September 30, 1999
MONEY MARKET
PORTFOLIOS
ANNUAL REPORT
TO SHAREHOLDERS
Not FDIC Insured [GRAPHIC OMITTED]
May Lose Value BLACKROCK
No Bank Guarantee FUNDS
PURE INVESTMENT STYLE(REGISTRATION MARK)
<PAGE>
BLACKROCK FUNDS
MONEY MARKET PORTFOLIOS
* Money Market
* U.S. Treasury Money Market
* Municipal Money Market
* New Jersey Municipal
Money Market
* North Carolina Municipal Money Market
* Ohio Municipal Money Market
* Pennsylvania Municipal
Money Market
* Virginia Municipal Money Market
TABLE OF CONTENTS
SHAREHOLDER LETTER............................................................1
PORTFOLIO SUMMARIES
Money Market............................................................3
U.S. Treasury Money Market..............................................5
Municipal Money Market..................................................6
New Jersey Municipal Money Market......................................10
North Carolina Municipal Money Market..................................13
Ohio Municipal Money Market............................................16
Pennsylvania Municipal Money Market....................................18
Virginia Municipal Money Market........................................23
PORTFOLIO FINANCIAL STATEMENTS
Statements of Operations............................................26-27
Statements of Changes in Net Assets.................................28-29
Financial Highlights................................................30-37
Notes to Financial Statements.......................................38-46
REPORT OF INDEPENDENT ACCOUNTANTS............................................47
<PAGE>
BLACKROCK FUNDS
October 14, 1999
Dear Shareholder:
We are pleased to present the Annual Report for the BlackRock Funds for
the fiscal year ended September 30, 1999, our last annual report of the
millenium.
As we look ahead to the new millenium the future looks promising. While
the Fed has indicated a bias to tightening, interest rates remain low and
stable. Inflation still seems to be in check, despite a general consensus that
world economies are strengthening. Over the past twelve months the S&P 500 moved
ahead by 27.8%, and the Dow did even better, returning 34.0%. Broadly, stocks
performed better than bonds over the same period, as the total return of the
Lehman Aggregate Index was -0.38%.
However, these numbers tell only part of the story. A closer look reveals
that much of the equity market's performance was generated in the last quarter
of 1998. As an example, the performance of the S&P 500 for the first nine months
of 1999 is only 5.87%. Additionally, performance has been narrow, with the
largest growth stocks (and, to some degree, the Internet sector) leading the
way. In other words, it looks like the great bull market of recent years may
have slowed its charge. It is still moving forward, but with less energy.
What should investors do?
We believe that the symbolism of the new millenium is appropriate for
investors. The idea that we are marking the passing of 1,000 years of human
history is a wonderful reminder of the virtue of patience.
While we will be hearing much exaggeration and cosmic rhetoric about the
"new age" of investing, we believe that this is a good time to call to mind a
concept that has proven its worth over many years of investment history. This is
the idea of "regression to the mean," which basically means that, over time,
markets tend to perform as they have always performed.
According to Ibbotson, from 1926 to 1998, the market for large company
stocks as measured by the S&P 500 Index has returned 11.22% annually. This is a
respectable return but significantly less generous than the S&P has been
returning in recent years. Therefore, if you believe that markets will revert to
their historical performance, this figure is a more realistic long-term planning
tool. On the other hand, if you are mesmerized by the recent dazzling
performance of internet stocks, 11.22% may look paltry.
Will the concept of "regression to the mean" impact markets in the new
millenium as it has in the past? Or have we really entered a new age in which
valuations are based on new and non-traditional measures and that markets can
continue to climb higher indefinitely. This is what some observers think. For
example, consider that the total market capitalization of AOL is approximately
$136 billion, which is nearly equal to the COMBINED market capitalizations of
Dow Industrial components J.P. Morgan, Alcoa, General Motors and Philip Morris.
There is even a best-selling book titled "Dow 36,000" whose authors believe that
the DJIA should be three times as high because they believe that "old" methods
of valuation are out of date and do not reflect the realities of the new
information economy. Of course we cannot predict the future, but we believe that
while certain factors may change, markets will continue to fluctuate in the
future as they have in the past.
1
<PAGE>
BLACKROCK FUNDS
BlackRock was founded on the belief that adhering to a disciplined
investment approach that seeks to manage risk rather than attempt to time the
markets will add value to client portfolios. That's why we continue to believe
that the best course of action in the new millenium is the same as it was in the
old: 1) work with your financial adviser to set your goals; 2) plan and
implement a sensible asset allocation that meets your goals and fits with your
personal ability to tolerate risk; and 3) consult with your financial advisor to
make ongoing adjustments.
We also believe that mutual funds, which provide a diversified investment
portfolio and professional management, may be the most appropriate investment
vehicle for individual investors.
