest some of its assets (not more than 5% of net assets) in certain short-term fixed income securities pending investment or to pay redeeming shareholders.

Key Risks

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	10 Years	Inception Date
Index Equity
Return Before Taxes	-22.23%	-14.72%	-0.78%	9.00%	04/20/92
Return After Taxes on Distributions	-22.66%	-15.06%	-1.22%	7.63%
Return After Taxes on Distributions and Sale of Shares	-13.63%	-11.50%	-0.78%	6.89%
S&P 500^® (Reflects no deduction for fees, expenses or taxes)	-22.10%	-14.55%	-0.59%	9.35%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Institutional Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses*

(Expenses that are deducted from fund assets)

Advisory fees	.025	%
Other expenses	.30	%
Total annual fund operating expenses	.325	%
Fee waivers and expense reimbursements**	.15	%
Net expenses**	.18	%

*	The Annual Fund Operating Expenses table and the Example reflect the expenses of both the Index Equity and Index Master Portfolios.

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to .18% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 105 for a discussion on these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Institutional Shares		$18		$90		$168		$398

Index Master Portfolio Management

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Institutional Share Outstanding Throughout Each Period)

Index Equity Portfolio



	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	20.03		$	27.59		$	24.69		$	19.65		$	18.32

Income from investment operations
Net investment income		0.25			0.26			0.27			0.27			0.24
Net gain (loss) on investments (both realized and unrealized)		(4.34	)		(7.63	)		2.97			5.10			1.39

Total from investment operations		(4.09	)		(7.37	)		3.24			5.37			1.63

Less distributions
Distributions from net investment income		(0.25	)		(0.19	)		(0.18	)		(0.27	)		(0.26	)
Distributions from net realized gains		– –			– –			(0.16	)		(0.06	)		(0.04	)

Total distributions		(0.25	)		(0.19	)		(0.34	)		(0.33	)		(0.30	)

Net asset value at end of period	$	15.69		$	20.03		$	27.59		$	24.69		$	19.65

Total return		(20.65	)%		(26.78	)%		13.10	%		27.36	%		8.91	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	741,161		$	557,845		$	665,743		$	507,841		$	354,215
Ratios of expenses to average net assets
After advisory/administration fee waivers		0.18	%¹		0.18	%¹		0.18	%¹		0.22	%¹		0.18	%¹
After advisory/administration fee waivers (excluding interest expense)		0.18	%¹		0.18	%¹		0.18	%¹		0.22	%¹		0.18	%¹
Before advisory/administration fee waivers		0.33	%¹		0.33	%¹		0.33	%¹		0.33	%¹		0.34	%¹
Ratios of net investment income to average net assets
After advisory/administration fee waivers		1.35	%		1.11	%		0.98	%		1.14	%		1.40	%
Before advisory/administration fee waivers		1.20	%		0.96	%		0.83	%		1.04	%		1.24	%
Portfolio turnover rate		6	%⁶		8	%⁵		8	%⁴		5	%³		9	%²

¹	Including expenses allocated from the U.S. Large Company Series of The DFA Investment Trust Company of 0.06% for the years ended 9/30/98 through 9/30/02.

²	For period December 1, 1997 through November 30, 1998.

³	For period December 1, 1998 through November 30, 1999.

⁴	For period December 1, 1999 through November 30, 2000.

⁵	For period December 1, 2000 through September 30, 2001.

⁶	For period December 1, 2001 through September 30, 2002.

BlackRock

Balanced Portfolio

IMPORTANT DEFINITIONS

Asset-Backed Securities: Bonds that are backed by a pool of assets, usually loans such as installment sale contracts or credit card receivables.

Investment Goal

The fund seeks long-term capital appreciation—current income from fixed income securities is the secondary objective.

Primary Investment Strategies

Equity Portion

The manager initially screens for “value” and “growth” stocks from the universe of companies with market capitalization above $1 billion. In pursuit of this goal, the fund manager uses the S&P 500^® Index as a benchmark and seeks to invest in stocks and market sectors in similar proportion to that index. The manager seeks to own securities in all sectors, but can overweight or underweight securities within sectors as he identifies market opportunities. The portfolio manager will adjust the blend of value/growth stocks based on performance expectations. The fund will invest primarily in common stock but can also invest in preferred stock and securities convertible into common and preferred stock.

Fixed Income Portion

IMPORTANT DEFINITIONS

Value and Growth Companies: All stocks are generally divided into the categories of “growth” or “value,” although there are times when a growth fund and a value fund may own the same stock. Value stocks are companies that appear to the manager to be undervalued by the market as measured by certain financial formulas. Growth stocks are companies whose earnings growth potential appears to the manager to be greater than the market in general, and whose growth in revenue is expected to continue for an extended period.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The value of your investment can go up or down depending upon market conditions, which means you could lose money.

The main risk of any investment in stocks is that values fluctuate in price.

Two of the main risks of investing in the fund are interest rate risk and credit risk. Typically, when interest rates rise, there is a corresponding decline in the market value of bonds such as those held by the fund. Credit risk refers to the possibility that the issuer of the bond will not be able to make principal and interest payments.

The fund may invest up to 10% of its total assets in non-dollar denominated bonds of issuers located outside of the United States. Non-U.S. securities involve risks not typically associated with investing in U.S. securities. These risks include but are not limited to: currency risks (the risk that the value of interest paid on non-U.S. securities, or the value of the securities themselves, may fall if currency exchange rates change), the risk that a security’s value will be hurt by changes in non-U.S. political or social conditions, including changes in policies restricting non-U.S. investment, the possibility of heavy taxation, nationalization or expropriation of assets and more difficulty obtaining information on non-U.S. securities or companies. In addition, a portfolio of non-U.S. securities may be harder to sell and may be subject to wider price movements than comparable investments in U.S. companies. There is also less regulation of non-U.S. securities markets.

Securities rated in the fourth highest category by the rating agencies are considered investment grade but may also have some speculative characteristics, meaning that they carry more risk than higher rated securities and may have problems making principal and interest payments in difficult economic climates. Investment grade ratings do not guarantee that bonds will not lose value.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

The chart and table below give you a picture of the fund’s long-term performance for Institutional Shares. The chart shows you how the fund’s performance has varied year by year and provides some indication of the risks of investing in the fund. The table compares the fund’s performance to that of a customized weighted index comprised of the returns of the S&P 500^® Index (65%) and the Lehman Aggregate Index (35%), recognized unmanaged indices of stock and bond market performance, respectively. As with all such investments, past performance is not an indication of future results.

The performance for the period before Institutional Shares were launched in May 1992 is based upon performance for Investor A Shares of the fund, which were first issued in May 1990. Institutional Shares of the fund have expenses of 0.93% of average daily net assets (after waivers and reimbursements) for the current fiscal year and Investor A Shares of the fund have expenses of 1.40% of average daily net assets (after waivers and reimbursements) for the current fiscal year.

As of 12/31

ANNUAL TOTAL RETURNS*

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	10 Years	Inception Date
Balanced
Return Before Taxes	-14.18%	-10.65%	-0.69%	6.69%	05/14/90
Return After Taxes on Distributions	-15.33%	-12.50%	-2.59%	4.67%
Return After Taxes on Distributions and Sale of Shares	-8.69%	-8.51%	-0.79%	4.97%
65% S&P 500^®/ 35% Leh. Agg. (Reflects no deduction for fees, expenses or taxes)	-11.41%	-6.14%	2.67%	9.01%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Institutional Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees	.55	%
Interest expense	.07	%
Other expenses	.34	%
Total annual fund operating expenses	.96	%
Fee waivers and expense reimbursements	.03	%
Net expenses*	.93	%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to .86% (excluding interest expense) of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 105 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Institutional Shares		$95		$303		$528		$1,175

Fund Management

The fund is managed by a team of investment professionals at BlackRock Advisors, Inc. (BlackRock), including Robert S. Kapito, R. Andrew Damm and Keith T. Anderson.

Keith T. Anderson, a Managing Director since 1988, has responsibility for the fixed income portion of the fund. Mr. Anderson has served as co-manager of the fund since 1995.

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Institutional Share Outstanding Throughout Each Period)

Balanced Portfolio



	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	13.28		$	20.16		$	19.75		$	18.35		$	18.22

Income from investment operations
Net investment income		0.58			0.35			0.48			0.49			0.38
Net gain (loss) on investments (both realized and unrealized)		(2.35	)		(4.05	)		1.10			2.18			1.43

Total from investment operations		(1.77	)		(3.70	)		1.58			2.67			1.81

Less distributions
Distributions from net investment income		(0.39	)		(0.37	)		(0.47	)		(0.48	)		(0.43	)
Distributions from net realized gains		– –			(2.81	)		(0.70	)		(0.79	)		(1.25	)

Total distributions		(0.39	)		(3.18	)		(1.17	)		(1.27	)		(1.68	)

Net asset value at end of period	$	11.12		$	13.28		$	20.16		$	19.75		$	18.35

Total return		(13.62	)%		(20.83	)%		8.05	%		14.81	%		10.82	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	24,055		$	205,085		$	385,793		$	414,057		$	374,899
Ratios of expenses to average net assets
After advisory/administration fee waivers		0.92	%		0.86	%		0.85	%		0.86	%		0.90	%
After advisory/administration fee waivers (excluding interest expense)		0.86	%		0.86	%		0.85	%		0.86	%		0.90	%
Before advisory/administration fee waivers		0.93	%		0.88	%		0.85	%		0.86	%		0.90	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		2.36	%		2.04	%		2.30	%		2.44	%		2.48	%
Before advisory/administration fee waivers		2.34	%		2.03	%		2.30	%		2.44	%		2.48	%
Portfolio turnover rate		232	%		210	%		176	%		122	%		134	%

BlackRock

U.S. Opportunities Portfolio

IMPORTANT DEFINITIONS

Fundamentals: “Fundamental” information about a company (such as its income statement, balance sheet, earnings and sales history, products and management).

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

The fund opened to new investors as of December 2, 2002. The fund may suspend sales to new investors at any time in the future.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

Because different kinds of stocks go in and out of favor depending on market conditions, this fund’s performance may be better or worse than other funds with different investment styles.

IPOs and companies that have recently gone public have the potential to produce substantial gains for the fund. However, there is no assurance that the fund will have access to profitable

IPOs. Furthermore, stocks of some newly-public companies may decline shortly after the initial public offering.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

The chart and table below give you a picture of the fund’s long-term performance for Institutional Shares. The information shows you how the fund’s performance has varied year by year and provides some indication of the risks of investing in the fund. The table compares the fund’s performance to that of the Salomon Smith Barney Extended Market Index U.S., a recognized unmanaged index of stock market performance (the new benchmark). Prior to December 2, 2002, the fund’s benchmark was the Wilshire Microcap Index. The new benchmark more accurately reflects the universe of securities in which the fund will invest. As with all such investments, past performance is not an indication of future results.

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	Since Inception	Inception Date
U.S. Opportunities
Return Before Taxes	-38.71%	-21.35%	16.48%	05/01/98
Return After Taxes on Distributions	-38.71%	-24.40%	12.63%
Return After Taxes on Distributions and Sale of Shares	-23.77%	-16.60%	13.05%
Salomon Smith Barney EMI U.S. (Reflects no deduction for fees, expenses or taxes)	-31.46%	-10.74%	-4.93%	N/A
Wilshire Microcap (Reflects no deduction for fees, expenses or taxes)	-9.03%	1.30%	4.00%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include fees paid by the fund for other expenses such as administration, transfer agency, custody, professional fees and registration fees.

One factor impacting the fund’s total return to date was its investments in IPOs and companies that had recently gone public. There is no assurance that the fund’s investments in IPOs or newly-public companies will have the same impact on performance in the future as they did in the past.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Institutional Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees	1.10	%
Other expenses	.40	%
Total annual fund operating expenses	1.50	%
Fee waivers and expense reimbursements*	—
Net expenses*	1.50	%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.60% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 105 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Institutional Shares		$153		$474		$818		$1,791

Fund Management

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Institutional Share Outstanding Throughout Each Period)

U.S. Opportunities Portfolio



	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			For the Period 5/1/98¹ through 9/30/98
Net asset value at beginning of period	$	17.76		$	45.41		$	24.73		$	9.38		$	10.00

Income from investment operations
Net investment income (loss)		(0.23	)³		0.04			0.03			(0.06	)		(0.01	)
Net gain (loss) on investments (both realized and unrealized)		(4.06	)		(17.61	)		23.95			15.41			(0.61	)

Total from investment operations		(4.29	)		(17.57	)		23.98			15.35			(0.62	)

Less distributions
Distributions from net realized gains		– –			(10.08	)		(3.30	)		– –			– –
Distribution from capital		(0.41	)		– –			– –			– –			– –

Total distributions		(0.41	)		(10.08	)		(3.30	)		– –			– –

Net asset value at end of period	$	13.06		$	17.76		$	45.41		$	24.73		$	9.38

Total return		(25.04	)%		(46.34	)%		103.63	%		163.37	%		(6.10	)%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	10,867		$	35,869		$	106,727		$	28,106		$	1,302
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.45	%		1.45	%		1.44	%		1.43	%		1.40	%²
Before advisory/administration fee waivers		1.49	%		1.47	%		1.44	%		1.65	%		2.73	%²
Ratios of net investment income to average net assets
After advisory/administration fee waivers		(1.23	)%		0.15	%		0.09	%		(0.72	)%		(0.33	)%²
Before advisory/administration fee waivers		(1.27	)%		0.14	%		0.09	%		(0.94	)%		(1.66	)%²
Portfolio turnover rate		361	%		402	%		445	%		346	%		119	%

¹	Commencement of operations of share class.

²	Annualized.

³	Calculated using the average shares outstanding method.

About Your Investment

Buying Shares

Institutional Shares are offered to:

Institutional investors

Trust departments of PNC Bank and its affiliates on behalf of clients for whom the bank:

acts in a fiduciary capacity (excluding participant-directed employee benefit plans)

otherwise has investment discretion or

acts as custodian for at least $2 million in assets

Individuals with a minimum investment of $2 million

Registered investment advisers with a minimum investment of $250,000

Purchase orders may be placed by telephoning (800) 441-7450.

What Price Per Share Will You Pay?

Since the NAV changes daily, the price you pay for your shares depends on the time that your order is received.

Purchase orders received before the close of regular trading on the New York Stock Exchange (NYSE) (currently 4 p.m. (Eastern time)) on each day the NYSE is open will be priced based on the NAV calculated at the close of trading on that day. NAV is calculated separately for each class of shares of each fund at 4 p.m. (Eastern time) each day the NYSE is open. Shares will not be priced on days the NYSE is closed. Purchase orders received after the close of trading will be priced based on the next calculation of NAV. Non-U.S. securities and certain other securities held by a fund may trade on days when the NYSE is closed. In these cases, net asset value of shares may change when fund shares cannot be bought or sold.

100

Certain financial institutions may buy and sell Institutional Shares on behalf of their customers. The institutions may charge a fee for this service and may impose additional conditions on owning fund shares. Shareholders should contact their institutions for more information.

Payment for Shares

Payment for Institutional Shares must normally be made in Federal funds or other funds immediately available by 4 p.m. (Eastern time) on the first business day following receipt of the order. Payment may also, at the discretion of the Company, be made in the form of securities that are permissible investments for the respective fund.

How Much is the Minimum Investment?

The minimum investment for the initial purchase of Institutional Shares is:

$5,000 for institutions

$250,000 for registered investment advisers

$2 million for individuals

There is no minimum requirement for later investments. The Company does not accept third party checks as payment for shares.

The Company may reject any purchase order, modify or waive the minimum initial or subsequent investment requirements and suspend and resume the sale of any share class of any fund at any time.

Master-Feeder Structure

101

Selling Shares

Shareholders may place redemption orders by telephoning (800) 441-7450. Shares are redeemed at their net asset value per share next determined after receipt of the redemption order, minus any applicable redemption/exchange fee. Each of the Mid-Cap Value, Mid-Cap Growth, Small Cap Value, Small Cap Core, Small Cap Growth, European Equity, Asia Pacific Equity, International Equity and International Opportunities Portfolios will deduct a fee of 2% from the redemption amount if the shares being redeemed have been held 90 days or less (other than shares acquired through reinvestment of dividends or other distributions). This fee applies only to (i) shares of the European Equity, Asia Pacific Equity, International Equity and International Opportunities Portfolios purchased on or after December 5, 2001 and (ii) subject to the approval of the Company’s Board of Trustees, shares of the Mid-Cap Value, Mid-Cap Growth, Small Cap Value, Small Cap Core and Small Cap Growth Portfolios purchased on or after March 1, 2003 and is designed to offset the costs and expenses associated with early redemptions. The Company, the administrators and the distributor will employ reasonable procedures to confirm that instructions communicated by telephone are genuine. The Company and its service providers will not be liable for any loss, liability, cost or expense for acting upon telephone instructions that are reasonably believed to be genuine in accordance with such procedures.

Payment for redeemed shares for which a redemption order is received before 4 p.m. (Eastern time) on a business day is normally made in Federal funds wired to the redeeming shareholder on the next business day, provided that the funds’ custodian is also open for business. Payment for redemption orders received after 4 p.m. (Eastern time) or on a day when the funds’ custodian is closed is normally wired in Federal funds on the next business day following redemption on which the funds’ custodian is open for business. The Company reserves the right to wire redemption proceeds within seven days after receiving a redemption order if, in the judgment of BlackRock Advisors, Inc., an earlier payment could adversely affect a fund. No charge for wiring redemption payments is imposed by the Company.

102

The Company may refuse a telephone redemption request if it believes it is advisable to do so.

If a shareholder acquiring Institutional Shares on or after May 1, 1998 no longer meets the eligibility standards for purchasing Institutional Shares (other than due to changes in market value), then the shareholder’s Institutional Shares will be converted to shares of another class of the same fund having the same total net asset value as the shares converted. If, at the time of conversion, an institution offering Service Shares of the fund is acting on the shareholder’s behalf, then the shareholder’s Institutional Shares will be converted to Service Shares. If not, then the shareholder’s Institutional Shares will be converted to Investor A Shares. Service Shares are currently authorized to bear additional service and processing fees at the total annual rate of .30% of average daily net assets, while Investor A Shares are currently authorized to bear additional service, processing and distribution fees at the total annual rate of .50% of average daily net assets.

The Company's Rights

The Company may:

Suspend the right of redemption if trading is halted or restricted on the NYSE or under other emergency conditions described in the Investment Company Act of 1940,

Postpone date of payment upon redemption if trading is halted or restricted on the NYSE or under other emergency conditions described in the Investment Company Act of 1940 or as described in the second paragraph in the section “Selling Shares” above

Redeem shares involuntarily in certain cases, such as when the value of a shareholder account falls below a specified level, as described below, and

Redeem shares for property other than cash if conditions exist which make cash payments undesirable in accordance with its rights under the Investment Company Act of 1940.

Statements

103

Accounts with Low Balances

Market Timing

104

purchase date of shares held in the account. The redemption fee will not be assessed on redemptions or exchanges by (i) accounts managed by PNC Advisors, (ii) certain 401(k) plans, bank or trust company accounts, asset allocation programs or wrap programs approved by the Company, (iii) accounts in the event of shareholder death or disability and (iv) certain other accounts in the absolute discretion of the Company when a shareholder can demonstrate hardship.

Management

BlackRock Funds’ adviser is BlackRock Advisors, Inc. (BlackRock). BlackRock was organized in 1994 to perform advisory services for investment companies and is located at 100 Bellevue Parkway,Wilmington, DE 19809. BlackRock is a wholly- owned subsidiary of BlackRock, Inc., one of the largest publicly traded investment management firms in the United States with $273 billion of assets under management as of December 31, 2002. BlackRock, Inc. is a majority-owned indirect subsidiary of The PNC Financial Services Group, Inc., one of the largest diversified financial services companies in the United States. BlackRock Financial Management, Inc. (BFM), an affiliate of BlackRock, located at 40 E. 52nd Street, New York, NY 10022, acts as sub-adviser to the Company. BlackRock International, Ltd. (BIL), an affiliate of BlackRock located at 40 Torphichen Street, Edinburgh, Scotland EH3 8JB, acts as co-adviser and sub-adviser to the Company. The only fund not managed by BlackRock or BIL is the Index Equity Portfolio, which invests all of its assets in the Index Master Portfolio. The Index Master Portfolio is advised by Dimensional Fund Advisors Inc. (DFA), located at 1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401. DFA was organized in May 1981 and provides investment management services to institutional investors. As of November 30, 2002, DFA had over $34 billion in assets under management.

105

IMPORTANT DEFINITIONS

Adviser: The adviser of a mutual fund is responsible for the overall investment management of the fund. The advisers for BlackRock Funds are BlackRock Advisors, Inc. and BlackRock International Ltd. The adviser for the Index Equity Portfolio is Dimentional Fund Advisors Inc.

Large Cap Value Equity		0.49%
Large Cap Growth Equity		0.50%
Mid-Cap Value Equity		0.80%
Mid-Cap Growth Equity		0.80%
Small Cap Value Equity		0.54%
Small Cap Core Equity		0.00%
Small Cap Growth Equity		0.53%
Global Science & Technology Opportunities		0.78%
European Equity		0.52%
Asia Pacific Equity		0.00%
International Equity		0.69%
International Opportunities		0.90%
Select Equity		0.49%
Balanced		0.52%
U.S. Opportunities		1.05%

For the fiscal year ended November 30, 2002, the Index Master Portfolio paid DFA an aggregate advisory fee of .025% of average daily net assets.

The total annual advisory fees that can be paid to BlackRock or BIL, as applicable (as a percentage of average daily net assets), are as follows:

Total Annual Advisory Fee for the Large Cap Value Equity, Large Cap Growth Equity, Small Cap Value Equity, Small Cap Growth Equity, Select Equity and Balanced Portfolios (Before Waivers)

AVERAGE DAILY NET ASSETS		INVESTMENT ADVISORY FEE
First $1 billion		.550%
$1 billion-$2 billion		.500%
$2 billion-$3 billion		.475%
more than $3 billion		.450%

Total Annual Advisory Fee for the Mid-Cap Value Equity and Mid-Cap Growth Equity Portfolios (Before Waivers)

AVERAGE DAILY NET ASSETS		INVESTMENT ADVISORY FEE
First $1 billion		.800%
$1 billion-$2 billion		.700%
$2 billion-$3 billion		.675%
more than $3 billion		.625%

106

Total Annual Advisory Fee for the Global Science & Technology Opportunities, European Equity and Asia Pacific Equity Portfolios (Before Waivers)

AVERAGE DAILY NET ASSETS		INVESTMENT ADVISORY FEE
First $1 billion		.900%
$1 billion-$2 billion		.850%
$2 billion-$3 billion		.800%
more than $3 billion		.750%

Total Annual Advisory Fee for the International Equity Portfolio (Before Waivers)

AVERAGE DAILY NET ASSETS		INVESTMENT ADVISORY FEE
First $1 billion		.750%
$1 billion-$2 billion		.700%
$2 billion-$3 billion		.675%
more than $3 billion		.650%

Total Annual Advisory Fee for the International Opportunities Portfolio (Before Waivers)

AVERAGE DAILY NET ASSETS		INVESTMENT ADVISORY FEE
First $1 billion		1.00%
$1 billion-$2 billion		.950%
$2 billion-$3 billion		.900%
more than $3 billion		.850%

Total Annual Advisory Fee for the U.S. Opportunities Portfolio (Before Waivers)

AVERAGE DAILY NET ASSETS		INVESTMENT ADVISORY FEE
First $1 billion		1.10%
$1 billion-$2 billion		1.05%
$2 billion-$3 billion		1.025%
more than $3 billion		1.00%

The Small Cap Core Equity Portfolio pays BlackRock a maximum annual advisory fee of 1.00% of its average daily net assets.

The Index Master Portfolio pays DFA a maximum annual advisory fee of .025% of its average daily net assets.

107

Information about the portfolio manager for each of the funds is presented in the appropriate fund section.

As discussed above, BlackRock and BIL have agreed to cap each fund’s net expenses at the levels shown in that fund’s expense table.

To achieve this cap, BlackRock or BIL, as applicable and the Company have entered into expense limitation agreements. The agreements set a limit on certain of the operating expenses of each fund through February 1, 2004 and requires BlackRock to waive or reimburse fees or expenses if these operating expenses exceed that limit. These expense limits (which apply to expenses charged on fund assets as a whole, but not expenses separately charged to the different share classes of a fund) as a percentage of average daily net assets are:

Large Cap Value Equity	.630	%
Large Cap Growth Equity	.650	%
Mid-Cap Value Equity	1.085	%
Mid-Cap Growth Equity	1.055	%
Small Cap Value Equity	.795	%
Small Cap Core Equity	1.125	%
Small Cap Growth Equity	.815	%
Global Science & Technology Opportunities	1.255	%
European Equity	1.275	%
Asia Pacific Equity	1.275	%
International Equity	.995	%
International Opportunities	1.275	%
Select Equity	.645	%
Index Equity	.150	%
Balanced	.690	%
U.S. Opportunities	1.425	%

If within two years following a waiver or reimbursement the operating expenses of a fund that previously received a waiver or reimbursement from BlackRock or BIL, as applicable, are less than the expense limit for that fund, the fund is required to repay BlackRock or BIL, as applicable, up to the amount of fees waived or expenses reimbursed under the agreement if: (1) the fund has more than $50 million in assets, (2) BlackRock or BIL, as applicable, continues to be the fund’s investment adviser and (3) the Board of Trustees of the Company has approved in advance the payments to BlackRock or BIL, as applicable, at the previous quarterly meeting of the Board.

108

Dividends and Distributions

BlackRock Funds makes two kinds of distributions to shareholders: net investment income and net realized capital gains.

Distributions of net investment income derived by a fund are paid within 10 days after the end of each quarter. The Company’s Board of Trustees may change the timing of such dividend payments.

Net realized capital gains (including net short-term capital gains), (if any), will be distributed by a fund at least annually at a date determined by the Company’s Board of Trustees.

Taxation of Distributions

Your annual tax statement from the Company will present in detail the tax status of your distributions for each year.

109

Distributions paid by a fund with respect to certain qualifying dividends received by the fund from domestic corporations may be eligible for the corporate dividends received deduction.

Important Notice Regarding Delivery of Shareholder Documents

Electronic Access to Shareholder Documents

To enroll:

Shareholders Who Hold Accounts With Investment Advisers, Banks or Brokerages:

1) Have your enrollment number ready. If you do not have one, please contact your financial adviser.

2) Log on to www.investordelivery.com.

110

Shareholders Who Hold Accounts Directly With the Fund:

1) Log on to http://funds.blackrock.com.

2) Click on Electronic Delivery icon on either side of your screen.

3) Complete the on-line form by entering your social security number, e-mail address and by selecting your electronic delivery preference.

111

For more information:

Annual/Semi-Annual Reports

Statement of Additional Information (SAI)

A Statement of Additional Information, dated January 28, 2003, has been filed with the Securities and Exchange Commission (SEC). The SAI, which includes additional information about the BlackRock Funds, may be obtained free of charge, along with the Company’s annual and semi-annual reports, by calling (800) 441-7450. The SAI, as supplemented from time to time, is incorporated by reference into this Prospectus.

Shareholder Account Service Representatives

Purchases and Redemptions

Call your registered representative or (800) 441-7450.

World Wide Web

Access general fund information and specific fund

performance. Request mutual fund prospectuses and literature. Forward mutual fund inquiries. www.blackrock.com

Email

Request prospectuses, SAI, Annual or Semi-Annual

Reports and literature. Forward mutual fund inquiries.

Mail to: funds@blackrock.com

Written Correspondence

BlackRock Funds

100 Bellevue Parkway

Mail Stop WR-R100-04-07

Wilmington, DE 19809

Internal Wholesalers/Broker Dealer Support

Available to support investment professionals

9 a.m. to 6 p.m. (Eastern time), Monday-Friday.

Call: (888) 8BLACKROCK

Securities and Exchange Commission (SEC)

INVESTMENT COMPANY ACT FILE NO. 811-05742

EQINSTPROS2/03

World class institutional asset management at a personal level

BlackRock Funds

Global Communications

Portfolio

Investor Shares

Prospectus

January 28, 2003

BlackRock Funds^SMis a mutual

fund family with 43 investment

portfolios, one of which is

described in this prospectus.

BlackRock Funds are sold

principally through licensed

investment professionals.

The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.

NOT FDIC		May Lose Value
INSURED		No Bank Guarantee

Table of

Contents

How to find the information you need


*How to find the information you need*		1

*Global Communications Portfolio*		2

*About Your Investment*

*How to Buy/Sell Shares*		10

*Dividends/Distributions/Taxes*		22

*Services for Shareholders*		24

How to Find the

Information You Need

About BlackRock Funds

This is the BlackRock Global Communications Portfolio Prospectus. It has been written to provide you with the information you need to make an informed decision about whether to invest in BlackRock Funds (the Company).

This prospectus contains information on the Global Communications Portfolio. Also included are sections that tell you about buying and selling shares, certain fees and expenses, shareholder features of the fund and your rights as a shareholder.

BlackRock

Global Communications Portfolio

IMPORTANT DEFINITIONS

Investment Style: Refers to the guiding principles of a mutual fund’s investment choices. The investment style of this fund is global communications growth, referring to the type of securities the managers will choose for this fund.

Market Capitalization: Market capitalization refers to the market value of a company and is calculated by multiplying the number of shares outstanding by the current price per share.

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

In pursuit of this goal, the fund normally invests at least 80% of its net assets in equity securities issued by U.S. and non-U.S. companies selected for their rapid and sustainable growth potential from the development, manufacture or sale of emerging or established communication technology services and equipment. The fund can also purchase securities issued by companies outside of the communication technology sector if such companies may benefit from the use of communication technology.

The fund primarily buys common stock but also can invest in preferred stock and securities convertible into common and preferred stock. The fund may also invest in Rule 144A securities, which are privately placed securities purchased and sold by qualified institutional buyers. From time to time the fund may invest in shares of companies through initial public offerings (IPOs).

The fund management team will invest in U.S. and non-U.S. companies (including companies located in emerging market countries) with market capitalizations greater than $25 million that they believe offer the best opportunities for growth and high investment returns. The management team screens for stocks whose medium to long term growth prospects it believes are superior to broad market averages. Once these candidates have been identified, the management team uses fundamental analysis to examine each company for financial strength before deciding to purchase the stock.

local and wide area network services or equipment companies

land-based, satellite and wireless carriers

communications equipment manufacturers

internet-related services or equipment, including internet service providers, web hosting and web content providers and internet portals

fiber optic transmission

communications software development

cable and other pay television services or equipment

video conferencing

data processing and delivery

paging

semiconductors

microwave

telephone utilities and large long distance carriers

wireless voice and data equipment and services

broadband infrastructure

digital cable services and equipment

optical components and integrated circuits

The fund generally will sell a stock when, in the management team’s opinion, there is a deterioration in the company’s fundamentals, the company fails to meet performance expectations or the stock’s relative price momentum declines meaningfully.

