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OverviewKey Facts About iShares U.S. Long Credit Bond Index Fund Investment Objective <div style="margin-top: 4pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">The investment objective of iShares U.S. Long Credit Bond Index Fund (the “Fund”), a series of BlackRock Funds^SM (the “Trust”), is to seek to provide investment results that correspond to the total return performance of fixed-income securities, in aggregate, as represented by the Bloomberg U.S. Long Credit Index (or the “Underlying Index”).</div> Fees and Expenses of the Fund <div style="margin-top: 4pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.</div> Annual Fund Operating Expenses(expenses that you pay each year as a percentage of the value of your investment) 0.0006 0 0.0006 0.0006 0.0012 -0.0012 June 30, 2035 Example: <div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:</div> 0 0 0 0 Portfolio Turnover: <div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the Example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 13% of the average value of its portfolio.</div> 0.13 Principal Investment Strategies of the Fund <div style="margin-top: 4pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">Under normal circumstances, at least 90% of the value of the Fund’s assets, plus the amount of any borrowings for investment purposes, is invested in securities comprising the Bloomberg U.S. Long Credit Index, which, for the Fund, are considered bonds. The Fund attempts to achieve, in both rising and falling markets, a correlation of at least 95% between the total return of its net assets before fees and expenses and the total return of the Fund’s benchmark index, the Bloomberg U.S. Long Credit Index. Notwithstanding the factors described below, perfect (100%) correlation</div> <div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">would be achieved if the total return of the Fund’s net assets, before fees and expenses, increased or decreased exactly as the total return of the Fund’s benchmark index increased or decreased. The Fund’s ability to match its investment performance to the investment performance of its benchmark index may be affected by, among other things, the Fund’s expenses, the amount of cash and cash equivalents held by the Fund, the manner in which the total return of the Fund’s benchmark index is calculated, the size of the Fund’s investment portfolio, and the timing, frequency and size of shareholder purchases and redemptions.</div> <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">The Bloomberg U.S. Long Credit Index is a capitalization weighted index that measures the investment grade, U.S. dollar-denominated, fixed-rate, taxable corporate and government-related bond markets with a maturity equal or greater than ten years. It is composed of the Bloomberg U.S. Corporate Index and a non-corporate component that includes non-U.S. agencies, sovereigns, supranationals and local authorities constrained by maturity. The index is rebalanced monthly. There were approximately 3,433 fixed-income securities included in the Bloomberg U.S. Long Credit Index as of December 31, 2024. All securities in the Bloomberg U.S. Long Credit Index are rated investment-grade.</div> <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">The Fund will be invested and reinvested primarily in U.S. debt securities with maturities greater than ten years, with the objective of approximating as closely as practicable the total rate of return of the Bloomberg U.S. Long Credit Index. The dollar-weighted average maturity of the Fund’s portfolio, under normal circumstances, is expected to be more than ten years.</div> <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">The Fund utilizes sampling techniques that are designed to allow the Fund to duplicate substantially the investment performance of the Bloomberg U.S. Long Credit Index. However, the Fund is not expected to track the Bloomberg U.S. Long Credit Index with the same degree of accuracy that complete replication of the Bloomberg U.S. Long Credit Index would provide. No attempt is made to manage the Fund using economic, financial or market analysis. In addition, at times, the portfolio composition of the Fund may be altered (or “rebalanced”) to reflect changes in the characteristics of the index that the Fund tracks.</div> <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">The Fund also may engage in futures, forwards and options transactions and other derivative securities transactions and lend its portfolio securities, each of which involves risk. The Fund may use futures contracts, forwards, options and other derivative transactions to manage its short-term liquidity and/or as substitutes for comparable market positions in the securities in its benchmark index. The Fund may also invest in high-quality money market instruments, including shares of money market funds advised by BFA or its affiliates.</div> Principal Risks of Investing in the Fund You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Debt Securities Risk </span></span>— Debt securities, such as bonds, involve risks, such as credit risk, interest rate risk, extension risk, and prepayment risk, each of which are described in further detail below:</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"> </td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Credit Risk</span> — Credit risk refers to the possibility that the issuer of a debt security (i.e., the borrower) will not be able to make payments of interest and principal when due. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also affect the value of the Fund’s investment in that issuer. The degree of credit risk depends on both the financial condition of the issuer and the terms of the obligation.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Interest Rate Risk</span> — The market value of bonds and other fixed-income securities changes in response to interest rate changes and other factors. Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall and decrease as interest rates rise.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"> </td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;">The Fund may be subject to a greater risk of rising interest rates during a period of historically low interest rates. For example, if interest rates increase by 1%, assuming a current portfolio duration of ten years, and all other factors being equal, the value of the Fund’s investments would be expected to decrease by 10%. (Duration is a measure of the price sensitivity of a debt security or portfolio of debt securities to relative changes in interest rates.) The magnitude of these fluctuations in the market price of bonds and other fixed-income securities is generally greater for those securities with longer maturities. Fluctuations in the market price of the Fund’s investments will not affect interest income derived from instruments already owned by the Fund, but will be reflected in the Fund’s net asset value. The Fund may lose money if short-term or long-term interest rates rise sharply in a manner not anticipated by Fund management.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"> </td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;">To the extent the Fund invests in debt securities that may be prepaid at the option of the obligor (such as mortgage-backed securities), the sensitivity of such securities to changes in interest rates may increase (to the detriment of the Fund) when interest rates rise. Moreover, because rates on certain floating rate debt securities typically reset only periodically, changes in prevailing interest rates (and particularly sudden and significant changes) can be expected to cause some fluctuations in the net asset value of the Fund to the extent that it invests in floating rate debt securities.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"> </td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;">These basic principles of bond prices also apply to U.S. Government securities. A security backed by the “full faith and credit” of the U.S. Government is guaranteed only as to its stated interest rate and face value at maturity, not its current market price. Just like other fixed-income securities, government-guaranteed securities will fluctuate in value when interest rates change.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"> </td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;">A general rise in interest rates has the potential to cause investors to move out of fixed-income securities on a large scale, which may increase redemptions from funds that hold large amounts of fixed-income securities. Heavy redemptions could cause the Fund to sell assets at inopportune times or at a loss or depressed value and could hurt the Fund’s performance.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Extension Risk </span>— When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these obligations to fall.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Prepayment Risk </span>— When interest rates fall, certain obligations will be paid off by the obligor more quickly than originally anticipated, and the Fund may have to invest the proceeds in securities with lower yields.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Index-Related Risk</span></span> — The index provider may rely on various sources of information to assess the criteria of components of the Underlying Index, including information that may be based on assumptions and estimates. Neither the Fund nor BFA can offer assurances that the index provider’s methodology or sources of information will provide an accurate assessment of included components or will result in the Fund meeting its investment objective. Errors in index data, index computations or the construction of the Underlying Index in accordance with its methodology may occur, and the index provider may not identify or correct them promptly or at all, which may have an adverse impact on the Fund and its shareholders. Unusual market conditions or other unforeseen circumstances (such as natural disasters, political unrest or war) may impact the index provider or a third-party data provider and could cause the index provider to postpone a scheduled rebalance. This could cause the Underlying Index to vary from its normal or expected composition.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Passive Investment Risk</span></span> — Because BFA does not select individual companies in the index that the Fund tracks, the Fund may hold securities of companies that present risks that an investment adviser researching individual securities might seek to avoid.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Concentration Risk</span></span> — The Fund reserves the right to concentrate its investments (i.e., invest 25% or more of its total assets in securities of issuers in a particular industry) to approximately the same extent that the Underlying Index concentrates in a particular industry. To the extent the Fund concentrates in a particular industry, it may be more susceptible to economic conditions and risks affecting that industry.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Derivatives Risk </span></span>— The Fund’s use of derivatives may increase its costs, reduce the Fund’s returns and/or increase volatility. Derivatives involve significant risks, including:</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Leverage Risk</span> — The Fund’s use of derivatives can magnify the Fund’s gains and losses. Relatively small market movements may result in large changes in the value of a derivatives position and can result in losses that greatly exceed the amount originally invested.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Market Risk</span> — Some derivatives are more sensitive to interest rate changes and market price fluctuations than other securities. The Fund could also suffer losses related to its derivatives positions as a result of unanticipated market movements, which losses are potentially unlimited. Finally, BFA may not be able to predict correctly the direction of securities prices, interest rates and other economic factors, which could cause the Fund’s derivatives positions to lose value.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Counterparty Risk</span> — Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will be unable or unwilling to fulfill its contractual obligation, and the related risks of having concentrated exposure to such a counterparty.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Illiquidity Risk</span> — The possible lack of a liquid secondary market for derivatives and the resulting inability of the Fund to sell or otherwise close a derivatives position could expose the Fund to losses and could make derivatives more difficult for the Fund to value accurately.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Operational Risk</span> — The use of derivatives includes the risk of potential operational issues, including documentation issues, settlement issues, systems failures, inadequate controls and human error.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Legal Risk</span> — The risk of insufficient documentation, insufficient capacity or authority of counterparty, or legality or enforceability of a contract.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Volatility and Correlation Risk</span> — 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 with the overall securities markets.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Valuation Risk </span>— Valuation for derivatives may not be readily available in the market. Valuation may be more difficult in times of market turmoil since many investors and market makers may be reluctant to purchase complex instruments or quote prices for them.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Hedging Risk</span> — Hedges are sometimes subject to imperfect matching between the derivative and the underlying security, and there can be no assurance that the Fund’s hedging transactions will be effective. The use of hedging may result in certain adverse tax consequences.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Tax Risk </span>— Certain aspects of the tax treatment of derivative instruments, including swap agreements and commodity-linked derivative instruments, are currently unclear and may be affected by changes in legislation, regulations or other legally binding authority. Such treatment may be less favorable than that given to a direct investment in an underlying asset and may adversely affect the timing, character and amount of income the Fund realizes from its investments.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Leverage Risk</span></span> — Some transactions may give rise to a form of economic leverage. These transactions may include, among others, derivatives, and may expose the Fund to greater risk and increase its costs. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet the applicable requirements of the Investment Company Act of 1940, as amended, and the rules thereunder. Increases and decreases in the value of the Fund’s portfolio will be magnified when the Fund uses leverage.