BlackRock Funds takes pride in the completeness of its mutual fund
offerings. We currently offer 36 different portfolios which can meet the needs
of virtually any investor regardless of investment goal and risk tolerance. In
addition to the traditional asset classes, we also offer funds such as
International Small Cap Equity, Micro-Cap Equity and High Yield Bond for
investors that are interested in more specialized markets.
Continued thanks for your confidence in BlackRock Funds. We appreciate the
opportunity to help you achieve your long-term investment goals.
Sincerely,
/S/KAREN H. SABATH
Karen H. Sabath
MANAGING DIRECTOR
BLACKROCK ADVISORS, INC.
2
<PAGE>
BLACKROCK FUNDS
STATEMENT OF NET ASSETS
MONEY MARKET PORTFOLIO
Par
AS OF SEPTEMBER 30, 1999 Maturity (000) Value
-------- ----- --------------
CERTIFICATES OF DEPOSIT--13.0%
DOMESTIC--5.5%
First Chicago NBD
6.06% 08/14/00 $25,000 $ 24,989,198
First National Bank of Chicago
5.23% 10/20/99 39,000 39,000,314
4.98% 01/06/00 50,000 49,997,436
Key Bank N.A.
5.71% 07/12/00 10,000 9,998,878
Wilmington Trust Co.
5.06% 10/20/99 15,000 15,000,000
5.53% 01/12/00 20,000 20,000,000
5.92% 01/27/00 24,800 24,800,000
--------------
183,785,826
--------------
EURO DOLLAR--0.8%
Australia and New Zealand Banking
5.03% 10/29/99 25,000 25,000,000
--------------
YANKEE DOLLAR--6.7%
Bank of Montreal Chicago
5.18% 05/10/00 24,850 24,844,179
Canadian Imperial Bank of Commerce
5.12% 02/23/00 25,000 24,995,145
5.18% 03/16/00 25,000 24,996,696
National Westminster PLC
4.98% 01/10/00 35,000 34,998,131
5.28% 04/03/00 50,000 49,994,578
Svenska Handelsbanken, Inc.
5.18% 03/16/00 25,000 24,994,769
Toronto Dominion
5.00% 01/05/00 15,000 14,999,619
5.10% 02/22/00 22,500 22,496,578
--------------
222,319,695
--------------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $431,105,521) 431,105,521
--------------
COMMERCIAL PAPER--53.4%
AGRICULTURAL SERVICES--2.1%
Cargill Global Funding PLC
5.42% 01/20/00 29,500 29,007,006
5.42% 01/28/00 45,000 44,193,775
--------------
73,200,781
--------------
AIRCRAFT ENGINES & ENGINE PARTS--2.5%
Allied-Signal, Inc.
5.20% 10/08/99 40,000 39,959,556
5.25% 02/15/00 25,000 24,500,521
5.25% 02/28/00 20,000 19,562,500
--------------
84,022,577
--------------
ASSET BACKED SECURITIES--14.8%
Atlantis One Funding Corp.
5.87% 01/20/00 40,000 39,276,033
Barton Capital Corp.
5.18% 10/05/99 25,677 25,662,222
5.16% 10/07/99 30,797 30,770,515
Dakota Certificates Program
5.37% 11/09/99 47,000 46,726,578
Delaware Funding Corp.
5.84% 02/14/00 30,000 29,338,133
Moriarty LLC
5.18% 10/12/99 54,500 54,413,739
5.33% 10/25/99 40,000 39,857,867
5.39% 12/20/99 60,000 59,281,333
Par
Maturity (000) Value
-------- ----- --------------
COMMERCIAL PAPER (CONTINUED)
ASSET BACKED SECURITIES (CONTINUED)
Pooled Accounts Receivable
Capital Corp.
5.40% 12/16/99 $50,000 $ 49,430,000
Preferred Receivables Funding
Corp.
5.37% 11/09/99 28,000 27,837,110
Sigma Finance, Inc.
5.21% 10/28/99 24,500 24,404,266
5.40% 11/08/99 25,000 24,857,500
5.40% 12/10/99 39,800 39,382,100
--------------
491,237,396
--------------
BANKS--12.0%
AB Spintab
5.35% 11/08/99 5,500 5,468,940
5.35% 11/17/99 12,000 11,916,183
5.35% 11/18/99 10,000 9,928,667
5.36% 12/09/99 25,000 24,743,167
Abbey National N.A.
4.92% 01/31/00 54,800 53,886,301
4.91% 02/01/00 25,000 24,580,604
Halifax PLC
5.33% 12/10/99 50,000 49,481,806
Nationwide Building Society
5.34% 11/23/99 49,500 49,110,848
San Paolo US
4.95% 11/17/99 40,000 39,741,500
Santander Finance, Inc.