The fund may also use forward foreign currency exchange contracts (obligations to buy or sell a currency at a set rate in the future) to hedge against movements in the value of non-U.S. currencies.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

The fund’s focus on stocks in the communication technology sector makes it more susceptible to factors affecting that sector and more volatile than funds that invest in many different sectors. Therefore, a downturn in the communication technology sector could hurt the fund’s performance to a greater extent than a fund that invests in many sectors.

In addition, investing in communication technology companies exposes the fund to special risks. For example, rapid advances in communication technology might cause existing products to become obsolete, and the fund’s returns could suffer to the extent it holds an affected company’s shares. Companies in a number of communication technology industries are also subject to more government regulations and approval processes than many other industries. This fact may affect a company’s overall profitability and cause its stock price to be more volatile. Additionally, communication technology companies are dependent upon consumer and business acceptance as new technologies evolve.

Because different kinds of stocks go in and out of favor depending on market conditions, this fund’s performance may be better or worse than other funds with different investment styles.

While the management team chooses stocks they believe have above-average earnings growth potential, there is no guarantee that the shares will increase in value or that they won’t move even lower.

The fund may invest more than 25% of its assets in securities whose issuers are located in a single country. These investments would make the fund more dependent upon the political and economic circumstances of that country than a mutual fund that owns stocks of companies in many countries.

The expenses of the fund can be expected to be higher than those of other funds investing primarily in domestic securities because the costs attributable to investing abroad are usually higher.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Distribution Fees: A method of charging distribution-related expenses against fund assets.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

Shareholder Fees

(Fees paid directly from your investment)

	A Shares	B Shares	C Shares
Maximum Sales Charge (Load) Imposed on Purchases*	5.0%	0.0%	0.0%
(as percentage of offering price)
Maximum Deferred Sales Charge (Load)	0.0%	4.5%**	1.00%***
(as percentage of offering price)

*	Reduced front-end sales charges may be available. A CDSC of up to 1.00% is assessed on certain redemptions of Investor A Shares that are purchased with no initial sales charge as part of an investment of $1,000,000 or more.

**	The CDSC is 4.5% if shares are redeemed in less than one year. The CDSC for Investor B Shares decreases for redemptions made in subsequent years. After six years there is no CDSC on B Shares. (See page 14 for complete schedule of CDSCs.)

***	There is no CDSC on C Shares after one year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

	A Shares	B Shares	C Shares
Advisory fees	.80%	.80%	.80%
Distribution (12b-1) fees	.10%	.75%	.75%
Other expenses¹	1.00%	1.00%	1.00%
Service fee	.25%	.25%	.25%
Processing fee	.15%	.15%	.15%
Other	.60%	.60%	.60%
Total annual fund operating expenses	1.90%	2.55%	2.55%
Fee waivers and expense reimbursements*	.33%	.23%	.29%
Net expenses*	1.57%	2.32%	2.32%

BlackRock and BlackRock Distributors, Inc., the fund’s distributor, have contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.57% (for Investor A Shares) and 2.32% (for Investor B and C Shares) of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 21 for a discussion of these waivers and reimbursements.

¹	The fund is newly organized and, accordingly, “Other expenses” are based on estimated amounts for the current fiscal year.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses, redemption at the end of each time period and, with respect to B Shares and C Shares only, no redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

	1 Year	3 Years
A Shares*	$652	$1,037
B Shares**
Redemption	$685	$1,122
B Shares
No Redemption	$235	$ 772
C Shares**
Redemption	$335	$ 772
C Shares
No Redemption	$235	$ 772

*	Reflects imposition of sales charge.

**	Reflects deduction of CDSC.

As a shareholder you pay certain fees and expenses. Shareholder transaction fees are paid out of your investment and annual fund operating expenses are paid out of fund assets.

Fund Management

The fund is managed by a team of investment professionals at BlackRock Advisors, Inc. (BlackRock) and BlackRock International, Ltd. (BIL). The team includes Thomas Callan, Michael Carey, Kenneth Anderson and David Stanistreet.

Thomas Callan has been a Managing Director with BlackRock since 1996 and served as an equity analyst for PNC Bank from 1993 to 1996. He has co-managed the fund since its inception.

Michael Carey has been a Vice President with BlackRock since 2000, an equity analyst with BlackRock since 1996 and served as a fixed income analyst for PNC Bank from 1993 to 1996. He has co-managed the fund since its inception.

About Your Investment

Buying Shares from a Registered Investment Professional

What Price Per Share Will You Pay?

The fund’s investments are valued based on market value, or where market quotations are not readily available, based on fair value as determined in good faith by or under the direction of the Company’s Board of Trustees. Under some circumstances certain short-term debt securities will be valued using the amortized cost method.

When you place a purchase order, you need to specify whether you want Investor A, B or C Shares. If you do not specify a class, you will receive Investor A Shares.

When Must You Pay?

How Much is the Minimum Investment?

purchase order, modify or waive the minimum investment requirements and suspend and resume the sale of any share class of any fund at any time.

Which Pricing Option Should You Choose?

A Shares (Front-End Load)

One time sales charge paid at time of purchase

Lower ongoing distribution fees

Free exchange with other A Shares in BlackRock Funds family

Advantage: Makes sense for investors who have long-term investment horizon because ongoing distribution fees are less than for other Investor Share classes.

Disadvantage: You pay sales charge up-front, and therefore you start off owning fewer shares.

B Shares (Back-End Load)

No front-end sales charge when you buy shares

You pay sales charge when you redeem shares. It is called a contingent deferred sales charge (CDSC) and it declines over 6 years to zero from a high of 4.5%.

Higher ongoing distribution fees than A Shares

Free exchange with other B Shares in BlackRock Funds family

Automatically convert to A Shares eight years from purchase

Advantage: No up-front sales charge so you start off owning more shares.

Disadvantage: You pay higher ongoing distribution fees than on A Shares each year you own shares, which means that you can expect lower total performance per share.

C Shares (Level Load)

No front-end sales charge when you buy shares

Contingent deferred sales charge (CDSC) of 1.00% if shares are redeemed within 12 months of purchase

Higher ongoing distribution fees than A Shares

Free exchange with other C Shares in BlackRock Funds family

Advantage: No up-front sales charge so you start off owning more shares. These shares may make sense for investors who have a shorter investment horizon relative to A or B Shares.

Disadvantage: You pay higher ongoing distribution fees than on A shares each year you own shares, which means that you can expect lower total performance per share. Shares do not convert to A Shares.

How Much is the Sales Charge?

The tables on the next page show the schedule of front-end sales charges that you may pay if you buy and sell Investor A, B and C Shares of a fund.

Purchase of Investor A Shares

The following tables show the front-end sales charges that you may pay if you buy Investor A Shares. The offering price for Investor A Shares includes any front-end sales charge.

The following schedule of front-end sales charges and quantity discounts applies to the Global Communications Portfolio.

AMOUNT OF TRANSACTION AT OFFERING PRICE	SALES CHARGE AS % OF OFFERING PRICE*	SALES CHARGE AS % OF NET ASSET VALUE*
Less than $50,000	5.00%	5.26%
$50,000 but less than $100,000	4.75%	4.99%
$100,000 but less than $250,000	4.50%	4.71%
$250,000 but less than $500,000	3.50%	3.83%
$500,000 but less than $1,000,000	2.50%	2.56%
$1 million or more	0.00%	0.00%

*	There is no initial sales charge on purchases of $1,000,000 or more of Investor A Shares; however, you will pay a CDSC of 1.00% of the offering price or the net asset value of the shares on the redemption date (whichever is less) for shares redeemed within 18 months after purchase.

Purchase of Investor B Shares

NUMBER OF YEARS ELAPSED SINCE PURCHASE		CONTINGENT DEFERRED SALES CHARGE (AS % OF DOLLAR AMOUNT SUBJECT TO THE CHARGE)
Up to one year		4.50%
More than one but less than two years		4.00%
More than two but less than three years		3.50%
More than three but less than four years		3.00%
More than four but less than five years		2.00%
More than five but less than six years		1.00%
More than six years		0.00%

Purchase of Investor C Shares

Can the Sales Charge be Reduced or Eliminated?

Right of Accumulation (Investor A Shares)

Letter of Intent (Investor A Shares)

investment to be covered by the letter. The initial investment must meet the minimum initial purchase requirement and represent at least 5% of the total intended purchase. The investor must tell PFPC that later purchases are subject to the Letter of Intent. During the term of the Letter of Intent, PFPC will hold Investor A Shares representing 5% of the indicated amount in an escrow account for payment of a higher sales load if the full amount indicated in the Letter of Intent is not purchased. Any redemptions made during the term of the Letter of Intent will be subtracted from the amount of the total purchase indicated in the letter. If the full amount indicated is not purchased within the 13-month period, and the investor does not pay the higher sales load within 20 days, PFPC will redeem enough of the Investor A Shares held in escrow to pay the difference.

Reinvestment Privilege (Investor A, Investor B and Investor C Shares)

Quantity Discounts (Investor A Shares)

Waiving the Sales Charge (Investor A Shares)

Waiving the Contingent Deferred Sales Charge (Investor B and Investor C Shares)

The CDSC on Investor B and Investor C Shares is not charged in certain circumstances, including share exchanges (see page 24) and redemptions made in connection with certain retirement plans and in connection with certain shareholder services offered by the Company. For more information on these waivers, please contact PFPC at (800) 441-7762 or see the SAI.

Distribution and Service Plan

In return for the fee, Service Organizations may provide one or more of the following services to their customers who own Investor Shares:

(1)

Responding to customer questions on the services performed by the Service Organization and investments in Investor Shares;

(2)

Assisting customers in choosing and changing dividend options, account designations and addresses; and

(3)

Providing other similar shareholder liaison services.

For a separate shareholder processing fee paid by all Investor Shares of up to .15% per year of the average daily net asset value of Investor Shares owned by each Service Organization’s customers, Service Organizations may provide one or more of these additional services:

(1)

Processing purchase and redemption requests from customers and placing orders with the Company’s transfer agent or the Distributor;

(2)

Processing dividend payments from the Company on behalf of customers;

(3)

Providing sub-accounting for Investor Shares beneficially owned by customers or the information necessary for sub-accounting; and

(4)

Providing other similar services.

BlackRock may receive a significant portion of these shareholder processing fees.

How to Sell Shares

CDSC and/or redemption/exchange fee. Shares may be redeemed by sending a written redemption request to BlackRock Funds c/o PFPC, P.O. Box 9819, Providence, Rhode Island 02940-8019.

Expedited Redemptions

The Company's Rights

The Company may:

Suspend the right of redemption if trading is halted or restricted on the NYSE or under other emergency conditions described in the Investment Company Act of 1940,

Redeem shares involuntarily in certain cases, such as when the value of a shareholder account falls below a specified level, as described below, and

Redeem shares for property other than cash if conditions exist which make cash payments undesirable in accordance with its rights under the Investment Company Act of 1940.

Accounts with Low Balances

IMPORTANT DEFINITIONS

Management

For their investment advisory services, BlackRock and BIL are entitled to fees computed daily and payable monthly.

The total annual advisory fees that can be paid to BlackRock and BIL (as a percentage of average daily net assets) are as follows:

Total Annual Advisory Fee for the Global Communications Portfolio (Before Waivers)

AVERAGE DAILY NET ASSETS		INVESTMENT ADVISORY FEE
First $1 billion		.800%
$1 billion-$2 billion		.700%
$2 billion-$3 billion		.675%
more than $3 billion		.625%

Information about the portfolio manager for the fund is presented on page 8.

As discussed above, BlackRock and BIL have agreed to cap the fund’s net expenses at the levels shown in the expense table.

To achieve this cap, BlackRock, BIL and the Company have entered into an expense limitation agreement. The agreement sets a limit on certain of the operating expenses of the fund through February 1, 2004 and requires BlackRock and BIL to waive or reimburse fees or expenses if these operating expenses exceed that limit. These expense limits (which apply to expenses charged on fund assets as a whole, but not expenses separately charged to the different share classes of a fund) as a percentage of average daily net assets are 0.925%.

If within two years following a waiver or reimbursement, the operating expenses of a fund that previously received a waiver or reimbursement from BlackRock and BIL are less than the expense limit for the fund, the fund is required to repay BlackRock and BIL up to the amount of fees waived or expenses reimbursed under the agreement if: (1) the fund has more than $50 million in assets, (2) BlackRock and BIL continue to be the fund’s investment advisers and (3) the Board of Trustees of the Company has approved in advance the payments to BlackRock and BIL at the previous quarterly meeting of the Board.

Dividends and Distributions

BlackRock Funds makes two kinds of distributions to share- holders: net investment income and net realized capital gains.

Distributions of net investment income derived by a fund are paid within 10 days after the end of each quarter. The Company’s Board of Trustees may change the timing of such dividend payments.

Net realized capital gains (including net short-term capital gains), if any, will be distributed by a fund at least annually at a date determined by the Company’s Board of Trustees.

Taxation of Distributions

Your annual tax statement from the Company will present in detail the tax status of your distributions for each year.

Distributions paid by a fund with respect to certain qualifying dividends received by the fund from domestic corporations may be eligible for the corporate dividends received deduction.

Services for Shareholders

BlackRock Funds offers shareholders many special features which can enable investors to have greater investment flexibility as well as more access to information about the Company.

Additional information about these features is available by calling PFPC at (800) 441-7762.

Exchange Privilege

The exchange of Investor B and Investor C Shares will not be subject to a CDSC.

The Company reserves the right to modify, limit the use of, or terminate the exchange privilege at any time.

Automatic Investment Plan (AIP)

Retirement Plans

Market Timing

Statements

Every BlackRock shareholder automatically receives regular account statements. In addition, for tax purposes, shareholders also receive a yearly statement describing the characteristics of any dividends or other distributions received.

Systematic Withdrawal Plan (SWP)

Important Notice Regarding Delivery of Shareholder Documents

The fund delivers only one copy of shareholder documents, including prospectuses, shareholder reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is known as “householding” and is intended to eliminate duplicate mailings and reduce expenses. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact the Company at (800) 441-7762.

Internet Transactions

Electronic Access to Shareholder Documents

To enroll:

Shareholders Who Hold Accounts With Investment Advisers, Banks or Brokerages:

1) Have your enrollment number ready. If you do not have one, please contact your financial adviser.

2) Log on to www.investordelivery.com.

3) Enter your assigned enrollment number plus the four-digit personal identification number (PIN) of your choice. The PIN should be the same for all accounts using the same e-mail address,

and will be required if you decide to change your delivery preference. Note: If you have additional BlackRock Fund shares in more than one account, you may receive additional copies of this notice with a separate enrollment number for each account. In that case, provide the information that applies to each enrollment number. If you have any questions, please contact your financial adviser.

Shareholders Who Hold Accounts Directly With the Fund:

1) Log on to http://funds.blackrock.com.

2) Click on Electronic Delivery icon on either side of your screen.

3) Complete the on-line form by entering your social security number, e-mail address and by selecting your electronic delivery preference.

For more information:

Annual/Semi-Annual Reports

Statement of Additional Information (SAI)

Shareholder Account Service Representatives

Purchases and Redemptions

Call your registered representative or (800) 441-7762.

World Wide Web

Access general fund information and specific fund

performance. Request mutual fund prospectuses and literature. Forward mutual fund inquiries. www.blackrock.com

Email

Request prospectuses, SAI, Annual or Semi-Annual

Reports and literature. Forward mutual fund inquiries.

Mail to: funds@blackrock.com

Written Correspondence

Post Office Address: BlackRock Funds, c/o PFPC Inc.,

P.O. Box 9819, Providence, RI 02940-8019

Street Address: BlackRock Funds, c/o PFPC Inc.,

400 Bellevue Parkway, Wilmington, DE 19809

Internal Wholesalers/Broker Dealer Support

Available to support investment professionals

9 a.m. to 6 p.m. (Eastern time), Monday-Friday.

Call: (888) 8BLACKROCK

Securities and Exchange Commission (SEC)

INVESTMENT COMPANY ACT FILE NO. 811-05742

EQINVAPROS2/03

World class institutional asset management at a personal level

BlackRock Funds

Global Communications

Portfolio

Service Shares

Prospectus

January 28, 2003

BlackRock Funds^SMis a mutual

fund family with 43 investment

portfolios, one of which is

described in this prospectus.

The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.

NOT FDIC		May Lose Value
INSURED		No Bank Guarantee

Table of

Contents


*How to find the information you need* *How to find the information you need*		1

*Global Communications Portfolio*		2

*About Your Investment* *How to Buy/Sell Shares*		9

*Dividends/Distributions/Taxes*		16

How to Find the

Information You Need

About BlackRock Funds

BlackRock

Global Communications Portfolio

IMPORTANT DEFINITIONS

Market Capitalization: Market capitalization refers to the market value of a company and is calculated by multiplying the number of shares outstanding by the current price per share.

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

The fund primarily buys common stock but also can invest in preferred stock and securities convertible into common and preferred stock. The fund may also invest in Rule 144A securities, which are privately placed securities purchased and sold by qualified institutional buyers. From time to time the fund may invest in shares of companies through initial public offerings (IPOs).

local and wide area network services or equipment companies

land-based, satellite and wireless carriers

communications equipment manufacturers

internet-related services or equipment, including internet service providers, web hosting and web content providers and internet portals

fiber optic transmission

communications software development

cable and other pay television services or equipment

video conferencing

data processing and delivery

paging

semiconductors

microwave

telephone utilities and large long distance carriers

wireless voice and data equipment and services

broadband infrastructure

digital cable services and equipment

optical components and integrated circuits

The fund generally will sell a stock when, in the fund management team’s opinion, there is a deterioration in the company’s fundamentals, the company fails to meet performance expectations or the stock’s relative price momentum declines meaningfully.

The fund may also use forward foreign currency exchange contracts (obligations to buy or sell a currency at a set rate in the future) to hedge against movements in the value of non-U.S. currencies.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

Non-U.S. involve risks not typically associated with investing in U.S. securities. These risks include but are not limited to: currency risks (the risk that the value of dividends or interest paid by non-U.S. securities, or the value of the securities themselves, may fall if currency exchange rates change), the risk that a security’s value will be hurt by changes in non-U.S. political or social conditions,

including changes in policies restricting non-U.S. investment, the possibility of heavy taxation, nationalization or expropriation of assets and more difficulty obtaining information on non-U.S. securities or companies. In addition, a portfolio of non-U.S. securities may be harder to sell and may be subject to wider price movements than comparable investments in U.S. companies. There is less government regulation of non-U.S. securities markets.

Because different kinds of stocks go in and out of favor depending on market conditions, this fund’s performance may be better or worse than other funds with different investment styles.

While the management team chooses stocks they believe have above-average earnings growth potential, there is no guarantee that the shares will increase in value or that they won’t move even lower.

Forward foreign currency exchange contracts do not eliminate movements in the value of non-U.S. securities but rather allow the

fund to establish a fixed rate of exchange for a future point in time. This strategy can have the effect of reducing returns and minimizing opportunities for gain.

The expenses of the fund can be expected to be higher than those of other funds investing primarily in domestic securities because the costs attributable to investing abroad are usually higher.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Service Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees			.80	%
Other expenses¹			.83	%
Service fees	.15	%
Processing fees	.15	%
Other	.53	%
Total annual fund operating expenses			1.63	%
Fee waivers and expense reimbursements*			.23	%
Net expenses*			1.40	%

BlackRock and BIL have contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.40% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock and BIL in the following two years. See the “Management” section on page 15 for a discussion of these waivers and reimbursements.

¹	The fund is newly organized and, accordingly, “Other expenses” are based on estimated amounts for the current fiscal year.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years
Service Shares		$143		$492

Fund Management

Thomas Callan has been a Managing Director with BlackRock since 1996 and served as an equity analyst for PNC Bank from 1993 to 1996. He has co-managed the fund since its inception.

Kenneth Anderson, Director and international equity investment manager at BIL, is primarily responsible for European equity research and portfolio management. Prior to joining BIL in 2000,

Mr. Anderson was an investment director and the deputy head of the Scottish Widows Investment Management European equity team. He has co-managed the fund since its inception.

About Your Investment

Buying Shares

Purchase orders may be placed by calling (800) 441-7450.

What Price Per Share Will You Pay?

Since the NAV changes daily, the price you pay for your shares depends on the time that your order is received.

Paying for Shares

How Much is the Minimum Investment?

The Company may reject any purchase order, modify or waive the minimum initial or subsequent investment requirements and suspend and resume the sale of any share class of any fund at any time.

Distribution and Service Plan

In return for the fee, Service Organizations may provide one or more of the following services to their customers who own Service Shares:

(1)

Responding to customer questions on the services performed by the Service Organization and investments in Service Shares;

(2)

Assisting customers in choosing and changing dividend options, account designations and addresses; and

(3)

Providing other similar shareholder liaison services.

(1)

Processing purchase and redemption requests from customers and placing orders with the Company’s transfer agent or the Company’s distributor;

(2)

Processing dividend payments from the Company on behalf of customers;

(3)

Providing sub-accounting for Service Shares beneficially owned by customers or the information necessary for sub-accounting; and

(4)

Providing other similar services.

BlackRock may receive a significant portion of these shareholder processing fees.

Selling Shares

Institutions may place redemption orders by telephoning (800) 441-7450. Shares are redeemed at their net asset value per share next determined after receipt of the redemption order, minus any applicable redemption/exchange fee. The Company, the administrators and the distributor will employ reasonable procedures to confirm that instructions communicated by telephone are genuine. The Company and its service providers will not be liable for any loss, liability, cost or expense for acting upon telephone instructions that are reasonably believed to be genuine in accordance with such procedures.

Persons who were shareholders of the Compass Capital Group of Funds at the time of its combination with the PNC^® Fund may redeem for cash some or all of their shares of a fund at any time by sending a written redemption request in proper form to BlackRock Funds at 100 Bellevue Parkway, Wilmington, DE 19809, MS WR-R100-04-07. They may also redeem shares by telephone if they have signed up for the expedited redemption privilege.

The Company may refuse a telephone redemption request if it believes it is advisable to do so and may use reasonable procedures to make sure telephone instructions are genuine.

The Company's Rights

The Company may:

Suspend the right of redemption if trading is halted or restricted on the NYSE or under other emergency conditions described in the Investment Company Act of 1940,

Redeem shares involuntarily in certain cases, such as when the value of a shareholder account falls below a specified level, as described below, and

Redeem shares for property other than cash if conditions exist which make cash payments undesirable in accordance with its rights under the Investment Company Act of 1940.

Statements

Accounts with Low Balances

Market Timing

The fund is not designed for market timing organizations or other entities using programmed or frequent exchanges. The exchange privilege is not intended as a vehicle for short-term trading. Excessive exchange activity may interfere with portfolio management and may have an adverse effect on all shareholders. If the Company determines, in its sole discretion, that your short-term trading is excessive or that you are engaging in market-timing activity, it reserves the right to reject any specific purchase or exchange order. If the Company rejects your purchase or exchange order, you will not be able to execute that transaction, and the Company will not be responsible for any losses you therefore may suffer. In addition, any redemptions that you make as a result of the activity described above will be subject to any and all redemption fees.

IMPORTANT DEFINITIONS

Management

For their investment advisory services, BlackRock and BIL are entitled to fees computed daily and payable monthly.

The total annual advisory fees that can be paid to BlackRock and BIL (as a percentage of average daily net assets) are as follows:

Total Annual Advisory Rate for the Global Communications Portfolio (Before Waivers)

AVERAGE DAILY NET ASSETS		INVESTMENT ADVISORY FEE
First $1 billion		.800%
$1 billion-$2 billion		.700%
$2 billion-$3 billion		.675%
more than $3 billion		.625%

Information about the portfolio manager for the fund is presented on page 7.

As discussed above, BlackRock has agreed to cap the fund’s net expenses at the levels shown in the expense table.

If within two years following a waiver or reimbursement the operating expenses of a fund that previously receive a waiver or reimbursement from BlackRock and BIL are less than the expense limit for the fund, the fund is required to repay BlackRock and BIL up to the amount of fees waived or expenses reimbursed under the agreement if: (1) the fund has more than $50 million in assets, (2) BlackRock and BIL continue to be the fund’s investment adviser and (3) the Board of Trustees of the Company has approved in advance the payments to BlackRock and BIL at the previous quarterly meeting of the Board.

Dividends and Distributions

BlackRock Funds makes two kinds of distributions to shareholders: net investment income and net realized capital gains.

Distributions of net investment income derived by a fund are paid within 10 days after the end of each quarter. The Company’s Board of Trustees may change the timing of such dividend payments.

Net realized capital gains (including net short-term capital gains), if any, will be distributed by a fund at least annually at a date determined by the Company’s Board of Trustees.

Taxation of Distributions

Distributions paid out of a fund’s “net capital gain” will be taxed to shareholders as long-term capital gain, regardless of how long a shareholder has owned shares. Distribution of net investment income and net short-term capital gains will be taxed to shareholders as ordinary income.

Your annual tax statement from the Company will present in detail the tax status of your distributions for each year.

Distributions paid by a fund with respect to certain qualifying dividends received by the fund from domestic corporations may be eligible for the corporate dividends received deduction.

Important Notice Regarding Delivery of Shareholder Documents

Electronic Access to Shareholder Documents

To enroll:

Shareholders Who Hold Accounts With Investment Advisers, Banks or Brokerages:

1) Have your enrollment number ready. If you do not have one, please contact your financial adviser.

2) Log on to www.investordelivery.com.

Shareholders Who Hold Accounts Directly With the Fund:

1) Log on to http://funds.blackrock.com.

2) Click on Electronic Delivery icon on either side of your screen.

3) Complete the on-line form by entering your social security number, e-mail address and by selecting your electronic delivery preference.

For more information:

Annual/Semi-Annual Reports

Statement of Additional Information (SAI)

A Statement of Additional Information, dated January 28, 2003, has been filed with the Securities and Exchange Commission (SEC). The SAI, which includes additional information about the BlackRock Funds, may be obtained free of charge, along with the Company’s annual and semi-annual reports, by calling (800) 441-7450. The SAI, as supplemented from time to time, is incorporated by reference into this Prospectus.

Shareholder Account Service Representatives

Purchases and Redemptions

Call your registered representative or (800) 441-7450.

World Wide Web

Access general fund information and specific fund

performance. Request mutual fund prospectuses and literature. Forward mutual fund inquiries. www.blackrock.com

Email

Request prospectuses, SAI, Annual or Semi-Annual

Reports and literature. Forward mutual fund inquiries.

Mail to: funds@blackrock.com

Written Correspondence

BlackRock Funds

100 Bellevue Parkway

Mail Stop WR-R100-04-07

Wilmington, DE 19809

Internal Wholesalers/Broker Dealer Support

Available to support investment professionals

9 a.m. to 6 p.m. (Eastern time), Monday-Friday.

Call: (888) 8BLACKROCK

Securities and Exchange Commission (SEC)

INVESTMENT COMPANY ACT FILE NO. 811-05742

EQSRVCPROS2/03

World class institutional asset management at a personal level

BlackRock Funds

Global Communications

Portfolio

Institutional Shares

Prospectus

January 28, 2003

BlackRock Funds^SMis a mutual

fund family with 43 investment

portfolios, one of which is

described in this prospectus.

The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.

NOT FDIC		May Lose Value
INSURED		No Bank Guarantee

Table of

Contents


*How to find the information you need* *How to find the information you need*		1

*Global Communications Portfolio*		2

*About Your Investment* *How to Buy/Sell Shares*		8

*Dividends/Distributions/Taxes*		13

How to Find the

Information You Need

About BlackRock Funds

BlackRock

Global Communications Portfolio

IMPORTANT DEFINITIONS

Market Capitalization: Market capitalization refers to the market value of a company and is calculated by multiplying the number of shares outstanding by the current price per share.

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

The fund primarily buys common stock but also can invest in preferred stock and securities convertible into common and preferred stock. The fund may also invest in Rule 144A securities, which are privately placed securities purchased and sold by qualified institutional buyers. From time to time the fund may invest in shares of companies through initial public offerings (IPOs).

local and wide area network services or equipment companies

land-based, satellite and wireless carriers

communications equipment manufacturers

internet-related services or equipment, including internet service providers, web hosting and web content providers and internet portals

fiber optic transmission

communications software development

n cable and other pay television services or equipment

n video conferencing

n data processing and delivery

n paging

n semiconductors

n microwave

n telephone utilities and large long distance carriers

n wireless voice and data equipment and services

n broadband infrastructure

n digital cable services and equipment

n optical components and integrated circuits

The fund generally will sell a stock when, in the management team’s opinion, there is a deterioration in the company’s fundamentals, the company fails to meet performance expectations or the stock’s relative price momentum declines meaningfully.

The fund may also use forward foreign currency exchange contracts (obligations to buy or sell a currency at a set rate in the future) to hedge against movements in the value of non-U.S. currencies.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

or expropriation of assets and more difficulty obtaining information on non-U.S. securities or companies. In addition, a portfolio of non-U.S. securities may be harder to sell and may be subject to wider price movements than comparable investments in U.S. companies. There is less government regulation of non-U.S. securities markets.

Because different kinds of stocks go in and out of favor depending on market conditions, this fund’s performance may be better or worse than other funds with different investment styles.

IPOs and companies that have recently gone public have the potential to produce substantial gains for the fund. However, there is no assurance that the fund will have access to profitable IPO. Furthermore, stocks of some newly-public companies may decline shortly after the initial public offering.

While the management team chooses stocks they believe have above-average earnings growth potential, there is no guarantee that the shares will increase in value or that they won’t move even lower.

Forward foreign currency exchange contracts do not eliminate movements in the value of non-U.S. securities but rather allow the fund to establish a fixed rate of exchange for a future point in

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

time. This strategy can have the effect of reducing returns and minimizing opportunities for gain.

The expenses of the fund can be expected to be higher than those of other funds investing primarily in domestic securities because the costs attributable to investing abroad are usually higher.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Institutional Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)


Advisory fees	.80	%
Other expenses¹	.53	%
Total annual fund operating expenses	1.33	%
Fee waivers and expense reimbursements*	.23	%
Net expenses*	1.10	%

BlackRock and BIL have contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.10% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock and BIL in the following two years. See the “Management” section on page 11 for a discussion of these waivers and reimbursements.

¹	The fund is newly organized and, accordingly, “Other expenses” are based on estimated amounts for the current fiscal year.

Example:

at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years
Institutional Shares		$112		$399

Fund Management

Thomas Callan has been a Managing Director with BlackRock since 1996 and served as an equity analyst for PNC Bank from 1993 to 1996. He has co-managed the fund since its inception.

About Your Investment

Buying Shares

Institutional Shares are offered to:

Institutional investors

Trust departments of PNC Bank and its affiliates on behalf of clients for whom the bank:

acts in a fiduciary capacity (excluding participant-directed employee benefit plans)

otherwise has investment discretion or

acts as custodian for at least $2 million in assets

Individuals with a minimum investment of $2 million

Registered investment advisers with a minimum investment of $250,000

Purchase orders may be placed by telephoning (800) 441-7450.

What Price Per Share Will You Pay?