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Market Risk and Selection Risk </span></span>— Market risk is the risk that one or more markets in which the Fund invests will go down in value, including the possibility that the markets will go down sharply and unpredictably. The value of a security or other asset may decline due to changes in general market conditions, economic trends or events that are not specifically related to the issuer of the security or other asset, or factors that affect a particular issuer or issuers, exchange, country, group of countries, region, market, industry, group of industries, sector or asset class. Local, regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues like pandemics or epidemics, recessions, or other events could have a significant impact on the Fund and its investments. Selection risk is the risk that the securities selected by Fund management will underperform the markets, the relevant indices or the securities selected by other funds with similar investment objectives and investment strategies. This means you may lose money.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Money Market Securities Risk </span></span>— If market conditions improve while the Fund has invested some or all of its assets in high quality money market securities, this strategy could result in reducing the potential gain from the market upswing, thus reducing the Fund’s opportunity to achieve its investment objective.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Representative Sampling Risk</span></span> — Representative sampling is a method of indexing that involves investing in a representative sample of securities that collectively have a similar investment profile to the Underlying Index and resemble the Underlying Index in terms of risk factors and other key characteristics. The Fund may or may not hold every security in the Underlying Index. When the Fund deviates from a full replication indexing strategy to utilize a representative sampling strategy, the Fund is subject to an increased risk of tracking error, in that the securities selected in the aggregate for the Fund may not have an investment profile similar to those of the Underlying Index.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Risk of Investing in the United States</span></span> — Certain changes in the U.S. economy, such as when the U.S. economy weakens or when its financial markets decline, may have an adverse effect on the securities to which the Fund has exposure.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Securities Lending Risk </span></span>— The Fund may engage in securities lending. Securities lending involves the risk that the Fund may lose money because the borrower of the loaned securities fails to return the securities in a timely manner or at all. The Fund could also lose money in the event of a decline in the value of collateral provided for loaned securities or a decline in the value of any investments made with cash collateral. These events could also trigger adverse tax consequences for the Fund.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Tracking Error Risk</span></span> — The Fund may be subject to “tracking error,” which is the divergence of the Fund’s performance from that of the Underlying Index. Tracking error may occur due to a number of factors, including differences between the securities and other assets held in the Fund’s portfolio and those included in the Underlying Index; differences in the timing and methodologies used to value securities and other assets; transaction costs and other expenses incurred by the Fund that the Underlying Index does not incur; the Fund’s holding of uninvested cash; differences in the timing of the accrual or the valuation of dividends or interest received by the Fund or distributions paid to Fund shareholders; tax gains or losses; the requirements for the Fund to maintain pass-through tax treatment; portfolio transactions carried out to minimize the distribution of capital gains to shareholders; the acceptance of custom baskets; changes to the Underlying Index; and impacts to the Fund of complying with certain regulatory requirements or limits. Tracking error risk may be heightened during times of increased market volatility or other unusual market conditions.</div> </td> </tr> </table> Performance Information <div style="margin-top: 4pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">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 Bloomberg U.S. Aggregate Bond Index and Bloomberg U.S. Long Credit Index. The Bloomberg U.S. Long Credit Index is relevant to the Fund because it has characteristics similar to the Fund’s investment strategy. To the extent that dividends and distributions have been paid by the Fund, the performance information for the Fund in the chart and table assumes reinvestment of the dividends and distributions. As with all such investments, past performance (before and after taxes) is not an indication of future results. The table includes all applicable fees. If BFA, BAL and their affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. Updated information on the Fund’s performance, including its current net asset value, can be obtained by visiting http://www.blackrock.com or can be obtained by phone at (800) 882‑0052.</div> 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 Bloomberg U.S. Aggregate Bond Index and Bloomberg U.S. Long Credit Index. The Bloomberg U.S. Long Credit Index is relevant to the Fund because it has characteristics similar to the Fund’s investment strategy. As with all such investments, past performance (before and after taxes) is not an indication of future results. http://www.blackrock.com (800) 882‑0052 ANNUAL TOTAL RETURNS iShares U.S. Long Credit Bond Index Fund As of 12/31 <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">During the periods shown in the bar chart, the highest return for a quarter was 13.29% (quarter ended December 31, 2023) and the lowest return for a quarter was –7.04% (quarter ended September 30, 2023).</div> highest return 0.1329 2023-12-31 lowest return -0.0704 2023-09-30 As of 12/31/24Average Annual Total Returns 2022-05-20 2022-05-20 2022-05-20 -0.0172 0.0081 -0.0377 -0.0126 -0.0100 -0.0026 0.0125 0.0089 -0.0201 0.0080 <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">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.</div> 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. Fund OverviewKey Facts About iShares U.S. Intermediate Credit Bond Index Fund Investment Objective <div style="margin-top: 4pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">The investment objective of iShares U.S. Intermediate Credit Bond Index Fund (the “Fund”), a series of BlackRock Funds^SM (the “Trust”), is to seek to provide investment results that correspond to the total return performance of fixed-income securities, in aggregate, as represented by the Bloomberg U.S. Intermediate Credit Index (or the “Underlying Index”).</div> Fees and Expenses of the Fund <div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.</div> Annual Fund Operating Expenses(expenses that you pay each year as a percentage of the value of your investment) 0.0006 0 0.0006 0.0006 0.0012 -0.0012 June 30, 2035 Example: <div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:</div> 0 0 0 0 Portfolio Turnover: <div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the Example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 20% of the average value of its portfolio.</div> 0.20 Principal Investment Strategies of the Fund <div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">Under normal circumstances, at least 90% of the value of the Fund’s assets, plus the amount of any borrowings for investment purposes, is invested in securities comprising the Bloomberg U.S. Intermediate Credit Index, which, for the Fund, are considered bonds. The Fund attempts to achieve, in both rising and falling markets, a correlation of at least</div> <div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">95% between the total return of its net assets before fees and expenses and the total return of the Fund’s benchmark index, the Bloomberg U.S. Intermediate Credit Index. Notwithstanding the factors described below, perfect (100%) correlation would be achieved if the total return of the Fund’s net assets, before fees and expenses, increased or decreased exactly as the total return of the Fund’s benchmark index increased or decreased. The Fund’s ability to match its investment performance to the investment performance of its benchmark index may be affected by, among other things, the Fund’s expenses, the amount of cash and cash equivalents held by the Fund, the manner in which the total return of the Fund’s benchmark index is calculated, the size of the Fund’s investment portfolio, and the timing, frequency and size of shareholder purchases and redemptions.</div> <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">The Bloomberg U.S. Intermediate Credit Index is a capitalization weighted index that measures the investment grade, U.S. dollar-denominated, fixed-rate, taxable corporate and government-related bond markets with a maturity greater than one year and less than ten years. It is composed of the Bloomberg U.S. Corporate Index and a non-corporate component that includes non-U.S. agencies, sovereigns, supranationals and local authorities constrained by maturity. The index is rebalanced monthly. There were approximately 5,610 fixed-income securities included in the Bloomberg U.S. Intermediate Credit Index as of December 31, 2024. All securities in the Bloomberg U.S. Intermediate Credit Index are rated investment-grade.</div> <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">The Fund will be invested and reinvested primarily in U.S. debt securities with maturities greater than one year but less than ten years, with the objective of approximating as closely as practicable the total rate of return of the Bloomberg U.S. Intermediate Credit Index.</div> <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">Under normal circumstances, the Fund expects to have a dollar-weighted average maturity of three to ten years, although the Fund’s dollar-weighted average maturity may go below three years to the extent it does so for the benchmark index.</div> <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">The Fund utilizes sampling techniques that are designed to allow the Fund to duplicate substantially the investment performance of the Bloomberg U.S. Intermediate Credit Index. However, the Fund is not expected to track the Bloomberg U.S. Intermediate Credit Index with the same degree of accuracy that complete replication of the Bloomberg U.S. Intermediate Credit Index would provide. No attempt is made to manage the Fund using economic, financial or market analysis. In addition, at times, the portfolio composition of the Fund may be altered (or “rebalanced”) to reflect changes in the characteristics of the index that the Fund tracks.</div> <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">The Fund also may engage in futures, forwards and options transactions and other derivative securities transactions and lend its portfolio securities, each of which involves risk. The Fund may use futures contracts, forwards, options and other derivative transactions to manage its short-term liquidity and/or as substitutes for comparable market positions in the securities in its benchmark index. The Fund may also invest in high-quality money market instruments, including shares of money market funds advised by BFA or its affiliates.</div> Principal Risks of Investing in the Fund You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Debt Securities Risk </span></span>— Debt securities, such as bonds, involve risks, such as credit risk, interest rate risk, extension risk, and prepayment risk, each of which are described in further detail below:</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"> </td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Credit Risk</span> — Credit risk refers to the possibility that the issuer of a debt security (i.e., the borrower) will not be able to make payments of interest and principal when due. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also affect the value of the Fund’s investment in that issuer. The degree of credit risk depends on both the financial condition of the issuer and the terms of the obligation.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Interest Rate Risk</span> — The market value of bonds and other fixed-income securities changes in response to interest rate changes and other factors. Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall and decrease as interest rates rise.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"> </td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;">The Fund may be subject to a greater risk of rising interest rates during a period of historically low interest rates. For example, if interest rates increase by 1%, assuming a current portfolio duration of ten years, and all other factors being equal, the value of the Fund’s investments would be expected to decrease by 10%. (Duration is a measure of the price sensitivity of a debt security or portfolio of debt securities to relative changes in interest rates.) The magnitude of these fluctuations in the market price of bonds and other fixed-income securities is generally greater for those securities with longer maturities. Fluctuations in the market price of the Fund’s investments will not affect interest income derived from instruments already owned by the Fund, but will be reflected in the Fund’s net asset value. The Fund may lose money if short-term or long-term interest rates rise sharply in a manner not anticipated by Fund management.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"> </td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;">To the extent the Fund invests in debt securities that may be prepaid at the option of the obligor (such as mortgage-backed securities), the sensitivity of such securities to changes in interest rates may increase (to the detriment of the Fund) when interest rates rise. Moreover, because rates on certain floating rate debt securities typically reset only periodically, changes in prevailing interest rates (and particularly sudden and significant changes) can be expected to cause some fluctuations in the net asset value of the Fund to the extent that it invests in floating rate debt securities.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"> </td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;">These basic principles of bond prices also apply to U.S. Government securities. A security backed by the “full faith and credit” of the U.S. Government is guaranteed only as to its stated interest rate and face value at maturity, not its current market price. Just like other fixed-income securities, government-guaranteed securities will fluctuate in value when interest rates change.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"> </td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;">A general rise in interest rates has the potential to cause investors to move out of fixed-income securities on a large scale, which may increase redemptions from funds that hold large amounts of fixed-income securities. Heavy redemptions could cause the Fund to sell assets at inopportune times or at a loss or depressed value and could hurt the Fund’s performance.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Extension Risk </span>— When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these obligations to fall.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Prepayment Risk </span>— When interest rates fall, certain obligations will be paid off by the obligor more quickly than originally anticipated, and the Fund may have to invest the proceeds in securities with lower yields.