5.18% 10/18/99 50,000 49,877,694
Spintab Swedmortgage AB
4.92% 10/01/99 30,000 30,000,000
4.82% 10/18/99 50,000 49,886,194
--------------
398,621,904
--------------
COMMUNICATION EQUIPMENT--0.8%
Alcatel Alsthom, Inc.
5.43% 03/13/00 27,000 26,332,110
--------------
CREDIT INSTITUTIONS--3.0%
Associates First Capital Corp.
5.28% 10/15/99 50,000 49,897,333
5.18% 10/18/99 50,000 49,877,694
--------------
99,775,027
--------------
MOTOR VEHICLE PARTS & ACCESSORIES--2.6%
Eaton Corp.
5.25% 10/04/99 45,000 44,980,313
5.40% 10/18/99 40,000 39,898,000
--------------
84,878,313
--------------
PUBLISHING & PRINTING--1.5%
Knight-Ridder, Inc.
5.35% 11/29/99 50,700 50,255,460
--------------
RETAIL MERCHANDISING--0.8%
St. Michael Finance Ltd.
5.27% 10/08/99 25,000 24,974,382
--------------
SERVICES - EQUIPMENT RENTAL & LEASING--1.0%
HD Real Estate Funding Corp.
5.72% 02/07/00 34,169 33,468,649
--------------
See accompanying notes to financial statements.
3
<PAGE>
BLACKROCK FUNDS
STATEMENT OF NET ASSETS
MONEY MARKET PORTFOLIO (CONCLUDED)
Par
AS OF SEPTEMBER 30, 1999 Maturity (000) Value
-------- ----- --------------
COMMERCIAL PAPER (CONTINUED)
SHORT-TERM BUSINESS CREDIT INSTITUTIONS--12.3%
Finova Capital Corp.
5.31% 10/01/99 $25,000 $ 25,000,000
5.35% 10/08/99 49,500 49,448,506
5.36% 11/09/99 29,700 29,527,542
5.37% 11/18/99 50,000 49,642,000
GE Capital International Funding, Inc.
5.29% 10/05/99 99,500 99,441,516
Heller Financial, Inc.
5.38% 10/13/99 49,600 49,511,051
5.36% 10/20/99 50,000 49,858,556
5.35% 10/25/99 25,000 24,910,833
5.38% 10/29/99 29,700 29,575,722
--------------
406,915,726
--------------
TOTAL COMMERCIAL PAPER
(Cost $1,773,682,325) 1,773,682,325
--------------
TIME DEPOSITS--6.0%
Bank of Montreal
5.56% 10/01/99 100,000 100,000,000
Suntrust Bank Atlanta
5.50% 10/01/99 100,000 100,000,000
--------------
TOTAL TIME DEPOSITS
(Cost $200,000,000) 200,000,000
--------------
GUARANTEED INVESTMENT CONTRACT--0.3%
Peoples Security Life
5.54% 10/01/99 10,000 10,000,000
(Cost $10,000,000)
--------------
VARIABLE RATE OBLIGATIONS--28.6%
ASSET BACKED SECURITIES--9.0%
Asset Securitization Corp.
5.49%** 10/27/99 115,000 114,990,712
Sigma Finance, Inc.
5.63%** 12/14/99 40,000 39,994,611
SMM Trust
5.49%** 11/26/99 64,850 64,850,000
5.57%** 12/15/99 80,000 80,000,000
--------------
299,835,323
--------------
BANKS--9.2%
Bankers Trust Co.
5.29%** 10/11/99 25,000 24,983,952
Bayerische Hypo-Und Vereinsbank
5.29%** 10/14/99 75,000 74,975,902
5.29%** 10/15/99 75,000 74,962,989
Key Bank N.A.
5.42%** 12/14/99 40,000 39,983,409
U.S. Bancorp
5.44%** 10/27/99 14,400 14,407,327
5.60%** 11/15/99 25,000 25,002,659
Westpac Banking Corp.
5.44%** 10/04/99 50,000 49,972,500
--------------
304,288,738
--------------
Par
Maturity (000) Value
-------- ----- --------------
VARIABLE RATE OBLIGATIONS (CONTINUED)
CHEMICAL--0.8%
Dow Chemical Co.
5.41%** 12/15/99 $25,000 $ 24,995,793
--------------
CREDIT INSTITUTIONS--6.6%
American Honda Finance Corp.
5.29%** 11/01/99 19,700 19,691,577
5.34%** 11/08/99 10,000 9,990,276
5.45%** 11/17/99 25,000 24,982,459
5.43%** 11/24/99 10,000 9,998,748
5.49%** 11/26/99 35,000 34,997,181
5.10%** 12/07/99 20,000 20,002,815
5.48%** 12/20/99 35,000 34,998,374
General Motors Acceptance Corp.