Since the NAV changes daily, the price you pay for your shares depends on the time that your order is received.

Purchase orders received before the close of regular trading on the New York Stock Exchange (NYSE) (currently 4 p.m. (Eastern time)) on each day the NYSE is open will be priced based on the NAV calculated at the close of trading on that day plus any applicable sales charge. NAV is calculated separately for each class of shares of each fund at 4 p.m. (Eastern time) each day the NYSE is open. Shares will not be priced on days the NYSE is closed. Purchase orders received after the close of trading will be priced based on the next calculation of NAV. Non-U.S. securities and certain other securities held by a fund may trade on days when the NYSE is closed. In these cases, net asset value of shares may change when fund shares cannot be bought or sold.

Payment for Shares

How Much is the Minimum Investment?

The minimum investment for the initial purchase of Institutional Shares is:

$5,000 for institutions

$250,000 for registered investment advisers

$2 million for individuals

There is no minimum requirement for later investments. The Company does not accept third party checks as payment for shares.

The Company may reject any purchase order, modify or waive the minimum initial or subsequent investment requirements and suspend and resume the sale of any share class of any fund at any time.

Selling Shares

Shareholders may place redemption orders by telephoning (800) 441-7450. Shares are redeemed at their net asset value per share next determined after receipt of the redemption order, minus any applicable redemption/exchange fee. The Company, the administrators and the distributor will employ reasonable procedures to confirm that instructions communicated by telephone are genuine. The Company and its service providers will not be liable for any loss, liability, cost or expense for acting upon telephone instructions that are reasonably believed to be genuine in accordance with such procedures.

Payment for redeemed shares for which a redemption order is received before 4 p.m. (Eastern time) on a business day is

normally made in Federal funds wired to the redeeming shareholder on the next business day, provided that the fund’s custodian is also open for business. Payment for redemption orders received after 4 p.m. (Eastern time) or on a day when the fund’s custodian is closed is normally wired in Federal funds on the next business day following redemption on which the fund’s custodian is open for business. The Company reserves the right to wire redemption proceeds within seven days after receiving a redemption order if, in the judgment of BlackRock Advisors, Inc., an earlier payment could adversely affect a fund. No charge for wiring redemption payments is imposed by the Company.

The Company may refuse a telephone redemption request if it believes it is advisable to do so.

The Company's Rights

The Company may:

Suspend the right of redemption if trading is halted or restricted on the NYSE or under other emergency conditions described in the Investment Company Act of 1940,

Postpone date of payment upon redemption if trading is halted or restricted on the NYSE or under other emergency

conditions described in the Investment Company Act of 1940 or as described in the second paragraph in the section “Selling Shares” above

Redeem shares involuntarily in certain cases, such as when the value of a shareholder account falls below a specified level, as described below, and

Redeem shares for property other than cash if conditions exist which make cash payments undesirable in accordance with its rights under the Investment Company Act of 1940.

Statements

Accounts with Low Balances

Market Timing

Management

BlackRock Funds’ adviser is BlackRock Advisors, Inc. (BlackRock). BlackRock was organized in 1994 to perform advisory services for investment companies and is located at

IMPORTANT DEFINITIONS

100 Bellevue Parkway,Wilmington, DE 19809. BlackRock is a wholly-owned subsidiary of BlackRock, Inc., one of the largest publicly traded investment management firms in the United States with $273 billion of assets under management as of December 31, 2002. BlackRock, Inc. is a majority-owned indirect subsidiary of The PNC Financial Services Group, Inc., one of the largest diversified financial services companies in the United States. BlackRock International, Ltd. (BIL), an affiliate of BlackRock located at 40 Torphichen Street, Edinburgh, Scotland EH3 8JB, acts as co-adviser to the Company.

For their investment advisory services, BlackRock and BIL are entitled to fees computed daily and payable monthly.

The total annual advisory fees that can be paid to BlackRock and BIL (as a percentage of average daily net assets) are as follows:

Total Annual Advisory Fee for the Global Communications Portfolio (Before Waivers)

AVERAGE DAILY NET ASSETS		INVESTMENT ADVISORY FEE
First $1 billion		.800%
$1 billion-$2 billion		.700%
$2 billion-$3 billion		.675%
more than $3 billion		.625%

Information about the portfolio manager for the fund is presented on page 7.

As discussed above, BlackRock and BIL have agreed to cap the fund’s net expenses at the levels shown in the expense table.

the different share classes of a fund) as a percentage of average daily net assets are 0.925%.

If within two years following a waiver or reimbursement the operating expenses of a fund that previously received a waiver or reimbursement from BlackRock and BIL are less than the expense limit for the fund, the fund is required to repay BlackRock and BIL up to the amount of fees waived or expenses reimbursed under the agreement if: (1) the fund has more than $50 million in assets, (2) BlackRock and BIL continue to be the fund’s investment advisers and (3) the Board of Trustees of the Company has approved in advance the payments to BlackRock and BIL at the previous quarterly meeting of the Board.

Dividends and Distributions

BlackRock Funds makes two kinds of distributions to shareholders: net investment income and net realized capital gains.

Distributions of net investment income derived by a fund are paid within 10 days after the end of each quarter. The Company’s Board of Trustees may change the timing of such dividend payments.

Net realized capital gains (including net short-term capital gains), (if any), will be distributed by a fund at least annually at a date determined by the Company’s Board of Trustees.

Taxation of Distributions

Your annual tax statement from the Company will present in detail the tax status of your distributions for each year.

If more than half of the total asset value of a fund is invested in non-U.S. stock or securities, the fund may elect to “pass through”

to its shareholders the amount of non-U.S. income taxes paid by it. In such case, each shareholder would be required to include his proportionate share of such taxes in his income and may be entitled to deduct or credit such taxes in computing his taxable income.

Distributions paid by a fund with respect to certain qualifying dividends received by the fund from domestic corporations may be eligible for the corporate dividends received deduction.

Important Notice Regarding Delivery of Shareholder Documents

Electronic Access to Shareholder Documents

To enroll:

Shareholders Who Hold Accounts With Investment Advisers, Banks or Brokerages:

1) Have your enrollment number ready. If you do not have one, please contact your financial adviser.

2) Log on to www.investordelivery.com.

preference. Note: If you have additional BlackRock Fund shares in more than one account, you may receive additional copies of this notice with a separate enrollment number for each account. In that case, provide the information that applies to each enrollment number. If you have any questions, please contact your financial adviser.

Shareholders Who Hold Accounts Directly With the Fund:

1) Log on to http://funds.blackrock.com.

2) Click on Electronic Delivery icon on either side of your screen.

3) Complete the on-line form by entering your social security number, e-mail address and by selecting your electronic delivery preference.

For more information:

Annual/Semi-Annual Reports

Statement of Additional Information (SAI)

A Statement of Additional Information, dated January 28, 2003, has been filed with the Securities and Exchange Commission (SEC). The SAI, which includes additional information about the BlackRock Funds, may be obtained free of charge, along with the Company’s annual and semi-annual reports, by calling (800) 441-7450. The SAI, as supplemented from time to time, is incorporated by reference into this Prospectus.

Shareholder Account Service Representatives

Purchases and Redemptions

Call your registered representative or (800) 441-7450.

World Wide Web

Access general fund information and specific fund

performance. Request mutual fund prospectuses and literature. Forward mutual fund inquiries. www.blackrock.com

Email

Request prospectuses, SAI, Annual or Semi-Annual

Reports and literature. Forward mutual fund inquiries.

Mail to: funds@blackrock.com

Written Correspondence

BlackRock Funds

100 Bellevue Parkway

Mail Stop WR-R100-04-07

Wilmington, DE 19809

Internal Wholesalers/Broker Dealer Support

Available to support investment professionals

9 a.m. to 6 p.m. (Eastern time), Monday-Friday.

Call: (888) 8BLACKROCK

Securities and Exchange Commission (SEC)

INVESTMENT COMPANY ACT FILE NO. 811-05742

EQINSTPROS2/03

BlackRock Funds

International Equity

Portfolio

BlackRock Shares

Prospectus

January 28, 2003

BlackRock Funds^SMis a mutual

fund family with 43 investment

portfolios, one of which is

described in this prospectus.

The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.

NOT FDIC		May Lose Value
INSURED		No Bank Guarantee

Table of

Contents


*How to find the information you need* *How to find the information you need*		1

*International Equity Portfolio*		2


*About Your Investment* *How to Buy/Sell Shares*		8

*Dividends/Distributions/Taxes*		12

How to Find the

Information You Need

About BlackRock Funds

This is the BlackRock International Equity (BlackRock Shares) Portfolio Prospectus. It has been written to provide you with the information you need to make an informed decision about whether to invest in BlackRock Funds (the Company).

This prospectus contains information on the International Equity (BlackRock Shares) Portfolio. Also included are sections that tell you about buying and selling shares, certain fees and expenses, shareholder features of the fund and your rights as a shareholder.

BlackRock

International Equity Portfolio

IMPORTANT DEFINITIONS

Investment Goal

The fund seeks long-term capital appreciation.

Primary Investment Strategies

The management team seeks to achieve consistent and sustainable performance through various market cycles by emphasizing stock selection. Stock selection is determined by looking at companies using a range of valuation criteria, including the strength of their management and business franchise. The management team will generally invest with a bias towards “growth” stocks, however, they may take advantage of opportunities in “value” stocks at appropriate points in the market or economic cycle. The management team will also consider factors such as prospects for relative economic growth, expected levels of inflation, government policies influencing business conditions and outlook for currency relationships.

The management team may, when consistent with the fund’s investment objective, use options or futures (commonly known as derivatives). An option is the right to buy or sell an instrument (which can be a security, an index of securities, a currency, or a basket of currencies) at a specific price on or before a specific date. A future is an agreement to buy or sell instruments of these types at a specific price on a specific date. The primary purpose of using derivatives is to attempt to reduce risk to the fund as a whole (hedge) but they may also be used to maintain liquidity, commit cash pending investment or for speculation to increase returns. The fund may also use forward currency exchange contracts (obligations to buy or sell a currency at a set rate in the future) to hedge against movements in the value of non-U.S. currencies.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

Because different kinds of stocks go in and out of favor depending on market conditions, this fund’s performance may be better or worse than other funds with different investment styles.

In addition, political and economic structures in emerging market countries may be undergoing rapid change and these countries may lack the social, political and economic stability of more developed countries. As a result some of the risks described above, including the risks of nationalization or expropriation of assets and the existence of smaller, more volatile and less regulated markets may be increased. The value of many investments in emerging market countries recently has dropped significantly due to economic and political turmoil in many of these countries.

While the management team chooses stocks they believe to be undervalued, there is no guarantee that the shares will increase in value or that they won’t move even lower.

Securities loans involve the risk of a delay in receiving additional collateral from the borrower if the value of the securities goes up while they are on loan. There is also the risk of delay in recovering the loaned securities and of losing rights to the collateral if a borrower goes bankrupt.

The fund may sometimes engage in short-term trading which could produce greater brokerage costs and taxable distributions to shareholders.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

Since BlackRock Shares of the fund have no performance history, the chart and table below give you a picture of the fund’s long-term performance for Institutional Shares of the fund, which were first issued in April 1992. Although the chart and table show returns for the Institutional Shares which are not offered in this prospectus, the Institutional Shares would have substantially similar annual returns as the BlackRock Shares offered in this prospectus because these shares and the BlackRock Shares are invested in the same portfolio of securities and the annual returns would differ only to the extent that the Institutional Shares and the BlackRock Shares do not have the same expenses. BlackRock Shares of the fund are estimated to have expenses of 0.99% of average daily net assets (after waivers and reimbursements) for the current fiscal year and Institutional Shares of the fund have expenses of 1.12% of average daily net assets (after waivers and reimbursements) for the current fiscal year. The information shows you how the fund’s performance has varied year by year and provides some indication of the risks of investing in the fund.

The table compares the fund’s performance to that of the MSCI EAFE, a recognized unmanaged index of stock market performance. As with all such investments, past performance is not an indication of future results.

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	Since Inception	Inception Date
International Equity —
Return Before Taxes	-17.74%	-19.94%	-4.93%	2.96%	04/27/92
International Equity —
Return After Taxes on Distributions	-17.74%	-20.83%	-6.35%	1.51%
International Equity —
Return After Taxes on Distributions and Sale of Shares	-10.89%	-14.82%	-3.32%	2.51%
MSCI EAFE
(Reflects no deduction for fees, expenses or taxes)	-15.94%	-17.24%	-2.89%	4.00%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions. Source: BlackRock Advisors, Inc.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The tables below describe the fees and expenses that you may pay if you buy and hold BlackRock Shares of the fund. The “Annual Fund Operating Expenses” table is based on expenses for the most recent fiscal year.

Shareholder Fees

(Fees paid directly from your investment)

Redemption/Exchange Fee*		2	%
(as a percentage of amount redeemed)

*	Fee applies only to shares purchased on or after 12/5/2001 that are redeemed or exchanged within 90 days of purchase.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees	.75	%
Other expenses¹	.24	%
Total annual fund operating expenses	.99	%
Fee waivers and expense reimbursements*	—
Net expenses*	.99	%

¹	“Other Expenses” are based on estimated amounts for the current fiscal year.

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to 1.02% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 11 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years
BlackRock Shares		$101		$315

Fund Management

The fund is managed by a team of professionals at BlackRock International, Ltd. (BIL), including Kenneth Anderson, Director and international equity investment manager at BIL since 2000 and William Low, Director and investment manager since 1996. Prior to joining BIL in 2000, Kenneth Anderson was an investment director and the deputy head of the Scottish Widows Investment Management European equity team. Prior to joining BIL in 1996, Mr. Low was with Dunedin Fund Managers Ltd., first as an investment analyst on the U.K. desk and then as a specialist in Pacific Basin equity markets. Kenneth Anderson and William Low have served as portfolio co-managers since January 2001.

About Your Investment

Buying Shares

BlackRock Shares are offered without a sales charge to institutional investors, registered investment advisers and certain fee-based programs.

Purchase orders may be placed by calling (800) 441-7450.

What Price Per Share Will You Pay?

The fund’s investments are valued based on market value, or where market quotations are not readily available, based on fair value as determined in good faith by or under the direction of the Board of Trustees of BlackRock Funds (the “Company”). Under some circumstances certain short-term debt securities will be valued using the amortized cost method.

Since the NAV changes daily, the price of your shares depends on the time that your order is received.

Purchase orders received before the close of regular trading on the New York Stock Exchange (NYSE) (currently 4 p.m. (Eastern time)) on each day the NYSE is open will be priced based on the NAV calculated at the close of trading on that day. NAV is calculated separately for each class of shares of the fund at 4 p.m. (Eastern time) each day the NYSE is open. Shares will not be priced on days the NYSE is closed. Purchase orders received after the close of trading will be priced based on the next calculation of NAV. Non-U.S. securities and certain other securities held by the fund may trade on days when the NYSE is closed. In these cases, net asset value of shares may change when fund shares cannot be bought or sold.

Paying for Shares

Payment for BlackRock Shares must normally be made in Federal funds or other funds immediately available by 4 p.m. (Eastern time) on the first business day following receipt of the order. Payment may also, at the discretion of the Company, be made in the form of securities that are permissible investments for the fund.

How Much is the Minimum Investment?

The minimum investment for the initial purchase of BlackRock Shares is generally $5,000,000. The minimum initial investment for registered investment advisers is $250,000, and there is no minimum initial investment requirement for fee-based programs with an annual fee of at least .50%. There is no minimum requirement for later investments. The Company does not accept third party checks as payment for shares.

The Company may reject any purchase order, modify or waive the minimum initial or subsequent investment requirements and suspend and resume the sale of any share class of any fund at any time.

Selling Shares

Shareholders may place redemption orders by telephoning (800) 441-7450. Shares are redeemed at their net asset value per share next determined after receipt of the redemption order. The fund, the administrators and the distributor will employ reasonable procedures to confirm that instructions communicated by telephone are genuine. The fund and its service providers will not be liable for any loss, liability, cost or expense for acting upon telephone instructions that are reasonably believed to be genuine in accordance with such procedures. Payment for redeemed shares for which a redemption order is received before 4 p.m. (Eastern time) on a business day is normally made in Federal funds wired to the redeeming shareholder on the next business day, provided that the fund’s custodian is also open for business. Payment for redemption orders received after 4 p.m. (Eastern time) or on a day when the fund’s custodian is closed is normally wired in Federal funds on the next business day following redemption on which the fund’s custodian is open for business. The Company reserves the right to wire redemption proceeds within seven days after receiving a redemption order if, in the judgement of BlackRock Advisors, Inc., an earlier payment could adversely affect the fund. No charge for wiring redemption payments is imposed by the Company.

During periods of substantial economic or market change, telephone redemptions may be difficult to complete. Redemption requests may also be mailed to BlackRock Funds at 100 Bellevue Parkway, Mail Stop WR-R100-04-07, Wilmington, DE 19809.

The Company may refuse a telephone redemption request if it believes it is advisable to do so.

The Company's Rights

The Company may:

Suspend the right of redemption if trading is halted or restricted on the NYSE or under other emergency conditions described in the Investment Company Act of 1940,

Postpone date of payment upon redemption if trading is halted or restricted on the NYSE or under other emergency conditions described in the Investment Company Act of 1940, or as described in the section “Selling Shares” above,

Redeem shares involuntarily in certain cases, such as when the value of a shareholder account falls below a specified level, as described below, and

Redeem shares for property other than cash if conditions exist which make cash payments undesirable in accordance with its rights under the Investment Company Act of 1940.

Market Timing

The fund will assess and retain a fee of 2% of the current NAV of shares being redeemed or exchanged within 90 days of purchase (other than those acquired through reinvestment of dividends or other distributions). This fee is for the benefit of the remaining shareholders. The fee is intended to encourage long-term investment, to compensate for transaction and other expenses caused by early redemptions, and to facilitate portfolio management. The “first-in, first-out” method is used to determine the holding period. Under this method, the date of redemption or exchange will be compared with the earliest purchase date of shares held in the amount. The redemption fee will not be assessed on redemptions

or exchanges by (i) accounts managed by PNC Advisors, (ii) certain 401(k) plans, bank or trust company accounts, asset allocation programs or wrap programs approved by the Company, (iii) accounts in the event of shareholder death or disability and (iv) certain other accounts in the absolute discretion of the Company when a shareholder can demonstrate hardship.

Statements

Accounts with Low Balances

The Company may redeem a shareholder’s account in the fund at any time the net asset value of the account in such fund falls below the applicable minimum initial investment as the result of a redemption. The shareholder will be notified in writing that the value of the account is less than the required amount and the shareholder will be allowed 30 days to make additional investments before the redemption is processed.

Management

For their investment advisory and sub-advisory services, BlackRock and BIL, as applicable, are entitled to fees computed daily on a fund-by-fund basis and payable monthly. For the fiscal year ended September 30, 2002, the aggregate advisory fees paid by the fund to BlackRock as a percentage of average daily net assets was 0.69%.

IMPORTANT DEFINITIONS

Adviser: The adviser of a mutual fund is responsible for the overall investment management of the fund. The adviser for BlackRock Funds is BlackRock Advisors, Inc.

The maximum annual advisory fees that can be paid to BlackRock (as a percentage of average daily net assets of the fund) are as follows:

Total Annual Advisory Fee (Before Waivers)

AVG DAILY NET ASSETS		INVESTMENT ADVISORY FEE
First $1 billion		.750%
$1 billion-$2 billion		.700%
$2 billion-$3 billion		.675%
greater than $3 billion		.650%

Information about the portfolio manager for the fund is presented on page 7.

As discussed above, BlackRock has agreed to cap the fund’s net expenses (excluding interest expense) at the levels shown in the fund’s expense table.

To achieve this cap, BlackRock and the Company have entered into an expense limitation agreement. The agreement sets a limit on certain of the operating expenses of the fund through February 1, 2004 and requires BlackRock to waive or reimburse fees or expenses if these operating expenses exceed that limit. This expense limit (which applies to expenses charged on fund assets as a whole, but not expenses separately charged to the different share classes of the fund) as a percentage of average daily net assets is .995%.

If within two years following a waiver or reimbursement, the operating expenses of the fund are less than the expense limit for the fund, the fund is required to repay BlackRock up to the amount of fees waived or expenses reimbursed under the agreement if: (1) the fund has more than $50 million in assets, (2) BlackRock continues to be the fund’s investment adviser and (3) the Board of Trustees of the Company has approved in advance the payments to BlackRock at the previous quarterly meeting of the Board.

Dividends and Distributions

BlackRock Funds makes two kinds of distributions to shareholders: net investment income and net realized capital gains.

Distributions of net investment income derived by the fund are paid within 10 days after the end of each quarter. The Company’s Board of Trustees may change the timing of such dividend payments.

Net realized capital gains (including net short-term capital gains), if any, will be distributed by the fund at least annually at a date determined by the Company’s Board of Trustees.

Taxation of Distributions

Distributions paid out of the fund’s “net capital gain” will be taxed to shareholders as long-term capital gain, regardless of how long a shareholder has owned shares. Distributions of net investment income and net short-term capital gains, other than exempt-interest dividends, will be taxed to shareholders as ordinary income.

Your annual tax statement from the Company will present in detail the tax status of your distributions for each year. If more than half of the total asset value of the fund is invested in non-U.S. stock or securities, the fund may elect to “pass through” to its shareholders the amount of non-U.S. income taxes paid by it. In such case, each shareholder would be required to include his proportionate share of such taxes in his income and may be entitled to deduct or credit such taxes in computing his taxable income.

Distributions paid by the fund with respect to certain qualifying dividends received by the fund from domestic corporations may be eligible for the corporate dividends received deductions.

Important Notice Regarding Delivery of Shareholder Documents

The fund delivers only one copy of shareholder documents, including prospectuses, shareholder reports and proxy statements to shareholders with multiple accounts at the same address. This practice is known as “householding” and is intended to eliminate duplicate mailings and reduce expenses. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact the Company at (800) 441-7450.

Electronic Access to Shareholder Documents

To enroll:

Shareholders Who Hold Accounts With Investment Advisers, Banks or Brokerages:

1) Have your enrollment number ready. If you do not have one, please contact your financial adviser.

2) Log on to www.investordelivery.com.

Shareholders Who Hold Accounts Directly With the Fund:

1) Log on to http://funds.blackrock.com.

2) Click on Electronic Delivery icon on either side of your screen.

3) Complete the on-line form by entering your social security number, e-mail address and by selecting your electronic delivery preference.

For more information:

Annual/Semi-Annual Reports

Statement of Additional Information (SAI)

A Statement of Additional Information, dated January 28, 2003, has been filed with the Securities and Exchange Commission (SEC). The SAI, which includes additional information about the BlackRock Funds, may be obtained free of charge, along with the Company’s annual and semi-annual reports, by calling (800) 441-7450. The SAI, as supplemented from time to time, is incorporated by reference into this Prospectus.

Shareholder Account Service Representatives

Purchases and Redemptions

Call your registered representative or (800) 441-7450.

World Wide Web

Access general fund information and specific fund

performance. Request mutual fund prospectuses and literature. Forward mutual fund inquiries. www.blackrock.com

Email

Request prospectuses, SAI, Annual or Semi-Annual

Reports and literature. Forward mutual fund inquiries.

Mail to: funds@blackrock.com

Written Correspondence

BlackRock Funds

100 Bellevue Parkway

Mail Stop WR-R100-04-07

Wilmington, DE 19809

Internal Wholesalers/Broker Dealer Support

Available to support investment professionals

9 a.m. to 6 p.m. (Eastern time), Monday-Friday.

Call: (888) 8BLACKROCK

Securities and Exchange Commission (SEC)

INVESTMENT COMPANY ACT FILE NO. 811-05742

EQINSTPROS2/03

BlackRock Funds

Select Equity

Portfolio

BlackRock Shares

Prospectus

January 28, 2003

BlackRock Funds^SMis a mutual
fund family with 43 investment
portfolios, one of which is
described in this prospectus.

The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.

NOT FDIC		May Lose Value
INSURED		No Bank Guarantee

Table of

Contents


*How to find the information you need* *How to find the information you need*		1

*Select Equity Portfolio*		2
*About Your Investment*
*How to Buy/Sell Shares*		8

*Dividends/Distributions/Taxes*		12

How to Find the

Information You Need

About BlackRock Funds

This is the BlackRock Select Equity (BlackRock Shares) Prospectus. It has been written to provide you with the information you need to make an informed decision about whether to invest in BlackRock Funds (the Company).

This prospectus contains information on the Select Equity (BlackRock Shares) Portfolio. Also included are sections that tell you about buying and selling shares, certain fees and expenses, shareholder features of the fund and your rights as a shareholder.

BlackRock

Select Equity Portfolio

IMPORTANT DEFINITIONS

Market Capitalization: Refers to the market value of the company and is calculated by multiplying the number of shares outstanding by the current price per share.

Value and Growth Companies: All stocks are generally divided into the categories of “growth” or “value,” although there are times when a growth fund and value fund may own the same stock. Value stocks are companies that appear to the manager to be undervalued by the market as measured by certain financial formulas. Growth stocks are companies whose earnings growth potential appears to the manager to be greater than the market in general, and whose growth in revenue is expected to continue for an extended period.

Investment Goal

The fund seeks long-term capital appreciation—current income is the secondary objective.

Primary Investment Strategies

The management team initially screens for “value” and “growth” stocks from the universe of companies with market capitalizations above $1 billion. The fund will invest in stocks that the management team believes offer attractive returns through capital appreciation. The fund will typically have a P/E multiple that is in line with the S&P 500^® Index. The management team uses fundamental analysis to examine each company for financial strength before deciding to purchase the stock.

The fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The main risk of any investment in stocks is that values fluctuate in price. The value of your investment can go up or down depending upon market conditions, which means you could lose money.

While the management team chooses stocks they believe to be under-valued, or which have above average growth potential, there is no guarantee that the shares will increase in value or that they won’t move even lower.

When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

Since BlackRock Shares of the fund have no performance history, the chart and table below give you a picture of the fund’s long-term performance for Institutional Shares of the fund. Although the chart and table show returns for the Institutional Shares which are not offered in this prospectus, the Institutional Shares would have substantially similar annual returns as the BlackRock Shares offered in this prospectus because the Institutional Shares and the BlackRock Shares are invested in the same portfolio of securities and the annual returns would differ only to the extent that the Institutional Shares and the BlackRock Shares do not have the same expenses. BlackRock Shares of the fund are estimated to have expenses of 0.65% of average daily net assets (after waivers and reimbursements) for the current fiscal year and Institutional Shares of the fund have expenses of 0.81% of average daily net assets (after waivers and reimbursements) for the current fiscal year. The information shows you how the fund’s performance has varied year by year and provides some indication of the risks of investing in the fund. The table compares the fund’s performance to that of the S&P 500^® Index, a recognized unmanaged index of stock market performance. As with all such investments, past performance is not an indication of future results.

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	Since Inception	Inception Date
Select Equity
Return Before Taxes	-26.06%	-20.88%	-5.71%	5.28%	09/13/93
Return After Taxes on Distributions	-26.39%	-21.88%	-6.95%	3.58%
Return After Taxes on Distributions and Sale of Shares	-16.00%	-15.44%	-3.99%	4.29%
S&P 500^® (Reflects no deduction for fees, expenses or taxes)	-22.10%	-14.55%	-0.59%	9.14%	N/A

*	The chart and the table both assume reinvestment of dividends and distributions.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold BlackRock Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees	.55	%
Other expenses¹	.19	%
Total annual fund operating expenses	.74	%
Fee waivers and expense reimbursements	.09	%
Net expenses*	.65	%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to .65% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 11 for a discussion of these waivers and reimbursements.

¹	“Other expenses” are based on estimated amounts for the current fiscal year.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years
BlackRock Shares		$66		$227

Fund Management

The fund is managed by a team of investment professionals at BlackRock Advisors, Inc. (BlackRock), including Robert S. Kapito and R. Andrew Damm.

About Your Investment

Buying Shares

BlackRock Shares are offered without a sales charge to institutional investors, registered investment advisers and certain fee-based programs.

Purchase orders may be placed by calling (800) 441-7450.

What Price Per Share Will You Pay?

The fund’s investments are valued based on market value, or where market quotations are not readily available, based on fair value as determined in good faith by or under the direction of the Board of Trustees of BlackRock Funds (the “Company”). Under some circumstances certain short-term debt securities will be valued using the amortized cost method.

Since the NAV changes daily, the price of your shares depends on the time that your order is received.

Purchase orders received before the close of regular trading on the New York Stock Exchange (NYSE) (currently 4 p.m. (Eastern time)) on each day the NYSE is open will be priced based on the NAV calculated at the close of trading on that day. NAV is calculated separately for each class of shares of the fund at 4 p.m. (Eastern time) each day the NYSE is open. Shares will not be priced on days the NYSE is closed. Purchase orders received after the close of trading will be priced based on the next calculation of NAV. Non-U.S. securities and certain other securities held by the fund may trade on days when the NYSE is closed. In these cases, net asset value of shares may change when fund shares cannot be bought or sold.

Paying for Shares

How Much is the Minimum Investment?

The Company may reject any purchase order, modify or waive the minimum initial or subsequent investment requirements and suspend and resume the sale of any share class of any fund at any time.

Selling Shares

Shareholders may place redemption orders by telephoning (800) 441-7450. Shares are redeemed at their net asset value per share next determined after receipt of the redemption order. The fund, the administrators and the distributor will employ reasonable procedures to confirm that instructions communicated by telephone are genuine. The fund and its service providers will not be liable for any loss, liability, cost or expense for acting upon telephone instructions that are reasonably believed to be genuine in accordance with such procedures.

Payment for redeemed shares for which a redemption order is received before 4 p.m. (Eastern time) on a business day is normally made in Federal funds wired to the redeeming shareholder on the next business day, provided that the fund’s custodian is also open for business. Payment for redemption orders received after 4 p.m. (Eastern time) or on a day when the fund’s custodian is closed is normally wired in Federal funds on the next business day following redemption on which the fund’s custodian is open for business. The Company reserves the right to wire redemption proceeds within seven days after receiving a redemption order if, in the judgement of BlackRock Advisors, Inc., an earlier payment could adversely affect the fund. No charge for wiring redemption payments is imposed by the Company.

The Company may refuse a telephone redemption request if it believes it is advisable to do so.

The Company's Rights

The Company may:

Suspend the right of redemption if trading is halted or restricted on the NYSE or under other emergency conditions described in the Investment Company Act of 1940,

Postpone date of payment upon redemption if trading is halted or restricted on the NYSE or under other emergency conditions described in the Investment Company Act of 1940 or as described in the second paragraph in the section “Selling Shares” above,

Redeem shares involuntarily in certain cases, such as when the value of a shareholder account falls below a specified level, as described below, and

Redeem shares for property other than cash if conditions exist which make cash payments undesirable in accordance with its rights under the Investment Company Act of 1940.

Market Timing

IMPORTANT DEFINITIONS

Adviser: The adviser of a mutual fund is responsible for the overall investment management of the fund. The adviser for BlackRock Funds is BlackRock Advisors, Inc.

as a result of the activity described above will be subject to any and all redemption fees.

