N-Q 1 d565366dnq.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 number: 811-05742

Name of Fund:  BlackRock Funds

BlackRock Real Estate Securities Fund

Fund Address:   100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock Funds, 55 East 52nd Street, New York, NY 10055

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

Date of fiscal year end: 01/31/2019

Date of reporting period: 04/30/2018

Item 1 – Schedule of Investments

Schedule of Investments  (unaudited) 

April 30, 2018

   

BlackRock Real Estate Securities Fund

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  

Common Stocks — 99.8%

    
Health Care — 10.6%            

CareTrust REIT, Inc.

     43,635     $ 576,418  

HCP, Inc.

     25,024       584,561  

Healthcare Trust of America, Inc., Class A

     20,525       512,920  

Sabra Health Care REIT, Inc.

     29,567       541,372  
   

 

 

  
      2,215,271  
Industrial — 9.6%            

Duke Realty Corp.

     20,043       543,165  

Liberty Property Trust

     16,045       671,002  

Prologis, Inc.

     3,921       254,512  

Rexford Industrial Realty, Inc.

     17,605       537,833  
   

 

 

  
      2,006,512  
Lodging — 7.6%            

Host Hotels & Resorts, Inc.

     57,848       1,131,507  

Sunstone Hotel Investors, Inc.

     30,202       471,151  
   

 

 

  
      1,602,658  
Office — 14.4%            

Alexandria Real Estate Equities, Inc.

     7,617       948,850  

Boston Properties, Inc.

     10,401       1,262,785  

Brandywine Realty Trust

     10,171       163,855  

Highwoods Properties, Inc.

     6,969       306,775  

JBG SMITH Properties

     4,610       169,971  

Mack-Cali Realty Corp.

     9,236       158,582  
   

 

 

  
      3,010,818  
Residential — 19.3%            

American Campus Communities, Inc.

     5,352       209,317  

AvalonBay Communities, Inc.

     7,624       1,242,712  

Equity Residential

     2,764       170,566  

Invitation Homes, Inc.

     31,748       734,649  

Mid-America Apartment Communities, Inc.

     6,966       637,110  

Sun Communities, Inc.

     6,725       631,141  

UDR, Inc.

     11,607       419,593  
   

 

 

  
      4,045,088  
Retail — 17.2%            

DDR Corp.

     41,657       302,013  

Federal Realty Investment Trust

     4,496       520,862  

Macerich Co.

     7,275       419,186  

Regency Centers Corp.

     10,589       623,163  

Simon Property Group, Inc.

     11,103       1,735,843  
   

 

 

  
      3,601,067  
Security   Shares     Value  
Self Storage — 4.8%            

Extra Space Storage, Inc.

     10,095     $ 904,411  

Public Storage

     531       107,145  
   

 

 

  
      1,011,556  
Specialty — 6.6%            

CyrusOne, Inc.

     8,824       472,878  

Digital Realty Trust, Inc.

     2,964       313,265  

Equinix, Inc.

     1,126       473,810  

GDS Holdings Ltd. - ADR (a)

    4,220       123,097  
   

 

 

  
      1,383,050  
Triple Net Lease — 9.7%            

EPR Properties

     12,320       677,846  

Spirit Realty Capital, Inc.

     77,209       621,533  

VEREIT, Inc.

     107,305       729,674  
   

 

 

  
      2,029,053  
   

 

 

  

Total Long-Term Investments — 99.8%
(Cost: $20,231,114)

       20,905,073  
   

 

 

  

Short-Term Securities — 0.1%

    
Money Market Funds — 0.1%            

BlackRock Liquidity Funds, T-Fund, Institutional Class, 1.57%, (b)(c)

    25,335       25,335  
   

 

 

  

Total Short-Term Securities — 0.1%
(Cost: $25,335)

       25,335  
   

 

 

  

Total Investments — 99.9%
(Cost: $20,256,449)

       20,930,408  

Other Assets Less Liabilities — 0.1%

       12,631  
   

 

 

  

Net Assets — 100.0%

     $ 20,943,039  
   

 

 

  
 
(a) Non-income producing security.
(b) Annualized 7-day yield as of period end.
(c) During the period ended April 30, 2018, 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
01/31/18		    Net Activity    Shares
Held at
04/30/18		    Value at
04/30/18		    Income    Net
Realized
Gain
(Loss)		    Change in
Unrealized
Appreciation
(Depreciation)

BlackRock Liquidity Funds, T-Fund, Institutional  Class

        152,006        (126,671 )        25,335      $ 25,335      $ 593      $ —      $ —

SL Liquidity Series, LLC, Money Market Series

        321,094        (321,094 )        —        —        116 (a)        44        (32 )
                   

 

 

       

 

 

       

 

 

       

 

 

  
                    $ 25,335      $ 709      $ 44      $ (32 )
                   

 

 

       

 

 

       

 

 

       

 

 

  

 

  (a)  Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.

For Fund compliance purposes, the Fund’s industry classifications refer to one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

 

 

SCHEDULE OF INVESTMENTS      1  

Schedule of Investments  (unaudited) (continued)

April 30, 2018

   

BlackRock Real Estate Securities Fund

 

Portfolio Abbreviation
ADR    American Depositary Receipt
REIT    Real Estate Investment Trust

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments. 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)

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 BlackRock Global Valuation Methodologies Committee (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 is based on the pricing transparency of the investments 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, refer to the Fund’s most recent financial statements as contained in its annual report.

The following table summarizes the Fund’s investments categorized in the disclosure hierarchy:

 

      Level 1      Level 2      Level 3      Total

Assets

                          

Investments

                          

Long-Term Investments(a)

     $ 20,905,073        $ —        $ —        $ 20,905,073

Short-Term Securities

        25,335          —          —          25,335
    

 

 

         

 

 

         

 

 

         

 

 

  
     $ 20,930,408        $ —        $ —        $ 20,930,408
    

 

 

         

 

 

         

 

 

         

 

 

  

 

  (a)  See above Schedule of Investments for values in each industry.

During the period ended April 30, 2018, there were no transfers between levels.

 

 

2    2018 BLACKROCK QUARTERLY REPORT TO SHAREHOLDERS

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: June 18, 2018   
  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: June 18, 2018   
  By:  

    /s/ Neal J. Andrews

   
    Neal J. Andrews   
    Chief Financial Officer (principal financial officer) of
    BlackRock Funds   
  Date: June 18, 2018