5.21%** 10/08/99 40,000 39,998,826
5.27%** 10/20/99 25,000 24,988,082
--------------
219,648,338
--------------
SECURITY BROKERS & DEALERS--2.7%
Merrill Lynch & Co., Inc.
5.52%** 11/22/99 40,000 40,004,872
Morgan Stanley& Co.
5.26%** 10/14/99 50,000 50,000,000
--------------
90,004,872
--------------
SHORT-TERM BUSINESS CREDIT INSTITUTIONS--0.3%
Caterpillar Financial Services Corp.
5.36%** 10/08/99 9,500 9,504,174
--------------
TOTAL VARIABLE RATE OBLIGATIONS
(Cost $948,277,238) 948,277,238
--------------
Shares
--------
SHORT TERM INVESTMENTS
Paine Webber Liquid Institutional
Reserves Money Market Fund
(Cost $7,195,132) 7,195,132 7,195,132
--------------
TOTAL INVESTMENTS IN SECURITIES
(Cost $3,370,260,216*) 101.5% 3,370,260,216
LIABILITIES IN EXCESS
OF OTHER ASSETS (1.5%) (49,726,598)
----- --------------
NET ASSETS (Equivalent to $1.00 per
share based on 2,076,111,738
Institutional shares, 748,206,288
Service shares, 486,593,972
Investor A shares, 5,413,685
Investor B shares and 4,268,290
Investor C shares outstanding) 100.0% $3,320,533,618
====== ==============
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE PER
INSTITUTIONAL, SERVICE,
INVESTOR A, INVESTOR B
AND INVESTOR C SHARE
($3,320,533,618 (DIVIDE) 3,320,593,973) $1.00
=====
- ----------------------
* Aggregate cost for Federal tax purposes.
** Rates shown are the rates as of September 30, 1999 and maturities shown are
the next interest readjustment date.
See accompanying notes to financial statements.
4
<PAGE>
BLACKROCK FUNDS
STATEMENT OF NET ASSETS
U.S. TREASURY MONEY MARKET PORTFOLIO
Par
AS OF SEPTEMBER 30, 1999 Maturity (000) Value
-------- ----- --------------
U.S. TREASURY OBLIGATIONS--32.4%
U.S. Treasury Bills
4.65% 12/23/99 $35,000 $ 34,625,174
U.S. Treasury Notes
5.88% 11/15/99 24,000 24,033,135
5.63% 11/30/99 55,000 55,081,315
7.75% 11/30/99 5,000 5,024,726
7.75% 01/31/00 28,500 28,777,369
5.50% 02/29/00 15,000 15,037,562
7.13% 02/29/00 13,000 13,121,345
6.88% 03/31/00 10,000 10,089,007
5.50% 04/15/00 5,000 5,013,452
6.75% 04/30/00 51,000 51,468,859
6.38% 05/15/00 10,000 10,087,198
5.50% 05/31/00 7,500 7,514,279
6.25% 05/31/00 10,000 10,070,086
5.88% 06/30/00 5,000 5,018,155
6.25% 08/31/00 10,000 10,068,461
4.50% 09/30/00 5,000 4,949,930
--------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $289,980,053) 289,980,053
--------------
REPURCHASE AGREEMENTS--67.5%
ABN Ambro Securities
5.33% 10/01/99 40,000 40,000,000
(Agreement dated 09/30/99 to be
repurchased at $40,005,922.
Collateralized by $40,806,033
U.S. Treasury Notes 5.625% to 6.00%
due 08/15/00 to 12/31/02. The value
of the collateral is $40,361,710.)
Bear Stearns & Co., Inc.
5.33% 10/01/99 40,000 40,000,000
(Agreement dated 09/30/99 to be
repurchased at $40,005,922.
Collateralized by $54,015,000
U.S. Treasury Strips 0.00% due 02/15/04
to 08/15/04. The value of the
collateral is $40,961,213.)
CS First Boston Corp.
5.21% 10/21/99 50,000 50,000,000
(Agreement dated 09/22/99 to be
repurchased at $50,209,847.
Collateralized by $46,312,000
U.S. Treasury Bonds 7.25% due
05/15/16. The value of the collateral
is $51,254,933.)
Goldman Sachs & Co.
5.00% 10/01/99 40,000 40,000,000
(Agreement dated 09/30/99 to be
repurchased at $40,005,556.
Collateralized by $40,824,000
U.S. Treasury Bonds 6.375% due
08/15/27. The value of the
collateral is $40,800,988.)
Greenwich Capital Markets
5.32% 10/01/99 150,000 150,000,000
(Agreement dated 09/30/99 to be
repurchased at $150,022,167.
Collateralized by $100,260,000
U.S. Treasury Bonds 7.25% to 15.75%
due 11/15/01 to 05/15/16
and $37,700,000 U.S. Treasury
Notes 5.50% due 03/31/03. The value
of the collateral is $153,003,582.)
