N-Q 1 d246897dnq.htm BLACKROCK FUNDS BLACKROCK FUNDS

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file numbers: 811-05742

Name of Fund:  BlackRock Funds

                                         BlackRock Developed Real Estate Index Fund

Fund Address:   100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock Funds, 55

            East 52nd Street, New York, NY 10055

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

Date of fiscal year end: 01/31/2017

Date of reporting period: 10/31/2016

Item 1 – Schedule of Investments

Schedule of Investments October 31, 2016 (Unaudited)

   

BlackRock Developed Real Estate Index Fund

(Percentages shown are based on Net Assets)

 

Common Stocks    Shares     Value  

Hotels, Restaurants & Leisure — 0.2%

  

Pando AB

      139      $ 2,204   

Ryman Hospitality Properties, Inc.

      200        10,084   
    

 

 

  
               12,288   

Real Estate Investment Trusts (REITs) — 75.9%

  

Acadia Realty Trust

      422        14,217   

Activia Properties, Inc.

      2        9,705   

Advance Residence Investment Corp.

      7        19,592   

Aedifica SA (a)

      58        4,813   

AEON REIT Investment Corp.

      3        3,638   

Agree Realty Corp.

      112        5,415   

Alexander’s, Inc.

      9        3,458   

Alexandria Real Estate Equities, Inc.

      410        44,202   

Allied Properties Real Estate Investment Trust

      435        11,695   

Alstria Office REIT-AG (a)

      861        11,106   

American Assets Trust, Inc.

      144        5,718   

American Campus Communities, Inc.

      653        34,028   

American Homes 4 Rent, Class A

      986        20,814   

Apartment Investment & Management Co., Class A

      774        34,110   

Apple Hospitality REIT, Inc.

      998        17,994   

Aritis REIT

      1,083        9,463   

Ascendas Real Estate Investment Trust

      10,271        17,503   

Ashford Hospitality Trust, Inc.

      553        3,213   

Assura PLC

      6,693        4,817   

AvalonBay Communities, Inc.

      669        114,519   

Axiare Patrimonio SOCIMI SA

      233        3,310   

Befimmo SA

      70        4,080   

Beni Stabili SpA SIIQ

      4,020        2,344   

Big Yellow Group PLC

      846        7,158   

Boardwalk REIT

      158        5,798   

Boston Properties, Inc.

      752        90,601   

Brandywine Realty Trust

      935        14,493   

British Land Co. PLC

      4,073        29,160   

Brixmor Property Group, Inc.

      1,462        37,164   

BWP Trust

      1,650        3,721   

Camden Property Trust

      403        32,820   

Canadian Apartment Properties REIT

      579        12,657   

Canadian REIT

      286        9,847   

Capital & Regional PLC

      2,148        1,485   

CapitaLand Commercial Trust Ltd.

      7,900        8,940   

CapitaLand Mall Trust

      10,500        15,647   

Care Capital Properties, Inc.

      318        8,449   

CBL & Associates Properties, Inc.

      700        7,490   

CDL Hospitality Trusts

      2,900        2,796   

Cedar Realty Trust, Inc.

      522        3,534   

Champion REIT

      9,000        5,112   
Common Stocks    Shares     Value  

Real Estate Investment Trusts (REITs) (continued)

  

Charter Hall Retail REIT

      1,352      $ 4,258   

Chartwell Retirement Residences

      659        7,340   

Chatham Lodging Trust

      153        2,708   

Chesapeake Lodging Trust

      201        4,364   

Cofinimmo SA

      91        10,654   

Colony Starwood Homes

      159        4,613   

Columbia Property Trust, Inc.

      723        15,241   

Cominar Real Estate Investment Trust

      690        7,644   

Corporate Office Properties Trust

      591        15,774   

Cousins Properties, Inc.

      2,136        16,597   

Crombie Real Estate Investment Trust

      316        3,188   

Cromwell Property Group

      5,697        3,939   

CubeSmart

      909        23,698   

Daiwa House REIT Investment Corp.

      5        13,556   

Daiwa Office Investment Corp.

      1        5,649   

DCT Industrial Trust, Inc.

      390        18,233   

DDR Corp.

      1,605        24,540   

Derwent London PLC

      430        12,717   

Dexus Property Group

      4,127        28,035   

DiamondRock Hospitality Co.

      821        7,512   

Digital Realty Trust, Inc.