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Index-Related Risk</span></span> — The index provider may rely on various sources of information to assess the criteria of components of the Underlying Index, including information that may be based on assumptions and estimates. Neither the Fund nor BFA can offer assurances that the index provider’s methodology or sources of information will provide an accurate assessment of included components or will result in the Fund meeting its investment objective. Errors in index data, index computations or the construction of the Underlying Index in accordance with its methodology may occur, and the index provider may not identify or correct them promptly or at all, which may have an adverse impact on the Fund and its shareholders. Unusual market conditions or other unforeseen circumstances (such as natural disasters, political unrest or war) may impact the index provider or a third-party data provider and could cause the index provider to postpone a scheduled rebalance. This could cause the Underlying Index to vary from its normal or expected composition.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Passive Investment Risk</span></span> — Because BFA does not select individual companies in the index that the Fund tracks, the Fund may hold securities of companies that present risks that an investment adviser researching individual securities might seek to avoid.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Concentration Risk</span></span> — The Fund reserves the right to concentrate its investments (i.e., invest 25% or more of its total assets in securities of issuers in a particular industry) to approximately the same extent that the Underlying Index concentrates in a particular industry. To the extent the Fund concentrates in a particular industry, it may be more susceptible to economic conditions and risks affecting that industry.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Derivatives Risk </span></span>— The Fund’s use of derivatives may increase its costs, reduce the Fund’s returns and/or increase volatility. Derivatives involve significant risks, including:</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Leverage Risk</span> — The Fund’s use of derivatives can magnify the Fund’s gains and losses. Relatively small market movements may result in large changes in the value of a derivatives position and can result in losses that greatly exceed the amount originally invested.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Market Risk</span> — Some derivatives are more sensitive to interest rate changes and market price fluctuations than other securities. The Fund could also suffer losses related to its derivatives positions as a result of unanticipated market movements, which losses are potentially unlimited. Finally, BFA may not be able to predict correctly the direction of securities prices, interest rates and other economic factors, which could cause the Fund’s derivatives positions to lose value.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Counterparty Risk</span> — Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will be unable or unwilling to fulfill its contractual obligation, and the related risks of having concentrated exposure to such a counterparty.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Illiquidity Risk</span> — The possible lack of a liquid secondary market for derivatives and the resulting inability of the Fund to sell or otherwise close a derivatives position could expose the Fund to losses and could make derivatives more difficult for the Fund to value accurately.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Operational Risk</span> — The use of derivatives includes the risk of potential operational issues, including documentation issues, settlement issues, systems failures, inadequate controls and human error.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Legal Risk</span> — The risk of insufficient documentation, insufficient capacity or authority of counterparty, or legality or enforceability of a contract.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Volatility and Correlation Risk</span> — 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 with the overall securities markets.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Valuation Risk </span>— Valuation for derivatives may not be readily available in the market. Valuation may be more difficult in times of market turmoil since many investors and market makers may be reluctant to purchase complex instruments or quote prices for them.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Hedging Risk</span> — Hedges are sometimes subject to imperfect matching between the derivative and the underlying security, and there can be no assurance that the Fund’s hedging transactions will be effective. The use of hedging may result in certain adverse tax consequences.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Tax Risk </span>— Certain aspects of the tax treatment of derivative instruments, including swap agreements and commodity-linked derivative instruments, are currently unclear and may be affected by changes in legislation, regulations or other legally binding authority. Such treatment may be less favorable than that given to a direct investment in an underlying asset and may adversely affect the timing, character and amount of income the Fund realizes from its investments.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Leverage Risk </span></span>— Some transactions may give rise to a form of economic leverage. These transactions may include, among others, derivatives, and may expose the Fund to greater risk and increase its costs. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet the applicable requirements of the Investment Company Act of 1940, as amended, and the rules thereunder. Increases and decreases in the value of the Fund’s portfolio will be magnified when the Fund uses leverage.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Market Risk and Selection Risk </span></span>— Market risk is the risk that one or more markets in which the Fund invests will go down in value, including the possibility that the markets will go down sharply and unpredictably. The value of a security or other asset may decline due to changes in general market conditions, economic trends or events that are not specifically related to the issuer of the security or other asset, or factors that affect a particular issuer or issuers, exchange, country, group of countries, region, market, industry, group of industries, sector or asset class. Local, regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues like pandemics or epidemics, recessions, or other events could have a significant impact on the Fund and its investments. Selection risk is the risk that the securities selected by Fund management will underperform the markets, the relevant indices or the securities selected by other funds with similar investment objectives and investment strategies. This means you may lose money.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Money Market Securities Risk </span></span>— If market conditions improve while the Fund has invested some or all of its assets in high quality money market securities, this strategy could result in reducing the potential gain from the market upswing, thus reducing the Fund’s opportunity to achieve its investment objective.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Representative Sampling Risk</span></span> — Representative sampling is a method of indexing that involves investing in a representative sample of securities that collectively have a similar investment profile to the Underlying Index and resemble the Underlying Index in terms of risk factors and other key characteristics. The Fund may or may not hold every security in the Underlying Index. When the Fund deviates from a full replication indexing strategy to utilize a representative sampling strategy, the Fund is subject to an increased risk of tracking error, in that the securities selected in the aggregate for the Fund may not have an investment profile similar to those of the Underlying Index.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Risk of Investing in the United States</span></span> — Certain changes in the U.S. economy, such as when the U.S. economy weakens or when its financial markets decline, may have an adverse effect on the securities to which the Fund has exposure.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Securities Lending Risk </span></span>— The Fund may engage in securities lending. Securities lending involves the risk that the Fund may lose money because the borrower of the loaned securities fails to return the securities in a timely manner or at all. The Fund could also lose money in the event of a decline in the value of collateral provided for loaned securities or a decline in the value of any investments made with cash collateral. These events could also trigger adverse tax consequences for the Fund.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Tracking Error Risk</span></span> — The Fund may be subject to “tracking error,” which is the divergence of the Fund’s performance from that of the Underlying Index. Tracking error may occur due to a number of factors, including differences between the securities and other assets held in the Fund’s portfolio and those included in the Underlying Index; differences in the timing and methodologies used to value securities and other assets; transaction costs and other expenses incurred by the Fund that the Underlying Index does not incur; the Fund’s holding of uninvested cash; differences in the timing of the accrual or the valuation of dividends or interest received by the Fund or distributions paid to Fund shareholders; tax gains or losses; the requirements for the Fund to maintain pass-through tax treatment; portfolio transactions carried out to minimize the distribution of capital gains to shareholders; the acceptance of custom baskets; changes to the Underlying Index; and impacts to the Fund of complying with certain regulatory requirements or limits. Tracking error risk may be heightened during times of increased market volatility or other unusual market conditions.</div> </td> </tr> </table> Performance Information <div style="margin-top: 4pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">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 Bloomberg U.S. Aggregate Bond Index and Bloomberg U.S. Intermediate Credit Index. The Bloomberg U.S. Intermediate Credit Index is relevant to the Fund because it has characteristics similar to the Fund’s investment strategy. To the extent that dividends and distributions have been paid by the Fund, the performance information for the Fund in the chart and table assumes reinvestment of the dividends and distributions. As with all such investments, past performance (before and after taxes) is not an indication of future results. The table includes all applicable fees. If BFA, BAL and their affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. Updated information on the Fund’s performance, including its current net asset value, can be obtained by visiting http://www.blackrock.com or can be obtained by phone at (800) 882-0052.</div> 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 Bloomberg U.S. Aggregate Bond Index and Bloomberg U.S. Intermediate Credit Index. The Bloomberg U.S. Intermediate Credit Index is relevant to the Fund because it has characteristics similar to the Fund’s investment strategy. As with all such investments, past performance (before and after taxes) is not an indication of future results. http://www.blackrock.com (800) 882-0052 ANNUAL TOTAL RETURNS iShares U.S. Intermediate Credit Bond Index Fund As of 12/31 <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">During the periods shown in the bar chart, the highest return for a quarter was 5.57% (quarter ended December 31, 2023) and the lowest return for a quarter was -1.47% (quarter ended December 31, 2024).</div> highest return 0.0557 2023-12-31 lowest return -0.0147 2024-12-31 As of 12/31/24Average Annual Total Returns 2022-05-20 2022-05-20 2022-05-20 0.0407 0.0350 0.0227 0.0193 0.0239 0.0200 0.0125 0.0089 0.0401 0.0346 <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">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.</div> 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. Fund OverviewKey Facts About iShares U.S. Long Government Bond Index Fund Investment Objective <div style="margin-top: 4pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">The investment objective of iShares U.S. Long Government Bond Index Fund (the “Fund”), a series of BlackRock Funds^SM (the “Trust”), is to seek to provide investment results that correspond to the total return performance of fixed-income securities, in aggregate, as represented by the Bloomberg U.S. Government: Long Bond Index (or the “Underlying Index”).</div> Fees and Expenses of the Fund <div style="margin-top: 4pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.</div> Annual Fund Operating Expenses(expenses that you pay each year as a percentage of the value of your investment) 0.0005 0 0.0005 0.0005 0.0010 -0.0010 June 30, 2035 Example: <div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:</div> 0 0 0 0 Portfolio Turnover: <div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the Example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 12% of the average value of its portfolio.</div> 0.12 Principal Investment Strategies of the Fund <div style="margin-top: 4pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">Under normal circumstances, at least 90% of the value of the Fund’s assets, plus the amount of any borrowings for investment purposes, is invested in securities comprising the Bloomberg U.S. Government: Long Bond Index, which, for the Fund, are considered bonds issued or guaranteed by the U.S. Government and its agencies or instrumentalities.</div> <div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">The Fund attempts to achieve, in both rising and falling markets, a correlation of at least 95% between the total return of its net assets before fees and expenses and the total return of the Fund’s benchmark index, the Bloomberg U.S. Government: Long Bond Index. Notwithstanding the factors described below, perfect (100%) correlation would be achieved if the total return of the Fund’s net assets, before fees and expenses, increased or decreased exactly as the total return of the Fund’s benchmark index increased or decreased. The Fund’s ability to match its investment performance to the investment performance of its benchmark index may be affected by, among other things, the Fund’s expenses, the amount of cash and cash equivalents held by the Fund, the manner in which the total return of the Fund’s benchmark index is calculated, the size of the Fund’s investment portfolio, and the timing, frequency and size of shareholder purchases and redemptions.</div> <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">The Bloomberg U.S. Government: Long Bond Index is a capitalization weighted index that measures U.S. dollar-denominated, fixed-rate, nominal U.S. Treasuries and U.S. agency debentures (securities issued by U.S. government owned or government sponsored entities, and debt explicitly guaranteed by the U.S. government) with a maturity equal or greater than ten years. The index is rebalanced monthly. There were approximately 114 fixed-income securities included in the Bloomberg U.S. Government: Long Bond Index as of December 31, 2024. All securities in the Bloomberg U.S. Government: Long Bond Index are rated investment-grade.