Par
Maturity (000) Value
-------- ----- --------------
REPURCHASE AGREEMENTS (CONTINUED)
J.P. Morgan Securities
5.30% 10/01/99 $40,000 $ 40,000,000
(Agreement dated 09/30/99 to be
repurchased at $40,005,889.
Collateralized by $40,824,000
U.S. Treasury Bonds 6.375%
due 08/18/27. The value of the
collateral is $40,800,988.)
Merrill Lynch
5.05% 10/01/99 40,000 40,000,000
(Agreement dated 09/30/99 to be
repurchased at $40,005,611.
Collateralized by $12,023,000
U.S. Treasury Bonds 8.125% to
8.50% due 02/15/20 to 05/15/21
and $43,926,000 U.S. Treasury
Notes 8.12% to 10.75% due
08/15/05 to 08/15/19. The value
of the collateral is $40,800,101.)
Morgan Stanley & Co.
5.65% 10/01/99 153,600 153,600,000
(Agreement dated 09/30/99 to be
repurchased at $153,624,107.
Collaterized by $5,638,000 U.S.
Treasury Strips 0.00% due 11/15/19,
$420,000 U.S. Treasury Notes 6.25%
due 02/15/03 and $136,431,000 U.S.
Treasury Bonds 7.25% to 7.625% due
05/15/16 to 11/15/22. The value of the
collateral is $153,664,689.)
Warburg, Dillon, Reed
5.21% 10/25/99 50,000 50,000,000
(Agreement dated 09/23/99 to be --------------
repurchased at $50,224,319.
Collateralized by $106,160,000
U.S. Treasury Strips 0.00% due
02/15/11. The value of the
collateral is $51,000,327.)
TOTAL REPURCHASE AGREEMENTS
(Cost $603,600,000) 603,600,000
--------------
TOTAL INVESTMENTS IN SECURITIES
(Cost $893,580,053*) 99.9% 893,580,053
OTHER ASSETS IN EXCESS
OF LIABILITIES 0.1% 644,500
------ --------------
NET ASSETS (Equivalent to $1.00 per share
based on 324,882,754 Institutional
shares, 524,150,752 Service shares and
45,210,117 Investor A shares outstanding) 100.0% $ 894,224,553
====== ==============
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE PER
INSTITUTIONAL, SERVICE
AND INVESTOR A SHARE
($894,224,553 (DIVIDE) 894,243,623) $1.00
=====
- ---------------------
* Aggregate cost for Federal tax purposes.
See accompanying notes to financial statements.
5
<PAGE>
BLACKROCK FUNDS
STATEMENT OF NET ASSETS
MUNICIPAL MONEY MARKET PORTFOLIO
Par
AS OF SEPTEMBER 30, 1999 Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS--100.0%
ALABAMA--2.6%
Columbia Industrial Development Board
PCRB (Alabama Power Co. Project)
Series 1999A DN
3.90%** 10/01/99 $10,300 $ 10,300,000
--------------
ARIZONA--0.6%
Phoenix Airport RB Series 1995A MB
5.55% 07/01/00 2,185 2,216,061
--------------
CALIFORNIA--0.5%
California Higher Education Student
Loan Authority, Inc. Loan RB
Series 1992D-2 MB
3.50% 04/01/00 2,000 2,000,000
--------------
COLORADO--0.4%
Douglas County School District
Regional 1 Douglas & Elbert Counties
RB Series 1999 TAN
4.50% 06/30/00 1,500 1,509,767
--------------
DELAWARE--1.7%
Delaware Economic Development
Authority RB (Normaco Income Project)
Series 1984 DN
4.05%** 10/07/99 6,600 6,600,000
--------------
FLORIDA--1.9%
Capital Projects Finance Authority RB
(Florida Hospital Association -
Capital Loan Program Project)
Series 1998A DN
3.75%** 10/07/99 2,500 2,500,000
Greater Orlando Aviation Authority RB
(Airport Facilities Subordinated Project)
Series 1999A TECP
3.54% 12/15/99 5,104 5,104,000
--------------
7,604,000
--------------
GEORGIA--6.2%
Burke County Development Authority RB
(Oglethorpe Power Corp. Project)
Series 1996 MB
3.35% 10/30/99 6,000 6,000,000
Burke County Development Authority RB
(Oglethorpe Power Corp. Project)
Series 1997C MB
3.45% 11/28/99 3,605 3,605,000
Burke County Development Authority RB
(Oglethorpe Power Corp. Project)
Series 1998C MB
3.45% 11/28/99 4,570 4,570,000
Burke County PCRB (Georgia Power
Project) Series 1999 MB
3.70% 02/11/00 5,000 5,000,000
Monroe County Development Authority
PCRB (Oglethorpe Power Corp. Project)
Series 1997 MB
3.45% 11/28/99 5,330 5,330,000
--------------
24,505,000
--------------
HAWAII--1.8%
Hawaii State Department of Budget and
Finance TECP Series 1999 MB