      791        73,903   

Douglas Emmett, Inc.

      682        24,893   

Dream Global Real Estate Investment Trust

      864        5,875   

Dream Office Real Estate Investment Trust

      442        5,506   

Duke Realty Corp.

      1,810        47,332   

DuPont Fabros Technology, Inc.

      322        13,141   

EastGroup Properties, Inc.

      123        8,353   

Education Realty Trust, Inc.

      397        16,908   

Empire State Realty Trust, Inc., Class A

      580        11,351   

Empiric Student Property PLC

      1,752        2,375   

EPR Properties

      335        24,361   

Equity Commonwealth (a)

      556        16,797   

Equity Lifestyle Properties, Inc.

      365        27,682   

Equity One, Inc.

      575        16,388   

Equity Residential

      1,759        108,618   

Essex Property Trust, Inc.

      320        68,509   

Eurocommercial Properties NV CVA

      200        8,509   

Extra Space Storage, Inc.

      548        40,086   

Federal Realty Investment Trust

      369        53,590   

FelCor Lodging Trust, Inc.

      561        3,585   

First Industrial Realty Trust, Inc.

      480        12,677   

First Potomac Realty Trust

      318        2,837   

Fonciere Des Regions

      150        13,109   

Forest City Realty Trust, Inc., Class A

      1,195        25,800   

Fortune Real Estate Investment Trust

      5,000        6,058   

Four Corners Property Trust, Inc.

      243        4,879   
 

 

                
   BLACKROCK DEVELOPED REAL ESTATE INDEX FUND    OCTOBER 31, 2016    1

Schedule of Investments (continued)

   

BlackRock Developed Real Estate Index Fund

 

Common Stocks    Shares     Value  

Real Estate Investment Trusts (REITs) (continued)

  

Franklin Street Properties Corp.

      371      $ 4,292   

Frontier Real Estate Investment Corp.

      2        9,407   

Fukuoka REIT Corp.

      2        3,471   

Gaming and Leisure Properties, Inc.

      995        32,666   

Gecina SA

      200        29,160   

General Growth Properties, Inc.

      2,539        63,348   

Getty Realty Corp.

      93        2,114   

GLP J-REIT

      10        12,531   

Goodman Group

      8,182        42,174   

Government Properties Income Trust

      165        3,158   

GPT Group

      9,058        32,023   

Gramercy Property Trust

      2,333        21,510   

Granite Real Estate Investment Trust

      192        6,041   

Great Portland Estates PLC

      1,598        11,595   

Green REIT PLC

      2,631        3,928   

H&R Real Estate Investment Trust

      1,291        21,955   

Hamborner REIT AG

      514        5,082   

Hammerson PLC

      3,122        21,003   

Hansteen Holdings PLC

      2,405        3,165   

HCP, Inc.

      2,343        80,248   

Healthcare Realty Trust, Inc.

      558        17,795   

Healthcare Trust of America, Inc., Class A

      795        24,327   

Hersha Hospitality Trust

      150        2,673   

Hibernia REIT PLC

      2,490        3,507   

Highwoods Properties, Inc.

      536        26,602   

Hospitality Properties Trust

      566        15,486   

Host Hotels & Resorts, Inc.

      3,838        59,412   

Hudson Pacific Properties, Inc.

      541        18,188   

Hulic Reit, Inc.

      3        5,250   

ICADE

      150        10,772   

Industrial & Infrastructure Fund Investment Corp.

      1        5,265   

Intervest Offices & Warehouses NV

      230        6,099   

Intu Properties PLC

      4,696        15,827   

Investa Office Fund

      2,000        6,442   

Investors Real Estate Trust

      539        3,272   

Invincible Investment Corp.

      9        4,363   

Irish Residential Properties REIT PLC

      2,102        2,711   

Japan Excellent, Inc.

      4        5,596   

Japan Hotel REIT Investment Corp.

      14        9,445   

Japan Logistics Fund, Inc.

      3        6,525   

Japan Prime Realty Investment Corp.

      3        12,956   

Japan Real Estate Investment Corp.

      7        40,536   

Japan Rental Housing Investments, Inc.

      7        5,417   
Common Stocks    Shares     Value  

Real Estate Investment Trusts (REITs) (continued)

  

Japan Retail Fund Investment Corp.

      13      $ 29,575   

Kenedix Office Investment Corp.

      2        11,277   

Kenedix Retail REIT Corp.