Statements

Accounts with Low Balances

Management

For its investment advisory and sub-advisory services, BlackRock is entitled to fees computed daily and payable monthly. For the fiscal year ended September 30, 2002, the aggregate advisory fees paid by the fund to BlackRock as a percentage of average daily net assets was .49%.

The total annual advisory fees that can be paid to BlackRock (as a percentage of average daily net assets of the fund) are as follows:

Total Annual Advisory Fee (Before Waivers)

AVG DAILY NET ASSETS		INVESTMENT ADVISORY FEE
First $1 billion		.550%
$1 billion-$2 billion		.500%
$2 billion-$3 billion		.475%
greater than $3 billion		.450%

As discussed above, BlackRock has agreed to cap the fund’s net expenses (excluding interest expense) at the levels shown in the fund’s expense table.

Dividends and Distributions

BlackRock Funds makes two kinds of distributions to shareholders: net investment income and net realized capital gains.

Distributions of net investment income derived by the fund are paid within 10 days after the end of each quarter. The Company’s Board of Trustees may change the timing of such dividend payments.

Net realized capital gains (including net short-term capital gains), if any, will be distributed by the fund at least annually at a date determined by the Company’s Board of Trustees.

Taxation of Distributions

Your annual tax statement from the Company will present in detail the tax status of your distributions for each year.

If more than half of the total asset value of the fund is invested in non-U.S. securities, the fund may elect to “pass through” to its shareholders the amount of non-U.S. income taxes paid by it. In such case, each shareholder would be required to include his proportionate share of such taxes in his income and may be entitled to deduct or credit such taxes when computing his taxable income.

Distributions paid by the fund with respect to certain qualifying dividends received by the fund from domestic corporations may be eligible for the corporate dividends received deduction.

Important Notice Regarding Delivery of Shareholder Documents

Electronic Access to Shareholder Documents

To enroll:

Shareholders Who Hold Accounts With Investment Advisers, Banks or Brokerages:

1) Have your enrollment number ready. If you do not have one, please contact your financial adviser.

2) Log on to www.investordelivery.com.

Shareholders Who Hold Accounts Directly With the Fund:

1) Log on to http://funds.blackrock.com.

2) Click on Electronic Delivery icon on either side of your screen.

3) Complete the on-line form by entering your social security number, e-mail address and by selecting your electronic delivery preference.

For more information:

Annual/Semi-Annual Reports

Statement of Additional Information (SAI)

A Statement of Additional Information, dated January 28, 2003, has been filed with the Securities and Exchange Commission (SEC). The SAI, which includes additional information about the BlackRock Funds, may be obtained free of charge, along with the Company’s annual and semi-annual reports, by calling (800) 441-7450. The SAI, as supplemented from time to time, is incorporated by reference into this Prospectus.

Shareholder Account Service Representatives

Purchases and Redemptions

Call your registered representative or (800) 441-7450.

World Wide Web

Access general fund information and specific fund

performance. Request mutual fund prospectuses and literature. Forward mutual fund inquiries. www.blackrock.com

Email

Request prospectuses, SAI, Annual or Semi-Annual

Reports and literature. Forward mutual fund inquiries.

Mail to: funds@blackrock.com

Written Correspondence

BlackRock Funds

100 Bellevue Parkway

Mail Stop WR-R100-04-07

Wilmington, DE 19809

Internal Wholesalers/Broker Dealer Support

Available to support investment professionals

9 a.m. to 6 p.m. (Eastern time), Monday-Friday.

Call: (888) 8BLACKROCK

Securities and Exchange Commission (SEC)

INVESTMENT COMPANY ACT FILE NO. 811-05742

EQINSTPROS2/03

World class institutional asset management at a personal level

BlackRock Funds

Money Market

Portfolios

Investor Shares

Prospectus

January 28, 2003

BlackRock Funds^SMis a mutual

fund family with 43 investment

portfolios, 8 of which are

described in this prospectus.

BlackRock Funds are sold

principally through licensed

investment professionals.

The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.

NOT FDIC		May Lose Value
INSURED		No Bank Guarantee

Table of

Contents

*How to find the information you need*

*How to find the information you need*		1

THE BLACKROCK MONEY MARKET PORTFOLIOS

*Money Market*		2

*U.S. Treasury Money Market*		8

*Municipal Money Market*		13

*New Jersey Municipal Money Market*		19

*North Carolina Municipal Money Market*		26

*Ohio Municipal Money Market*		33

*Pennsylvania Municipal Money Market*		39

*Virginia Municipal Money Market*		46

*About Your Investment*

*How to Buy/Sell Shares*		52

*Dividends/Distributions/Taxes*		60

*Services for Shareholders*		62

How to Find the

Information You Need

About BlackRock Funds

This is the BlackRock Money Market Portfolios Prospectus. It has been written to provide you with the information you need to make an informed decision about whether to invest in BlackRock Funds (the Company).

This prospectus contains information on all 8 of the BlackRock Money Market funds. The prospectus is organized so that each fund has its own short section. Simply turn to the section for any particular fund to read about important fund facts. Also included are sections that tell you about buying and selling shares, certain fees and expenses, shareholder features of the funds and your rights as a shareholder. These sections apply to all the funds.

BlackRock

Money Market Portfolio

IMPORTANT DEFINITIONS

Asset-Backed Securities: Debt securities that are backed by a pool of assets, usually loans such as installment sale contracts or credit card receivables.

Commercial Paper: Short-term securities with maturities of 1 to 270 days which are issued by banks, corporations and others.

Dollar-Weighted Average Maturity: The average maturity of the fund is the average amount of time until the organizations that issued the debt securities in the fund’s portfolio must pay off the principal amount of the debt. “Dollar-weighted” means the larger the dollar value of debt security in the fund, the more weight it gets in calculating this average.

Liquidity: Liquidity is the ability to easily convert investments into cash without losing a significant amount of money in the process.

Net Asset Value (NAV): The value of everything the fund owns, minus everything it owes, divided by the number of shares held by investors.

Repurchase Agreement: A special type of short-term investment. A dealer sells securities to a fund and agrees to buy them back later at a set price. In effect, the dealer is borrowing the fund’s money for a short time, using the securities as collateral.

Variable or Floating Rate Securities: Securities whose interest rates adjust automatically after a certain period of time and/or whenever a predetermined standard interest rate changes.

Investment Goal

The fund seeks as high a level of current income as is consistent with maintaining liquidity and stability of principal.

Primary Investment Strategies

In pursuit of this goal, the fund invests in a broad range of short term, high quality, U.S. dollar-denominated instruments, including government, bank, commercial and other obligations.

Specifically, the fund may invest in:

1)	U.S. dollar-denominated obligations issued or supported by the credit of U.S. or foreign banks or savings institutions with total assets of more than $1 billion (including obligations of foreign branches of such banks).

High quality commercial paper and other obligations issued or guaranteed by U.S. and foreign corporations and other issuers rated (at the time of purchase) A-2 or higher by Standard and Poor’s, Prime-2 or higher by Moody’s or F-2 or higher by Fitch, as well as high quality corporate bonds rated A or higher at the time of purchase by those rating agencies.

3)	Unrated notes, paper and other instruments that are determined by the fund manager to be of comparable quality to the instruments described above.

4)	Asset-backed securities (including interests in pools of assets such as mortgages, installment purchase obligations and credit card receivables).

5)	Securities issued or guaranteed by the U.S. Government or by its agencies or authorities.

6)	Dollar-denominated securities issued or guaranteed by foreign governments or their political subdivisions, agencies or authorities.

7)	Repurchase agreements relating to the above instruments.

The fund seeks to maintain a net asset value of $1.00 per share.

Quality

The fund manager, under guidelines established by the Company’s Board of Trustees, will only purchase securities that have short-term debt ratings at the time of purchase in the two highest rating categories from at least two national rating agencies, or one such rating if the security is rated by only one agency. Securities that do not have a short-term rating must be determined by the fund manager to be of comparable quality.

Maturity

The fund is managed so that the dollar-weighted average maturity of all its investments will be 90 days or less. The fund will buy only those securities which have remaining maturities of 397 days or less (except for certain variable and floating rate instruments and securities collateralizing repurchase agreements). The fund’s securities may not earn as high a level of income as longer term or lower quality securities, which generally have greater risk and fluctuate more in value.

Normally, the fund may hold up to 20% of its assets in uninvested cash reserves. Uninvested cash will not earn income.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The value of money market investments tends to fall when prevailing interest rates rise, when an issuer’s creditworthiness declines or when the rate of inflation increases, although they’re generally less sensitive to such changes than longer-term securities.

The fund’s ability to concentrate its investments in the banking industry could increase risks. The profitability of banks depends largely on the availability and cost of funds, which can change depending upon economic conditions and governmental policies. Banks are also exposed to losses if borrowers get into financial trouble and can’t repay their loans.

The obligations of foreign banks and other foreign issuers may involve certain risks in addition to those of domestic issuers, including higher transaction costs, less complete financial information, political and economic instability, less stringent regulatory requirements and less market liquidity.

Treasury obligations differ only in their interest rates, maturities and time of issuance. Obligations of U.S. Government agencies and authorities are supported by varying degrees of credit. No assurance can be given that the U.S. Government will provide financial support to its agencies and authorities if it is not obligated by law to do so.

The fund is able to invest in securities issued by private companies, which subjects it, to a limited extent, to credit risk, which refers to the possibility that the issuer of a security will not be able to make principal or interest payments.

The fund could lose money if a seller under a repurchase agreement defaults or declares bankruptcy.

The fund may purchase variable and floating rate instruments. The absence of an active market for these securities could make it difficult for the fund to dispose of them if the issuer defaults.

Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. When you invest in this fund you are not making a bank deposit. Your investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency.

Risk / Return Information

The chart and table on the next page give you a picture of the fund’s long-term performance for Investor A Shares (in the chart) and Investor A, B and C Shares (in the table). The information shows you how the fund’s performance has varied year by year and provides some indication of the risks of investing in the fund. As with all such investments, past performance is not an indication of future results.

The performance for the period before Investor A Shares were launched is based upon performance for Service Shares of the fund, which were first issued in October 1989. Investor A Shares were launched in January 1993, Investor B Shares were launched in September 1995 and Investor C Shares were launched in October 1996. The performance for Investor B Shares for the period before they were launched is based upon performance for Service and Investor A Shares, and the performance for Investor C Shares for the period before they were launched is based upon performance for Service, Investor A and Investor B Shares. The actual return of Investor A Shares would have been lower than shown for the period before they were launched because Investor A Shares have higher expenses than Service Shares. Also, the actual returns of Investor B and C Shares would have been lower compared to Investor A Shares because Investor B and C Shares have higher expenses than Investor A Shares. Investor A Shares of the fund have expenses of .89% of average daily net assets (after waivers and reimbursements) for the current fiscal year and Investor B Shares and Investor C Shares of the fund each have expenses of 1.49% of average daily net assets (after waivers and reimbursements) for the current fiscal year. Service Shares of the fund have expenses of .72% of average daily net assets (after waivers and reimbursements) for the current fiscal year.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Distribution Fees: A method of charging distribution-related expenses against fund assets.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

As of 12/31

Investor A Shares

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	10 Years	Inception Date
Money Market; Inv A
Return Before Taxes	1.15%	3.47%	3.99%	4.15%	10/04/89
Money Market; Inv B
Return Before Taxes	0.54%	2.85%	3.32%	3.67%	10/04/89
Money Market; Inv C
Return Before Taxes	0.54%	2.85%	3.32%	3.65%	10/04/89

*	The chart and the table both assume reinvestment of dividends and distributions.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Investor A, B and C Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

	A Shares	B Shares	C Shares
Advisory fees	.39%	.39%	.39%
Distribution (12b-1) fees	.10%	.75%	.75%
Other expenses	.69%	.69%	.69%
Service fees	.25%	.25%	.25%
Processing fees	.15%	.15%	.15%
Other	.29%	.29%	.29%
Total annual fund operating expenses	1.18%	1.83%	1.83%
Fee waivers and expense reimbursements*	.29%	.34%	.34%
Net expenses*	.89%	1.49%	1.49%

BlackRock and BlackRock Distributors, Inc., the fund’s distributor, have contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to .89% (for Investor A Shares) and 1.49% (for Investor B and C Shares) of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 58 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual cost may be higher or lower, based on these assumptions your costs would be:

	1 Year		3 Years		5 Years		10 Years
A Shares	$	91	$	346	$	621	$1,406
B Shares*	$	152	$	543	$	959	$1,949/$1,869*
C Shares*	$	152	$	543	$	959	$2,120

These expense figures do not reflect the imposition of the deferred sales charge which may be deducted upon the redemption of Investor B or Investor C Shares of a fund received in an exchange transaction for Investor B or Investor C Shares of a non-money market investment portfolio of the Company as described in the applicable prospectuses. No deferred sales charge is deducted upon the redemption of Investor B or Investor C Shares of a fund that are purchased from the Company and not acquired by exchange.

**	Based on the conversion of Investor B Shares to Investor A Shares after eight years (applies to shares received in an exchange transaction for Investor B Shares of an equity portfolio of the Company).

***	Based on the conversion of Investor B Shares to Investor A Shares after seven years (applies to shares received in an exchange transaction for Investor B Shares of a bond portfolio of the Company).

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Investor A, B or C Share Outstanding Throughout Each Period)

Money Market Portfolio

	INVESTOR A SHARES															INVESTOR B SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98			Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Income from investment operations
Net investment income		0.0139			0.0449			0.0539			0.0441			0.0495			0.0079			0.0389			0.0475			0.0371			0.0426

Total from investment operations		0.0139			0.0449			0.0539			0.0441			0.0495			0.0079			0.0389			0.0475			0.0371			0.0426

Less distributions
Distributions from net investment income		(0.0139	)		(0.0449	)		(0.0539	)		(0.0441	)		(0.0495	)		(0.0079	)		(0.0389	)		(0.0475	)		(0.0371	)		(0.0426	)

Total distributions		(0.0139	)		(0.0449	)		(0.0539	)		(0.0441	)		(0.0495	)		(0.0079	)		(0.0389	)		(0.0475	)		(0.0371	)		(0.0426	)

Net asset value at end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Total return		1.39	%		4.59	%		5.53	%		4.50	%		5.06	%		0.79	%		3.96	%		4.85	%		3.77	%		4.34	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	539,268		$	531,518		$	405,740		$	486,578		$	365,458		$	21,864		$	15,853		$	6,371		$	5,414		$	1,805
Ratios of expenses to average net assets
After advisory/administration fee waivers		0.89	%		0.89	%		0.85	%		0.80	%		0.77	%		1.49	%		1.49	%		1.49	%		1.49	%		1.48	%
Before advisory/administration fee waivers		1.08	%		1.07	%		1.03	%		0.99	%		1.01	%		1.68	%		1.67	%		1.67	%		1.68	%		1.72	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		1.38	%		4.43	%		5.37	%		4.40	%		4.94	%		0.77	%		3.64	%		4.84	%		3.71	%		4.22	%
Before advisory/administration fee waivers		1.19	%		4.25	%		5.19	%		4.21	%		4.70	%		0.57	%		3.46	%		4.66	%		3.52	%		3.98	%

	INVESTOR C SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Income from investment operations
Net investment income		0.0078			0.0389			0.0475			0.0371			0.0426

Total from investment operations		0.0078			0.0389			0.0475			0.0371			0.0426

Less distributions
Distributions from net investment income		(0.0078	)		(0.0389	)		(0.0475	)		(0.0371	)		(0.0426	)

Total distributions		(0.0078	)		(0.0389	)		(0.0475	)		(0.0371	)		(0.0426	)

Net asset value at end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Total return		0.79	%		3.96	%		4.85	%		3.77	%		4.34	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	7,873		$	9,429		$	4,134		$	4,268		$	337
Ratios of expenses to average net assets
After advisory/administration fee waivers		1.49	%		1.49	%		1.49	%		1.49	%		1.49	%
Before advisory/administration fee waivers		1.68	%		1.67	%		1.67	%		1.68	%		1.73	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		0.79	%		3.68	%		4.77	%		3.71	%		4.22	%
Before advisory/administration fee waivers		0.60	%		3.50	%		4.59	%		3.52	%		3.98	%

BlackRock

U.S. Treasury Money Market Portfolio

IMPORTANT DEFINITIONS

Liquidity: Liquidity is the ability to easily convert investments into cash without losing a significant amount of money in the process.

Net Asset Value (NAV): The value of everything the fund owns, minus everything it owes, divided by the number of shares held by investors.

Variable or Floating Rate Securities: Securities whose interest rates adjust automatically after a certain period of time and/or whenever a predetermined standard interest rate changes.

Investment Goal

The fund seeks as high a level of current income as is consistent with maintaining liquidity and stability of principal.

Primary Investment Strategies

In pursuit of this goal, the fund invests exclusively in short-term bills, notes and other obligations issued or guaranteed by the U.S. Treasury and related repurchase agreements.

The fund seeks to maintain a net asset value of $1.00 per share.

Quality

The fund manager, under guidelines established by the Company’s Board of Trustees, will purchase securities that have short-term debt ratings at the time of purchase in the two highest rating categories from at least two national rating agencies, or one such rating if the security is rated by only one agency. Securities that do not have a short-term rating must be determined by the fund manager to be of comparable quality.

Maturity

Normally, the fund may hold up to 20% of its assets in uninvested cash reserves. Uninvested cash will not earn income.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The value of money market investments tends to fall when prevailing interest rates rise or when the rate of inflation increases, although they’re generally less sensitive to such changes than longer-term securities.

Treasury obligations differ only in their interest rates, maturities and time of issuance.

The fund could lose money if a seller under a repurchase agreement defaults or declares bankruptcy.

The fund may purchase variable and floating rate instruments. The absence of an active market for these securities could make it difficult for the fund to dispose of them if the issuer defaults.

Risk / Return Information

The chart and table on the next page give you a picture of the fund’s long-term performance for Investor A Shares (in the chart) and Investor A and C Shares (in the table). The information shows you how the fund’s performance has varied year by year and provides some indication of the risks of investing in the fund. As with all such investments, past performance is not an indication of future results.

The performance for the period before Investor A Shares were launched is based upon performance for Service Shares of the fund, which were first issued in November 1989. Investor A Shares were launched in January 1993 and Investor C Shares were launched in December 1998. The performance for Investor C Shares for the period before they were launched is based upon performance for Service and Investor A Shares. The actual return of Investor A Shares would have been lower than shown for the period before they were launched because Investor A Shares have higher expenses than Service Shares. Also, the actual return of Investor B and C Shares would be lower compared to Investor A Shares because Investor B and C Shares have higher expenses than Investor A Shares. Investor A Shares of the fund have expenses of .88% of average daily net assets (after waivers and reimbursements) for the current fiscal year and Investor B Shares and Investor C Shares of the fund each are expected to have expenses of 1.48% of average daily net assets (after waivers and reimbursements) for the current fiscal year. Service Shares of the fund have expenses of .71% of average daily net assets (after waivers and reimbursements) for the current fiscal year. As of February 7, 2000, there were no Investor B Shares outstanding and as of February 6, 2002, there were no Investor C Shares outstanding. For the periods that Investor C Shares were not outstanding, the performance of Investor C Shares is based on the return of Investor A Shares and adjusted to reflect the expenses of Investor C Shares. The performance of Investor B Shares of the

fund is not shown because these shares are not currently

outstanding.

As of 12/31

Investor A Shares

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	10 Years	Inception Date
US Treasury MM; Inv A
Return Before Taxes	0.98%	3.18%	3.70%	3.94%	11/01/89
US Treasury MM; Inv C
Return Before Taxes	0.39%	2.56%	3.15%	3.67%	11/01/89

*	The chart and the table both assume reinvestment of dividends and distributions.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Distribution Fees: A method of charging distribution-related expenses against fund assets.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Investor A, B and C Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

	A Shares		B Shares		C Shares
Advisory fees	.45	%	.45	%	.45	%
Distribution (12b-1) fees	.10	%	.75	%	.75	%
Other expenses	.71	%	.71	%	.71	%
Service fees	.25%		.25%		.25%
Processing fees	.15%		.15%		.15%
Other	.31%		.31%		.31%
Total annual fund operating expenses	1.26	%	1.91	%	1.91	%
Fee waivers and expense reimbursements*	.38	%	.43	%	.43	%
Net expenses*	.88	%	1.48	%	1.48	%

BlackRock and BlackRock Distributors, Inc., the fund’s distributor, have contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to .88% (for Investor A Shares) and 1.48% (for Investor B and C Shares) of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 58 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual cost may be higher or lower, based on these assumptions your costs would be:

	1 Year		3 Years		5 Years		10 Years
A Shares	$	90	$	362	$	655	$1,489
B Shares*	$	151	$	558	$	992	$2,028/$1,949*
C Shares*	$	151	$	558	$	992	$2,198

**	Based on the conversion of Investor B Shares to Investor A Shares after eight years (applies to shares received in an exchange transaction for Investor B Shares of an equity portfolio of the Company).

***	Based on the conversion of Investor B Shares to Investor A Shares after seven years (applies to shares received in an exchange transaction for Investor B Shares of a bond portfolio of the Company).

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Investor A, B or C Share Outstanding Throughout Each Period)

U.S. Treasury Money Market Portfolio

	INVESTOR A SHARES															INVESTOR B SHARES			INVESTOR C SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98			1/10/00¹ through 2/7/00			1/22/02 through 2/6/02⁵			12/8/98¹ through 5/25/99
Net asset value at beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Income from investment operations
Net investment income		0.0119			0.0417			0.0497			0.0412			0.0476			0.0037			0.0003			0.0138

Total from investment operations		0.0119			0.0417			0.0497			0.0412			0.0476			0.0037			0.0003			0.0138

Less distributions
Distributions from net investment income		(0.0119	)		(0.0417	)		(0.0497	)		(0.0412	)		(0.0476	)		(0.0037	)		(0.0003	)		(0.0138	)

Total distributions		(0.0119	)		(0.0417	)		(0.0497	)		(0.0412	)		(0.0476	)		(0.0037	)		(0.0003	)		(0.0138	)

Net asset value at end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Total return		1.20	%		4.26	%		5.09	%		4.20	%		4.87	%		0.37	%		0.03	%		1.39	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	68,299		$	35,178		$	31,808		$	45,224		$	71,811		$	– –	⁴	$	– –	⁶	$	– –	³
Ratios of expenses to average net assets
After advisory/administration fee waivers		0.88	%		0.88	%		0.86	%		0.82	%		0.81	%		1.48	%²		1.48	%²		1.48	%²
Before advisory/administration fee waivers		1.16	%		1.15	%		1.13	%		1.09	%		1.12	%		1.75	%²		1.76	%²		1.75	%²
Ratios of net investment income to average net assets
After advisory/administration fee waivers		1.15	%		4.17	%		4.91	%		4.12	%		5.57	%		4.70	%²		0.72	%²		3.46	%²
Before advisory/administration fee waivers		0.87	%		3.90	%		4.64	%		3.85	%		5.26	%		4.43	%²		0.44	%²		3.19	%²

¹	Commencement of operations of share class.

²	Annualized.

³	There were no Investor C Shares outstanding as of September 30, 1999.

⁴	There were no Investor B Shares outstanding as of September 30, 2000.

⁵	Reissuance of shares.

⁶	There were no Investor C Shares outstanding as of September 30, 2002.

BlackRock

Municipal Money Market Portfolio

IMPORTANT DEFINITIONS

Dollar-Weighted Average Maturity: The average maturity of the fund is the average amount of time until the organizations that issued the debt securities in the fund’s portfolio must pay off the principal amount of the debt. “Dollar-weighted” means the larger the dollar value of debt security in the Fund, the more weight it gets in calculating this average.

General Obligation Bonds: Bonds which are secured by the issuer’s pledge of its full faith, credit and taxing power for the payment of principal and interest.

Liquidity: Liquidity is the ability to easily convert investments into cash without losing a significant amount of money in the process.

Municipal Lease Obligations: These provide participation in municipal lease agreements and installment purchase contracts, but are not part of the general obligations of the municipality.

Municipal Security: A short-term obligation issued by or on behalf of states, possessions and territories of the United States, their political subdivisions and their agencies or authorities.

Net Asset Value (NAV): The value of everything the fund owns, minus everything it owes, divided by the number of shares held by investors.

Revenue Bonds: Bonds which are secured only by the revenues from a particular facility or class of facilities, such as a water or sewer system, or from the proceeds of a special excise tax or other revenue source.

Investment Goal

The fund seeks as high a level of current income exempt from Federal income tax as is consistent with maintaining liquidity and stability of principal.

Primary Investment Strategies

In pursuit of this goal, the fund invests primarily in Municipal Securities.

Specifically, the fund may invest in:

1)	Fixed and variable rate notes and similar debt instruments rated MIG-2, VMIG-2 or Prime-2 or higher by Moody’s, SP-2 or A-2 or higher by Standard & Poor’s or F-2 or higher by Fitch.

2)	Tax-exempt commercial paper and similar debt instruments rated Prime-2 or higher by Moody’s, A-2 or higher by Standard & Poor’s or F-2 or higher by Fitch.

3)	Municipal bonds rated A or higher by Moody’s, Standard & Poor’s or Fitch.

4)	Unrated notes, paper and other instruments that are determined by the fund manager to be of comparable quality to the instruments described above.

The fund seeks to maintain a net asset value of $1.00 per share.

The fund normally invests at least 80% of its net assets in Municipal Securities and other instruments whose interest is exempt from regular Federal income tax. The other 20% of its assets can be invested in securities which are subject to regular Federal income tax. Interest income from the fund’s investments may be subject to the Federal Alternative Minimum Tax.

The fund intends to invest so that less than 25% of its total assets are Municipal Securities of issuers located in the same state.

Quality

IMPORTANT DEFINITIONS

Tax-Exempt Commercial Paper: Short-term Municipal Securities with maturities of 1 to 270 days.

Variable or Floating Rate Securities: Securities whose interest rates adjust automatically after a certain period of time and/or whenever a predetermined standard interest rate changes.

Maturity

Normally, the fund may hold up to 20% of its assets in uninvested cash reserves. Uninvested cash will not earn income. It is possible that in extreme market conditions the fund may invest more than 20% of its assets in securities that are not Municipal Securities (and therefore are subject to regular Federal income tax) and may hold an unlimited amount of uninvested cash reserves. If market conditions improve, these strategies could result in reducing the potential gain from the market upswing, thus reducing the fund’s opportunity to achieve its investment objective.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made. The fund may not change the requirement that it normally invest at least 80% of its net assets in Municipal Securities and other instruments whose interest is exempt from regular Federal income tax without shareholder approval.

Key Risks

Municipal Securities include revenue bonds, general obligation bonds and municipal lease obligations. Revenue bonds include private activity bonds, which are not payable from the general revenues of the issuer. Consequently, the credit quality of private activity bonds is usually directly related to the credit standing of the corporate user of the facility involved. To the extent that the fund’s assets are invested in private activity bonds, the fund will be subject to the particular risks presented by the laws and economic conditions relating to such projects and bonds to a greater extent than if its assets were not so invested. Municipal Securities also include moral obligation bonds, which are normally issued by special purpose public authorities. If the issuer of moral obligation bonds is unable to pay its debts from current revenues, it may draw on a reserve fund the restoration of which is a moral but not a legal obligation of the state or municipality which created the issuer. Municipal lease obligations are not

guaranteed by the issuer and are generally less liquid than other securities. Municipal lease obligations also are subject to the risk that the municipality will not appropriate funds for lease payments.

There may be less information available on the financial condition of issuers of Municipal Securities than for public corporations. The market for municipal bonds may be less liquid than for taxable bonds. This means that it may be harder to buy and sell Municipal Securities, especially on short notice.

The fund may invest without limit in bonds the interest on which may be subject to the Federal Alternative Minimum Tax. Interest on these bonds that is received by taxpayers subject to the Federal Alternative Minimum Tax is taxable.

The fund may invest 25% or more of its assets in Municipal Securities whose interest is paid solely from revenues of similar projects. For example, the fund may invest more than 25% of its assets in Municipal Securities related to water or sewer systems. This type of concentration exposes the fund to the legal and economic risks relating to those projects.

The fund will rely on legal opinions of counsel to issuers of Municipal Securities as to the tax-free status of investments and will not do its own analysis.

The fund may purchase variable and floating rate instruments. The absence of an active market for these securities could make it difficult for the fund to dispose of them if the issuer defaults.

Risk / Return Information

period before they were launched because Investor A Shares have higher expenses than Service Shares. Also, the actual return of Investor B and C Shares would be lower compared to Investor A Shares because Investor B and C Shares have higher expenses than Investor A Shares. Investor A Shares of the fund have expenses of .89% of average daily net assets (after waivers and reimbursements) for the current fiscal year and Investor B and C Shares of the fund each are expected to have expenses of 1.49% of average daily net assets (after waivers and reimbursements) for the current fiscal year. Service Shares of the fund have expenses of .72% of average daily net assets (after waivers and reimbursements) for the current fiscal year. As of December 18, 1998, there were no Investor C Shares outstanding. For the periods that Investor C Shares were not outstanding, the performance of Investor C Shares is based on the return of Investor A shares and adjusted to reflect the expenses of Investor C shares. The performance of Investor B Shares of the fund is not shown because these shares have never been issued.

As of 12/31

Investor A Shares

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	10 Years	Inception Date
Municipal MM; Inv A
Return Before Taxes	0.81%	2.08%	2.28%	2.45%	11/01/89
Municipal MM; Inv C
Return Before Taxes	0.21%	1.48%	1.69%	2.14%	11/01/89

*	The chart and the table both assume reinvestment of dividends and distributions.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Distribution Fees: A method of charging distribution-related expenses against fund assets.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Investor A, B and C Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

	A Shares		B Shares		C Shares
Advisory fees	.45	%	.45	%	.45	%
Distribution (12b-1) fees	.10	%	.75	%	.75	%
Other expenses	.72	%	.72	%	.72	%
Service fees	.25%		.25%		.25%
Processing fees	.15%		.15%		.15%
Other	.32%		.32%		.32%
Total annual fund operating expenses	1.27	%	1.92	%	1.92	%
Fee waivers and expense reimbursements*	.38	%	.43	%	.43	%
Net expenses*	.89	%	1.49	%	1.49	%

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual cost may be higher or lower, based on these assumptions your costs would be:

	1 Year		3 Years		5 Years		10 Years
A Shares	$	91	$	365	$	660	$1,501
B Shares*	$	152	$	561	$	997	$2,039/$1,960*
C Shares*	$	152	$	561	$	997	$2,208

These expense figures do not reflect the imposition of the deferred sales charge which may be deducted upon the redemption of Investor B or Investor C Shares of a fund received in an exchange transaction for Investor B or Investor C Shares of a non-money market investment portfolio of the Company as described in the applicable prospectuses. No deferred sales charge is deducted upon the redemption of Investor B or Investor C Shares of a fund that is purchased from the Company and not acquired by exchange.

**	Based on the conversion of Investor B Shares to Investor A Shares after eight years (applies to shares received in an exchange transaction for Investor B Shares of an equity portfolio of the Company).