3.50% 12/07/99 97,000 7,000,000
--------------
Par
Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS (CONTINUED)
ILLINOIS--10.8%
Chicago O'Hare International Airport
System RB (Airport Improvement
Project) Series 1996A MB
4.70% 01/01/00 $ 1,290 $ 1,294,596
Illinois Development Finance
Authority IDRB (Royal
Continental Box Co. Project)
Series 1995A DN
3.84%** 10/07/99 700 700,000
Illinois Development Finance
Authority IDRB (Webster-Wayne
Shopping Center Project)
Series 1985 DN
3.79%** 10/07/99 6,085 6,085,000
Illinois Development Finance Authority
PCRB (Illinois Power Co. Project)
Series 1993 MB
3.65% 02/22/00 4,000 4,000,000
Illinois Educational Facilities Authority RB
(National Louis University Project)
Series 1999A DN
3.79%** 10/07/99 2,000 2,000,000
Illinois Health Facilities Authority RB
(Evanston Hospital Corp. Project)
Series 1988 MB
3.05% 02/15/00 8,000 8,000,000
Illinois Health Facilities Authority RB
(Evanston Hospital Corp. Project)
Series 1990A MB
3.55% 07/31/00 9,500 9,500,000
Illinois Health Facilities Authority
Revolving Fund Pooled Financing
Program RB (The University of
Chicago Project) Series 1994 MB
3.20% 08/01/15 4,800 4,800,000
Roselle Village IDRB (Abrasive-Form, Inc.
Project) Series 1995 DN
4.22%** 10/07/99 1,700 1,700,000
Village of Schiller Park IDRB (Victor
Products Corp. Project)
Series 1995 DN
4.22%** 10/07/99 400 400,000
Winnebago County RB (Mill Project)
Series 1996 DN
3.88%** 10/07/99 3,910 3,910,000
--------------
42,389,596
--------------
INDIANA--2.8%
Indiana Development Finance Authority
Refunding PCRB (Southern Indiana
Gas and Electric Co. Project)
Series 1998A MB
3.00% 03/01/00 5,000 5,000,000
Marion Industrial Economic Development
RB (The Synectic Partnership Project)
Series 1997 DN
3.79%** 10/07/99 3,715 3,715,000
Monroe County IDRB (Griner Engineering,
Inc. Project) Series 1997 DN
4.00%** 10/07/99 2,301 2,301,000
--------------
11,016,000
--------------
KANSAS--0.6%
Wyandotte County/Kansas City RB
Series 1999C MB
3.30% 02/01/00 2,222 2,222,339
--------------
See accompanying notes to financial statements.
6
<PAGE>
BLACKROCK FUNDS
STATEMENT OF NET ASSETS
MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)
Par
AS OF SEPTEMBER 30, 1999 Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS (CONTINUED)
KENTUCKY--1.8%
Kentucky Housing Authority RB
Series 1999C MB
3.20% 07/01/00 $ 1,000 $ 1,000,000
Meade County IDRB (Liters Quarry, Inc.
Project) Series 1999 DN
4.00%** 10/07/99 3,000 3,000,000
Pulaski County Solid Waste Disposal RB
(National Rural Utilities for East
Kentucky Power Project)
Series 1993B MB
3.55% 02/15/00 3,000 3,000,000
--------------
7,000,000
--------------
LOUISIANA--6.7%
Plaquemines Harbor Terminal TECP
Series 1999 MB
3.35% 10/07/99 3,000 3,000,000
Plaquemines Port Harbor and Terminal
District Marine Terminal Facilities RB
(Electro-Coal Transfer Project)
Series 1985A MB
3.50% 12/09/99 2,000 2,000,000
Plaquemines Port Harbor and Terminal
District Marine Terminal Facilities RB
(Electro-Coal Transfer Project)
Series 1985C MB
3.20% 10/07/99 19,100 19,100,000
3.25% 10/07/99 2,500 2,500,000
--------------
26,600,000
--------------
MARYLAND--10.8%
Anne Arundel County RB (Mountain
Ridge Apartments Project)
Series 1996 DN
3.95%** 10/07/99 6,135 6,135,000
Anne Arundel County RB
Series 1999 TECP
3.50% 02/09/00 3,000 3,000,000
Baltimore County PCRB (Baltimore Gas
and Electric Co. Project)
Series 1985 TECP
3.20% 10/07/99 6,600 6,600,000
Baltimore County RB (Shade Tree Trace
Project) Series 1996 DN
3.95%** 10/07/99 6,425 6,425,000
Maryland Finance Authority IDRB
(Baltimore International Culinary
Project) Series 1994 DN
3.90%** 10/07/99 3,525 3,525,000
Maryland Health and Higher Education
Facilities Authority RB (Catholic Health
Project) Series 1997B DN
3.80%** 10/07/99 5,700 5,700,000
Maryland IDA Finance RB (Brass Mill
Road LP Facility Project)