      2        4,827   

Keppel REIT

      12,300        9,647   

Killam Apartment Real Estate Investment Trust

      260        2,299   

Kilroy Realty Corp.

      429        30,815   

Kimco Realty Corp.

      2,061        54,843   

Kite Realty Group Trust

      315        7,853   

Kiwi Property Group Ltd.

      4,768        5,000   

Klepierre

      977        39,928   

Land Securities Group PLC

      3,119        38,085   

Lar Espana Real Estate Socimi SA

      802        5,756   

LaSalle Hotel Properties

      466        11,068   

Lexington Realty Trust

      965        9,785   

Liberty Property Trust

      774        31,293   

Life Storage, Inc.

      265        21,372   

Link REIT

      10,000        71,139   

LondonMetric Property PLC

      2,311        4,216   

LTC Properties, Inc.

      264        13,229   

Macerich Co.

      765        54,147   

Mack-Cali Realty Corp.

      353        9,065   

Mapletree Commercial Trust

      8,710        9,579   

Mapletree Industrial Trust

      8,400        10,388   

Mapletree Logistics Trust

      4,000        2,976   

Medical Properties Trust, Inc.

      1,415        19,725   

MedicX Fund Ltd.

      3,615        3,850   

Mercialys SA

      170        3,522   

Merlin Properties Socimi SA

      1,255        14,081   

Mid-America Apartment Communities, Inc.

      367        34,039   

Milestone Apartments Real Estate Investment Trust

      279        3,752   

Mirvac Group

      17,686        28,056   

Monmouth Real Estate Investment Corp.

      262        3,582   

Monogram Residential Trust, Inc.

      673        7,093   

Mori Hills REIT Investment Corp.

      5        7,050   

Mori Trust Sogo REIT, Inc.

      3        4,827   

National Health Investors, Inc.

      225        17,046   

National Retail Properties, Inc.

      685        31,250   

New Senior Investment Group, Inc.

      384        4,001   

New York REIT, Inc.

      801        7,545   

Nippon Accommodations Fund, Inc.

      2        9,101   

Nippon Building Fund, Inc.

      6        35,653   

Nippon Prologis REIT, Inc.

      6        13,579   

Nomura Real Estate Master Fund, Inc.

      17        27,594   

Northview Apartment Real Estate Investment Trust

      182        2,704   

NSI NV

      491        1,927   
 

 

                
2    BLACKROCK DEVELOPED REAL ESTATE INDEX FUND    OCTOBER 31, 2016   

Schedule of Investments (continued)

   

BlackRock Developed Real Estate Index Fund

 

Common Stocks    Shares     Value  

Real Estate Investment Trusts (REITs) (continued)

  

Omega Healthcare Investors, Inc.

      819      $ 26,069   

Orix JREIT, Inc.

      10        17,130   

Paramount Group, Inc.

      642        9,983   

Parkway, Inc. (a)

      165        2,973   

Pebblebrook Hotel Trust

      307        7,454   

Pennsylvania Real Estate Investment Trust

      300        5,853   

Physicians Realty Trust

      551        10,893   

Picton Property Income Ltd.

      6,984        6,048   

Piedmont Office Realty Trust, Inc., Class A

      803        16,445   

Post Properties, Inc.

      317        20,855   

Premier Investment Corp.

      4        5,156   

Primary Health Properties PLC

      2,413        3,293   

Prologis, Inc.

      2,559        133,477   

PS Business Parks, Inc.

      80        8,783   

Public Storage

      709        151,528   

Pure Industrial Real Estate Trust

      1,354        5,431   

QTS Realty Trust, Inc., Class A

      185        8,503   

Ramco-Gershenson Properties Trust

      261        4,526   

Realty Income Corp.

      1,311        77,664   

Redefine International PLC

      4,345        2,205   

Regency Centers Corp.

      555        39,999   

Retail Opportunity Investments Corp.

      841        16,913   

Retail Properties of America, Inc., Class A

      1,348        20,988   

Rexford Industrial Realty, Inc.

      238        5,012   

RioCan Real Estate Investment Trust

      1,561        30,352   

RLJ Lodging Trust

      707        13,942   

Sabra Health Care REIT, Inc.

      335        7,806   

Safestore Holdings PLC

      737        3,235   

Saul Centers, Inc.

      69        4,173   

Scentre Group

      23,579        75,465   

Schroder Real Estate Investment Trust Ltd.