***	Based on the conversion of Investor B Shares to Investor A Shares after seven years (applies to shares received in an exchange transaction for Investor B Shares of a bond portfolio of the Company).

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Investor A or C Share Outstanding Throughout Each Period)

Municipal Money Market Portfolio

	INVESTOR A SHARES															INVESTOR C SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98			For the Period 10/1/98 through 12/18/98			Year Ended 9/30/98³
Net asset value at beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Income from investment operations
Net investment income		0.0095			0.0268			0.0309			0.0235			0.0280			0.0040			0.0133

Total from investment operations		0.0095			0.0268			0.0309			0.0235			0.0280			0.0040			0.0133

Less distributions
Distributions from net investment income		(0.0095	)		(0.0268	)		(0.0309	)		(0.0235	)		(0.0280	)		(0.0040	)		(0.0133	)

Total distributions		(0.0095	)		(0.0268	)		(0.0309	)		(0.0235	)		(0.0280	)		(0.0040	)		(0.0133	)

Net asset value at end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Total return		0.95	%		2.71	%		3.13	%		2.37	%		2.83	%		0.40	%		1.34	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	6,587		$	9,013		$	7,396		$	4,705		$	9,227		$	– –	¹	$	306
Ratios of expenses to average net assets
After advisory/administration fee waivers		0.89	%		0.89	%		0.89	%		0.89	%		0.86	%		1.49	%²		1.47	%
Before advisory/administration fee waivers		1.17	%		1.16	%		1.17	%		1.17	%		1.18	%		1.77	%²		1.79	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		0.96	%		2.65	%		3.09	%		2.33	%		2.80	%		1.73	%²		2.08	%
Before advisory/administration fee waivers		0.68	%		2.37	%		2.81	%		2.05	%		2.48	%		1.45	%²		1.76	%

¹	There were no Investor C shares outstanding as of September 30, 1999.

²	Annualized.

³	This class has opened, closed and then reopened during the fiscal year. The financial highlights are reflective of the cumulative periods that the class was opened.

BlackRock

New Jersey Municipal Money Market Portfolio

IMPORTANT DEFINITIONS

General Obligation Bonds: Bonds which are secured by the issuer’s pledge of its full faith, credit and taxing power for the payment of principal and interest.

Liquidity: Liquidity is the ability to easily convert investments into cash without losing a significant amount of money in the process.

Municipal Lease Obligations: These provide participation in municipal lease agreements and installment purchase contracts, but are not part of the general obligations of the municipality.

Municipal Security: A short-term obligation issued by or on behalf of states, possessions and territories of the United States, their political subdivisions and their agencies and authorities.

Net Asset Value (NAV): The value of everything the fund owns, minus everything it owes, divided by the number of shares held by investors.

Tax-Exempt Commercial Paper: Short-term Municipal Securities with maturities of 1 to 270 days.

Variable or Floating Rate Securities: Securities whose interest rates adjust automatically after a certain period of time and/or whenever a predetermined standard interest rate changes.

Investment Goal

The fund seeks as high a level of current income exempt from Federal income tax and, to the extent possible, New Jersey state income tax, as is consistent with maintaining liquidity and stability of principal.

Primary Investment Strategies

In pursuit of this goal, the fund invests primarily in Municipal Securities of issuers located in New Jersey.

Specifically, the fund may invest in:

1)	Fixed and variable rate notes and similar debt instruments rated MIG-2, VMIG-2 or Prime-2 or higher by Moody’s, SP-2 or A-2 or higher by Standard & Poor’s or F-2 or higher by Fitch.

2)	Tax-exempt commercial paper and similar debt instruments rated Prime-2 or higher by Moody’s, A-2 or higher by Standard & Poor’s or F-2 or higher by Fitch.

3)	Municipal bonds rated A or higher by Moody’s, Standard & Poor’s or Fitch.

4)	Unrated notes, paper and other instruments that are determined by the fund manager to be of comparable quality to the instruments described above.

The fund seeks to maintain a net asset value of $1.00 per share.

The fund normally invests at least 80% of its assets in Municipal Securities and other instruments whose interest is exempt from regular Federal income tax and New Jersey state income tax. The other 20% of its assets can be invested in securities of non-municipal issuers the income from which the fund manager believes is exempt from regular Federal income tax and/or New Jersey state income tax and securities which are subject to regular Federal income tax and New Jersey state income tax. Interest income from the fund’s investments may be subject to the Federal Alternative Minimum Tax.

In addition, the fund normally invests at least 80% of its assets in New Jersey Municipal Securities and other obligations which are statutorily free from state and local taxation under the laws of New Jersey or the United States in order to qualify as a “qualified investment fund” under New Jersey law. The fund may invest in Municipal Securities of issuers located outside of New Jersey the

interest from which is exempt from regular Federal income tax and New Jersey state income tax.

Quality

The fund manager, under guidelines established by the Company’s Board of Trustees, will only purchase securities that have short- term debt ratings at the time of purchase in the two highest rating categories from at least two national rating agencies, or one such rating if the security is rated by only one agency. Securities that do not have a short-term rating must be determined by the fund manager to be of comparable quality.

Maturity

Normally, the fund may hold up to 20% of its assets in uninvested cash reserves. Uninvested cash will not earn income. It is possible that in extreme market conditions the fund may invest more than 20% of its assets in securities that are not Municipal Securities (and therefore are subject to regular Federal income tax and New Jersey state income tax) and may hold an unlimited amount of uninvested cash reserves. If market conditions improve, these strategies could result in reducing the potential gain from the market upswing, thus reducing the fund’s opportunity to achieve its investment objective.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made. The fund may not change the requirement that it normally invest at least 80% of its assets in Municipal Securities and other instruments whose interest is exempt from regular Federal income tax and New Jersey state income tax without shareholder approval.

Key Risks

securities and issuers than in a diversified portfolio. The change in value of any one security may affect the overall value of the fund more than it would in a diversified portfolio. In particular, changes in the economic conditions and governmental policies of New Jersey and its political subdivisions, including as a result of legislation or litigation changing the taxation of Municipal Securities or the rights of Municipal Security holders in the event of bankruptcy, could hurt the value of the fund’s shares.

The fund will rely on legal opinions of counsel to issuers of Municipal Securities as to the tax-free status of investments and will not do its own analysis.

The fund may purchase variable and floating rate instruments. The absence of an active market for these securities could make it difficult for the fund to dispose of them if the issuer defaults.

Risk / Return Information

The chart and table on the next page give you a picture of the fund’s long-term performance for Investor A Shares (in the chart) and Investor A and B Shares (in the table). The information shows you how the fund’s performance has varied year by year and provides some indication of the risks of investing in the fund. As with all such investments, past performance is not an indication of future results.

The performance for the period before Investor A Shares were launched is based upon performance for Service Shares of the fund, which were first issued in July 1991. Investor A Shares were launched in January 1996 and Investor B Shares were launched in March 1997. The performance of Investor B Shares for the period before they were launched is based upon performance for Service and Investor A Shares. The actual return of Investor A Shares would have been lower than shown for the period before they were launched because Investor A Shares have higher expenses than Service Shares. Also, the actual return of Investor B and C Shares would be lower compared to Investor A Shares because Investor B and C Shares have higher expenses than Investor A Shares. Investor A Shares of the fund have expenses of .86% of average daily net assets (after waivers and reimbursements) for the current fiscal year and Investor B and C Shares of the fund are each expected to have expenses of 1.46% of average daily net assets (after waivers and reimbursements) for the current fiscal year. Service Shares of the fund have expenses of .69% of average daily net assets (after waivers and reimbursements) for the current fiscal year. As of February 8, 2000, there were no Investor B Shares outstanding. For the periods that Investor B Shares were not outstanding, the performance of Investor B Shares is based on the return of Investor A Shares and adjusted to reflect the expenses of Investor B Shares. The performance of Investor C Shares of the fund is not shown because these shares have never been issued.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Distribution Fees: A method of charging distribution-related expenses against fund assets.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

As of 12/31

Investor A Shares

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	10 Years	Inception Date
NJ Municipal MM; Inv A
Return Before Taxes	0.74%	1.98%	2.17%	2.36%	07/01/91
NJ Municipal MM; Inv B
Return Before taxes	0.15%	1.40%	1.62%	2.06%	07/01/91

*	The chart and the table both assume reinvestment of dividends and distributions.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Investor A, B and C Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

	A Shares		B Shares		C Shares
Advisory fees	.45	%	.45	%	.45	%
Distribution (12b-1) fees	.10	%	.75	%	.75	%
Other expenses	.73	%	.73	%	.73	%
Service fees	.25%		.25%		.25%
Processing fees	.15%		.15%		.15%
Other	.33%		.33%		.33%
Total annual fund operating expenses	1.28	%	1.93	%	1.93	%
Fee waivers and expense reimbursements*	.42	%	.47	%	.47	%
Net expenses*	.86	%	1.46	%	1.46	%

BlackRock and BlackRock Distributors, Inc., the fund’s distributor, have contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to .96% (for Investor A Shares) and 1.46% (for Investor B and C Shares) of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 58 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual cost may be higher or lower, based on these assumptions your costs would be:

	1 Year		3 Years		5 Years		10 Years
A Shares	$	88	$	364	$	662	$1,508
B Shares*	$	149	$	561	$	998	$2,046/$1,967*
C Shares*	$	149	$	561	$	998	$2,216

**	Based on the conversion of Investor B Shares to Investor A Shares after eight years (applies to shares received in an exchange transaction for Investor B Shares of an equity portfolio of the Company).

***	Based on the conversion of Investor B Shares to Investor A Shares after seven years (applies to shares received in an exchange transaction for Investor B Shares of a bond portfolio of the Company).

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Investor A or B Share Outstanding Throughout Each Period)

New Jersey Municipal Money Market Portfolio†

	INVESTOR A SHARES															INVESTOR B SHARES
	Year Ended 9/30/02			Year ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98			For the Period 10/1/99 through 2/8/00			Year Ended 9/30/99			For the Period 5/13/98³ through 9/30/98
Net asset value at beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Income from investment operations
Net investment income		0.0087			0.0258			0.0292			0.0227			0.0265			0.0077			0.0094			0.0079

Total from investment operations		0.0087			0.0258			0.0292			0.0227			0.0265			0.0077			0.0094			0.0079

Less distributions
Distributions from net investment income		(0.0087	)		(0.0258	)		(0.0292	)		(0.0227	)		(0.0265	)		(0.0077	)		(0.0094	)		(0.0079	)

Total distributions		(0.0087	)		(0.0258	)		(0.0292	)		(0.0227	)		(0.0265	)		(0.0077	)		(0.0094	)		(0.0079	)

Net asset value at end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Total return		0.87	%		2.61	%		2.96	%		2.30	%		2.68	%		0.77	%		0.94	%		0.79	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	14,244		$	16,417		$	6,421		$	22,370		$	43,995			– –¹			– –			– –
Ratios of expenses to average net assets
After advisory/administration fee waivers		0.86	%		0.86	%		0.93	%		0.91	%		0.91	%		1.46	%²		1.46	%		1.44	%²
Before advisory/administration fee waivers		1.18	%		1.17	%		1.24	%		1.23	%		1.28	%		1.77	%²		1.78	%		1.81	%²
Ratios of net investment income to average net assets
After advisory/administration fee waivers		0.87	%		2.40	%		2.86	%		2.27	%		2.64	%		2.33	%²		1.72	%		2.12	%²
Before advisory/administration fee waivers		0.54	%		2.09	%		2.55	%		1.95	%		2.27	%		2.02	%²		1.40	%		1.75	%²

^†

The Portfolio commenced operations on July 1, 1991 as the New Jersey Municipal Money Market Fund, a separate investment portfolio (the “Predecessor New Jersey Municipal Money Market Portfolio”) of Compass Capital Group, which was organized as a Massachusetts business trust. On January 13, 1996, the assets and liabilities of the Predecessor New Jersey Municipal Money Market Portfolio were transferred to this Portfolio, and were combined with the assets of a pre-existing portfolio of investments maintained by the Fund.

¹	There were no Investor B Shares outstanding as of September 30, 2000.

²	Annualized.

³	Reissuance of shares.

BlackRock

North Carolina Municipal Money Market Portfolio

IMPORTANT DEFINITIONS

General Obligation Bonds: Bonds which are secured by the issuer’s pledge of its full faith, credit and taxing power for the payment of principal and interest.

Liquidity: Liquidity is the ability to easily convert investments into cash without losing a significant amount of money in the process.

Municipal Lease Obligations: These provide participation in municipal lease agreements and installment purchase contracts, but are not part of the general obligations of the municipality.

Municipal Security: A short-term obligation issued by or on behalf of states, possessions and territories of the United States, their political subdivisions and their agencies and authorities.

Net Asset Value (NAV): The value of everything the fund owns, minus everything it owes, divided by the number of shares held by investors.

Investment Goal

The fund seeks as high a level of current income exempt from Federal income tax and, to the extent possible, North Carolina state income tax, as is consistent with maintaining liquidity and stability of principal.

Primary Investment Strategies

In pursuit of this goal, the fund invests primarily in Municipal Securities of issuers located in North Carolina.

Specifically, the fund may invest in:

1)	Fixed and variable rate notes and similar debt instruments rated MIG-2, VMIG-2 or Prime-2 or higher by Moody’s, SP-2 or A-2 or higher by Standard & Poor’s or F-2 or higher by Fitch.

2)	Tax-exempt commercial paper and similar debt instruments rated Prime-2 or higher by Moody’s, A-2 or higher by Standard & Poor’s or F-2 or higher by Fitch.

3)	Municipal bonds rated A or higher by Moody’s, Standard & Poor’s or Fitch.

4)	Unrated notes, paper and other instruments that are determined by the fund manager to be of comparable quality to the instruments described above.

The fund seeks to maintain a net asset value of $1.00 per share.

The fund normally invests at least 80% of its net assets in Municipal Securities and other instruments whose interest is exempt from regular Federal income tax and North Carolina state income tax. The other 20% of its assets can be invested in securities of non-municipal issuers the income from which the fund manager believes is exempt from regular Federal income tax and/or North Carolina state income tax and securities which are subject to regular Federal income tax and North Carolina state income tax. Interest income from the fund’s investments may be subject to the Federal Alternative Minimum Tax. The fund may invest in Municipal Securities of issuers located outside of North Carolina, the interest from which is exempt from regular Federal income tax and North Carolina state income tax.

Quality

IMPORTANT DEFINITIONS

Tax-Exempt Commercial Paper: Short-term Municipal Securities with maturities of 1 to 270 days.

Variable or Floating Rate Securities: Securities whose interest rates adjust automatically after a certain period of time and/or whenever a predetermined standard interest rate changes.

rating if the security is rated by only one agency. Securities that do not have a short-term rating must be determined by the fund manager to be of comparable quality.

Maturity

Normally, the fund may hold up to 20% of its assets in uninvested cash reserves. Uninvested cash will not earn income. It is possible that in extreme market conditions the fund may invest more than 20% of its assets in securities that are not Municipal Securities (and therefore are subject to regular Federal income tax and North Carolina state income tax) and may hold an unlimited amount of uninvested cash reserves. If market conditions improve, these strategies could result in reducing the potential gain from the market upswing, thus reducing the fund’s opportunity to achieve its investment objective.

Key Risks

The fund concentrates its investments in securities of issuers located in North Carolina and is non-diversified under the Investment Company Act. This raises special concerns because performance is more dependent upon the performance of a smaller number of securities and issuers than in a diversified portfolio. The change in value of any one security may affect the overall value of the fund more than it would in a diversified portfolio. In particular, changes in the economic conditions and governmental policies of North Carolina and its political subdivisions, including as a result of legislation or litigation

changing the taxation of Municipal Securities or the rights of Municipal Security holders in the event of bankruptcy, could hurt the value of the fund’s shares.

The fund will rely on legal opinions of counsel to issuers of Municipal Securities as to the tax-free status of investments and will not do its own analysis.

The fund may purchase variable and floating rate instruments. The absence of an active market for these securities could make it difficult for the fund to dispose of them if the issuer defaults.

Risk / Return Information

The performance for the period before Investor A Shares were launched is based upon performance for Institutional Shares of the fund, which were first issued in May 1993, and Service Shares of the fund, which were first issued in April 1994. Investor A Shares were launched in February 1995 and Investor B Shares were launched in January 2000. The actual return of Investor A Shares would have been lower than shown for the period before they were launched because Investor A Shares have higher expenses than these older classes. Also, the actual return of Investor B and C Shares would be lower compared to Investor A Shares because Investor B and C Shares have higher expenses than Investor A Shares. Investor A Shares of the fund have expenses of .77% of average daily net assets (after waivers and reimbursements) for the current fiscal year and Investor B and C Shares of the fund are each expected to have expenses of 1.37% of average daily net assets (after waivers and reimbursements) for the current fiscal year. Institutional Shares and Service Shares of the fund have expenses of .30% and .60% of average daily net assets (after waivers and reimbursements), respectively, for the current fiscal year. As of December 14, 2001, there were no Investor B Shares outstanding. For the periods that Investor B Shares were not outstanding, the performance of Investor B Shares is based on the return of Investor A Shares and adjusted to reflect the expenses of Investor B Shares. The performance of Investor C Shares of the fund is not shown because these shares have never been issued.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Distribution Fees: A method of charging distribution-related expenses against fund assets.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

As of 12/31

Investor A Shares

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	Since Inception	Inception Date
NC Municipal MM; Inv A
Return Before Taxes	0.77%	2.08%	2.31%	2.52%	05/03/92
NC Municipal MM; Inv B
Return Before Taxes	0.16%	1.41%	1.90%	2.42%	05/03/93

*	The chart and the table both assume reinvestment of dividends and distributions.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Investor A, B and C Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

	A Shares		B Shares		C Shares
Advisory fees	.45	%	.45	%	.45	%
Distribution (12b-1) fees	.10	%	.75	%	.75	%
Other expenses	.74	%	.74	%	.74	%
Service fees	.25%		.25%		.25%
Processing fees	.15%		.15%		.15%
Other	.34%		.34%		.34%
Total annual fund operating expenses	1.29	%	1.94	%	1.94	%
Fee waivers and expense reimbursements*	.52	%	.57	%	.57	%
Net expenses*	.77	%	1.37	%	1.37	%

BlackRock and BlackRock Distributors, Inc., the fund’s distributor, have contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to .87% (for Investor A Shares) and 1.37% (for Investor B and C Shares) of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 58 for a discussion of the waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual cost may be higher or lower, based on these assumptions your costs would be:

	1 Year		3 Years		5 Years		10 Years
A Shares	$	79	$	358	$	658	$1,511
B Shares*	$	139	$	554	$	994	$2,049/$1,970*
C Shares*	$	139	$	554	$	994	$2,218

**	Based on the conversion of Investor B Shares to Investor A Shares after eight years (applies to shares received in an exchange transaction for Investor B Shares of an equity portfolio of the Company.

***	Based on the conversion of Investor B Shares to Investor A Shares after seven years (applies to shares received in an exchange transaction for Investor B Shares of a bond portfolio of the Company).

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Investor A or B Share Outstanding Throughout Each Period)

North Carolina Municipal Money Market Portfolio

	INVESTOR A SHARES															INVESTOR B SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98			For the Period 10/1/01 through 12/14/01			Year Ended 9/30/01			For the Period 1/12/00¹ through 9/30/00
Net asset value at beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Income from investment operations
Net investment income		0.0082			0.0266			0.0315			0.0241			0.0288			0.0012			0.0203			0.0185

Total from investment operations		0.0082			0.0266			0.0315			0.0241			0.0288			0.0012			0.0203			0.0185

Less distributions
Distributions from net investment income		(0.0082	)		(0.0266	)		(0.0315	)		(0.0241	)		(0.0288	)		(0.0012	)		(0.0203	)		(0.0185	)

Total distributions		(0.0082	)		(0.0266	)		(0.0315	)		(0.0241	)		(0.0288	)		(0.0012	)		(0.0203	)		(0.0185	)

Net asset value at end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Total return		0.88	%		2.70	%		3.20	%		2.44	%		2.92	%		0.12	%		2.05	%		1.86	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	375		$	415		$	358		$	369		$	245		$	– –	³	$	6		$	6
Ratios of expenses to average net assets
After advisory/administration fee waivers		0.77	%		0.77	%		0.77	%		0.77	%		0.76	%		1.37	%²		1.37	%		1.37	%²
Before advisory/administration fee waivers		1.19	%		1.17	%		1.19	%		1.17	%		1.21	%		1.79	%²		1.77	%		1.79	%²
Ratios of net investment income to average net assets
After advisory/administration fee waivers		0.88	%		2.52	%		3.15	%		2.40	%		2.88	%		0.60	%²		2.02	%		2.61	%²
Before advisory/administration fee waivers		0.46	%		2.12	%		2.73	%		2.00	%		2.43	%		0.18	%²		1.62	%		2.19	%²

¹	Commencement of operations of share class.

²	Annualized.

³	There were no Investor B Shares outstanding as of September 30, 2001.

BlackRock

Ohio Municipal Money Market Portfolio

IMPORTANT DEFINITIONS

General Obligation Bonds: Bonds which are secured by the issuer’s pledge of its full faith, credit and taxing power for the payment of principal and interest.

Liquidity: Liquidity is the ability to easily convert investments into cash without losing a significant amount of money in the process.

Municipal Lease Obligations: These provide participation in municipal lease agreements and installment purchase contracts, but are not part of the general obligations of the municipality.

Municipal Security: A short-term obligation issued by or on behalf of states, possessions and territories of the United States, their political subdivisions and their agencies and authorities.

Net Asset Value (NAV): The value of everything the fund owns, minus everything it owes, divided by the number of shares held by investors.

Tax-Exempt Commercial Paper: Short-term Municipal Securities with maturities of 1 to 270 days.

Investment Goal

The fund seeks as high a level of current income exempt from Federal income tax and, to the extent possible, Ohio state income tax, as is consistent with maintaining liquidity and stability of principal.

Primary Investment Strategies

In pursuit of this goal, the fund invests primarily in Municipal Securities of issuers located in Ohio.

Specifically, the fund may invest in:

1)	Fixed and variable rate notes and similar debt instruments rated MIG-2, VMIG-2 or Prime-2 or higher by Moody’s, SP-2 or A-2 or higher by Standard & Poor’s or F-2 or higher by Fitch.

2)	Tax-exempt commercial paper and similar debt instruments rated Prime-2 or higher by Moody’s, A-2 or higher by Standard & Poor’s or F-2 or higher by Fitch.

3)	Municipal bonds rated A or higher by Moody’s, Standard & Poor’s or Fitch.

4)	Unrated notes, paper and other instruments that are determined by the fund manager to be of comparable quality to the instruments described above.

The fund seeks to maintain a net asset value of $1.00 per share.

The fund normally invests at least 80% of its net assets in Municipal Securities and other instruments whose interest is exempt from regular Federal income tax and Ohio state income tax. The other 20% of its assets can be invested in securities of non-municipal issuers the income from which the fund manager believes is exempt from regular Federal income tax and/or Ohio state income tax and securities which are subject to regular Federal income tax and Ohio state income tax. Interest income from the fund’s investments may be subject to the Federal Alternative Minimum Tax. The Fund may invest in Municipal Securities of issuers located outside of Ohio, the interest from which is exempt from regular Federal income tax.

Quality

IMPORTANT DEFINITIONS

Variable or Floating Rate Securities: Securities whose interest rates adjust automatically after a certain period of time and/or whenever a predetermined standard interest rate changes.

Maturity

The fund is managed so that the dollar weighted average maturity of all its investments will be 90 days or less. The fund will buy only those securities which have remaining maturities of 397 days or less (except for certain variable and floating rate instruments and securities collateralizing repurchase agreements). The fund’s securities may not earn as high a level of income as longer term or lower quality securities, which generally have greater risk and fluctuate more in value.

Normally, the fund may hold up to 20% of its assets in uninvested cash reserves. Uninvested cash will not earn income. It is possible that in extreme market conditions the fund may invest more than 20% of its assets in securities that are not Municipal Securities (and therefore are subject to regular Federal income tax and Ohio state income tax) and may hold an unlimited amount of uninvested cash reserves. If market conditions improve, these strategies could result in reducing the potential gain from the market upswing, thus reducing the fund’s opportunity to achieve its investment objective.

Key Risks

The fund concentrates its investments in securities of issuers located in Ohio and is non-diversified under the Investment Company Act. This raises special concerns because performance is more dependent upon the performance of a smaller number of securities and issuers than in a diversified portfolio. The change in value of any one security may affect the overall value of the fund more than it would in a diversified portfolio. In particular, changes in the economic conditions and governmental policies of Ohio and its political subdivisions, including as a result of legislation or litigation changing the taxation of Municipal Securities or the rights of Municipal Security holders in the event of bankruptcy, could hurt the value of the fund’s shares.

Municipal Securities include revenue bonds, general obligation bonds and municipal lease obligations. Revenue bonds include private activity bonds, which are not payable from the general

revenues of the issuer. Consequently, the credit quality of private activity bonds is usually directly related to the credit standing of the corporate user of the facility involved. To the extent that the fund’s assets are invested in private activity bonds, the fund will be subject to the particular risks presented by the laws and economic conditions relating to such projects and bonds to a greater extent than if its assets were not so invested. Municipal Securities also include moral obligation bonds, which are normally issued by special purpose public authorities. If the issuer of moral obligation bonds is unable to pay its debts from current revenues, it may draw on a reserve fund the restoration of which is a moral but not a legal obligation of the state or municipality which created the issuer. Municipal lease obligations are not guaranteed by the issuer and are generally less liquid than other securities. Municipal lease obligations also are subject to the risk that the municipality will not appropriate funds for lease payments.

The fund will rely on legal opinions of counsel to issuers of Municipal Securities as to the tax-free status of investments and will not do its own analysis.

The fund may purchase variable and floating rate instruments. The absence of an active market for these securities could make it difficult for the fund to dispose of them if the issuer defaults.

Risk / Return Information

The chart and table below give you a picture of the fund’s long-term performance for Investor A Shares. The information shows you how the fund’s performance has varied year by year and provides some indication of the risks of investing in the fund. As with all such investments, past performance is not an indication of future results.

The performance for the period before Investor A Shares were launched is based upon performance for Service Shares of the fund, which were first issued in June 1993. Investor A Shares were launched in October 1993. The actual return of Investor A Shares would have been lower than shown for the period before they were launched because Investor A Shares have higher expenses than Service Shares. Investor A Shares of the fund have expenses of .86% of average daily net assets (after waivers and reimbursements) for the current fiscal year and Service Shares of the fund have expenses of .69% of average daily net assets (after waivers and reimbursements) for the current fiscal year. The performance of Investor B and Investor C Shares of the fund is not shown because these shares have never been issued. The returns of these shares would be lower than shown for Investor A Shares because Investor B and Investor C Shares have higher expenses than Investor A Shares. Investor B and Investor C Shares each are expected to have expenses of 1.46% of average daily net assets (after waivers and reimbursements) for the current fiscal year.

As of 12/31

Investor A Shares

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	Since Inception	Inception Date
OH Municipal MM; Inv A
Return Before Taxes	0.94%	2.21%	2.39%	2.57%	06/01/93

*	The chart and the table both assume reinvestment of dividends and distributions.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Distribution Fees: A method of charging distribution-related expenses against fund assets.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Investor A, B and C Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

	A Shares		B Shares		C Shares
Advisory fees	.45	%	.45	%	.45	%
Distribution (12b-1) fees	.10	%	.75	%	.75	%
Other expenses	.74	%	.74	%	.74	%
Service fees	.25%		.25%		.25%
Processing fees	.15%		.15%		.15%
Other	.34%		.34%		.34%
Total annual fund operating expenses	1.29	%	1.94	%	1.94	%
Fee waivers and expense reimbursements*	.43	%	.48	%	.48	%
Net expenses*	.86	%	1.46	%	1.46	%

BlackRock and BlackRock Distributors, Inc., the fund’s distributor, have contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to .96% (for Investor A Shares) and 1.46% (for Investor B and C Shares) of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. see the “Management” section on page 58 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual cost may be higher or lower, based on these assumptions your costs would be:

	1 Year		3 Years		5 Years		10 Years
A Shares	$	88	$	367	$	666	$1,519
B Shares*	$	149	$	563	$	1,003	$2,056/$1,977*
C Shares*	$	149	$	563	$	1,003	$2,226

**	Based on the conversion of Investor B Shares to Investor A Shares after eight years (applies to shares received in an exchange transaction for Investor B Shares of an equity portfolio of the Company).

***	Based on the conversion of Investor B Shares to Investor A Shares after seven years (applies to shares received in an exchange transaction for Investor B Shares of a bond portfolio of the Company).

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Investor A Share Outstanding Throughout Each Period)

Ohio Municipal Money Market Portfolio

	INVESTOR A SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Income from investment operations
Net investment income		0.0107			0.0284			0.0313			0.0246			0.0286

Total from investment operations		0.0107			0.0284			0.0313			0.0246			0.0286

Less distributions
Distributions from net investment income		(0.0107	)		(0.0284	)		(0.0313	)		(0.0246	)		(0.0286	)

Total distributions		(0.0107	)		(0.0284	)		(0.0313	)		(0.0246	)		(0.0286	)

Net asset value at end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Total return		1.07	%		2.88	%		3.18	%		2.49	%		2.90	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	30,851		$	44,050		$	41,010		$	44,929		$	15,904
Ratios of expenses to average net assets
After advisory/administration fee waivers		0.86	%		0.86	%		0.87	%		0.87	%		0.85	%
Before advisory/administration fee waivers		1.18	%		1.18	%		1.19	%		1.19	%		1.21	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		1.09	%		2.84	%		3.13	%		2.47	%		2.86	%
Before advisory/administration fee waivers		0.77	%		2.51	%		2.81	%		2.15	%		2.50	%

BlackRock

Pennsylvania Municipal Money Market Portfolio

IMPORTANT DEFINITIONS

General Obligation Bonds: Bonds which are secured by the issuer’s pledge of its full faith, credit and taxing power for the payment of principal and interest.

Liquidity: Liquidity is the ability to easily convert investments into cash without losing a significant amount of money in the process.

Municipal Lease Obligations: These provide participation in municipal lease agreements and installment purchase contracts, but are not part of the general obligations of the municipality.

Municipal Security: A short term obligation issued by or on behalf of states, possessions and territories of the United States, their political subdivisions and their agencies and authorities.

Net Asset Value (NAV): The value of everything the fund owns, minus everything it owes, divided by the number of shares held by investors.

Investment Goal

The fund seeks as high a level of current income exempt from Federal income tax and, to the extent possible, Pennsylvania state income tax, as is consistent with maintaining liquidity and stability of principal.

Primary Investment Strategies

In pursuit of this goal, the fund invests primarily in Municipal Securities of issuers located in Pennsylvania.

Specifically, the fund may invest in:

1)	Fixed and variable rate notes and similar debt instruments rated MIG-2, VMIG-2 or Prime-2 or higher by Moody’s, SP-2 or A-2 or higher by Standard & Poor’s or F-2 or higher by Fitch.