Series 1995 DN
3.95%** 10/07/99 3,105 3,105,000
Maryland IDA Finance RB (Patapsco
Associates LP Facility Project)
Series 1995 DN
3.95%** 10/07/99 2,040 2,040,000
University of Maryland RB (University
Revenue Revolving Equipment Loan
Project) Series 1996B DN
3.65%** 10/07/99 6,200 6,200,000
--------------
42,730,000
--------------
Par
Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS (CONTINUED)
MASSACHUSETTS--2.2%
Massachusetts Housing Finance Agency
Multi-Family Development RB
(Princeton Crossing Project)
Series 1996A DN
3.90%** 10/07/99 $ 6,900 $ 6,900,000
Whiteman-Hanson Regional School
District GO Series 1999 BAN
3.50% 03/24/00 1,850 1,852,561
--------------
8,752,561
--------------
MICHIGAN--0.8%
Benton Harbor Area School District RB
Series 1999 MB
4.00% 08/31/00 1,000 1,002,652
Lakeview School District RB
Series 1999 MB
4.00% 08/22/00 1,200 1,202,579
Pinckney Community Schools RB
Series 1999 MB
4.25% 10/01/99 1,000 1,002,170
--------------
3,207,401
--------------
MINNESOTA--1.0%
Minneapolis GO Series 1995B DN
3.65%** 10/07/99 3,410 3,410,000
Minneapolis GO Series 1999A DN
3.65%** 10/07/99 600 600,000
--------------
4,010,000
--------------
MISSOURI--1.4%
Kansas City IDRB (Mid-America Health
Services Project) Series 1984 DN
3.90%** 10/07/99 5,400 5,400,000
--------------
NEW HAMPSHIRE--0.6%
New Hampshire Health and Education
Facilities Authority RB (Tilton School
Project) Series 1999 DN
3.85%** 10/07/99 2,500 2,500,000
--------------
NEW JERSEY--6.1%
Barnegat Township GO Series 1999 BAN
3.93% 01/10/00 2,000 2,001,515
Essex County Improvement Authority GO
Series 1999 BAN
3.50% 03/31/00 3,000 3,005,057
Hudson County Certificates of Participation
Series 1992A-9 DN
3.60%** 10/07/99 6,900 6,900,000
New Jersey Economic Development
Authority PCRB (Public Service Electric
and Gas Co. Project) Series 1995A DN
3.40%** 10/07/99 4,500 4,500,000
New Jersey Economic Development
Authority RB (Airis Newark LLC Project)
Series 1998 DN
3.80%** 10/07/99 4,300 4,300,000
New Jersey Economic Development
Authority RB (Ocean Spray Cranberries,
Inc. Project) Series 1987 MB
3.70% 07/01/00 1,000 1,000,000
New Jersey Housing and Mortgage
Finance Agency RB Series 1999 MB
3.75% 09/14/00 1,000 1,000,000
See accompanying notes to financial statements.
7
<PAGE>
BLACKROCK FUNDS
STATEMENT OF NET ASSETS
MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)
Par
AS OF SEPTEMBER 30, 1999 Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS (CONTINUED)
NEW JERSEY (CONTINUED)
New Jersey Sports and Exposition
Authority RB Series 1992C DN
3.75%** 10/07/99 $ 700 $ 700,000
New Jersey Sports and Exposition
Authority RB Series 1998A DN
3.82%** 10/07/99 625 625,000
--------------
24,031,572
--------------
NEW YORK--0.4%
New York Power Authority RB
Series 1985 MB
3.55% 03/01/00 1,500 1,500,000
--------------
NORTH CAROLINA--4.1%
Mecklenburg County GO
Series 1996B DN
3.70%** 10/07/99 700 700,000
North Carolina Educational Facilities
Finance Agency RB (Gardner-Webb
University Project) Series 1997 DN
3.75%** 10/07/99 2,300 2,300,000
North Carolina Medical Care Commission
Health Care Facility RB (Lutheran
Services for the Aging Project)
Series 1998 DN
3.80%** 10/07/99 900 900,000
North Carolina Medical Care Commission
Hospital RB (Luthern Retirement Project)
Series 1999 DN
3.80%** 10/07/99 3,700 3,700,000
North Carolina Medical Care Commission
Hospital RB (Moses Cone Memorial
Hospital System Project) Series 1995 DN
3.85%** 10/07/99 4,500 4,500,000
North Carolina Medical Care Commission
Hospital RB (Pooled Financing Project)
Series 1994 DN
3.75%** 10/07/99 2,100 2,100,000
University of North Carolina RB (Chapel
Parking System Board of Governors
of the UNC Project) Series 1997C DN
3.70%** 10/07/99 1,800 1,800,000
--------------
16,000,000
--------------
NORTH DAKOTA--1.2%
Fargo IDRB (Owen Industries, Inc.