      7,731        5,346   

Segro PLC

      3,187        17,070   

Sekisui House REIT, Inc.

      3        4,056   

Sekisui House SI Residential Investment Corp.

      4        4,637   

Select Income REIT

      270        6,680   

Senior Housing Properties Trust

      898        19,100   

Seritage Growth Properties, Class A

      106        4,828   

Shaftesbury PLC

      1,606        18,017   

Shopping Centres Australasia Property Group

      2,729        4,533   

Silver Bay Realty Trust Corp.

      75        1,256   

Simon Property Group, Inc.

      1,535        285,449   

SL Green Realty Corp.

      463        45,476   
Common Stocks    Shares     Value  

Real Estate Investment Trusts (REITs) (continued)

  

Smart Real Estate Investment Trust

      453      $ 11,297   

Spirit Realty Capital, Inc.

      2,392        28,489   

STAG Industrial, Inc.

      251        5,791   

Standard Life Investment Property Income Trust Ltd.

      5,663        5,874   

Stockland

      11,592        38,931   

STORE Capital Corp.

      759        20,713   

Summit Hotel Properties, Inc.

      304        3,949   

Sun Communities, Inc.

      303        23,310   

Sunstone Hotel Investors, Inc.

      1,313        16,491   

Suntec Real Estate Investment Trust

      13,400        16,185   

Tanger Factory Outlet Centers, Inc.

      576        20,045   

Target Healthcare REIT Ltd.

      3,935        5,334   

Taubman Centers, Inc.

      255        18,477   

Terreno Realty Corp.

      168        4,385   

Tier REIT, Inc.

      245        3,614   

Tokyu REIT, Inc.

      3        3,956   

Tritax Big Box REIT PLC

      6,770        11,253   

UDR, Inc.

      1,424        49,797   

Unibail-Rodamco SE

      446        105,865   

United Urban Investment Corp.

      11        18,601   

Urban Edge Properties

      575        14,841   

Urstadt Biddle Properties, Inc., Class A

      85        1,828   

Vastned Retail NV

      177        6,803   

Ventas, Inc.

      1,709        115,785   

VEREIT, Inc.

      4,779        44,923   

Vicinity Centres

      15,503        33,808   

Vornado Realty Trust

      871        80,811   

Warehouses De Pauw CVA

      50        4,607   

Washington Prime Group, Inc.

      688        7,217   

Washington Real Estate Investment Trust

      474        13,945   

Weingarten Realty Investors

      649        23,500   

Welltower, Inc.

      1,734        118,831   

Wereldhave NV

      164        7,341   

Westfield Corp.

      8,524        57,604   

Workspace Group PLC

      638        4,907   

WP Carey, Inc.

      444        26,969   

Xenia Hotels & Resorts, Inc.

      505        7,883   
    

 

 

  
               5,198,046   

Real Estate Management & Development — 17.3%

     

ADO Properties SA (b)

      147        5,373   

Aeon Mall Co. Ltd.

      500        7,425   

Allreal Holding AG (a)

      36        5,298   

Azrieli Group Ltd.

      180        7,663   

BUWOG AG (a)

      428        10,345   

CA Immobilien Anlagen AG (a)

      277        5,026   

Capital & Counties Properties PLC

      2,791        9,842   

CapitaLand Ltd.

      10,400        23,066   
 

 

                
   BLACKROCK DEVELOPED REAL ESTATE INDEX FUND    OCTOBER 31, 2016    3

Schedule of Investments (continued)

   

BlackRock Developed Real Estate Index Fund

 

Common Stocks    Shares     Value  

Real Estate Management & Development (continued)

  

Castellum AB

      1,283      $ 17,385   

Cheung Kong Property Holdings Ltd.

      13,000        96,105   

City Developments Ltd.

      2,400        14,613   

Citycon OYJ

      1,477        3,461   

Conwert Immobilien Invest SE (a)

      267        4,736   

D Carnegie & Co. AB (a)

      461        5,180   

Deutsche Euroshop AG

      200        8,644   

Deutsche Wohnen AG, Bearer Shares

      1,592        52,013   

Entra ASA (b)

      256        2,744   

F&C Commercial Property Trust Ltd.

      1,956        3,002   

Fabege AB

      768        12,971   

Fastighets AB Balder, B Shares (a)

      428        9,721   

First Capital Realty, Inc.