</div> <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">The Fund will be invested and reinvested primarily in U.S. debt securities with maturities greater than ten years, with the objective of approximating as closely as practicable the total rate of return of the Bloomberg U.S. Government: Long Bond Index. The dollar-weighted average maturity of the Fund’s portfolio, under normal circumstances, is expected to be more than ten years.</div> <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">The Fund utilizes sampling techniques that are designed to allow the Fund to duplicate substantially the investment performance of the Bloomberg U.S. Government: Long Bond Index. However, the Fund is not expected to track the Bloomberg U.S. Government: Long Bond Index with the same degree of accuracy that complete replication of the Bloomberg U.S. Government: Long Bond Index would provide. No attempt is made to manage the Fund using economic, financial or market analysis. In addition, at times, the portfolio composition of the Fund may be altered (or “rebalanced”) to reflect changes in the characteristics of the index that the Fund tracks.</div> <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">The Fund also may engage in futures, forwards and options transactions and other derivative securities transactions and lend its portfolio securities, each of which involves risk. The Fund may use futures contracts, forwards, options and other derivative transactions to manage its short-term liquidity and/or as substitutes for comparable market positions in the securities in its benchmark index. The Fund may also invest in high-quality money market instruments, including shares of money market funds advised by BFA or its affiliates.</div> Principal Risks of Investing in the Fund You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Debt Securities Risk</span></span> — Debt securities, such as bonds, involve risks, such as credit risk, interest rate risk, extension risk, and prepayment risk, each of which are described in further detail below:</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"> </td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Credit Risk</span> — Credit risk refers to the possibility that the issuer of a debt security (i.e., the borrower) will not be able to make payments of interest and principal when due. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also affect the value of the Fund’s investment in that issuer. The degree of credit risk depends on both the financial condition of the issuer and the terms of the obligation.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"> </td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Interest Rate Risk</span> — The market value of bonds and other fixed-income securities changes in response to interest rate changes and other factors. Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall and decrease as interest rates rise.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"> </td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;">The Fund may be subject to a greater risk of rising interest rates during a period of historically low interest rates. For example, if interest rates increase by 1%, assuming a current portfolio duration of ten years, and all other factors being equal, the value of the Fund’s investments would be expected to decrease by 10%. (Duration is a measure of the price sensitivity of a debt security or portfolio of debt securities to relative changes in interest rates.) The magnitude of these fluctuations in the market price of bonds and other fixed-income securities is generally greater for those securities with longer maturities. Fluctuations in the market price of the Fund’s investments will not affect interest income derived from instruments already owned by the Fund, but will be reflected in the Fund’s net asset value. The Fund may lose money if short-term or long-term interest rates rise sharply in a manner not anticipated by Fund management.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"> </td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;">To the extent the Fund invests in debt securities that may be prepaid at the option of the obligor (such as mortgage-backed securities), the sensitivity of such securities to changes in interest rates may increase (to the detriment of</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 3%;"> </td> <td style="vertical-align: top; text-align: left;">the Fund) when interest rates rise. Moreover, because rates on certain floating rate debt securities typically reset only periodically, changes in prevailing interest rates (and particularly sudden and significant changes) can be expected to cause some fluctuations in the net asset value of the Fund to the extent that it invests in floating rate debt securities.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"> </td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;">These basic principles of bond prices also apply to U.S. Government securities. A security backed by the “full faith and credit” of the U.S. Government is guaranteed only as to its stated interest rate and face value at maturity, not its current market price. Just like other fixed-income securities, government-guaranteed securities will fluctuate in value when interest rates change.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"> </td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;">A general rise in interest rates has the potential to cause investors to move out of fixed-income securities on a large scale, which may increase redemptions from funds that hold large amounts of fixed-income securities. Heavy redemptions could cause the Fund to sell assets at inopportune times or at a loss or depressed value and could hurt the Fund’s performance.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Extension Risk </span>— When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these obligations to fall.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Prepayment Risk</span> — When interest rates fall, certain obligations will be paid off by the obligor more quickly than originally anticipated, and the Fund may have to invest the proceeds in securities with lower yields.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Index-Related Risk</span></span> — The index provider may rely on various sources of information to assess the criteria of components of the Underlying Index, including information that may be based on assumptions and estimates. Neither the Fund nor BFA can offer assurances that the index provider’s methodology or sources of information will provide an accurate assessment of included components or will result in the Fund meeting its investment objective. Errors in index data, index computations or the construction of the Underlying Index in accordance with its methodology may occur, and the index provider may not identify or correct them promptly or at all, which may have an adverse impact on the Fund and its shareholders. Unusual market conditions or other unforeseen circumstances (such as natural disasters, political unrest or war) may impact the index provider or a third-party data provider and could cause the index provider to postpone a scheduled rebalance. This could cause the Underlying Index to vary from its normal or expected composition.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">U.S. Government Obligations Risk </span></span><span style="font-style: italic;">—</span><span style="font-weight: bold;"><span style="font-style: italic;"> </span></span>Certain securities in which the Fund may invest, including securities issued by certain U.S. Government agencies and U.S. Government sponsored enterprises, are not guaranteed by the U.S. Government or supported by the full faith and credit of the United States. In addition, circumstances could arise that could prevent the timely payment of interest or principal on U.S. Government obligations, such as reaching the legislative “debt ceiling.” Such non-payment could result in losses to the Fund and substantial negative consequences for the U.S. economy and the global financial system.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Passive Investment Risk</span></span> — Because BFA does not select individual companies in the index that the Fund tracks, the Fund may hold securities of companies that present risks that an investment adviser researching individual securities might seek to avoid.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"></span><span style="font-weight: bold;"><span style="font-style: italic;">Concentration Risk</span></span><span style="font-weight: bold;"></span> — The Fund reserves the right to concentrate its investments (i.e., invest 25% or more of its total assets in securities of issuers in a particular industry) to approximately the same extent that the Underlying Index concentrates in a particular industry. To the extent the Fund concentrates in a particular industry, it may be more susceptible to economic conditions and risks affecting that industry.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Derivatives Risk </span></span>— The Fund’s use of derivatives may increase its costs, reduce the Fund’s returns and/or increase volatility. Derivatives involve significant risks, including:</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Leverage Risk</span> — The Fund’s use of derivatives can magnify the Fund’s gains and losses. Relatively small market movements may result in large changes in the value of a derivatives position and can result in losses that greatly exceed the amount originally invested.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Market Risk</span> — Some derivatives are more sensitive to interest rate changes and market price fluctuations than other securities. The Fund could also suffer losses related to its derivatives positions as a result of unanticipated market movements, which losses are potentially unlimited. Finally, BFA may not be able to predict correctly the direction of securities prices, interest rates and other economic factors, which could cause the Fund’s derivatives positions to lose value.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Counterparty Risk</span> — Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will be unable or unwilling to fulfill its contractual obligation, and the related risks of having concentrated exposure to such a counterparty.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Illiquidity Risk</span> — The possible lack of a liquid secondary market for derivatives and the resulting inability of the Fund to sell or otherwise close a derivatives position could expose the Fund to losses and could make derivatives more difficult for the Fund to value accurately.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Operational Risk</span> — The use of derivatives includes the risk of potential operational issues, including documentation issues, settlement issues, systems failures, inadequate controls and human error.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Legal Risk</span> — The risk of insufficient documentation, insufficient capacity or authority of counterparty, or legality or enforceability of a contract.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Volatility and Correlation Risk</span> — 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 with the overall securities markets.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Valuation Risk</span> — Valuation for derivatives may not be readily available in the market. Valuation may be more difficult in times of market turmoil since many investors and market makers may be reluctant to purchase complex instruments or quote prices for them.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Hedging Risk</span> — Hedges are sometimes subject to imperfect matching between the derivative and the underlying security, and there can be no assurance that the Fund’s hedging transactions will be effective. The use of hedging may result in certain adverse tax consequences.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Tax Risk</span> — Certain aspects of the tax treatment of derivative instruments, including swap agreements and commodity-linked derivative instruments, are currently unclear and may be affected by changes in legislation, regulations or other legally binding authority. Such treatment may be less favorable than that given to a direct investment in an underlying asset and may adversely affect the timing, character and amount of income the Fund realizes from its investments.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Leverage Risk </span></span>— Some transactions may give rise to a form of economic leverage. These transactions may include, among others, derivatives, and may expose the Fund to greater risk and increase its costs. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet the applicable requirements of the Investment Company Act of 1940, as amended, and the rules thereunder. Increases and decreases in the value of the Fund’s portfolio will be magnified when the Fund uses leverage.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Market Risk and Selection Risk </span></span>— Market risk is the risk that one or more markets in which the Fund invests will go down in value, including the possibility that the markets will go down sharply and unpredictably. The value of a security or other asset may decline due to changes in general market conditions, economic trends or events that are not specifically related to the issuer of the security or other asset, or factors that affect a particular issuer or issuers, exchange, country, group of countries, region, market, industry, group of industries, sector or asset class. Local, regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues like pandemics or epidemics, recessions, or other events could have a significant impact on the Fund and its investments. Selection risk is the risk that the securities selected by Fund management will underperform the markets, the relevant indices or the securities selected by other funds with similar investment objectives and investment strategies. This means you may lose money.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Money Market Securities Risk </span></span>— If market conditions improve while the Fund has invested some or all of its assets in high quality money market securities, this strategy could result in reducing the potential gain from the market upswing, thus reducing the Fund’s opportunity to achieve its investment objective.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Representative Sampling Risk</span></span> — Representative sampling is a method of indexing that involves investing in a representative sample of securities that collectively have a similar investment profile to the Underlying Index and resemble the Underlying Index in terms of risk factors and other key characteristics. The Fund may or may not hold every security in the Underlying Index. When the Fund deviates from a full replication indexing strategy to utilize a representative sampling strategy, the Fund is subject to an increased risk of tracking error, in that the securities selected in the aggregate for the Fund may not have an investment profile similar to those of the Underlying Index.