2)	Tax-exempt commercial paper and similar debt instruments rated Prime-2 or higher by Moody’s, A-2 or higher by Standard & Poor’s or F-2 or higher by Fitch.

3)	Municipal bonds rated A or higher by Moody’s, Standard & Poor’s or Fitch.

4)	Unrated notes, paper and other instruments that are determined by the fund manager to be of comparable quality to the instruments described above.

The fund seeks to maintain a net asset value of $1.00 per share.

The fund normally invests at least 80% of its net assets in Municipal Securities and other instruments whose interest is exempt from regular Federal income tax and Pennsylvania state income tax. The other 20% of its assets can be invested in securities of non-municipal issuers the income from which the fund manager believes is exempt from regular Federal income tax and/or Pennsylvania state income tax and securities which are subject to regular Federal income tax and Pennsylvania state income tax. Interest income from the fund’s investments may be subject to the Federal Alternative Minimum Tax. The fund may invest in Municipal Securities of issuers located outside of Pennsylvania the interest from which is exempt from regular Federal income tax and Pennsylvania state income tax.

Quality

The fund manager, under guidelines established by the Company’s Board of Trustees, will only purchase securities that have short-term

IMPORTANT DEFINITIONS

Tax-Exempt Commercial Paper: Short-term Municipal Securities with maturities of 1 to 270 days.

Variable or Floating Rate Securities: Securities whose interest rates adjust automatically after a certain period of time and/or whenever a predetermined standard interest rate changes.

debt ratings at the time of purchase in the two highest rating categories from at least two national rating agencies, or one such rating if the security is rated by only one agency. Securities that do not have a short-term rating must be determined by the fund manager to be of comparable quality.

Maturity

Normally, the fund may hold up to 20% of its assets in uninvested cash reserves. Uninvested cash will not earn income. It is possible that in extreme market conditions the fund may invest more than 20% of its assets in securities that are not Municipal Securities (and therefore are subject to regular Federal income tax and Pennsylvania state income tax) and may hold an unlimited amount of uninvested cash reserves. If market conditions improve, these strategies could result in reducing the potential gain from the market upswing, thus reducing the fund’s opportunity to achieve its investment objective.

Key Risks

The fund concentrates its investments in securities of issuers located in Pennsylvania and is non-diversified under the Investment Company Act. This raises special concerns because performance is more dependent upon the performance of a smaller number of securities and issuers than in a diversified portfolio. The change in value of any one security may affect the overall value of the fund more than it would in a diversified portfolio. In particular, changes in the economic conditions and governmental policies of Pennsylvania and its political subdivisions, including as a result of

legislation or litigation changing the taxation of Municipal Securities or the rights of Municipal Security holders in the event of bankruptcy, could hurt the value of the fund’s shares.

The fund will rely on legal opinions of counsel to issuers of Municipal Securities as to the tax-free status of investments and will not do its own analysis.

The fund may purchase variable and floating rate instruments. The absence of an active market for these securities could make it difficult for the fund to dispose of them if the issuer defaults.

Risk / Return Information

The performance for the period before Investor A Shares were launched is based upon performance for Institutional and Service Shares of the fund, which were both first issued in June 1993. Investor A Shares were launched in December 1993 and Investor B Shares were launched in December 2001. The actual return of Investor A Shares would have been lower than shown for the period before they were launched because Investor A Shares have higher expenses than these older classes. Also, the actual return of Investor B and C Shares would be lower compared to Investor A Shares. Investor A Shares of the fund have expenses of .89% of average daily net assets (after waivers and reimbursements) for the current fiscal year and Investor B and C Shares of the fund are each expected to have expenses of 1.49% of average daily net assets (after waivers and reimbursements) for the current fiscal year. Institutional Shares and Service Shares of the fund have expenses of .42% and .72% of average daily net assets (after waivers and reimbursements), respectively, for the current fiscal year. As of April 9, 2002, there were no Investor B Shares outstanding. For the periods that Investor B Shares were not outstanding, the performance of Investor B Shares is based on the return of Investor A Shares and adjusted to reflect the expenses of Investor B Shares. The performance of Investor C Shares of the fund is not shown because these shares have never been issued.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Distribution Fees: A method of charging distribution-related expenses against fund assets.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

As of 12/31

Investor A Shares

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	Since Inception	Inception Date
PA Municipal MM; Inv A
Return Before Taxes	0.71%	1.97%	2.21%	2.44%	06/01/93
PA Municipal MM; Inv B
Return Before Taxes	0.13%	1.75%	2.07%	2.42%	06/01/93

*	The chart and the table both assume reinvestment of dividends and distributions.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Investor A, B and C Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

	A Shares		B Shares		C Shares
Advisory fees	.45	%	.45	%	.45	%
Distribution (12b-1) fees	.10	%	.75	%	.75	%
Other expenses	.72	%	.72	%	.72	%
Service fees	.25%		.25%		.25%
Processing fees	.15%		.15%		.15%
Other	.32%		.32%		.32%
Total annual fund operating expenses	1.27	%	1.92	%	1.92	%
Fee waivers and expense reimbursements*	.38	%	.43	%	.43	%
Net expenses*	.89	%	1.49	%	1.49	%

BlackRock and BlackRock Distributors, Inc., the fund’s distributor, have contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to .99% (for Investor A Shares) and 1.49% (for Investor B and C Shares) of average daily net assets until February 1, 2004. The Fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 58 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual cost may be higher or lower, based on these assumptions your costs would be:

	1 Year		3 Years		5 Years		10 Years
A Shares	$	91	$	365	$	660		$1,501
B Shares*	$	152	$	561	$	997	$	2,039/$1,960*
C Shares*	$	152	$	561	$	997		$2,208

**	Based on the conversion of Investor B Shares to Investor A Shares after eight years (applies to shares received in an exchange transaction for Investor B Shares of an equity portfolio of the Company).

***	Based on the conversion of Investor B Shares to Investor A Shares after seven years (applies to shares received in an exchange transaction for Investor B Shares of a bond portfolio of the Company).

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Investor A or B Share Outstanding Throughout Each Period)

Pennsylvania Municipal Money Market Portfolio



	INVESTOR A SHARES															INVESTOR B SHARES
	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98			For the Period 12/12/01 through 4/9/02
Net asset value at beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Income from investment operations
Net investment income		0.0084			0.0252			0.0304			0.0235			0.0276			0.0003

Total from investment operations		0.0084			0.0252			0.0304			0.0235			0.0276			0.0003

Less distributions
Distributions from net investment income		(0.0084	)		(0.0252	)		(0.0304	)		(0.0235	)		(0.0276	)		(0.0003	)

Total distributions		(0.0084	)		(0.0252	)		(0.0304	)		(0.0235	)		(0.0276	)		(0.0003	)

Net asset value at end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Total return		0.84	%		2.54	%		3.08	%		2.37	%		2.80	%		0.05	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	68,204		$	75,332		$	62,421		$	135,341		$	110,860		$	– –	¹
Ratios of expenses to average net assets
After advisory/administration fee waivers		0.88	%		0.89	%		0.92	%		0.88	%		0.85	%		1.49	%²
Before advisory/administration fee waivers		1.16	%		1.16	%		1.18	%		1.16	%		1.17	%		1.76	%²
Ratios of net investment income to average net assets
After advisory/administration fee waivers		0.83	%		2.46	%		3.00	%		2.34	%		2.75	%		0.14	%²
Before advisory/administration fee waivers		0.55	%		2.19	%		2.74	%		2.06	%		2.43	%		(0.13	)%²

¹	There were no Investor B shares outstanding as of September 30, 2002.

²	Annualized.

BlackRock

Virginia Municipal Money Market Portfolio

IMPORTANT DEFINITIONS

General Obligation Bonds: Bonds which are secured by the issuer’s pledge of its full faith, credit and taxing power for the payment of principal and interest.

Liquidity: Liquidity is the ability to easily convert investments into cash without losing a significant amount of money in the process.

Municipal Lease Obligations: These provide participation in municipal lease agreements and installment purchase contracts, but are not part of the general obligations of the municipality.

Municipal Security: A short-term obligation issued by or on behalf of states, possessions and territories of the United States, their political subdivisions and their agencies and authorities.

Net Asset Value (NAV): The value of everything the fund owns, minus every thing it owes, divided by the number of shares held by investors.

Investment Goal

The fund seeks as high a level of current income exempt from Federal income tax and, to the extent possible, Virginia state income tax, as is consistent with maintaining liquidity and stability of principal.

Primary Investment Strategies

In pursuit of this goal, the fund invests primarily in Municipal Securities of issuers located in Virginia.

Specifically, the fund may invest in:

1)	Fixed and variable rate notes and similar debt instruments rated MIG-2, VMIG-2 or Prime-2 or higher by Moody’s, SP-2 or A-2 or higher by Standard & Poor’s or F-2 or higher by Fitch.

2)	Tax-exempt commercial paper and similar debt instruments rated Prime-2 or higher by Moody’s, A-2 or higher by Standard & Poor’s or F-2 or higher by Fitch.

3)	Municipal bonds rated A or higher by Moody’s, Standard & Poor’s or Fitch.

4)	Unrated notes, paper and other instruments that are determined by the fund manager to be of comparable quality to the instruments described above.

The fund seeks to maintain a net asset value of $1.00 per share.

The fund normally invests at least 80% of its net assets in Municipal Securities and other instruments whose interest is exempt from regular Federal income tax and Virginia state income tax. The other 20% of its assets can be invested in securities of non-municipal issuers the income from which the fund manager believes is exempt from regular Federal income tax and/or Virginia state income tax and securities which are subject to regular Federal income tax and Virginia state income tax. Interest income from the fund’s investments may be subject to the Federal Alternative Minimum Tax. The fund may invest in Municipal Securities of issuers located outside of Virginia the interest from which is exempt from regular Federal income tax and Virginia state income tax.

Quality

The fund manager, under guidelines established by the Company’s Board of Trustees, will only purchase securities that have short- term debt ratings at the time of purchase in the two highest rating

IMPORTANT DEFINITIONS

Tax-Exempt Commercial Paper: Short-term Municipal Securities with maturities of 1 to 270 days.

Variable or Floating Rate Securities: Securities whose interest rates adjust automatically after a certain period of time and/or whenever a predetermined standard interest rate changes.

categories from at least two national rating agencies, or one such rating if the security is rated by only one agency. Securities that do not have a short-term rating must be determined by the fund manager to be of comparable quality.

Maturity

Normally, the fund may hold up to 20% of its assets in uninvested cash reserves. Uninvested cash will not earn income. It is possible that in extreme market conditions the fund may invest more than 20% of its assets in securities that are not Municipal Securities (and therefore are subject to regular Federal income tax and Virginia state income tax) and may hold an unlimited amount of uninvested cash reserves. If market conditions improve, these strategies could result in reducing the potential gain from the market upswing, thus reducing the fund’s opportunity to achieve its investment objective.

Key Risks

The value of money market instruments tends to fall when prevailing interest rates rise, when an issuer’s creditworthiness declines or when the rate of inflation increases, although they’re generally less sensitive to such changes than longer-term securities.

The fund concentrates its investments in securities of issuers located in Virginia and is non-diversified under the Investment Company Act. This raises special concerns because performance is more dependent upon the performance of a smaller number of securities and issuers than in a diversified portfolio. The change in value of any one security may affect the overall value of the fund more than it would in a diversified portfolio. In particular, changes in the economic conditions and governmental policies of Virginia and its political subdivisions, including as a result of legislation or litigation changing the taxation of Municipal Securities or the rights of Municipal Security holders in the event of bankruptcy, could hurt the value of the fund’s shares.

The fund will rely on legal opinions of counsel to issuers of Municipal Securities as to the tax-free status of investments and will not do its own analysis.

The fund may purchase variable and floating rate instruments. The absence of an active market for these securities could make it difficult for the fund to dispose of them if the issuer defaults.

Risk / Return Information

The performance for the period before Investor A Shares were launched is based upon performance for Institutional Shares of the fund, which were first issued in July 1994, and Service Shares of the fund, which were first issued in October 1994. Investor A Shares were launched in May 1997. The actual return of Investor A Shares would have been lower than shown for the period before they were launched because Investor A Shares have higher expenses than these older classes. Investor A Shares of the fund are expected to have expenses of .77% of average daily net assets (after waivers and reimbursements) for the current fiscal year. Institutional Shares and Service Shares of the fund have expenses of .30% and .40% of average daily net assets (after waivers and reimbursements), respectively, for the current fiscal year. As of March 12, 2002, there were no Investor A Shares outstanding. For the periods that Investor A Shares were not outstanding, the performance of Investor A Shares is based on the return of Service Shares and adjusted to reflect the expenses of Investor A Shares. The performance of Investor B and C Shares of the fund is not shown because these shares have never been issued. The returns of these shares would be lower than shown for Investor A Shares because Investor B and C Shares have higher expenses than Investor A Shares.

As of 12/31

Investor A Shares

ANNUAL TOTAL RETURNS*

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Distribution Fees: A method of charging distribution-related expenses against fund assets.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS

		1 Year		3 Years		5 Years		Since Inception		Inception Date
VA Municipal MM; Inv A		0.83%		2.13%		2.32%		2.71%		7/25/94

*	The chart and the table both assume reinvestment of dividends and distributions.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Investor A, B and C Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

	A Shares		B Shares		C Shares
Advisory fees	.45	%	.45	%	.45	%
Distribution (12b-1) fees	.10	%	.75	%	.75	%
Other expenses	.77	%	.77	%	.77	%
Service fees	.25%		.25%		.25%
Processing fees	.15%		.15%		.15%
Other	.37%		.37%		.37%
Total annual fund operating expenses	1.32	%	1.97	%	1.97	%
Fee waivers and expense reimbursements*	.55	%	.60	%	.60	%
Net expenses*	.77	%	1.37	%	1.37	%

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual cost may be higher or lower, based on these assumptions your costs would be:

	1 Year		3 Years		5 Years		10 Years
A Shares	$	79	$	364	$	671	$1,542
B Shares*	$	139	$	560	$	1,007	$2,079/$2,000*
C Shares*	$	139	$	560	$	1,007	$2,247

**	Based on the conversion of Investor B Shares to Investor A Shares after eight years (applies to shares received in an exchange transaction for Investor B Shares of an equity portfolio of the Company).

***	Based on the conversion of Investor B Shares to Investor A Shares after seven years (applies to shares received in an exchange transaction for Investor B Shares of a bond portfolio of the Company).

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Investor A Share Outstanding Throughout Each Period)

Virginia Municipal Money Market Portfolio


	INVESTOR A SHARES
	For the Period 10/1/01 through 3/12/02			Year Ended 9/30/01			Year Ended 9/30/00²			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Income from investment operations
Net investment income		0.0051			0.0276			0.0288			0.0237			0.0280

Total from investment operations		0.0051			0.0276			0.0288			0.0237			0.0280

Less distributions
Distributions from net investment income		(0.0051	)		(0.0276	)		(0.0288	)		(0.0237	)		(0.0280	)

Total distributions		(0.0051	)		(0.0276	)		(0.0288	)		(0.0237	)		(0.0280	)

Net asset value at end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Total return		0.51	%		2.80	%		2.92	%		2.40	%		2.84	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	– –	³	$	3,008		$	3,020		$	1,261		$	643
Ratios of expenses to average net assets
After advisory/administration fee waivers		0.77	%¹		0.77	%		0.87	%		0.87	%		0.87	%
Before advisory/administration fee waivers		1.20	%¹		1.20	%		1.31	%		1.32	%		1.34	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		1.21	%¹		2.72	%		3.11	%		2.38	%		2.85	%
Before advisory/administration fee waivers		0.77	%¹		2.28	%		2.67	%		1.93	%		2.38	%

¹	Annualized.

²	This class has closed and reopened during the fiscal year. The financial highlights are reflective of the cumulative periods that the class was opened.

³	There were no Investor A Shares at September 30, 2002.

About Your Investment

Buying Shares from a Registered Investment Professional

BlackRock Funds believes that investors can benefit from the advice and ongoing assistance of a registered investment professional. Your registered representative can help you to buy shares by telephone. Before you place your order make sure that you have read the prospectus and have a discussion with your registered representative about the details of your investment.

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets and are reflected in the fund’s price.

What Price Per Share Will You Pay?

A mutual fund is a pool of investors’ money that is used to purchase a portfolio of securities, which in turn is owned in common by the investors. Investors put money into a mutual fund by buying shares. If a mutual fund has a portfolio worth $5 million dollars and has 5 million shares outstanding, the net asset value (NAV) per share is $1.00. When you buy Investor Shares you pay the NAV/share. Although each fund described in this prospectus seeks to maintain an NAV of $1.00 per share, there is no guarantee it will be able to do so.

The funds’ investments are valued based on the amortized cost method described in the SAI.

PFPC, the Company’s transfer agent, will probably receive your order from your registered representative. However, you can also fill out a purchase application and mail it to the transfer agent with your check. Please call (800) 441-7762 for a purchase application. Purchase orders received by the transfer agent before 12 noon (Eastern time) on each day the New York Stock Exchange (NYSE) and the Federal Reserve Bank of Philadelphia are open will be priced based on the next NAV calculated on that day.

NAV is calculated separately for each class of shares of each fund at 4 p.m. (Eastern time) each day the NYSE and the Federal Reserve Bank of Philadelphia are open. Shares will not be priced on days the NYSE or the Federal Reserve Bank of Philadelphia are closed.

Investor B and C shares are only offered pursuant to the Company’s exchange privilege and cannot be purchased by you directly.

If a shareholder acquiring Investor A shares on or after May 1, 1998 later meets the requirements for purchasing Institutional Shares of a fund (other than due to changes in market value), then the shareholder’s Investor A Shares will automatically be converted to Institutional Shares of the same fund having the same total net asset value as the shares converted.

When Must You Pay?

Payment for an order must be made by your registered representative in Federal funds or other immediately available funds by 4 p.m. (Eastern time) on the business day following PFPC’s receipt of the order. If payment is not received by this time, the order will be canceled and you and your registered representative will be responsible for any loss to a fund. For shares purchased directly from the transfer agent, a check payable to BlackRock Funds and bearing the name of the fund you are buying must accompany a completed purchase application. The Company does not accept third party checks. You may also wire Federal funds to the transfer agent to purchase shares, but you must call PFPC at (800) 441-7762 before doing so to confirm the wiring instructions.

How Much is the Minimum Investment?

The minimum investment for the initial purchase of Investor Shares is $500. There is a $50 minimum for all later investments. The Company permits a lower initial investment if you are an employee of the Company or one of its service providers or if you participate in the Automatic Investment Plan in which you make regular, periodic investments through a savings or checking account. Your investment professional can advise you on how to begin an Automatic Investment Plan. The Company may reject any purchase order, modify or waive the minimum investment requirements and suspend and resume the sale of any share class of the Company at any time.

Distribution and Service Plan

In return for the fee, Service Organizations may provide one or more of the following services to their customers who own Investor Shares:

(1)

Responding to customer questions on the services performed by the Service Organization and investments in Investor Shares;

(2)

Assisting customers in choosing and changing dividend options, account designations and addresses; and

(3)

Providing other similar shareholder liaison services.

(1)

Processing purchase and redemption requests from customers and placing orders with the Company’s transfer agent or the Distributor;

(2)

Processing dividend payments from the Company on behalf of customers;

(3)

Providing sub-accounting for Investor Shares beneficially owned by customers or the information necessary for sub-accounting; and

(4)

Providing other similar services.

BlackRock may receive a significant portion of these shareholder processing fees.

How to Sell Shares

You can redeem shares at any time (although certain verification may be required for redemptions in excess of $25,000 or in certain other cases). The Company will redeem your shares at the next net asset value (NAV) calculated after your order is received by the fund’s transfer agent minus any applicable contingent deferred sales charge (CDSC). Except when CDSCs are applied, BlackRock Funds will not charge for redemptions. Shares may be redeemed by sending a properly signed written redemption request to BlackRock Funds c/o PFPC, P.O. Box 9819, Providence, RI 02940-8019.

You can also make redemption requests through your registered investment professional, who may charge for this service.

Shareholders should indicate whether they are redeeming Investor A, Investor B or Investor C Shares. If a shareholder owns more than one class of a fund and does not indicate which class he or she is redeeming, the fund will redeem shares so as to minimize the CDSC charged.

Upon request, the Company will provide the holders of Investor A Shares with checkwriting privileges. An investor who wants to use this checkwriting redemption procedure must complete the checkwriting application and signature card when completing the account application. Investors interested in obtaining the checkwriting option on existing accounts may contact PFPC at (800) 441-7762. The checkwriting option is not available in connection with the redemption of Investor B or Investor C Shares.

Expedited Redemptions

The Company's Rights

The Company may:

Suspend the right of redemption if trading is halted or restricted on the NYSE or under other emergency conditions described in the Investment Company Act of 1940,

Redeem shares involuntarily in certain cases, such as when the value of a shareholder account falls below a specified level, as described below, and

Redeem shares for property other than cash if conditions exist which make cash payments undesirable in accordance with its rights under the Investment Company Act of 1940.

Accounts with Low Balances

Market Timing

IMPORTANT DEFINITIONS

Adviser: The adviser of a mutual fund is responsible for the overall investment management of the fund. The adviser for BlackRock Funds is BlackRock Advisors, Inc.

Sub-Adviser: The sub-adviser of a fund is responsible for its day-to-day management and will generally make all buy and sell decisions. Sub-advisers also provide research and credit analysis. The sub-adviser for all the funds is BlackRock Institutional Management Corporation.

BlackRock Funds’ Adviser is BlackRock Advisors, Inc. (BlackRock). BlackRock was organized in 1994 to perform advisory services for investment companies and is located at 100 Bellevue Parkway, Wilmington, DE 19809. BlackRock is a wholly-owned subsidiary of BlackRock, Inc., one of the largest publicly traded investment management firms in the United States with $273 billion of assets under management as of December 31, 2002. BlackRock, Inc. is a majority-owned indirect subsidiary of The PNC Financial Services Group, Inc., one of the largest diversified financial services companies in the United States. BlackRock Institutional Management Corporation (BIMC), an affiliate of BlackRock located at 100 Bellevue Parkway, Wilmington, DE 19809, acts as sub-adviser to the Company.

For their investment advisory and sub-advisory services, BlackRock and BIMC are entitled to fees computed daily on a fund-by-fund basis and payable monthly. For the fiscal year ended September 30, 2002, the aggregate advisory fees paid by the funds to BlackRock as a percentage of average daily net assets were:

Money Market		0.20%
U.S. Treasury Money Market		0.17%
Municipal Money Market		0.17%
New Jersey Municipal Money Market		0.13%
North Carolina Municipal Money Market		0.03%
Ohio Municipal Money Market		0.12%
Pennsylvania Municipal Money Market		0.17%
Virginia Municipal Money Market		0.00%

The maximum annual advisory fees that can be paid to BlackRock on behalf of each fund (as a percentage of average daily net assets) are as follows:

AVERAGE DAILY NET ASSETS		INVESTMENT ADVISORY FEE
First $1 billion		.450%
$1 billion-$2 billion		.400%
$2 billion-$3 billion		.375%
more than $3 billion		.350%

As discussed above, BlackRock and the Distributor have agreed to cap each fund’s net expenses at the levels shown in that fund’s expense table.

To achieve this cap, BlackRock and the Company have entered into an expense limitation agreement. The agreement sets a limit on certain of the operating expenses of each fund through February 1, 2004 and requires BlackRock to waive or reimburse fees or expenses if these operating expenses exceed that limit. These expense limits (which apply to expenses charged on fund assets as a whole, but not expenses separately charged to the different share classes of a fund) as a percentage of average daily net assets are:

Money Market		.310%
U.S. Treasury Money Market		.295%
Municipal Money Market		.295%
New Jersey Municipal Money Market		.265%
North Carolina Municipal Money Market		.195%
Ohio Municipal Money Market		.265%
Pennsylvania Municipal Money Market		.295%
Virginia Municipal Money Market		.205%

If within two years following a waiver or reimbursement, the operating expenses of a fund that previously received a waiver or reimbursement from BlackRock are less than the expense limit for that fund, the fund is required to repay BlackRock up to the amount of fees waived or expenses reimbursed under the agreement if: (1) the fund has more than $50 million in assets, (2) BlackRock continues to be the fund’s investment adviser and (3) the Board of Trustees of the Company has approved in advance the payments to BlackRock at the previous quarterly meeting of the Board.

In addition, through February 1, 2004, BlackRock and the Distributor have contractually agreed to waive distribution and service fees for the funds as follows:

Money Market, U.S. Treasury Money Market and Municipal Money Market Portfolios—.10% of average daily net assets with respect to Investor A shares and .15% of average daily net assets with respect to Investor B and Investor C Shares.

New Jersey Municipal Money Market, North Carolina Municipal Money Market, Ohio Municipal Money Market, Pennsylvania Municipal Money Market and Virginia Municipal Money Market Portfolios—.15% of average daily net assets with respect to Investor B and Investor C Shares.

Dividends and Distributions

BlackRock Funds makes two kinds of distributions to shareholders: dividends and net capital gain.

Dividends are paid out of the net investment income derived by a fund and are declared daily and paid monthly within five business days after the end of the month. The Company’s Board of Trustees may change the timing of dividend payments. Shareholders whose purchase orders are executed at 12 noon (Eastern time) (4 p.m. (Eastern time) for the U.S. Treasury Money Market Portfolio) receive dividends for that day. Shareholders whose redemption orders have been received by 12 noon (Eastern time) do not receive dividends for that day.

Net capital gain occurs when the fund manager sells securities held for more than one year at a profit. Net capital gain (if any) is distributed to shareholders at least annually at a date determined by the Company’s Board of Trustees.

Taxation of Distributions

Distributions paid out of a fund’s “net capital gain” will be taxed to shareholders as long-term capital gain, regardless of how long a shareholder has owned shares. Distributions of net investment income, other than exempt-interest dividends, and net short-term capital gains will be taxed to shareholders as ordinary income.

Each of the Municipal Money Market, Pennsylvania Municipal Money Market, New Jersey Municipal Money Market, Ohio Municipal Money Market, North Carolina Municipal Money Market and Virginia Municipal Money Market Portfolios intends to pay most of its dividends as exempt-interest dividends, which means such dividends are exempt from regular Federal income tax (but may be subject to the Federal Alternative Minimum Tax). The state or municipality where you live may not charge you state and local taxes on dividends paid with respect to interest on obligations of such state or municipality. Otherwise, these dividends will generally be subject to state and local taxes.

Dividends paid with respect to interest on securities issued by the U.S. Government and its agencies may also be exempt from some types of state and local taxes.

Your annual tax statement from the Company will present in detail the tax status of your distributions for each year.

Because every investor has an individual tax situation, and also because the tax laws are subject to periodic changes, you should always consult your tax professional about Federal, state and local tax consequences of owning shares of the Company.

Services for Shareholders

BlackRock Funds offers shareholders many special features which can enable investors to have greater investment flexibility as well as more access to information about the Company.

Additional information about these features is available by calling PFPC at (800) 441-7762.

Exchange Privilege

BlackRock Funds offers 43 different funds, enough to meet virtually any investment need. Once you are a shareholder, you have the right to exchange Investor A, B, or C Shares from one fund to Investor A, B, or C Shares of another to meet your changing financial needs. For example, if you own Investor A Shares of a fund that has an investment objective of long term capital growth and you are nearing retirement, you may want to switch into Investor A Shares of another fund that has current income as an investment objective.

You can exchange $500 (or any other applicable minimum) or more from one BlackRock Fund into another. Investor A, Investor B, and Investor C Shares of each fund may be exchanged for shares of the same class of other funds which offer that class of shares, based on their respective net asset values. (You can exchange less than $500 if you already have an account in the fund into which you are exchanging.) The Company’s equity and bond funds have sales charges. Therefore the exchange of Investor A Shares may be subject to that sales charge. Investor A Shares of a money market fund that were obtained with the exchange privilege and that originally were shares of an equity or bond fund (and therefore subject to a sales charge) can be exchanged for Investor A Shares of an equity or bond fund based on their respective net asset values. Such exchanges may be subject to the difference between the sales charge originally paid and the sales charge (if any) payable on the newly acquired shares. Exchanges of shares of a money market fund for Investor B or C Shares of an equity or bond fund will be subject to a contingent deferred sales charge upon the sale of these B or C Shares. For Federal income tax purposes a share exchange is a taxable event and a capital gain or loss may be realized. Please consult your tax or other financial adviser before making an exchange request.

To make an exchange, you must send a written request to PFPC at P.O. Box 9819, Providence, RI 02940-8019. You can also make exchanges via telephone automatically, unless you previously indicated that you did not want this option. If so, you may not use telephone exchange privileges until completing a Telephone Exchange Authorization Form. To receive a copy of the form contact PFPC. The Company has the right to reject any telephone request.

The Company reserves the right to modify, limit the use of, or terminate the exchange privilege at any time.

Automatic Investment Plan (AIP)

Retirement Plans

Shares may be purchased in conjunction with individual retirement accounts (IRAs) and rollover IRAs where PNC Bank or any of its affiliates acts as custodian. For more information about applications or annual fees, please contact the Fund Agent, PFPC Inc., at P.O. Box 9819, Providence, RI 02940-8019 or call 1-800-441-7762. To determine if you are eligible for an IRA and whether an IRA will benefit you, you should consult with a tax adviser.

Statements

Systematic Withdrawal Plan (SWP)

This feature can be used by investors who want to receive regular distributions from their accounts. To start a SWP a shareholder must have a current investment of $10,000 or more in a fund. Shareholders can elect to receive cash payments of $50 or more monthly, every other month, quarterly, semi-annually or annually. Shareholders may sign up by completing the SWP Application Form which may be obtained from PFPC. Shareholders should realize that if withdrawals exceed income, the invested principal in their account will be depleted.

To participate in the SWP, shareholders must have their dividends automatically reinvested and may not hold share certificates. Shareholders may change or cancel the SWP at any time, upon written notice to PFPC. If an investor purchases additional Investor A Shares of a fund at the same time he or she redeems shares through the SWP, that investor may lose money because of the sales charge involved. No CDSC will be assessed on redemptions of Investor B or Investor C Shares made through the SWP that do not exceed 12% of the account’s net asset value on an annualized basis. For example, monthly, quarterly and semi-annual SWP redemptions of Investor B or Investor C Shares will not be subject to the CDSC if they do not exceed 1%, 3% and 6%, respectively, of an account’s net asset value on the redemption date. SWP redemptions of Investor B or Investor C Shares in excess of this limit will still pay the applicable CDSC.

Important Notice Regarding Delivery of Shareholder Documents

The funds deliver only one copy of shareholder documents, including prospectuses, shareholder reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is known as “householding” and is intended to eliminate duplicate mailings and reduce expenses. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact the Company at (800) 441-7762.