      263        4,194   

Grainger PLC

      1,387        3,752   

Grand City Properties SA

      433        7,617   

Hang Lung Properties Ltd.

      9,000        19,792   

Hemfosa Fastigheter AB

      387        3,639   

Henderson Land Development Co. Ltd.

      6,400        37,857   

Hispania Activos Inmobiliarios SOCIMI SA

      336        4,127   

Hongkong Land Holdings Ltd.

      5,400        36,160   

Hufvudstaden AB, A Shares

      498        7,708   

Hulic Co. Ltd.

      1,400        13,330   

Hysan Development Co. Ltd.

      3,000        13,846   

Inmobiliaria Colonial SA

      833        5,874   

Kennedy Wilson Europe Real Estate PLC

      469        5,822   

Kerry Properties Ltd.

      3,000        9,499   

Kungsleden AB

      543        3,424   

LEG Immobilien AG (a)

      274        23,112   

Mitsubishi Estate Co. Ltd.

      6,000        119,249   

Mitsui Fudosan Co. Ltd.

      5,000        113,869   

Mobimo Holding AG (a)

      23        5,534   

New World Development Co. Ltd.

      22,000        27,351   

Nomura Real Estate Holdings, Inc.

      500        8,443   

NTT Urban Development Corp.

      400        3,677   

PSP Swiss Property AG, Registered Shares

      227        20,312   

Sino Land Co. Ltd.

      12,000        20,375   

Sponda OYJ

      911        4,313   

Sumitomo Realty & Development Co. Ltd.

      2,000        52,572   

Sun Hung Kai Properties Ltd.

      7,000        104,238   
Common Stocks    Shares     Value  

Real Estate Management & Development (continued)

  

Swire Properties Ltd.

      4,600      $ 13,210   

Swiss Prime Site AG, Registered Shares (a)

      237        19,657   

TAG Immobilien AG

      453        6,041   

TLG Immobilien AG

      200        4,193   

Tokyo Tatemono Co. Ltd.

      900        11,433   

UK Commercial Property Trust Ltd.

      4,000        3,824   

UNITE Group PLC

      1,073        7,268   

UOL Group Ltd.

      1,900        7,728   

Vonovia SE

      2,177        76,750   

Wallenstam AB, B Shares

      1,406        10,830   

Wharf Holdings Ltd.

      5,000        37,489   

Wihlborgs Fastigheter AB

      187        3,624   
    

 

 

  
               1,186,346   
Total Common Stocks — 93.4%        6,396,680   
 
           
Investment Companies — 3.4%         

iShares International Developed Real Estate ETF (c)

      8,130        231,055   
Total Long-Term Investments
(Cost — $6,677,684) — 96.8%		         6,627,735   
 
           
Short-Term Securities         

BlackRock T-Fund, Institutional Class, 0.22% (c)(d)

      574,408        574,408   
Total Short-Term Securities
(Cost — $574,408) — 8.4%		         574,408   
Total Investments (Cost — $7,252,092*) — 105.2%        7,202,143   
Liabilities in Excess of Other Assets — (5.2)%        (353,851 ) 
 

 

 

  

Net Assets — 100.0%

  

   $ 6,848,292   
 

 

 

  

 

  *   As of October 31, 2016, gross unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:

 

Tax cost

    $ 7,280,266   
  

 

 

  

Gross unrealized appreciation

    $ 349,730   

Gross unrealized depreciation

      (427,853 ) 
  

 

 

  

Net unrealized depreciation

    $ (78,123 ) 
  

 

 

  
 

 

                
4    BLACKROCK DEVELOPED REAL ESTATE INDEX FUND    OCTOBER 31, 2016   

Schedule of Investments (continued)

   

BlackRock Developed Real Estate Index Fund

 

 

Notes to Schedule of Investments

 

(a)   Non-income producing security.

 

(b)   Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors.

 

(c)   During the period ended October 31, 2016, investments in issuers considered to be affiliates of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate   Shares
Held at
January 31,
2016		    

Shares

Purchased

    

Shares

Interest Sold

     Shares
Held at
October 31,
2016		     Value at
October 31,
2016		    
Income		     Realized
Gain		  

BlackRock Premier Government Institutional Fund

     76,937        —        (76,937 )1      —        —      $ 146        —   

BlackRock Liquidity Funds, T-Fund, Institutional Class

     —        574,408 2      —        574,408      $ 574,408        16        —   

iShares International Developed Real Estate ETF

     —        16,560        (8,430 )      8,130        231,055        —      $ 371   

Total

           $ 805,463      $ 162      $ 371   

1    Represents net shares/beneficial interest sold.

       

    

2    Represents net shares/beneficial interest purchased.

       

    

 

(d)   Current yield as of period end.