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Risk of Investing in the United States</span></span> — Certain changes in the U.S. economy, such as when the U.S. economy weakens or when its financial markets decline, may have an adverse effect on the securities to which the Fund has exposure.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Securities Lending Risk </span></span>— The Fund may engage in securities lending. Securities lending involves the risk that the Fund may lose money because the borrower of the loaned securities fails to return the securities in a timely manner or at all. The Fund could also lose money in the event of a decline in the value of collateral provided for loaned securities or a decline in the value of any investments made with cash collateral. These events could also trigger adverse tax consequences for the Fund.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Tracking Error Risk</span></span> — The Fund may be subject to “tracking error,” which is the divergence of the Fund’s performance from that of the Underlying Index. Tracking error may occur due to a number of factors, including differences between the securities and other assets held in the Fund’s portfolio and those included in the Underlying Index; differences in the timing and methodologies used to value securities and other assets; transaction costs and other expenses incurred by the Fund that the Underlying Index does not incur; the Fund’s holding of uninvested cash; differences in the timing of the accrual or the valuation of dividends or interest received by the</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 3%;"> </td> <td style="vertical-align: top;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt;">Fund or distributions paid to Fund shareholders; tax gains or losses; the requirements for the Fund to maintain pass-through tax treatment; portfolio transactions carried out to minimize the distribution of capital gains to shareholders; the acceptance of custom baskets; changes to the Underlying Index; and impacts to the Fund of complying with certain regulatory requirements or limits. Tracking error risk may be heightened during times of increased market volatility or other unusual market conditions.</div> </td> </tr> </table> Performance Information <div style="margin-top: 4pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">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 Bloomberg U.S. Aggregate Bond Index and Bloomberg U.S. Government: Long Bond Index. The Bloomberg U.S. Government: Long Bond Index is relevant to the Fund because it has characteristics similar to the Fund’s investment strategy. To the extent that dividends and distributions have been paid by the Fund, the performance information for the Fund in the chart and table assumes reinvestment of the dividends and distributions. As with all such investments, past performance (before and after taxes) is not an indication of future results. The table includes all applicable fees. If BFA, BAL and their affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. Updated information on the Fund’s performance, including its current net asset value, can be obtained by visiting http://www.blackrock.com or can be obtained by phone at (800) 882-0052.</div> 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 Bloomberg U.S. Aggregate Bond Index and Bloomberg U.S. Government: Long Bond Index. The Bloomberg U.S. Government: Long Bond Index is relevant to the Fund because it has characteristics similar to the Fund’s investment strategy. As with all such investments, past performance (before and after taxes) is not an indication of future results. http://www.blackrock.com (800) 882-0052 ANNUAL TOTAL RETURNS iShares U.S. Long Government Bond Index Fund As of 12/31 <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">During the periods shown in the bar chart, the highest return for a quarter was 12.22% (quarter ended December 31, 2023) and the lowest return for a quarter was –11.65% (quarter ended September 30, 2023).</div> highest return 0.1222 2023-12-31 lowest return -0.1165 2023-09-30 As of 12/31/24Average Annual Total Returns 2022-05-20 2022-05-20 2022-05-20 -0.0601 -0.0625 -0.0751 -0.0763 -0.0353 -0.0523 0.0125 0.0089 -0.0637 -0.0636 <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">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.</div> 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. Fund OverviewKey Facts About iShares U.S. Intermediate Government Bond Index Fund Investment Objective <div style="margin-top: 4pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">The investment objective of iShares U.S. Intermediate Government Bond Index Fund (the “Fund”), a series of BlackRock Funds^SM (the “Trust”), is to seek to provide investment results that correspond to the total return performance of fixed-income securities, in aggregate, as represented by the Bloomberg U.S. Government: Intermediate Bond Index (or the “Underlying Index”).</div> Fees and Expenses of the Fund <div style="margin-top: 4pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.</div> Annual Fund Operating Expenses(expenses that you pay each year as a percentage of the value of your investment) 0.0005 0 0.0005 0.0005 0.0010 -0.0010 June 30, 2035 Example: <div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:</div> 0 0 0 0 Portfolio Turnover: <div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the Example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 21% of the average value of its portfolio.</div> 0.21 Principal Investment Strategies of the Fund <div style="margin-top: 4pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">Under normal circumstances, at least 90% of the value of the Fund’s assets, plus the amount of any borrowings for investment purposes, is invested in securities comprising the Bloomberg U.S. Government: Intermediate Bond Index,</div> <div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">which, for the Fund, are considered bonds issued or guaranteed by the U.S. Government and its agencies or instrumentalities. The Fund attempts to achieve, in both rising and falling markets, a correlation of at least 95% between the total return of its net assets before fees and expenses and the total return of the Fund’s benchmark index, the Bloomberg U.S. Government: Intermediate Bond Index. Notwithstanding the factors described below, perfect (100%) correlation would be achieved if the total return of the Fund’s net assets, before fees and expenses, increased or decreased exactly as the total return of the Fund’s benchmark index increased or decreased. The Fund’s ability to match its investment performance to the investment performance of its benchmark index may be affected by, among other things, the Fund’s expenses, the amount of cash and cash equivalents held by the Fund, the manner in which the total return of the Fund’s benchmark index is calculated, the size of the Fund’s investment portfolio, and the timing, frequency and size of shareholder purchases and redemptions.</div> <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">The Bloomberg U.S. Government: Intermediate Bond Index is a capitalization weighted index that measures U.S. dollar-denominated, fixed-rate, nominal U.S. Treasuries and U.S. agency debentures (securities issued by U.S. government owned or government sponsored entities, and debt explicitly guaranteed by the U.S. government) with a maturity equal or greater than one year and less than ten years. The index is rebalanced monthly. There were approximately 527 fixed-income securities included in the Bloomberg U.S. Government: Intermediate Bond Index as of December 31, 2024. All securities in the Bloomberg U.S. Government: Intermediate Bond Index are rated investment-grade.</div> <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">The Fund will be invested and reinvested primarily in U.S. debt securities with maturities greater than one year but less than ten years, with the objective of approximating as closely as practicable the total rate of return of the Bloomberg U.S. Government: Intermediate Bond Index.</div> <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">Under normal circumstances, the Fund expects to have a dollar-weighted average maturity of three to ten years, although the Fund’s dollar-weighted average maturity may go below three years to the extent it does so for the benchmark index.</div> <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">The Fund utilizes sampling techniques that are designed to allow the Fund to duplicate substantially the investment performance of the Bloomberg U.S. Government: Intermediate Bond Index. However, the Fund is not expected to track the Bloomberg U.S. Government: Intermediate Bond Index with the same degree of accuracy that complete replication of the Bloomberg U.S. Government: Intermediate Bond Index would provide. No attempt is made to manage the Fund using economic, financial or market analysis. In addition, at times, the portfolio composition of the Fund may be altered (or “rebalanced”) to reflect changes in the characteristics of the index that the Fund tracks.</div> <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">The Fund also may engage in futures, forwards and options transactions and other derivative securities transactions and lend its portfolio securities, each of which involves risk. The Fund may use futures contracts, forwards, options and other derivative transactions to manage its short-term liquidity and/or as substitutes for comparable market positions in the securities in its benchmark index. The Fund may also invest in high-quality money market instruments, including shares of money market funds advised by BFA or its affiliates.</div> Principal Risks of Investing in the Fund You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Debt Securities Risk </span></span>— Debt securities, such as bonds, involve risks, such as credit risk, interest rate risk, extension risk, and prepayment risk, each of which are described in further detail below:</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"> </td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Credit Risk</span> — Credit risk refers to the possibility that the issuer of a debt security (i.e., the borrower) will not be able to make payments of interest and principal when due. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also affect the value of the Fund’s investment in that issuer. The degree of credit risk depends on both the financial condition of the issuer and the terms of the obligation.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Interest Rate Risk</span> — The market value of bonds and other fixed-income securities changes in response to interest rate changes and other factors. Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall and decrease as interest rates rise.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"> </td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;">The Fund may be subject to a greater risk of rising interest rates during a period of historically low interest rates. For example, if interest rates increase by 1%, assuming a current portfolio duration of ten years, and all other factors being equal, the value of the Fund’s investments would be expected to decrease by 10%. (Duration is a measure of the price sensitivity of a debt security or portfolio of debt securities to relative changes in interest rates.) The magnitude of these fluctuations in the market price of bonds and other fixed-income securities is generally greater for those securities with longer maturities. Fluctuations in the market price of the Fund’s investments will not affect interest income derived from instruments already owned by the Fund, but will be reflected in the Fund’s net asset value. The Fund may lose money if short-term or long-term interest rates rise sharply in a manner not anticipated by Fund management.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"> </td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;">To the extent the Fund invests in debt securities that may be prepaid at the option of the obligor (such as mortgage-backed securities), the sensitivity of such securities to changes in interest rates may increase (to the detriment of the Fund) when interest rates rise. Moreover, because rates on certain floating rate debt securities typically reset only periodically, changes in prevailing interest rates (and particularly sudden and significant changes) can be expected to cause some fluctuations in the net asset value of the Fund to the extent that it invests in floating rate debt securities.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"> </td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;">These basic principles of bond prices also apply to U.S. Government securities. A security backed by the “full faith and credit” of the U.S. Government is guaranteed only as to its stated interest rate and face value at maturity, not its current market price. Just like other fixed-income securities, government-guaranteed securities will fluctuate in value when interest rates change.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"> </td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;">A general rise in interest rates has the potential to cause investors to move out of fixed-income securities on a large scale, which may increase redemptions from funds that hold large amounts of fixed-income securities. Heavy redemptions could cause the Fund to sell assets at inopportune times or at a loss or depressed value and could hurt the Fund’s performance.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Extension Risk </span>— When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these obligations to fall.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Prepayment Risk </span>— When interest rates fall, certain obligations will be paid off by the obligor more quickly than originally anticipated, and the Fund may have to invest the proceeds in securities with lower yields.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Index-Related Risk</span></span> — The index provider may rely on various sources of information to assess the criteria of components of the Underlying Index, including information that may be based on assumptions and estimates. Neither the Fund nor BFA can offer assurances that the index provider’s methodology or sources of information will provide an accurate assessment of included components or will result in the Fund meeting its investment objective. Errors in index data, index computations or the construction of the Underlying Index in accordance with its methodology may occur, and the index provider may not identify or correct them promptly or at all, which may have an adverse impact on the Fund and its shareholders. Unusual market conditions or other unforeseen circumstances (such as natural disasters, political unrest or war) may impact the index provider or a third-party data provider and could cause the index provider to postpone a scheduled rebalance. This could cause the Underlying Index to vary from its normal or expected composition.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">U.S. Government Obligations Risk </span></span>— Certain securities in which the Fund may invest, including securities issued by certain U.S. Government agencies and U.S. Government sponsored enterprises, are not guaranteed by the U.S. Government or supported by the full faith and credit of the United States. In addition, circumstances could arise that could prevent the timely payment of interest or principal on U.S. Government obligations, such as reaching the legislative “debt ceiling.” Such non-payment could result in losses to the Fund and substantial negative consequences for the U.S. economy and the global financial system.