Internet Transactions

The total purchase amount will be debited directly from your bank account via the Automated Clearing House (ACH) system. Purchases made on the Internet using the ACH system will have a trade date that is the day after the purchase is made. Proceeds from Internet redemptions may be sent via check, ACH or wire to the bank account of record. The Company will limit Internet purchases and redemptions in Investor Class shares to $25,000.00. Applications may be down loaded from www.blackrock.com. Please read the Internet Services Disclosure Agreement and the User Agreement before attempting to transact online.

The Company employs reasonable procedures to confirm that transactions entered over the Internet are genuine. The procedures include the use of a protected password, Secure Socket Layering (SSL), 128-bit encryption and other precautions designed to protect the integrity, confidentiality and security of shareholder information. By entering into the User Agreement with the Company in order to open an account through the website, the shareholder waives any right to reclaim any losses from the Company, or any of its affiliates, incurred through fraudulent activity.

Electronic Access to Shareholder Documents

To enroll:

Shareholders Who Hold Accounts With Investment Advisers, Banks or Brokerages:

1) Have your enrollment number ready. If you do not have one, please contact your financial adviser.

2) Log on to www.investordelivery.com.

Shareholders Who Hold Accounts Directly With the Fund:

1) Log on to http://funds.blackrock.com.

2) Click on Electronic Delivery icon on either side of your screen.

3) Complete the on-line form by entering your social security number, e-mail address and by selecting your electronic delivery preference.

For more information:

Annual/Semi-Annual Reports

Statement of Additional Information (SAI)

Shareholder Account Service Representatives

Representatives are available to discuss account balance information, mutual fund prospectuses, literature, programs and services available. Hours: 8 a.m. to 6 p.m. (Eastern time), Monday-Friday. Call: (800) 441-7762.

Purchases and Redemptions

Call your registered representative or (800) 441-7762.

World Wide Web

Access general fund information and specific fund

performance. Request mutual fund prospectuses and literature. Forward mutual fund inquiries. www.blackrock.com

Email

Request prospectuses, SAI, Annual or Semi-Annual

Reports and literature. Forward mutual fund inquiries.

Mail to: funds@blackrock.com

Written Correspondence

Post Office Address: BlackRock Funds, c/o PFPC Inc.

P.O. Box 9819, Providence, RI 02940-8019

Street Address: BlackRock Funds, c/o PFPC Inc.

400 Bellevue Parkway, Wilmington, DE 19809

Internal Wholesalers/Broker Dealer Support

Available to support investment professionals

9 a.m. to 6 p.m. (Eastern time), Monday-Friday.

Call: (888) 8BLACKROCK

Securities and Exchange Commission (SEC)

INVESTMENT COMPANY ACT FILE NO. 811-05742

MMINVAPROS2/03

World class institutional asset management at a personal level

BlackRock Funds

Money Market

Portfolios

Service Shares

Prospectus

January 28, 2003

BlackRock Funds^SMis a mutual

fund family with 43 investment

portfolios, 8 of which are

described in this prospectus.

NOT FDIC		May Lose Value
INSURED		No Bank Guarantee

The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.

Table of Contents


*How to find the information you need* *How to find the information you need*		1

THE BLACKROCK MONEY MARKET PORTFOLIOS

*Money Market*		2

*U.S. Treasury Money Market*		7

*Municipal Money Market*		11

*New Jersey Municipal Money Market*		17

*North Carolina Municipal Money Market*		23

*Ohio Municipal Money Market*		29

*Pennsylvania Municipal Money Market*		35

*Virginia Municipal Money Market*		41

*About Your Investment* *How to Buy/Sell Shares*		47

*Dividends/Distributions/Taxes*		55

How to Find the

Information You Need

About BlackRock Funds

BlackRock

Money Market Portfolio

IMPORTANT DEFINITIONS

Asset-Backed Securities: Debt securities that are backed by a pool of assets, usually loans such as installment sale contracts or credit card receivables.

Commercial Paper: Short-term securities with maturities of 1 to 270 days which are issued by banks, corporations and others.

Liquidity: Liquidity is the ability to easily convert investments into cash without losing a significant amount of money in the process.

Net Asset Value (NAV): The value of everything the fund owns, minus everything it owes, divided by the number of shares held by investors.

Variable or Floating Rate Securities: Securities whose interest rates adjust automatically after a certain period of time and/or whenever a predetermined standard interest rate changes.

Investment Goal

The fund seeks as high a level of current income as is consistent with maintaining liquidity and stability of principal.

Primary Investment Strategies

In pursuit of this goal, the fund invests in a broad range of short term, high quality, U.S. dollar-denominated instruments, including government, bank, commercial and other obligations.

Specifically, the fund may invest in:

1)	U.S. dollar-denominated obligations issued or supported by the credit of U.S. or foreign banks or savings institutions with total assets of more than $1 billion (including obligations of foreign branches of such banks).

3)	Unrated notes, paper and other instruments that are determined by the fund manager to be of comparable quality to the instruments described above.

4)	Asset-backed securities (including interests in pools of assets such as mortgages, installment purchase obligations and credit card receivables).

5)	Securities issued or guaranteed by the U.S. Government or by its agencies or authorities.

6)	Dollar-denominated securities issued or guaranteed by foreign governments or their political subdivisions, agencies or authorities.

7)	Repurchase agreements relating to the above instruments.

The fund seeks to maintain a net asset value of $1.00 per share.

Quality

Maturity

Normally, the fund may hold up to 20% of its assets in uninvested cash reserves. Uninvested cash will not earn income.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

Treasury obligations differ only in their interest rates, maturities and time of issuance. Obligations of U.S. Government agencies

and authorities are supported by varying degrees of credit. No assurance can be given that the U.S. Government will provide financial support to its agencies and authorities if it is not obligated by law to do so.

The fund could lose money if a seller under a repurchase agreement defaults or declares bankruptcy.

The fund may purchase variable and floating rate instruments. The absence of an active market for these securities could make it difficult for the fund to dispose of them if the issuer defaults.

Risk / Return Information

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	10 Years	Inception Date
Money Market
Return Before Taxes	1.32%	3.64%	4.12%	4.30%	10/04/89

*	The chart and the table both assume reinvestment of dividends and distributions.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Service Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees			.39	%
Other expenses			.52	%
Service fees	.15	%
Processing fees	.15	%
Other	.22	%
Total annual fund operating expenses			.91	%
Fee waivers and expense reimbursements*			.19	%
Net expenses*			.72	%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to .72% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 53 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual cost may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Service Shares		$74		$271		$485		$1,102

Financial Highlights

FINANCIAL HIGHLIGHTS

(For a Service Share Outstanding Throughout Each Period)

Money Market Portfolio



	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Income from investment operations
Net investment income		0.0156			0.0466			0.0552			0.0448			0.0502

Total from investment operations		0.0156			0.0466			0.0552			0.0448			0.0502

Less distributions
Distributions from net investment income		(0.0156	)		(0.0466	)		(0.0552	)		(0.0448	)		(0.0502	)

Total distributions		(0.0156	)		(0.0466	)		(0.0552	)		(0.0448	)		(0.0502	)

Net asset value at end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Total return		1.57	%		4.77	%		5.66	%		4.58	%		5.14	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	567,574		$	853,306		$	629,769		$	748,191		$	808,962
Ratios of expenses to average net assets
After advisory/administration fee waivers		0.72	%		0.72	%		0.72	%		0.72	%		0.69	%
Before advisory/administration fee waivers		0.91	%		0.90	%		0.90	%		0.91	%		0.93	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		1.60	%		4.66	%		5.49	%		4.48	%		5.03	%
Before advisory/administration fee waivers		1.41	%		4.49	%		5.31	%		4.29	%		4.79	%

BlackRock

U.S. Treasury Money Market Portfolio

IMPORTANT DEFINITIONS

Liquidity: Liquidity is the ability to easily convert investments into cash without losing a significant amount of money in the process.

Net Asset Value (NAV): The value of everything the fund owns, minus everything it owes, divided by the number of shares held by investors.

Variable or Floating Rate Securities: Securities whose interest rates adjust automatically after a certain period of time and/or whenever a predetermined standard interest rate changes.

Investment Goal

The fund seeks as high a level of current income as is consistent with maintaining liquidity and stability of principal.

Primary Investment Strategies

In pursuit of this goal, the fund invests exclusively in short-term bills, notes and other obligations issued or guaranteed by the U.S. Treasury and related repurchase agreements.

The fund seeks to maintain a net asset value of $1.00 per share.

Quality

Maturity

Normally, the fund may hold up to 20% of its assets in uninvested cash reserves. Uninvested cash will not earn income.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

Treasury obligations differ only in their interest rates, maturities and time of issuance.

The fund could lose money if a seller under a repurchase agreement defaults or declares bankruptcy.

The fund may purchase variable and floating rate instruments. The absence of an active market for these securities could make it difficult for the fund to dispose of them if the issuer defaults.

Risk / Return Information

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	10 Years	Inception Date
US Treasury MM
Return Before Taxes	1.16%	3.35%	3.85%	4.12%	11/01/89

*	The chart and the table both assume reinvestment of dividends and distributions.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Service Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees			.45	%
Other expenses			.54	%
Service fees	.15	%
Processing fees	.15	%
Other	.24	%
Total annual fund operating expenses			.99	%
Fee waivers and expense reimbursements*			.28	%
Net expenses*			.71	%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to .71% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 53 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual cost may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Service Shares		$73		$287		$520		$1,188

Financial Highlights

FINANCIAL HIGHLIGHTS

(For a Service Share Outstanding Throughout Each Period)

U.S. Treasury Money Market Portfolio



	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Income from investment operations
Net investment income		0.0136			0.0435			0.0513			0.0423			0.0489

Total from investment operations		0.0136			0.0435			0.0513			0.0423			0.0489

Less distributions
Distributions from net investment income		(0.0136	)		(0.0435	)		(0.0513	)		(0.0423	)		(0.0489	)

Total distributions		(0.0136	)		(0.0435	)		(0.0513	)		(0.0423	)		(0.0489	)

Net asset value at end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Total return		1.37	%		4.43	%		5.25	%		4.31	%		5.00	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	265,841		$	398,130		$	412,321		$	524,122		$	596,644
Ratios of expenses to average net assets
After advisory/administration fee waivers		0.71	%		0.71	%		0.71	%		0.71	%		0.68	%
Before advisory/administration fee waivers		0.98	%		0.98	%		0.98	%		0.98	%		0.99	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		1.39	%		4.39	%		5.10	%		4.23	%		4.90	%
Before advisory/administration fee waivers		1.11	%		4.12	%		4.83	%		3.96	%		4.59	%

BlackRock

Municipal Money Market Portfolio

IMPORTANT DEFINITIONS

Dollar-Weighted Average Maturity: The average maturity of the fund is the average amount of time until the organizations that issued the debt securities in the fund’s portfolio must pay off the principal amount of the debt. “Dollar-weighted” means the larger the dollar value of debt security in the Fund, the more weight it gets in calculating this average.

General Obligation Bonds: Bonds which are secured by the issuer’s pledge of its full faith, credit and taxing power for the payment of principal and interest.

Liquidity: Liquidity is the ability to easily convert investments into cash without losing a significant amount of money in the process.

Municipal Lease Obligations: These provide participation in municipal lease agreements and installment purchase contracts, but are not part of the general obligations of the municipality.

Municipal Security: A short-term obligation issued by or on behalf of states, possessions and territories of the United States, their political subdivisions and their agencies or authorities.

Net Asset Value (NAV): The value of everything the fund owns, minus everything it owes, divided by the number of shares held by investors.

Investment Goal

The fund seeks as high a level of current income exempt from Federal income tax as is consistent with maintaining liquidity and stability of principal.

Primary Investment Strategies

In pursuit of this goal, the fund invests primarily in Municipal Securities.

Specifically, the fund may invest in:

1)	Fixed and variable rate notes and similar debt instruments rated MIG-2, VMIG-2 or Prime-2 or higher by Moody’s, SP-2 or A-2 or higher by Standard & Poor’s or F-2 or higher by Fitch.

2)	Tax-exempt commercial paper and similar debt instruments rated Prime-2 or higher by Moody’s, A-2 or higher by Standard & Poor’s or F-2 or higher by Fitch.

3)	Municipal bonds rated A or higher by Moody’s, Standard & Poor’s or Fitch.

4)	Unrated notes, paper and other instruments that are determined by the fund manager to be of comparable quality to the instruments described above.

The fund seeks to maintain a net asset value of $1.00 per share.

The fund intends to invest so that less than 25% of its total assets are Municipal Securities of issuers located in the same state.

IMPORTANT DEFINITIONS

Tax-Exempt Commercial Paper: Short-term Municipal Securities with maturities of 1 to 270 days.

Variable or Floating Rate Securities: Securities whose interest rates adjust automatically after a certain period of time and/or whenever a predetermined standard interest rate changes.

Quality

Maturity

Key Risks

The fund will rely on legal opinions of counsel to issuers of Municipal Securities as to the tax-free status of investments and will not do its own analysis.

The fund may purchase variable and floating rate instruments. The absence of an active market for these securities could make it difficult for the fund to dispose of them if the issuer defaults.

Risk / Return Information

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	10 Years	Inception Date
Municipal MM
Return Before Taxes	0.98%	2.26%	2.45%	2.64%	11/01/89

*	The chart and the table both assume reinvestment of dividends and distributions.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

The table below describes the fees and expenses that you may pay if you buy and hold Service Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees			.45	%
Other expenses			.55	%
Service fees	.15	%
Processing fees	.15	%
Other	.25	%
Total annual fund operating expenses			1.00	%
Fee waivers and expense reimbursements*			.28	%
Net expenses*			.72	%

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual cost may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Service Shares		$74		$291		$525		$1,199

Financial Highlights

FINANCIAL HIGHLIGHTS

(For a Service Share Outstanding Throughout Each Period)

Municipal Money Market Portfolio



	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Income from investment operations
Net investment income		0.0112			0.0285			0.0326			0.0252			0.0297

Total from investment operations		0.0112			0.0285			0.0326			0.0252			0.0297

Less distributions
Distributions from net investment income		(0.0112	)		(0.0285	)		(0.0326	)		(0.0252	)		(0.0297	)

Total distributions		(0.0112	)		(0.0285	)		(0.0326	)		(0.0252	)		(0.0297	)

Net asset value at end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Total return		1.12	%		2.88	%		3.31	%		2.54	%		3.01	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	104,474		$	138,402		$	112,807		$	151,261		$	140,155
Ratios of expenses to average net assets
After advisory/administration fee waivers		0.72	%		0.72	%		0.72	%		0.72	%		0.69	%
Before advisory/administration fee waivers		1.00	%		0.99	%		1.00	%		1.00	%		1.01	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		1.13	%		2.82	%		3.23	%		2.50	%		2.96	%
Before advisory/administration fee waivers		0.85	%		2.54	%		2.95	%		2.22	%		2.64	%

BlackRock

New Jersey Municipal Money Market Portfolio

IMPORTANT DEFINITIONS

General Obligation Bonds: Bonds which are secured by the issuer’s pledge of its full faith, credit and taxing power for the payment of principal and interest.

Liquidity: Liquidity is the ability to easily convert investments into cash without losing a significant amount of money in the process.

Municipal Lease Obligations: These provide participation in municipal lease agreements and installment purchase contracts, but are not part of the general obligations of the municipality.

Municipal Security: A short-term obligation issued by or on behalf of states,possessions and territories of the United States, their political subdivisions and their agencies and authorities.

Net Asset Value (NAV): The value of everything the fund owns, minus everything it owes, divided by the number of shares held by investors.

Investment Goal

Primary Investment Strategies

In pursuit of this goal, the fund invests primarily in Municipal Securities of issuers located in New Jersey.

Specifically, the fund may invest in:

1)	Fixed and variable rate notes and similar debt instruments rated MIG-2, VMIG-2 or Prime-2 or higher by Moody’s, SP-2 or A-2 or higher by Standard & Poor’s or F-2 or higher by Fitch.

2)	Tax-exempt commercial paper and similar debt instruments rated Prime-2 or higher by Moody’s, A-2 or higher by Standard & Poor’s or F-2 or higher by Fitch.

3)	Municipal bonds rated A or higher by Moody’s, Standard & Poor’s or Fitch.

4)	Unrated notes, paper and other instruments that are determined by the fund manager to be of comparable quality to the instruments described above.

The fund seeks to maintain a net asset value of $1.00 per share.

IMPORTANT DEFINITIONS

Tax-Exempt Commercial Paper: Short-term Municipal Securities with maturities of 1 to 270 days.

Variable or Floating Rate Securities: Securities whose interest rates adjust automatically after a certain period of time and/or whenever a predetermined standard interest rate changes.

Quality

Maturity

Normally, the fund may hold up to 20% of its assets in uninvested cash reserves. Uninvested cash will not earn income. It is possible that in extreme market conditions the fund may invest more than 20% of its assets in securities that are not Municipal Securities (and therefore are subject to regular Federal income tax and New Jersey state income tax) and may hold an unlimited amount of uninvested cash reserves. If market conditions improve, these strategies could result in reducing the potential gain from the market upswing, thus reducing the fund’s opportunity to achieve its investment objective.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made. The fund may not change the requirement that it normally invest at least 80% of its assets in Municipal Securities and other instruments whose interest is exempt from regular Federal income tax and New Jersey state income tax without shareholder approval.

Key Risks

The fund concentrates its investments in securities of issuers located in New Jersey and is non-diversified under the Investment

Company Act. This raises special concerns because performance is more dependent upon the performance of a smaller number of securities and issuers than in a diversified portfolio. The change in value of any one security may affect the overall value of the fund more than it would in a diversified portfolio. In particular, changes in the economic conditions and governmental policies of New Jersey and its political subdivisions, including as a result of legislation or litigation changing the taxation of Municipal Securities or the rights of Municipal Security holders in the event of bankruptcy, could hurt the value of the fund’s shares.

The fund will rely on legal opinions of counsel to issuers of Municipal Securities as to the tax-free status of investments and will not do its own analysis.

The fund may purchase variable and floating rate instruments. The absence of an active market for these securities could make it difficult for the fund to dispose of them if the issuer defaults.

Risk / Return Information

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	10 Years	Inception Date
New Jersey Municipal MM
Return Before Taxes	0.91%	2.17%	2.38%	2.51%	07/01/91

*	The chart and the table both assume reinvestment of dividends and distributions.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Service Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees			.45	%
Other expenses			.56	%
Service fees	.15	%
Processing fees	.15	%
Other	.26	%
Total annual fund operating expenses			1.01	%
Fee waivers and expense reimbursements*			.32	%
Net expenses*			.69	%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to .69% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 53 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual cost may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Service Shares		$70		$290		$527		$1,207

Financial Highlights

The financial information in the table below shows the fund’s financial performance for the periods indicated^†. Certain information reflects results for a single fund share. The term “Total Return” indicates how much your investment would have increased or decreased during this period of time and assumes that you have reinvested all dividends and distributions. These figures have been audited by PricewaterhouseCoopers LLP, the fund’s independent accountants. The auditor’s report, along with the fund’s financial statements, are included in the Company’s annual report, which is available upon request (see back cover for ordering instructions).

FINANCIAL HIGHLIGHTS

(For a Service Share Outstanding Throughout Each Period)

New Jersey Municipal

Money Market Portfolio†



	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Income from investment operations
Net investment income		0.0104			0.0275			0.0317			0.0249			0.0289

Total from investment operations		0.0104			0.0275			0.0317			0.0249			0.0289

Less distributions
Distributions from net investment income		(0.0104	)		(0.0275	)		(0.0317	)		(0.0249	)		(0.0289	)

Total distributions		(0.0104	)		(0.0275	)		(0.0317	)		(0.0249	)		(0.0289	)

Net asset value at end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Total return		1.04	%		2.79	%		3.21	%		2.52	%		2.93	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	65,074		$	60,296		$	55,177		$	37,120		$	35,152
Ratios of expenses to average net assets
After advisory/administration fee waivers		0.69	%		0.69	%		0.69	%		0.69	%		0.67	%
Before advisory/administration fee waivers		1.01	%		1.00	%		1.00	%		1.01	%		1.04	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		1.04	%		2.75	%		3.23	%		2.49	%		2.89	%
Before advisory/administration fee waivers		0.71	%		2.44	%		2.92	%		2.17	%		2.52	%

†

BlackRock

North Carolina Municipal Money Market Portfolio

IMPORTANT DEFINITIONS

General Obligation Bonds: Bonds which are secured by the issuer’s pledge of its full faith, credit and taxing power for the payment of principal and interest.

Liquidity: Liquidity is the ability to easily convert investments into cash without losing a significant amount of money in the process.

Municipal Lease Obligations: These provide participation in municipal lease agreements and installment purchase contracts, but are not part of the general obligations of the municipality.

Municipal Security: A short-term obligation issued by or on behalf of states,possessions and territories of the United States, their political subdivisions and their agencies and authorities.

Net Asset Value (NAV): The value of everything the fund owns, minus everything it owes, divided by the number of shares held by investors.

collateral.

Tax-Exempt Commercial Paper: Short-term Municipal Securities with maturities of 1 to 270 days.

Variable or Floating Rate Securities: Securities whose interest rates adjust automatically after a certain period of time and/or whenever a predetermined standard interest rate changes.

Investment Goal

Primary Investment Strategies

In pursuit of this goal, the fund invests primarily in Municipal Securities of issuers located in North Carolina.

Specifically, the fund may invest in:

1)	Fixed and variable rate notes and similar debt instruments rated MIG-2, VMIG-2 or Prime-2 or higher by Moody’s, SP-2 or A-2 or higher by Standard & Poor’s or F-2 or higher by Fitch.

2)	Tax-exempt commercial paper and similar debt instruments rated Prime-2 or higher by Moody’s, A-2 or higher by Standard & Poor’s or F-2 or higher by Fitch.

3)	Municipal bonds rated A or higher by Moody’s, Standard & Poor’s or Fitch.

4)	Unrated notes, paper and other instruments that are determined by the fund manager to be of comparable quality to the instruments described above.

The fund seeks to maintain a net asset value of $1.00 per share.

Quality

not have a short-term rating must be determined by the fund manager to be of comparable quality.

Maturity

Normally, the fund may hold up to 20% of its assets in uninvested cash reserves. Uninvested cash will not earn income. It is possible that in extreme market conditions the fund may invest more than 20% of its assets in securities that are not Municipal Securities (and therefore are subject to regular Federal income tax and North Carolina state income tax) and may hold an unlimited amount of uninvested cash reserves. If market conditions improve, these strategies could result in reducing the potential gain from the market upswing, thus reducing the fund’s opportunity to achieve its investment objective.

Key Risks

In particular, changes in the economic conditions and governmental policies of North Carolina and its political subdivisions, including as a result of legislation or litigation changing the taxation of Municipal Securities or the rights of Municipal Security holders in the event of bankruptcy, could hurt the value of the fund’s shares.

The fund will rely on legal opinions of counsel to issuers of Municipal Securities as to the tax-free status of investments and will not do its own analysis.

The fund may purchase variable and floating rate instruments. The absence of an active market for these securities could make it difficult for the fund to dispose of them if the issuer defaults.

Risk / Return Information

The performance for the period before Service Shares were launched in April 1994 is based upon performance for Institutional Shares of the fund, which were first issued in May 1993. The actual return of Service Shares would have been lower than shown for the period before they were launched because Service Shares have higher expenses than Institutional Shares. Service Shares of the fund have expenses of .60% of average daily net assets (after waivers and reimbursements) for the current fiscal year and Institutional Shares of the fund have expenses of .30% of average daily net assets (after waivers and reimbursements) for the current fiscal year.

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	Since Inception	Inception Date
North Carolina Municipal MM
Return Before Taxes	0.94%	2.26%	2.48%	2.67%	05/03/93

*	The chart and the table both assume reinvestment of dividends and distributions.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Service Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees			.45	%
Other expenses			.57	%
Service fees	.15	%
Processing fees	.15	%
Other	.27	%
Total annual fund operating expenses			1.02	%
Fee waivers and expense reimbursements*			.42	%
Net expenses*			.60	%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to .60% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 53 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual cost may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Service Shares		$61		$283		$522		$1,210

Financial Highlights

FINANCIAL HIGHLIGHTS

(For a Service Share Outstanding Throughout Each Period)

North Carolina Municipal

Money Market Portfolio



	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Income from investment operations
Net investment income		0.0104			0.0283			0.0332			0.0258			0.0305

Total from investment operations		0.0104			0.0283			0.0332			0.0258			0.0305

Less distributions
Distributions from net investment income		(0.0104	)		(0.0283	)		(0.0332	)		(0.0258	)		(0.0305	)

Total distributions		(0.0104	)		(0.0283	)		(0.0332	)		(0.0258	)		(0.0305	)

Net asset value at end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Total return		1.05	%		2.87	%		3.37	%		2.61	%		3.09	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	205		$	519		$	649		$	1,639		$	19,306
Ratios of expenses to average net assets
After advisory/administration fee waivers		0.60	%		0.60	%		0.60	%		0.60	%		0.60	%
Before advisory/administration fee waivers		1.02	%		1.00	%		1.02	%		1.00	%		1.05	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		1.14	%		2.80	%		3.20	%		2.57	%		3.04	%
Before advisory/administration fee waivers		0.71	%		2.40	%		2.78	%		2.17	%		2.59	%

BlackRock

Ohio Municipal Money Market Portfolio

IMPORTANT DEFINITIONS

General Obligation Bonds: Bonds which are secured by the issuer’s pledge of its full faith, credit and taxing power for the payment of principal and interest.

Liquidity: Liquidity is the ability to easily convert investments into cash without losing a significant amount of money in the process.

Municipal Lease Obligations: These provide participation in municipal lease agreements and installment purchase contracts, but are not part of the general obligations of the municipality.

Municipal Security: A short-term obligation issued by or on behalf of states, possessions and territories of the United States, their political subdivisions and their agencies and authorities.

Net Asset Value (NAV): The value of everything the fund owns, minus everything it owes, divided by the number of shares held by investors.

Investment Goal

Primary Investment Strategies

In pursuit of this goal, the fund invests primarily in Municipal Securities of issuers located in Ohio.

Specifically, the fund may invest in:

1)	Fixed and variable rate notes and similar debt instruments rated MIG-2, VMIG-2 or Prime-2 or higher by Moody’s, SP-2 or A-2 or higher by Standard & Poor’s or F-2 or higher by Fitch.

2)	Tax-exempt commercial paper and similar debt instruments rated Prime-2 or higher by Moody’s, A-2 or higher by Standard & Poor’s or F-2 or higher by Fitch.

3)	Municipal bonds rated A or higher by Moody’s, Standard & Poor’s or Fitch.

4)	Unrated notes, paper and other instruments that are determined by the fund manager to be of comparable quality to the instruments described above.

The fund seeks to maintain a net asset value of $1.00 per share.

The fund normally invests at least 80% of its net assets in Municipal Securities and other instruments whose interest is exempt from regular Federal income tax and Ohio state income tax. The other 20% of its assets can be invested in securities of non-municipal issuers the income from which the fund manager believes is exempt from regular Federal income tax and/or Ohio state income tax and securities which are subject to regular Federal income tax and Ohio state income tax. Interest income from the fund’s investments may be subject to the Federal Alternative Minimum Tax. The fund may invest in Municipal Securities of issuers located outside of Ohio, the interest from which is exempt from regular Federal income tax.

Quality

IMPORTANT DEFINITIONS

Tax-Exempt Commercial Paper: Short-term Municipal Securities with maturities of 1 to 270 days.

Variable or Floating Rate Securities: Securities whose interest rates adjust automatically after a certain period of time and/or whenever a predetermined standard interest rate changes.

agency. Securities that do not have a short-term rating must be determined by the fund manager to be of comparable quality.

Maturity

Normally, the fund may hold up to 20% of its assets in uninvested cash reserves. Uninvested cash will not earn income. It is possible that in extreme market conditions the fund may invest more than 20% of its assets in securities that are not Municipal Securities (and therefore are subject to regular Federal income tax and Ohio state income tax) and may hold an unlimited amount of uninvested cash reserves. If market conditions improve, these strategies could result in reducing the potential gain from the market upswing, thus reducing the fund’s opportunity to achieve its investment objective.

Key Risks

changes in the economic conditions and governmental policies of Ohio and its political subdivisions, including as a result of legislation or litigation changing the taxation of Municipal Securities or the rights of Municipal Security holders in the event of bankruptcy, could hurt the value of the fund’s shares.

The fund will rely on legal opinions of counsel to issuers of Municipal Securities as to the tax-free status of investments and will not do its own analysis.

The fund may purchase variable and floating rate instruments. The absence of an active market for these securities could make it difficult for the fund to dispose of them if the issuer defaults.

Risk / Return Information

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	Since Inception	Inception Date
Ohio Municipal MM
Return Before Taxes	1.11%	2.38%	2.57%	2.76%	06/01/93

*	The chart and the table both assume reinvestment of dividends and distributions.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Service Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees			.45	%
Other expenses			.57	%
Service fees	.15	%
Processing fees	.15	%
Other	.27	%
Total annual fund operating expenses			1.02	%
Fee waivers and expense reimbursements*			.33	%
Net expenses*			.69	%

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual cost may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Service Shares		$70		$292		$531		$1,218

Financial Highlights

FINANCIAL HIGHLIGHTS

(For a Service Share Outstanding Throughout Each Period)

Ohio Municipal Money Market Portfolio



	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Income from investment operations
Net investment income		0.0124			0.0301			0.0331			0.0264			0.0304

Total from investment operations		0.0124			0.0301			0.0331			0.0264			0.0304

Less distributions
Distributions from net investment income		(0.0124	)		(0.0301	)		(0.0331	)		(0.0264	)		(0.0304	)

Total distributions		(0.0124	)		(0.0301	)		(0.0331	)		(0.0264	)		(0.0304	)

Net asset value at end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Total return		1.25	%		3.05	%		3.36	%		2.67	%		3.08	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	11,511		$	12,667		$	10,284		$	11,284		$	58,077
Ratios of expenses to average net assets
After advisory/administration fee waivers		0.69	%		0.69	%		0.69	%		0.69	%		0.67	%
Before advisory/administration fee waivers		1.02	%		1.01	%		1.01	%		1.01	%		1.03	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		1.19	%		2.95	%		3.29	%		2.65	%		3.04	%
Before advisory/administration fee waivers		0.87	%		2.63	%		2.97	%		2.33	%		2.68	%

BlackRock

Pennsylvania Municipal Money Market Portfolio

IMPORTANT DEFINITIONS

General Obligation Bonds: Bonds which are secured by the issuer’s pledge of its full faith, credit and taxing power for the payment of principal and interest.

Liquidity: Liquidity is the ability to easily convert investments into cash without losing a significant amount of money in the process.

Municipal Lease Obligations: These provide participation in municipal lease agreements and installment purchase contracts, but are not part of the general obligations of the municipality.

Municipal Security: A short term obligation issued by or on behalf of states, possessions and territories of the United States, their political subdivisions and their agencies and authorities.

Net Asset Value (NAV): The value of everything the fund owns, minus everything it owes, divided by the number of shares held by investors.

Investment Goal

Primary Investment Strategies

In pursuit of this goal, the fund invests primarily in Municipal Securities of issuers located in Pennsylvania.