 

Derivative Financial Instruments Outstanding as of Period End

 

Futures Contracts                      
Contracts
Long		     Issue   Expiration   Notional
Value		     Unrealized
Depreciation		  
  4      Dow Jones U.S. Real Estate Index   December 2016   $ 120,440      $ (3,641 ) 

 

Portfolio Abbreviations

 

 

CVA    Certificaten Van Aandelen (Dutch Certificate)              
ETF    Exchange-Traded Fund              
REIT    Real Estate Investment Trust              

 

                
   BLACKROCK DEVELOPED REAL ESTATE INDEX FUND    OCTOBER 31, 2016    5

Schedule of Investments (continued)

   

BlackRock Developed Real Estate Index Fund

 

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation methodologies are categorized into a fair value hierarchy consisting of three broad levels for financial reporting purposes as follows:

 

  •  

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

 

  •  

Level 2 — other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market–corroborated inputs)

 

  •  

Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund’s own assumptions used in determining the fair value of investments and derivative financial instruments)

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Investments classified within Level 3 have significant unobservable inputs used by the Global Valuation Committee in determining the price for Fair Valued Investments. Level 3 Investments include equity or debt issued by privately-held companies. There may not be a secondary market, and/or there are a limited number of investors. Level 3 investments may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the Global Valuation Committee in the absence of market information.

Changes in valuation methodologies may result in transfers into or out of an assigned level within the hierarchy. In accordance with the Fund’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investments and derivative financial instruments and is not necessarily an indication of the risks associated with investing in those securities. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, refer to the Fund’s most recent financial statements as contained in its semi-annual report.

The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

     Level 1     Level 2     Level 3     Total  

Assets:

        
Investments:        

Common Stocks:

        

Hotels, Restaurants & Leisure

   $ 12,288        —        —      $ 12,288   

Real Estate Investment Trusts (REITs)

     3,836,479        1,361,566        —        5,198,045   

Real Estate Management & Development

     19,509        1,166,838        —        1,186,347   

Investment Companies

     231,055        —        —        231,055   

Short-Term Securities

     574,408        —        —        574,408   
 

 

 

  

Total

   $ 4,673,739      $ 2,528,404        —      $ 7,202,143   
 

 

 

  
         
Derivative Financial Instruments 1        

Liabilities:

        

Equity contracts

   $ (3,641 )      —        —      $ (3,641 ) 

1    Derivative financial instruments are futures contracts, which are valued at the unrealized appreciation (depreciation) on the instrument.

       

 

                
6    BLACKROCK DEVELOPED REAL ESTATE INDEX FUND    OCTOBER 31, 2016   

Schedule of Investments (concluded)

   

BlackRock Developed Real Estate Index Fund

 

The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial reporting purposes. As of period end, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:

 

     Level 1     Level 2     Level 3     Total  

Assets:

        

Cash

   $ 440        —        —      $ 440   

Cash pledged for futures contracts

     6,000        —        —        6,000   

Foreign currency at value

     68,477        —        —        68,477   
 

 

 

  

Total

   $ 74,917        —        —      $ 74,917   
 

 

 

  

During the period ended October 31, 2016, there were no transfers between levels.

 

                
   BLACKROCK DEVELOPED REAL ESTATE INDEX FUND    OCTOBER 31, 2016    7

Item 2 – Controls and Procedures

 

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

 

2(b) – There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 3 – Exhibits

Certifications – Attached hereto

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

 

BlackRock Funds
By:       /s/ John M. Perlowski                    
  John M. Perlowski
 

Chief Executive Officer (principal executive officer) of

BlackRock Funds

Date: December 20, 2016

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

 

By:       /s/ John M. Perlowski                    
  John M. Perlowski
 

Chief Executive Officer (principal executive officer) of

BlackRock Funds

Date: December 20, 2016

 

By:       /s/ Neal J. Andrews                    
  Neal J. Andrews
 

Chief Financial Officer (principal financial officer) of

BlackRock Funds

Date: December 20, 2016