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Passive Investment Risk</span></span> — Because BFA does not select individual companies in the index that the Fund tracks, the Fund may hold securities of companies that present risks that an investment adviser researching individual securities might seek to avoid.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Concentration Risk</span></span> — The Fund reserves the right to concentrate its investments (i.e., invest 25% or more of its total assets in securities of issuers in a particular industry) to approximately the same extent that the Underlying Index concentrates in a particular industry. To the extent the Fund concentrates in a particular industry, it may be more susceptible to economic conditions and risks affecting that industry.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Derivatives Risk </span></span>— The Fund’s use of derivatives may increase its costs, reduce the Fund’s returns and/or increase volatility. Derivatives involve significant risks, including:</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Leverage Risk</span> — The Fund’s use of derivatives can magnify the Fund’s gains and losses. Relatively small market movements may result in large changes in the value of a derivatives position and can result in losses that greatly exceed the amount originally invested.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Market Risk</span> — Some derivatives are more sensitive to interest rate changes and market price fluctuations than other securities. The Fund could also suffer losses related to its derivatives positions as a result of unanticipated market movements, which losses are potentially unlimited. Finally, BFA may not be able to predict correctly the direction of securities prices, interest rates and other economic factors, which could cause the Fund’s derivatives positions to lose value.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Counterparty Risk</span> — Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will be unable or unwilling to fulfill its contractual obligation, and the related risks of having concentrated exposure to such a counterparty.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Illiquidity Risk</span> — The possible lack of a liquid secondary market for derivatives and the resulting inability of the Fund to sell or otherwise close a derivatives position could expose the Fund to losses and could make derivatives more difficult for the Fund to value accurately.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Operational Risk</span> — The use of derivatives includes the risk of potential operational issues, including documentation issues, settlement issues, systems failures, inadequate controls and human error.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Legal Risk</span> — The risk of insufficient documentation, insufficient capacity or authority of counterparty, or legality or enforceability of a contract.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Volatility and Correlation Risk</span> — 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 with the overall securities markets.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Valuation Risk </span>— Valuation for derivatives may not be readily available in the market. Valuation may be more difficult in times of market turmoil since many investors and market makers may be reluctant to purchase complex instruments or quote prices for them.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Hedging Risk</span> — Hedges are sometimes subject to imperfect matching between the derivative and the underlying security, and there can be no assurance that the Fund’s hedging transactions will be effective. The use of hedging may result in certain adverse tax consequences.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Tax Risk </span>— Certain aspects of the tax treatment of derivative instruments, including swap agreements and commodity-linked derivative instruments, are currently unclear and may be affected by changes in legislation, regulations or other legally binding authority. Such treatment may be less favorable than that given to a direct investment in an underlying asset and may adversely affect the timing, character and amount of income the Fund realizes from its investments.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Leverage Risk</span></span> — Some transactions may give rise to a form of economic leverage. These transactions may include, among others, derivatives, and may expose the Fund to greater risk and increase its costs. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet the applicable requirements of the Investment Company Act of 1940, as amended, and the rules thereunder. Increases and decreases in the value of the Fund’s portfolio will be magnified when the Fund uses leverage.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Market Risk and Selection Risk </span></span>— Market risk is the risk that one or more markets in which the Fund invests will go down in value, including the possibility that the markets will go down sharply and unpredictably. The value of a security or other asset may decline due to changes in general market conditions, economic trends or events that are not specifically related to the issuer of the security or other asset, or factors that affect a particular issuer or issuers, exchange, country, group of countries, region, market, industry, group of industries, sector or asset class. Local, regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues like pandemics or epidemics, recessions, or other events could have a significant impact on the Fund and its investments. Selection risk is the risk that the securities selected by Fund management will underperform the markets, the relevant indices or the securities selected by other funds with similar investment objectives and investment strategies. This means you may lose money.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Money Market Securities Risk </span></span>— If market conditions improve while the Fund has invested some or all of its assets in high quality money market securities, this strategy could result in reducing the potential gain from the market upswing, thus reducing the Fund’s opportunity to achieve its investment objective.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Representative Sampling Risk</span></span> — Representative sampling is a method of indexing that involves investing in a representative sample of securities that collectively have a similar investment profile to the Underlying Index and resemble the Underlying Index in terms of risk factors and other key characteristics. The Fund may or may not hold every security in the Underlying Index. When the Fund deviates from a full replication indexing strategy to utilize a representative sampling strategy, the Fund is subject to an increased risk of tracking error, in that the securities selected in the aggregate for the Fund may not have an investment profile similar to those of the Underlying Index.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Risk of Investing in the United States</span></span> — Certain changes in the U.S. economy, such as when the U.S. economy weakens or when its financial markets decline, may have an adverse effect on the securities to which the Fund has exposure.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Securities Lending Risk </span></span>— The Fund may engage in securities lending. Securities lending involves the risk that the Fund may lose money because the borrower of the loaned securities fails to return the securities in a timely manner or at all. The Fund could also lose money in the event of a decline in the value of collateral provided for loaned securities or a decline in the value of any investments made with cash collateral. These events could also trigger adverse tax consequences for the Fund.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Tracking Error Risk</span></span> — The Fund may be subject to “tracking error,” which is the divergence of the Fund’s performance from that of the Underlying Index. Tracking error may occur due to a number of factors, including differences between the securities and other assets held in the Fund’s portfolio and those included in the Underlying Index; differences in the timing and methodologies used to value securities and other assets; transaction costs and other expenses incurred by the Fund that the Underlying Index does not incur; the Fund’s holding of uninvested cash; differences in the timing of the accrual or the valuation of dividends or interest received by the</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 3%;"> </td> <td style="vertical-align: top;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt;">Fund or distributions paid to Fund shareholders; tax gains or losses; the requirements for the Fund to maintain pass-through tax treatment; portfolio transactions carried out to minimize the distribution of capital gains to shareholders; the acceptance of custom baskets; changes to the Underlying Index; and impacts to the Fund of complying with certain regulatory requirements or limits. Tracking error risk may be heightened during times of increased market volatility or other unusual market conditions.</div> </td> </tr> </table> Performance Information <div style="margin-top: 4pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">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 Bloomberg U.S. Aggregate Bond Index and Bloomberg U.S. Government: Intermediate Bond Index. The Bloomberg U.S. Government: Intermediate Bond Index is relevant to the Fund because it has characteristics similar to the Fund’s investment strategy. To the extent that dividends and distributions have been paid by the Fund, the performance information for the Fund in the chart and table assumes reinvestment of the dividends and distributions. As with all such investments, past performance (before and after taxes) is not an indication of future results. The table includes all applicable fees. If BFA, BAL and their affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. Updated information on the Fund’s performance, including its current net asset value, can be obtained by visiting http://www.blackrock.com or can be obtained by phone at (800) 882‑0052.</div> 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 Bloomberg U.S. Aggregate Bond Index and Bloomberg U.S. Government: Intermediate Bond Index. The Bloomberg U.S. Government: Intermediate Bond Index is relevant to the Fund because it has characteristics similar to the Fund’s investment strategy. As with all such investments, past performance (before and after taxes) is not an indication of future results. http://www.blackrock.com (800) 882‑0052 ANNUAL TOTAL RETURNS iShares U.S. Intermediate Government Bond Index Fund As of 12/31 <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">During the periods shown in the bar chart, the highest return for a quarter was 3.97% (quarter ended December 31, 2023) and the lowest return for a quarter was -1.62% (quarter ended December 31, 2024).</div> highest return 0.0397 2023-12-31 lowest return -0.0162 2024-12-31 As of 12/31/24Average Annual Total Returns 2022-05-20 2022-05-20 2022-05-20 0.0255 0.0154 0.0129 0.0052 0.0150 0.0074 0.0125 0.0089 0.0244 0.0147 <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">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.</div> 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. Fund OverviewKey Facts About iShares U.S. Securitized Bond Index Fund Investment Objective <div style="margin-top: 4pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">The investment objective of iShares U.S. Securitized Bond Index Fund (the “Fund”), a series of BlackRock Funds^SM (the “Trust”), is to seek to provide investment results that correspond to the total return performance of fixed-income securities, in aggregate, as represented by the Bloomberg U.S. Securitized: MBS, ABS, and CMBS Index (or the “Underlying Index”).</div> Fees and Expenses of the Fund <div style="margin-top: 4pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.</div> Annual Fund Operating Expenses(expenses that you pay each year as a percentage of the value of your investment) 0.0006 0 0.0006 0.0006 0.0001 0.0013 -0.0012 0.0001 June 30, 2035 The Total Annual Fund Operating Expenses do not correlate to the ratio of expenses to average net assets given in the Fund’s most recent annual financial statements and additional information which does not include Acquired Fund Fees and Expenses. Example: <div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:</div> 1 3 6 13 Portfolio Turnover: <div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the Example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 252% of the average value of its portfolio.</div> 2.52 Principal Investment Strategies of the Fund <div style="margin-top: 4pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">Under normal circumstances, at least 90% of the value of the Fund’s assets, plus the amount of any borrowings for investment purposes, is invested in securities comprising the Bloomberg U.S. Securitized: MBS, ABS, and CMBS Index, which, for the Fund, are considered bonds. The Fund attempts to achieve, in both rising and falling markets, a correlation of at least 95% between the total return of its net assets before fees and expenses and the total return of the Fund’s benchmark index, the Bloomberg U.S. Securitized: MBS, ABS, and CMBS Index. Notwithstanding the factors described below, perfect (100%) correlation would be achieved if the total return of the Fund’s net assets, before fees and expenses, increased or decreased exactly as the total return of the Fund’s benchmark index increased or decreased. The Fund’s ability to match its investment performance to the investment performance of its benchmark index may be affected by, among other things, the Fund’s expenses, the amount of cash and cash equivalents held by the Fund, the manner in which the total return of the Fund’s benchmark index is calculated, the size of the Fund’s investment portfolio, and the timing, frequency and size of shareholder purchases and redemptions.</div> <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">The Bloomberg U.S. Securitized: MBS, ABS, and CMBS Index is a capitalization weighted index that measures all U.S. dollar-denominated, investment grade, securitized issues within the Bloomberg U.S. Aggregate Bond Index. Mortgage-backed securities must have a weighted average maturity of at least one year. Commercial mortgage-backed securities and asset-backed securities must have a remaining average life of at least one year. The index is rebalanced monthly. There were approximately 4,019 fixed-income securities included in the Bloomberg U.S. Securitized: MBS, ABS, and CMBS Index as of December 31, 2024. All securities in the Bloomberg U.S. Securitized: MBS, ABS, and CMBS Index are rated investment-grade.</div> <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">The Fund will be invested and reinvested primarily in U.S. debt securities with maturities greater than ten years, with the objective of approximating as closely as practicable the total rate of return of the Bloomberg U.S. Securitized: MBS, ABS, and CMBS Index.