Specifically, the fund may invest in:

1)	Fixed and variable rate notes and similar debt instruments rated MIG-2, VMIG-2 or Prime-2 or higher by Moody’s, SP-2 or A-2 or higher by Standard & Poor’s or F-2 or higher by Fitch.

2)	Tax-exempt commercial paper and similar debt instruments rated Prime-2 or higher by Moody’s A-2 or higher by Standard & Poor’s, or F-2 or higher by Fitch.

3)	Municipal bonds rated A or higher by Moody’s, Standard & Poor’s or Fitch.

4)	Unrated notes, paper and other instruments that are determined by the fund manager to be of comparable quality to the instruments described above.

The fund seeks to maintain a net asset value of $1.00 per share.

Quality

IMPORTANT DEFINITIONS

Tax-Exempt Commercial Paper: Short-term Municipal Securities with maturities of 1 to 270 days.

Variable or Floating Rate Securities: Securities whose interest rates adjust automatically after a certain period of time and/or whenever a predetermined standard interest rate changes.

not have a short-term rating must be determined by the fund manager to be of comparable quality.

Maturity

Normally, the fund may hold up to 20% of its assets in uninvested cash reserves. Uninvested cash will not earn income. It is possible that in extreme market conditions the fund may invest more than 20% of its assets in securities that are not Municipal Securities (and therefore are subject to regular Federal income tax and Pennsylvania state income tax) and may hold an unlimited amount of uninvested cash reserves. If market conditions improve, these strategies could result in reducing the potential gain from the market upswing, thus reducing the fund’s opportunity to achieve its investment objective.

Key Risks

The fund will rely on legal opinions of counsel to issuers of Municipal Securities as to the tax-free status of investments and will not do its own analysis.

The fund may purchase variable and floating rate instruments. The absence of an active market for these securities could make it difficult for the fund to dispose of them if the issuer defaults.

Risk / Return Information

The performance for the period before Service Shares were launched on June 11, 1993 is based upon performance for Institutional Shares of the fund, which were first issued on June 1, 1993. The actual return of Service Shares would have been lower than shown for the period before they were launched because Service Shares have higher expenses than Institutional Shares. Service Shares of the fund have expenses of .72% of average daily net assets (after waivers and reimbursements) for the current fiscal year and Institutional Shares of the fund have expenses of .42% of average daily net assets (after waivers and reimbursements) for the current fiscal year.

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	Since Inception	Inception Date
Pennsylvania Municipal MM
Return Before Taxes	0.89%	2.15%	2.38%	2.62%	06/01/93

*	The chart and the table both assume reinvestment of dividends and distributions.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Service Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees			.45	%
Other expenses			.55	%
Service fees	.15	%
Processing fees	.15	%
Other	.25	%
Total annual fund operating expenses			1.00	%
Fee waivers and expense reimbursements*			.28	%
Net expenses*			.72	%

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual cost may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Service Shares		$74		$291		$525		$1,199

Financial Highlights

FINANCIAL HIGHLIGHTS

(For a Service Share Outstanding Throughout Each Period)

Pennsylvania Municipal

Money Market Portfolio


	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Income from investment operations
Net investment income		0.0101			0.0269			0.0324			0.0250			0.0292

Total from investment operations		0.0101			0.0269			0.0324			0.0250			0.0292

Less distributions
Distributions from net investment income		(0.0101	)		(0.0269	)		(0.0324	)		(0.0250	)		(0.0292	)

Total distributions		(0.0101	)		(0.0269	)		(0.0324	)		(0.0250	)		(0.0292	)

Net asset value at end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Total return		1.01	%		2.72	%		3.29	%		2.53	%		2.97	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	54,574		$	75,431		$	83,474		$	76,173		$	73,735
Ratios of expenses to average net assets
After advisory/administration fee waivers		0.72	%		0.72	%		0.72	%		0.72	%		0.69	%
Before advisory/administration fee waivers		1.01	%		0.99	%		0.98	%		1.00	%		1.01	%
Ratios of net investment income to average new assets
After advisory/administration fee waivers		1.01	%		2.73	%		3.25	%		2.50	%		2.92	%
Before advisory/administration fee waivers		0.73	%		2.46	%		2.99	%		2.22	%		2.60	%

BlackRock

Virginia Municipal Money Market Portfolio

IMPORTANT DEFINITIONS

General Obligation Bonds: Bonds which are secured by the issuer’s pledge of its full faith, credit and taxing power for the payment of principal and interest.

Liquidity: Liquidity is the ability to easily convert investments into cash without losing a significant amount of money in the process.

Municipal Lease Obligations: These provide participation in municipal lease agreements and installment purchase contracts, but are not part of the general obligations of the municipality.

Municipal Security: A short-term obligation issued by or on behalf of states, possessions and territories of the United States, their political subdivisions and their agencies and authorities.

Net Asset Value (NAV): The value of everything the Fund owns, minus everything it owes, divided by the number of shares held by investors.

Investment Goal

Primary Investment Strategies

In pursuit of this goal, the fund invests primarily in Municipal Securities of issuers located in Virginia.

Specifically, the fund may invest in:

1)	Fixed and variable rate notes and similar debt instruments rated MIG-2, VMIG-2 or Prime-2 or higher by Moody’s, SP-2 or A-2 or higher by Standard & Poor’s or F-2 or higher by Fitch.

2)	Tax-exempt commercial paper and similar debt instruments rated Prime-2 or higher by Moody’s, A-2 or higher by Standard & Poor’s or F-2 or higher by Fitch.

3)	Municipal bonds rated A or higher by Moody’s, Standard & Poor’s or Fitch.

4)	Unrated notes, paper and other instruments that are determined by the fund manager to be of comparable quality to the instruments described above.

The fund seeks to maintain a net asset value of $1.00 per share.

Quality

IMPORTANT DEFINITIONS

Tax-Exempt Commercial Paper: Short-term Municipal Securities with maturities of 1 to 270 days.

Variable or Floating Rate Securities: Securities whose interest rates adjust automatically after a certain period of time and/or whenever a predetermined standard interest rate changes.

agency. Securities that do not have a short-term rating must be determined by the fund manager to be of comparable quality.

Maturity

Normally, the fund may hold up to 20% of its assets in uninvested cash reserves. Uninvested cash will not earn income. It is possible that in extreme market conditions the fund may invest more than 20% of its assets in securities that are not Municipal Securities (and therefore are subject to regular Federal income tax and Virginia state income tax) and may hold an unlimited amount of uninvested cash reserves. If market conditions improve, these strategies could result in reducing the potential gain from the market upswing, thus reducing the fund’s opportunity to achieve its investment objective.

Key Risks

changes in the economic conditions and governmental policies of Virginia and its political subdivisions, including as a result of legislation or litigation changing the taxation of Municipal Securities or the rights of Municipal Security holders in the event of bankruptcy, could hurt the value of the fund’s shares.

Municipal Securities include revenue bonds, general obligation bonds and municipal lease obligations. Revenue bonds include private activity bonds, which are not payable from the general revenues of the issuer. Consequently, the credit quality of private activity bonds is usually directly related to the credit standing of the corporate user of the facility involved. To the extent that the fund’s assets are invested in private activity bonds, the fund will be subject to the particular risks presented by the laws and economic conditions relating to such projects and bonds to a greater extent than if its assets were not so invested, Municipal Securities also include moral obligation bonds, which are normally issued by special purpose public authorities. If the issuer of moral obligation bonds is unable to pay its debts from current revenues, it may draw on a reserve fund the restoration of which is a moral but not a legal obligation of the state or municipality which created the issuer. Municipal lease obligations are not guaranteed by the issuer and are generally less liquid than other securities. Municipal lease obligations also are subject to the risk that the municipality will not appropriate funds for lease payments.

The fund will rely on legal opinions of counsel to issuers of Municipal Securities as to the tax-free status of investments and will not do its own analysis.

The fund may purchase variable and floating rate instruments. The absence of an active market for these securities could make it difficult for the fund to dispose of them if the issuer defaults.

Risk / Return Information

The performance for the period before Service Shares were launched in October 1994 is based upon performance for Institutional Shares of the fund, which were first issued in July 1994. The actual return of Service Shares would have been lower than shown for the period before they were launched because Service Shares have higher expenses than Institutional Shares. Service Shares of the fund have expenses of .40% of average daily net assets (after waivers and reimbursements) for the current fiscal year and Institutional Shares of the fund have expenses of .30% of average daily net assets (after waivers and reimbursements) for the current fiscal year.

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	Since Inception	Inception Date
VA Municipal MM
Return Before Taxes	1.15%	2.38%	2.58%	2.86%	07/25/94

*	The chart and the table both assume reinvestment of dividends and distributions.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Service Fees: Fees that are paid to service organizations that provide shareholder account service and maintenance.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Service Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees			.45	%
Other expenses			.60	%
Service fees	.15	%
Processing fees	.15	%
Other	.30	%
Total annual fund operating expenses			1.05	%
Fee waivers and expense reimbursements*			.65	%
Net expenses*			.40	%

BlackRock and BlackRock Distributors, Inc., the fund’s distributor have contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to .40% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 53 for a discussion of these waivers and reimbursements.

The table does not reflect charges or credits which investors might incur if they invest through a financial institution.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual cost may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Service Shares		$41		$269		$516		$1,224

Financial Highlights

FINANCIAL HIGHLIGHTS

(For a Service Share Outstanding Throughout Each Period)

Virginia Municipal Money Market Portfolio



	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Income from investment operations
Net investment income		0.0124			0.0293			0.0337			0.0264			0.0308

Total from investment operations		0.0124			0.0293			0.0337			0.0264			0.0308

Less distributions
Distributions from net investment income		(0.0124	)		(0.0293	)		(0.0337	)		(0.0264	)		(0.0308	)

Total distributions		(0.0124	)		(0.0293	)		(0.0337	)		(0.0264	)		(0.0308	)

Net asset value at end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Total return		1.25	%		2.97	%		3.42	%		2.68	%		3.13	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	44,143		$	611		$	458		$	2,786		$	3,405
Ratios of expenses to average net assets
After advisory/administration fee waivers		0.40	%		0.60	%		0.60	%		0.60	%		0.60	%
Before advisory/administration fee waivers		0.88	%		1.03	%		1.04	%		1.05	%		1.07	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		1.19	%		2.94	%		3.17	%		2.65	%		3.08	%
Before advisory/administration fee waivers		0.72	%		2.51	%		2.73	%		2.20	%		2.61	%

About Your Investment

Buying Shares

Service Shares are offered without a sales charge to financial institutions (such as banks and brokerage firms) acting on behalf of their customers, certain persons who were shareholders of the Compass Capital Group of Funds at the time of its combination with The PNC^® Fund in 1996 and investors that participate in the Capital Directions^sm asset allocation program. Service Shares will normally be held by institutions or in the name of nominees of institutions on behalf of their customers. Service Shares are normally purchased through a customer’s account at an institution through procedures established by the institution. In these cases, confirmation of share purchases and redemptions will be sent to the institutions. A customer’s ownership of shares will be recorded by the institution and reflected in the account statements provided by the institutions to their customers. Investors wishing to purchase Service Shares should contact their institutions.

Purchase orders may be placed by calling (800) 441-7450.

What Price Per Share Will You Pay?

Amutual fund is a pool of investors’ money that is used to purchase a portfolio of securities, which in turn is owned in common by the investors. Investors put money into a mutual fund by buying shares. If a mutual fund has a portfolio worth $5 million dollars and has 5 million shares outstanding, the net asset value (NAV) per share is $1.00. Although each fund described in this prospectus seeks to maintain an NAV of $1.00 per share, there is no guarantee it will be able to do so.

The funds’ investments are valued based on the amortized cost method described in the SAI.

Service Shares are sold at the net asset value per share determined after an order is received by the Company’s transfer agent. You may place a purchase order for each fund by telephoning (800) 441-7450 before 12 noon (Eastern time) on a day the New York Stock Exchange (NYSE) and the Federal Reserve Bank of Philadelphia are open. For each fund, if your order is received before 12 noon (Eastern time) on a day the NYSE and the Federal Reserve Bank of Philadelphia are open, it will be executed at 12 noon (Eastern time). If payment for such order is not received by 4 p.m. (Eastern time), the order will be cancelled. You will be informed if this should happen. No orders will be accepted after 12 noon (Eastern time).

Paying for Shares

Payment for Service Shares must normally be made in Federal funds or other funds immediately available to the Company’s custodian. Payment may also, at the discretion of the Company, be made in the form of securities that are permissible investments for the respective fund.

How Much is the Minimum Investment?

The Company may reject any purchase order, modify or waive the minimum initial or subsequent investment requirements and suspend and resume the sale of any share class of the fund at any time.

Distribution and Service Plan

Under the Plan, the Company may also enter into arrangements with brokers, dealers, financial institutions and industry professionals (Service Organizations) (including PNC Bank, BlackRock and their affiliates). Under these arrangements, Service Organizations will provide certain support services to their customers who own Service Shares. The Company may pay a shareholder servicing fee of up to .15% per year of the average daily net asset value of Service Shares owned by each Service Organization’s customers. All Service Shares pay this shareholder servicing fee.

In return for that fee, Service Organizations may provide one or more of the following services to their customers who own Service Shares:

(1)

Responding to customer questions on the services performed by the Service Organization and investments in Service Shares;

(2)

Assisting customers in choosing and changing dividend options, account designations and addresses; and

(3)

Providing other similar shareholder liaison services.

(1)

Processing purchase and redemption requests from customers and placing orders with the Company’s transfer agent or the Company’s distributor;

(2)

Processing dividend payments from the Company on behalf of customers;

(3)

Providing sub-accounting for Service Shares beneficially owned by customers or the information necessary for sub-accounting; and

(4)

Providing other similar services.

BlackRock may receive a significant portion of these shareholder processing fees.

Selling Shares

Customers of institutions may redeem Service Shares in accordance with the procedures applicable to their accounts with the institutions. These procedures will vary according to the type of account and the institution involved and customers should consult their account managers in this regard. Institutions are responsible for transmitting redemption orders and crediting their customers’ accounts with redemption proceeds on a timely basis. In the case of shareholders holding share certificates the certificates must accompany the redemption request.

Institutions may place redemption orders by telephoning (800) 441-7450. Shares are redeemed at their net asset value per share next determined after receipt of the redemption order. The Company, the administrators and the distributor will employ reasonable procedures to confirm that instructions communicated by telephone are genuine. The Company and its service providers will not be liable for any loss, liability, cost or expense for acting upon telephone instructions that are reasonably believed to be genuine in accordance with such procedures.

Payment for redeemed shares for which a redemption order is received before 12 noon (Eastern time) on a business day is normally made in Federal funds wired to the redeeming institution on the same business day, provided that the funds’ custodian is also open for business. Payment for redemption orders received between 12 noon (Eastern time) and 4 p.m. (Eastern time) or on a day when the funds’ custodian is closed is normally wired in Federal funds on the next business day following redemption on which the funds’ custodian is open for business. The Company reserves the right to wire redemption proceeds within seven days

after receiving a redemption order if, in the judgement of BlackRock Advisors, Inc., an earlier payment could adversely affect a fund. No charge for wiring redemption payments is imposed by the Company, although institutions may charge their customer accounts for redemption services. Information relating to such redemption services and charges, if any, should be obtained by customers from their institutions.

Persons who were stockholders of the Compass Capital Group of Funds at the time of its combination with the PNC^® Fund may redeem for cash some or all of their shares of a fund at any time by sending a written redemption request in proper form to BlackRock Funds at 100 Bellevue Parkway, Mail Stop WR-R100-04-07, Wilmington, DE 19809. They may also redeem shares by telephone if they have signed up for the expedited redemption privilege.

The Company is not responsible for the efficiency of the Federal wire system or the shareholder’s firm or bank. The Company does not currently charge for wire transfers. The shareholder is responsible for any charges imposed by the shareholder’s bank. To change the name of the single, designated bank account to receive wire redemption proceeds, it is necessary to send a written request to BlackRock Funds at 100 Bellevue Parkway, Mail Stop WR-R100-04-07, Wilmington, DE 19809.

The Company may refuse a telephone redemption request if it believes it is advisable to do so and may use reasonable procedures to make sure telephone instructions are genuine.

Investor A Shares of the same fund having the same total net asset value as the shares converted. Investor A Shares are currently authorized to bear additional service and distribution fees at the total annual rate of .20% of average daily net assets. If a shareholder acquiring Service Shares on or after May 1, 1998 later becomes eligible to purchase Institutional Shares (other than due to changes in market value), then the shareholder’s Service Shares will be converted to Institutional Shares of the same fund having the same total net asset value as the shares converted.

The Company's Rights

The Company may:

Suspend the right of redemption if trading is halted or restricted on the NYSE or under other emergency conditions described in the Investment Company Act of 1940,

Redeem shares involuntarily in certain cases, such as when the value of a shareholder account falls below a specified level, as described below, and

Redeem shares for property other than cash if conditions exist which make cash payments undesirable in accordance with its rights under the Investment Company Act of 1940.

Accounts with Low Balances

The Company may redeem a shareholder’s account in any fund at any time the net asset value of the account in such fund falls below $5,000 as the result of a redemption or an exchange request. The shareholder will be notified in writing that the value of the account is less than the required amount and the shareholder will be allowed 30 days to make additional investments before the redemption is processed. If a customer has agreed with an institution to maintain a minimum balance in his or her account, and the balance in the account falls below the minimum, the customer may be obligated to redeem all or part of his or her shares in the fund to the extent necessary to maintain the minimum balance required.

Market Timing

Statements

Management

IMPORTANT DEFINITIONS

Adviser: The adviser of a mutual fund is responsible for the overall investment management of the fund. The adviser for BlackRock Funds is BlackRock Advisors, Inc.

Sub-Adviser: The sub-adviser of a fund is responsible for its day-to-day management and will generally make all buy and sell decisions. Sub-advisers also provide research and credit analysis. The sub-adviser for all the funds is BlackRock Institutional Management Corporation.

Money Market	0.20	%
U.S. Treasury Money Market	0.17	%
Municipal Money Market	0.17	%
New Jersey Municipal Money Market	0.13	%
North Carolina Municipal Money Market	0.03	%
Ohio Municipal Money Market	0.12	%
Pennsylvania Municipal Money Market	0.17	%
Virginia Municipal Money Market	0.00	%

The maximum annual advisory fees that can be paid to BlackRock on behalf of each fund (as a percentage of average daily net assets) are as follows:

AVERAGE DAILY NET ASSETS		INVESTMENT ADVISORY FEE
First $1 billion		.450%
$1 billion-$2 billion		.400%
$2 billion-$3 billion		.375%
more than $3 billion		.350%

As discussed above, BlackRock has agreed to cap each fund’s net expense at the levels shown in that fund’s expense table.

Money Market	.310	%
U.S. Treasury Money Market	.295	%
Municipal Money Market	.295	%
New Jersey Municipal Money Market	.265	%
North Carolina Municipal Money Market	.195	%
Ohio Municipal Money Market	.265	%
Pennsylvania Municipal Money Market	.295	%
Virginia Municipal Money Market	.205	%

Dividends and Distributions

BlackRock Funds makes two kinds of distributions to shareholders: dividends and net capital gain.

Taxation of Distributions

Distributions paid out of a fund’s “net capital gain” will be taxed to shareholders as long-term capital gain, regardless of how long a shareholder has owned shares. Distributions of net investment income, other than exempt-interest dividends, and net short-term capital gains will be taxed to shareholders as ordinary income.

Dividends paid with respect to interest on securities issued by the U.S. Government and its agencies may also be exempt from some types of state and local taxes.

Your annual tax statement from the Company will present in detail the tax status of your distributions for each year.

Important Notice Regarding Delivery of Shareholder Documents

Electronic Access to Shareholder Documents

To enroll:

Shareholders Who Hold Accounts With Investment Advisers, Banks or Brokerages:

1) Have your enrollment number ready. If you do not have one, please contact your financial adviser.

2) Log on to www.investordelivery.com.

Shareholders Who Hold Accounts Directly With the Fund:

1) Log on to http://funds.blackrock.com.

2) Click on Electronic Delivery icon on either side of your screen.

3) Complete the on-line form by entering your social security number, e-mail address and by selecting your electronic delivery preference.

For more information:

Annual/Semi-Annual Reports

Statement of Additional Information (SAI)

A Statement of Additional Information, dated January 28, 2003, has been filed with the Securities and Exchange Commission (SEC). The SAI, which includes additional information about the BlackRock Funds, may be obtained free of charge, along with the Company’s annual and semi-annual reports, by calling (800) 441-7450. The SAI, as supplemented from time to time, is incorporated by reference into this Prospectus.

Shareholder Account Service Representatives

Purchases and Redemptions

Call your registered representative or (800) 441-7450.

World Wide Web

Access general fund information and specific fund

performance. Request mutual fund prospectuses and literature. Forward mutual fund inquiries. www.blackrock.com

Email

Request prospectuses, SAI, Annual or Semi-Annual

Reports and literature. Forward mutual fund inquiries.

Mail to: funds@blackrock.com

Written Correspondence

BlackRock Funds 100 Bellevue Parkway Mail Stop WR-R100-04-07

Wilmington, DE 19809

Internal Wholesalers/Broker Dealer Support

Available to support investment professionals

9 a.m. to 6 p.m. (Eastern time), Monday-Friday.

Call: (888) 8BLACKROCK

Securities and Exchange Commission (SEC)

INVESTMENT COMPANY ACT FILE NO. 811-05742

MMSRVCPROS2/03

World class institutional asset management at a personal level

BlackRock Funds

Money Market

Portfolios

Institutional Shares

Prospectus

January 28, 2003

BlackRock Funds^SMis a mutual

fund family with 43 investment

portfolios, 8 of which are

described in this prospectus.

The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.


NOT FDIC		May Lose Value
INSURED		No Bank Guarantee

Table of

Contents

How to find the information you need

*How to find the information you need*		1

THE BLACKROCK MONEY MARKET PORTFOLIOS

*Money Market*		2

*U.S. Treasury Money Market*		8

*Municipal Money Market*		12

*New Jersey Municipal Money Market*		18

*North Carolina Municipal Money Market*		24

*Ohio Municipal Money Market*		30

*Pennsylvania Municipal Money Market*		36

*Virginia Municipal Money Market*		42

*About Your Investment* *How to Buy/Sell Shares*		48

*Dividends/Distributions/Taxes*		53

How to Find the

Information You Need

About BlackRock Funds

BlackRock

Money Market Portfolio

IMPORTANT DEFINITIONS

Asset-Backed Securities: Debt securities that are backed by a pool of assets, usually loans such as installment sale contracts or credit card receivables.

Commercial Paper: Short-term securities with maturities of 1 to 270 days which are issued by banks, corporations and others.

Liquidity: Liquidity is the ability to easily convert investments into cash without losing a significant amount of money in the process.

Net Asset Value (NAV): The value of everything the fund owns, minus everything it owes, divided by the number of shares held by investors.

Variable or Floating Rate Securities: Securities whose interest rates adjust automatically after a certain period of time and/or whenever a predetermined standard interest rate changes.

Investment Goal

The fund seeks as high a level of current income as is consistent with maintaining liquidity and stability of principal.

Primary Investment Strategies

In pursuit of this goal, the fund invests in a broad range of short term, high quality, U.S. dollar-denominated instruments, including government, bank, commercial and other obligations.

Specifically, the fund may invest in:

1)	U.S. dollar-denominated obligations issued or supported by the credit of U.S. or foreign banks or savings institutions with total assets of more than $1 billion (including obligations of foreign branches of such banks).

3)	Unrated notes, paper and other instruments that are determined by the fund manager to be of comparable quality to the instruments described above.

4)	Asset-backed securities (including interests in pools of assets such as mortgages, installment purchase obligations and credit card receivables).

5)	Securities issued or guaranteed by the U.S. Government or by its agencies or authorities.

6)	Dollar-denominated securities issued or guaranteed by foreign governments or their political subdivisions, agencies or authorities.

7)	Repurchase agreements relating to the above instruments.

The fund seeks to maintain a net asset value of $1.00 per share.

Quality

Maturity

Normally, the fund may hold up to 20% of its assets in uninvested cash reserves. Uninvested cash will not earn income.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

The fund could lose money if a seller under a repurchase agreement defaults or declares bankruptcy.

The fund may purchase variable and floating rate instruments. The absence of an active market for these securities could make it difficult for the fund to dispose of them if the issuer defaults.

Risk / Return Information

The performance for the period before Institutional Shares were launched in August 1993 is based upon performance for Service Shares of the fund, which were first issued in October 1989. Institutional Shares of the fund have expenses of .42% of average daily net assets (after waivers and reimbursements) for the current fiscal year and Service Shares of the fund have expenses of .72% of average daily net assets (after waivers and reimbursements) for the current fiscal year.

As of 12/31

ANNUAL TOTAL RETURNS*

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	10 Years	Inception Date
Money Market
Return Before Taxes	1.62%	3.95%	4.43%	4.59%	10/04/89

*	The chart and the table both assume reinvestment of dividends and distributions.

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Institutional Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees	.39	%
Other expenses	.22	%
Total annual fund operating expenses	.61	%
Fee waivers and expense reimbursements*	.19	%
Net expenses*	.42	%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to .42% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 51 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual cost may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Institutional Shares		$43		$176		$321		$744

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Institutional Share Outstanding Throughout Each Period)

Money Market Portfolio



	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year Ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Income from investment operations
Net investment income		0.0186			0.0496			0.0582			0.0478			0.0532

Total from investment operations		0.0186			0.0496			0.0582			0.0478			0.0532

Less distributions
Distributions from net investment income		(0.0186	)		(0.0496	)		(0.0582	)		(0.0478	)		(0.0532	)

Total distributions		(0.0186	)		(0.0496	)		(0.0582	)		(0.0478	)		(0.0532	)

Net asset value at end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Total return		1.87	%		5.08	%		5.98	%		4.89	%		5.46	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	2,462,579		$	2,507,649		$	2,231,404		$	2,076,083		$	1,858,165
Ratios of expenses to average net assets
After advisory/administration fee waivers		0.42	%		0.42	%		0.42	%		0.42	%		0.39	%
Before advisory/administration fee waivers		0.61	%		0.60	%		0.60	%		0.61	%		0.63	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		1.86	%		4.96	%		5.83	%		4.78	%		5.32	%
Before advisory/administration fee waivers		1.67	%		4.79	%		5.65	%		4.59	%		5.08	%

BlackRock

U.S. Treasury Money Market Portfolio

IMPORTANT DEFINITIONS

Liquidity: Liquidity is the ability to easily convert investments into cash without losing a significant amount of money in the process.

Net Asset Value (NAV): The value of everything the fund owns, minus everything it owes, divided by the number of shares held by investors.

Variable or Floating Rate Securities: Securities whose interest rates adjust automatically after a certain period of time and/or whenever a predetermined standard interest rate changes.

Investment Goal

The fund seeks as high a level of current income as is consistent with maintaining liquidity and stability of principal.

Primary Investment Strategies

In pursuit of this goal, the fund invests exclusively in short-term bills, notes and other obligations issued or guaranteed by the U.S. Treasury and related repurchase agreements.

The fund seeks to maintain a net asset value of $1.00 per share.

Quality

Maturity

Normally, the fund may hold up to 20% of its assets in uninvested cash reserves. Uninvested cash will not earn income.

Should the Company’s Board of Trustees determine that the investment objective of the fund should be changed, shareholders will be given at least 30 days notice before any such change is made.

Key Risks

Treasury obligations differ only in their interest rates, maturities and time of issuance.

The fund could lose money if a seller under a repurchase agreement defaults or declares bankruptcy.

The fund may purchase variable and floating rate instruments. The absence of an active market for these securities could make it difficult for the fund to dispose of them if the issuer defaults.

Risk / Return Information

The performance for the period before Institutional Shares were launched in August 1993 is based upon performance for Service Shares of the fund, which were first issued in November 1989. Institutional Shares of the fund have expenses of .41% of average daily net assets (after waivers and reimbursements) for the current fiscal year and Service Shares of the fund have expenses of .71% of average daily net assets (after waivers and reimbursements) for the current fiscal year.

As of 12/31

ANNUAL TOTAL RETURNS*

IMPORTANT DEFINITIONS

Advisory Fees: Fees paid to the investment adviser for portfolio management services.

Other Expenses: Include administration, transfer agency, custody, professional fees and registration fees.

As of 12/31/02

AVERAGE ANNUAL TOTAL RETURNS*

	1 Year	3 Years	5 Years	10 Years	Inception Date
US Treasury MM
Return Before Taxes	1.46%	3.66%	4.16%	4.41%	11/01/89

*	The chart and the table both assume reinvestment of dividends and distributions.

Expenses and Fees

As a shareholder you pay certain fees and expenses. Annual fund operating expenses are paid out of fund assets.

The table below describes the fees and expenses that you may pay if you buy and hold Institutional Shares of the fund. The table is based on expenses for the most recent fiscal year.

Annual Fund Operating Expenses

(Expenses that are deducted from fund assets)

Advisory fees	.45	%
Other expenses	.24	%
Total annual fund operating expenses	.69	%
Fee waivers and expense reimbursements*	.28	%
Net expenses*	.41	%

BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit fund expenses to .41% of average daily net assets until February 1, 2004. The fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. See the “Management” section on page 51 for a discussion of these waivers and reimbursements.

Example:

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses and redemption at the end of each time period. Although your actual cost may be higher or lower, based on these assumptions your costs would be:

		1 Year		3 Years		5 Years		10 Years
Institutional Shares		$42		$193		$356		$832

Financial Highlights

FINANCIAL HIGHLIGHTS

(For an Institutional Share Outstanding Throughout Each Period)

U.S. Treasury Money Market Portfolio



	Year Ended 9/30/02			Year Ended 9/30/01			Year Ended 9/30/00			Year ended 9/30/99			Year Ended 9/30/98
Net asset value at beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Income from investment operations
Net investment income		0.0166			0.0464			0.0543			0.0453			0.0519

Total from investment operations		0.0166			0.0464			0.0543			0.0453			0.0519

Less distributions
Distributions from net investment income		(0.0166	)		(0.0464	)		(0.0543	)		(0.0453	)		(0.0519	)

Total distributions		(0.0166	)		(0.0464	)		(0.0543	)		(0.0453	)		(0.0519	)

Net asset value at end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Total return		1.68	%		4.74	%		5.56	%		4.63	%		5.32	%
Ratios/Supplemental data
Net assets at end of period (in thousands)	$	526,344		$	380,200		$	317,272		$	324,879		$	297,161
Ratios of expenses to average net assets
After advisory/administration fee waivers		0.41	%		0.41	%		0.41	%		0.41	%		0.38	%
Before advisory/administration fee waivers		0.68	%		0.68	%		0.68	%		0.68	%		0.69	%
Ratios of net investment income to average net assets
After advisory/administration fee waivers		1.62	%		4.61	%		5.43	%		4.53	%		5.19	%
Before advisory/administration fee waivers		1.35	%		4.34	%		5.16	%		4.26	%		4.88	%