</div> <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">The Fund utilizes sampling techniques that are designed to allow the Fund to duplicate substantially the investment performance of the Bloomberg U.S. Securitized: MBS, ABS, and CMBS Index. However, the Fund is not expected to track the Bloomberg U.S. Securitized: MBS, ABS, and CMBS Index with the same degree of accuracy that complete replication of the Bloomberg U.S. Securitized: MBS, ABS, and CMBS Index would provide. No attempt is made to manage the Fund using economic, financial or market analysis. In addition, at times, the portfolio composition of the Fund may be altered (or “rebalanced”) to reflect changes in the characteristics of the index that the Fund tracks.</div> <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">The Fund also may engage in futures, forwards and options transactions and other derivative securities transactions and lend its portfolio securities, each of which involves risk. The Fund may use futures contracts, forwards, options and other derivative transactions to manage its short-term liquidity and/or as substitutes for comparable market positions in the securities in its benchmark index. The Fund may also invest in high-quality money market instruments, including shares of money market funds advised by BFA or its affiliates.</div> Principal Risks of Investing in the Fund You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Debt Securities Risk</span></span> — Debt securities, such as bonds, involve risks, such as credit risk, interest rate risk, extension risk, and prepayment risk, each of which are described in further detail below:</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"> </td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Credit Risk</span> — Credit risk refers to the possibility that the issuer of a debt security (i.e., the borrower) will not be able to make payments of interest and principal when due. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also affect the value of the Fund’s investment in that issuer. The degree of credit risk depends on both the financial condition of the issuer and the terms of the obligation.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"> </td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Interest Rate Risk</span> — The market value of bonds and other fixed-income securities changes in response to interest rate changes and other factors. Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall and decrease as interest rates rise.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"> </td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;">The Fund may be subject to a greater risk of rising interest rates during a period of historically low interest rates. For example, if interest rates increase by 1%, assuming a current portfolio duration of ten years, and all other factors being equal, the value of the Fund’s investments would be expected to decrease by 10%. (Duration is a measure of the price sensitivity of a debt security or portfolio of debt securities to relative changes in interest rates.) The magnitude of these fluctuations in the market price of bonds and other fixed-income securities is generally greater for those securities with longer maturities. Fluctuations in the market price of the Fund’s investments will not affect interest income derived from instruments already owned by the Fund, but will be reflected in the Fund’s net asset value. The Fund may lose money if short-term or long-term interest rates rise sharply in a manner not anticipated by Fund management.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"> </td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;">To the extent the Fund invests in debt securities that may be prepaid at the option of the obligor (such as mortgage-backed securities), the sensitivity of such securities to changes in interest rates may increase (to the detriment of the Fund) when interest rates rise. Moreover, because rates on certain floating rate debt securities typically reset only periodically, changes in prevailing interest rates (and particularly sudden and significant changes) can be expected to cause some fluctuations in the net asset value of the Fund to the extent that it invests in floating rate debt securities.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"> </td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;">These basic principles of bond prices also apply to U.S. Government securities. A security backed by the “full faith and credit” of the U.S. Government is guaranteed only as to its stated interest rate and face value at maturity, not its current market price. Just like other fixed-income securities, government-guaranteed securities will fluctuate in value when interest rates change.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"> </td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;">A general rise in interest rates has the potential to cause investors to move out of fixed-income securities on a large scale, which may increase redemptions from funds that hold large amounts of fixed-income securities. Heavy redemptions could cause the Fund to sell assets at inopportune times or at a loss or depressed value and could hurt the Fund’s performance.</td> </tr> </table> <div style="font-size: 6pt; margin-top: 0pt; margin-bottom: 0pt;"> </div> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Extension Risk </span>— When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these obligations to fall.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Prepayment Risk </span>— When interest rates fall, certain obligations will be paid off by the obligor more quickly than originally anticipated, and the Fund may have to invest the proceeds in securities with lower yields.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Index-Related Risk</span></span> — The index provider may rely on various sources of information to assess the criteria of components of the Underlying Index, including information that may be based on assumptions and estimates. Neither the Fund nor BFA can offer assurances that the index provider’s methodology or sources of information will provide an accurate assessment of included components or will result in the Fund meeting its investment objective. Errors in index data, index computations or the construction of the Underlying Index in accordance with its methodology may occur, and the index provider may not identify or correct them promptly or at all, which may have an adverse impact on the Fund and its shareholders. Unusual market conditions or other unforeseen circumstances (such as natural disasters, political unrest or war) may impact the index provider or a third-party data provider and could cause the index provider to postpone a scheduled rebalance. This could cause the Underlying Index to vary from its normal or expected composition.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Mortgage- and Asset-Backed Securities Risks</span></span> — Mortgage- and asset-backed securities represent interests in “pools” of mortgages or other assets, including consumer loans or receivables held in trust. Mortgage- and asset-backed securities are subject to credit, interest rate, prepayment and extension risks. These securities also are subject to risk of default on the underlying mortgage or asset, particularly during periods of economic downturn. Small movements in interest rates (both increases and decreases) may quickly and significantly reduce the value of certain mortgage-backed securities.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Structured Securities Risk</span></span> — Because structured securities of the type in which the Fund may invest typically involve no credit enhancement, their credit risk generally will be equivalent to that of the underlying instruments, index or reference obligation and will also be subject to counterparty risk. The Fund may have the right to receive payments only from the structured security, and generally does not have direct rights against the issuer or the entity that sold the assets to be securitized. In addition to the general risks associated with debt securities discussed herein, structured securities carry additional risks, including, but not limited to: the possibility that distributions from collateral securities will not be adequate to make interest or other payments; the quality of the collateral may decline in value or default; and the possibility that the structured securities are subordinate to other classes. The Fund is permitted to invest in a class of structured securities that is either subordinated or unsubordinated to the right of payment of another class. Subordinated structured securities typically have higher yields and present greater risks than unsubordinated structured securities. Structured securities are typically sold in private placement transactions, and there currently is no active trading market for structured securities. Structured securities are based upon the movement of one or more factors, including currency exchange rates, interest rates, reference bonds and stock indices, and changes in interest rates and impact of these factors may cause significant price fluctuations. Additionally, changes in the reference instrument or security may cause the interest rate on the structured security to be reduced to zero. Certain issuers of such structured securities may be deemed to be “investment companies” as defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”). As a result, the Fund’s investment in such securities may be limited by certain investment restrictions contained in the Investment Company Act.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Passive Investment Risk</span></span> — Because BFA does not select individual companies in the index that the Fund tracks, the Fund may hold securities of companies that present risks that an investment adviser researching individual securities might seek to avoid.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"></span><span style="font-weight: bold;"><span style="font-style: italic;">Concentration Risk</span></span><span style="font-weight: bold;"></span> — The Fund reserves the right to concentrate its investments (i.e., invest 25% or more of its total assets in securities of issuers in a particular industry) to approximately the same extent that the Underlying Index concentrates in a particular industry. To the extent the Fund concentrates in a particular industry, it may be more susceptible to economic conditions and risks affecting that industry.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Derivatives Risk </span></span>— The Fund’s use of derivatives may increase its costs, reduce the Fund’s returns and/or increase volatility. Derivatives involve significant risks, including:</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Leverage Risk</span> — The Fund’s use of derivatives can magnify the Fund’s gains and losses. Relatively small market movements may result in large changes in the value of a derivatives position and can result in losses that greatly exceed the amount originally invested.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Market Risk</span> — Some derivatives are more sensitive to interest rate changes and market price fluctuations than other securities. The Fund could also suffer losses related to its derivatives positions as a result of unanticipated market movements, which losses are potentially unlimited. Finally, BFA may not be able to predict correctly the direction of securities prices, interest rates and other economic factors, which could cause the Fund’s derivatives positions to lose value.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Counterparty Risk</span> — Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will be unable or unwilling to fulfill its contractual obligation, and the related risks of having concentrated exposure to such a counterparty.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Illiquidity Risk</span> — The possible lack of a liquid secondary market for derivatives and the resulting inability of the Fund to sell or otherwise close a derivatives position could expose the Fund to losses and could make derivatives more difficult for the Fund to value accurately.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Operational Risk</span> — The use of derivatives includes the risk of potential operational issues, including documentation issues, settlement issues, systems failures, inadequate controls and human error.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Legal Risk</span> — The risk of insufficient documentation, insufficient capacity or authority of counterparty, or legality or enforceability of a contract.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Volatility and Correlation Risk</span> — 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 with the overall securities markets.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Valuation Risk </span>— Valuation for derivatives may not be readily available in the market. Valuation may be more difficult in times of market turmoil since many investors and market makers may be reluctant to purchase complex instruments or quote prices for them.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Hedging Risk</span> — Hedges are sometimes subject to imperfect matching between the derivative and the underlying security, and there can be no assurance that the Fund’s hedging transactions will be effective. The use of hedging may result in certain adverse tax consequences.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 1%; vertical-align: top; text-align: left;"><span style="font-style: italic;"> </span></td> <td style="font-size: 8pt; width: 2%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"><span style="font-style: italic;">Tax Risk </span>— Certain aspects of the tax treatment of derivative instruments, including swap agreements and commodity-linked derivative instruments, are currently unclear and may be affected by changes in legislation, regulations or other legally binding authority. Such treatment may be less favorable than that given to a direct investment in an underlying asset and may adversely affect the timing, character and amount of income the Fund realizes from its investments.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">High Portfolio Turnover Risk</span></span> — The Fund may engage in active and frequent trading of its portfolio securities. High portfolio turnover (more than 100%) 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 portfolio securities may result in the realization and/or distribution to shareholders of higher capital gains or losses as compared to a fund with less active trading policies. These effects of higher than normal portfolio turnover may adversely affect Fund performance.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Leverage Risk</span></span> — Some transactions may give rise to a form of economic leverage. These transactions may include, among others, derivatives, and may expose the Fund to greater risk and increase its costs. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet the applicable requirements of the Investment Company Act, and the rules thereunder. Increases and decreases in the value of the Fund’s portfolio will be magnified when the Fund uses leverage.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Market Risk and Selection Risk </span></span>— Market risk is the risk that one or more markets in which the Fund invests will go down in value, including the possibility that the markets will go down sharply and unpredictably. The value of a security or other asset may decline due to changes in general market conditions, economic trends or events that are not specifically related to the issuer of the security or other asset, or factors that affect a particular issuer or issuers, exchange, country, group of countries, region, market, industry, group of industries, sector or asset class. Local, regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues like pandemics or epidemics, recessions, or other events could have a significant impact on the Fund and its investments. Selection risk is the risk that the securities selected by Fund management will underperform the markets, the relevant indices or the securities selected by other funds with similar investment objectives and investment strategies. This means you may lose money.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Money Market Securities Risk </span></span>— If market conditions improve while the Fund has invested some or all of its assets in high quality money market securities, this strategy could result in reducing the potential gain from the market upswing, thus reducing the Fund’s opportunity to achieve its investment objective.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Representative Sampling Risk</span></span> — Representative sampling is a method of indexing that involves investing in a representative sample of securities that collectively have a similar investment profile to the Underlying Index and resemble the Underlying Index in terms of risk factors and other key characteristics. The Fund may or may not hold every security in the Underlying Index. When the Fund deviates from a full replication indexing strategy to utilize a representative sampling strategy, the Fund is subject to an increased risk of tracking error, in that the securities selected in the aggregate for the Fund may not have an investment profile similar to those of the Underlying Index.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Risk of Investing in the United States</span></span> — Certain changes in the U.S. economy, such as when the U.S. economy weakens or when its financial markets decline, may have an adverse effect on the securities to which the Fund has exposure.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Securities Lending Risk </span></span>— The Fund may engage in securities lending. Securities lending involves the risk that the Fund may lose money because the borrower of the loaned securities fails to return the securities in a timely manner or at all. The Fund could also lose money in the event of a decline in the value of collateral provided for loaned securities or a decline in the value of any investments made with cash collateral. These events could also trigger adverse tax consequences for the Fund.</div> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font-family: arial; font-size: 10pt; border: 0px; width: 100%;"> <tr style="page-break-inside: avoid;"> <td style="width: 2%; vertical-align: top; text-align: left;"><span style="font-family: times new roman;">∎</span></td> <td style="width: 1%; vertical-align: top;"> </td> <td style="vertical-align: top; text-align: left;"> <div style="margin-top: 0pt; margin-bottom: 0pt; font-family: arial; font-size: 10pt; text-align: left;"><span style="font-weight: bold;"><span style="font-style: italic;">Tracking Error Risk</span></span> — The Fund may be subject to “tracking error,” which is the divergence of the Fund’s performance from that of the Underlying Index. Tracking error may occur due to a number of factors, including differences between the securities and other assets held in the Fund’s portfolio and those included in the Underlying Index; differences in the timing and methodologies used to value securities and other assets; transaction costs and other expenses incurred by the Fund that the Underlying Index does not incur; the Fund’s holding of uninvested cash; differences in the timing of the accrual or the valuation of dividends or interest received by the Fund or distributions paid to Fund shareholders; tax gains or losses; the requirements for the Fund to maintain pass-through tax treatment; portfolio transactions carried out to minimize the distribution of capital gains to shareholders; the acceptance of custom baskets; changes to the Underlying Index; and impacts to the Fund of complying with certain regulatory requirements or limits. Tracking error risk may be heightened during times of increased market volatility or other unusual market conditions.</div> </td> </tr> </table> Performance Information <div style="margin-top: 4pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">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 Bloomberg U.S. Aggregate Bond Index and Bloomberg U.S. Securitized: MBS, ABS, and CMBS Index. The Bloomberg U.S. Securitized: MBS, ABS, and CMBS Index is relevant to the Fund because it has characteristics similar to the Fund’s investment strategy. To the extent that dividends and distributions have been paid by the Fund, the performance information for the Fund in the chart and table assumes reinvestment of the dividends and distributions. As with all such investments, past performance (before and after taxes) is not an indication of future results. The table includes all applicable fees. If BFA, BAL and their affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. Updated information on the Fund’s performance, including its current net asset value, can be obtained by visiting http://www.blackrock.com or can be obtained by phone at (800) 882-0052.</div> 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 Bloomberg U.S. Aggregate Bond Index and Bloomberg U.S. Securitized: MBS, ABS, and CMBS Index. The Bloomberg U.S. Securitized: MBS, ABS, and CMBS Index is relevant to the Fund because it has characteristics similar to the Fund’s investment strategy. As with all such investments, past performance (before and after taxes) is not an indication of future results. http://www.blackrock.com (800) 882-0052 ANNUAL TOTAL RETURNS iShares U.S. Securitized Bond Index Fund As of 12/31 <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">During the periods shown in the bar chart, the highest return for a quarter was 7.12% (quarter ended December 31, 2023) and the lowest return for a quarter was –3.81% (quarter ended September 30, 2023).</div> highest return 0.0712 2023-12-31 lowest return -0.0381 2023-09-30 As of 12/31/24Average Annual Total Returns 2022-05-20 2022-05-20 2022-05-20 0.0153 0.0068 -0.0006 -0.0074 0.0090 -0.0008 0.0125 0.0089 0.0146 0.0068 <div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: arial;">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.</div> 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. As described in the “Management of the Funds” section of the Fund’s prospectus beginning on page 52, BlackRock Fund Advisors (“BFA”), the Fund’s investment manager, and BlackRock Advisors, LLC (“BAL”), the Fund’s administrator, have contractually agreed to waive their management fee and administration fee, as applicable, through June 30, 2035. On July 1 of each year, the waiver agreement will renew automatically for an additional one year so that the agreement will have a perpetual ten-year term. The contractual agreement may be terminated upon 90 days’ notice by a majority of the non‑interested trustees of the Trust or by a vote of a majority of the outstanding voting securities of the Fund. The Fund has added this broad-based index in response to new regulatory requirements. Independent Expenses consist of the Fund’s allocable portion of the fees and expenses of the independent trustees of the Trust, counsel to such independent trustees and the independent registered public accounting firm that provides audit services to the Fund. BAL and BFA have contractually agreed to reimburse, or provide offsetting credits to, the Fund, as applicable, for Independent Expenses through June 30, 2035 or such later date as BAL and BFA may determine. On July 1 of each year, the waiver agreement will renew automatically for an additional one year so that the agreement will have a perpetual ten-year term. After giving effect to such contractual arrangements, Independent Expenses will be 0.00%. Such contractual arrangements may be terminated upon 90 days’ notice by a majority of the non-interested trustees of the Trust or by a vote of a majority of the outstanding voting securities of the Fund. The Fund has added this broad-based index in response to new regulatory requirements. As described in the “Management of the Funds” section of the Fund’s prospectus beginning on page 52, BlackRock Fund Advisors (“BFA”), the Fund’s investment manager, and BlackRock Advisors, LLC (“BAL”), the Fund’s administrator, have contractually agreed to waive their management fee and administration fee, as applicable, through June 30, 2035. On July 1 of each year, the waiver agreement will renew automatically for an additional one year so that the agreement will have a perpetual ten-year term. The contractual agreement may be terminated upon 90 days’ notice by a majority of the non‑interested trustees of the Trust or by a vote of a majority of the outstanding voting securities of the Fund. Independent Expenses consist of the Fund’s allocable portion of the fees and expenses of the independent trustees of the Trust, counsel to such independent trustees and the independent registered public accounting firm that provides audit services to the Fund. BAL and BFA have contractually agreed to reimburse, or provide offsetting credits to, the Fund, as applicable, for Independent Expenses through June 30, 2035 or such later date as BAL and BFA may determine. On July 1 of each year, the waiver agreement will renew automatically for an additional one year so that the agreement will have a perpetual ten-year term. After giving effect to such contractual arrangements, Independent Expenses will be 0.00%. Such contractual arrangements may be terminated upon 90 days’ notice by a majority of the non-interested trustees of the Trust or by a vote of a majority of the outstanding voting securities of the Fund. Independent Expenses consist of the Fund’s allocable portion of the fees and expenses of the independent trustees of the Trust, counsel to such independent trustees and the independent registered public accounting firm that provides audit services to the Fund. BAL and BFA have contractually agreed to reimburse, or provide offsetting credits to, the Fund, as applicable, for Independent Expenses through June 30, 2035 or such later date as BAL and BFA may determine. On July 1 of each year, the waiver agreement will renew automatically for an additional one year so that the agreement will have a perpetual ten-year term. After giving effect to such contractual arrangements, Independent Expenses will be 0.00%. Such contractual arrangements may be terminated upon 90 days’ notice by a majority of the non-interested trustees of the Trust or by a vote of a majority of the outstanding voting securities of the Fund. The Fund has added this broad-based index in response to new regulatory requirements. As described in the “Management of the Funds” section of the Fund’s prospectus beginning on page 52, BlackRock Fund Advisors (“BFA”), the Fund’s investment manager, and BlackRock Advisors, LLC (“BAL”), the Fund’s administrator, have contractually agreed to waive their management fee and administration fee, as applicable, through June 30, 2035. On July 1 of each year, the waiver agreement will renew automatically for an additional one year so that the agreement will have a perpetual ten-year term. The contractual agreement may be terminated upon 90 days’ notice by a majority of the non‑interested trustees of the Trust or by a vote of a majority of the outstanding voting securities of the Fund. Independent Expenses consist of the Fund’s allocable portion of the fees and expenses of the independent trustees of the Trust, counsel to such independent trustees and the independent registered public accounting firm that provides audit services to the Fund. BAL and BFA have contractually agreed to reimburse, or provide offsetting credits to, the Fund, as applicable, for Independent Expenses through June 30, 2035 or such later date as BAL and BFA may determine. On July 1 of each year, the waiver agreement will renew automatically for an additional one year so that the agreement will have a perpetual ten-year term. After giving effect to such contractual arrangements, Independent Expenses will be 0.00%. Such contractual arrangements may be terminated upon 90 days’ notice by a majority of the non-interested trustees of the Trust or by a vote of a majority of the outstanding voting securities of the Fund. The Fund has added this broad-based index in response to new regulatory requirements. As described in the “Management of the Funds” section of the Fund’s prospectus beginning on page 52, BlackRock Fund Advisors (“BFA”), the Fund’s investment manager, and BlackRock Advisors, LLC (“BAL”), the Fund’s administrator, have contractually agreed to waive their management fee and administration fee, as applicable, through June 30, 2035. On July 1 of each year, the waiver agreement will renew automatically for an additional one year so that the agreement will have a perpetual ten-year term. The contractual agreement may be terminated upon 90 days’ notice by a majority of the non‑interested trustees of the Trust or by a vote of a majority of the outstanding voting securities of the Fund. Independent Expenses consist of the Fund’s allocable portion of the fees and expenses of the independent trustees of the Trust, counsel to such independent trustees and the independent registered public accounting firm that provides audit services to the Fund. BAL and BFA have contractually agreed to reimburse, or provide offsetting credits to, the Fund, as applicable, for Independent Expenses through June 30, 2035 or such later date as BAL and BFA may determine. On July 1 of each year, the waiver agreement will renew automatically for an additional one year so that the agreement will have a perpetual ten-year term. After giving effect to such contractual arrangements, Independent Expenses will be 0.00%. Such contractual arrangements may be terminated upon 90 days’ notice by a majority of the non-interested trustees of the Trust or by a vote of a majority of the outstanding voting securities of the Fund. The Fund has added this broad-based index in response to new regulatory requirements. As described in the “Management of the Funds” section of the Fund’s prospectus beginning on page 52, BlackRock Fund Advisors (“BFA”), the Fund’s investment manager, and BlackRock Advisors, LLC (“BAL”), the Fund’s administrator, have contractually agreed to waive their management fee and administration fee, as applicable, through June 30, 2035. On July 1 of each year, the waiver agreement will renew automatically for an additional one year so that the agreement will have a perpetual ten-year term. The contractual agreement may be terminated upon 90 days’ notice by a majority of the non‑interested trustees of the Trust or by a vote of a majority of the outstanding voting securities of the Fund. The Total Annual Fund Operating Expenses do not correlate to the ratio of expenses to average net assets given in the Fund’s most recent annual financial statements and additional information which does not include Acquired Fund Fees and Expenses.