Project) Series 1997 DN
3.90%** 10/07/99 1,000 1,000,000
Mercer County Solid Waste Disposal RB
(National Rural Utilities Project)
Series 1995A MB
3.65% 03/01/00 2,900 2,900,000
North Dakota Housing Finance Agency RB
(Home Mortgage Project)
Series 1999C MB
3.20% 04/01/00 1,000 1,000,000
--------------
4,900,000
--------------
Par
Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS (CONTINUED)
OHIO--8.8%
Allen BAN Series 1999 MB
3.35% 04/13/00 $ 2,000 $ 2,001,545
Clinton County Hospital RB (Ohio
Hospital Capital, Inc. Pooled
Financing Project) Series 1998 DN
3.80%** 10/07/99 12,100 12,100,000
Cuyahoga County RB (Cleveland Clinic
Foundation Project) Series 1997D DN
3.95%** 10/01/99 300 300,000
Harrison County Economic Development RB
(Carriage Inn of Cadiz Project)
Series 1996 DN
3.90%** 10/07/99 1,665 1,665,000
Middleburg Heights Hospital
Improvement RB (Southwest General
Health Center Project) Series 1997 DN
3.80%** 10/07/99 4,800 4,800,000
Ohio Air Quality Development Authority
PCRB (PPG Industries, Inc. Project)
Series 1988A DN
4.00%** 10/07/99 500 500,000
Ohio Water Authority Solid Waste
Disposal RB (American Steel & Wire
Corp. Project) Series 1995 DN
3.95%** 10/07/99 300 300,000
Toledo Services Special Assessment
Notes Series 1997 DN
3.75%** 10/07/99 2,900 2,900,000
Toledo-Lucas County Port Authority
Cultural Facilities RB (Toledo Museum
of Art Project) Series 1999 DN
4.00%** 10/07/99 2,000 2,000,000
Warren County Health Care Facilities RB
(Otterbein Homes Project)
Series 1998B DN
3.80%** 10/07/99 8,300 8,300,000
--------------
34,866,545
--------------
OKLAHOMA--0.5%
Muskogee Industrial Trust PCRB
(Oklahoma Gas and Electric Co.
Project) Series 1995A DN
3.90%** 10/07/99 2,000 2,000,000
--------------
OREGON--4.3%
Oregon Health, Housing, Education
and Cultural Facility Authority RB
(Peacehealth Project) Series 1998 DN
3.80%** 10/07/99 15,000 15,000,000
Oregon Housing and Community
Services Department Mortgage RB
(Single Family Mortgage Project)
Series 1999K MB
3.58% 08/17/00 2,000 2,000,000
--------------
17,000,000
--------------
See accompanying notes to financial statements.
8
<PAGE>
BLACKROCK FUNDS
STATEMENT OF NET ASSETS
MUNICIPAL MONEY MARKET PORTFOLIO (CONCLUDED)
Par
AS OF SEPTEMBER 30, 1999 Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS (CONTINUED)
PENNSYLVANIA--9.6%
Luzerne County Convention Center
Authority Hotel Room Rent Tax RB
Series 1998A DN
3.80%** 10/07/99 $ 5,000 $ 5,000,000
Pennsylvania Higher Education Facilities
Authority RB (The University of
Pennsylvania Health Services Project)
Series 1994B DN
3.85%** 10/07/99 9,980 9,980,000
Pennsylvania Higher Education Facilities
Authority RB (The University of
Pennsylvania Health Services Project)
Series 1996C DN
3.85%** 10/07/99 13,700 13,700,000
Pennsylvania Higher Education Facilities
Authority RB (The University of
Pennsylvania Health Services Project)
Series 1998B DN
3.85%** 10/07/99 6,995 6,995,000
Sayre Health Care Facilities Authority RB
(VHA Capital Financing Project)
Series 1985A DN
3.80%** 10/07/99 2,000 2,000,000
--------------
37,675,000
--------------
RHODE ISLAND--0.4%
Rhode Island Housing and Mortgage
Finance Corp. Homeownership
Opportunity RB Series 1998B-24 MB
3.15% 12/15/99 1,700 1,700,000
--------------
SOUTH CAROLINA--1.2%
Piedmont Municipal Electric Power
Agency RB Series 1997C DN
3.80%** 10/07/99 2,300 2,300,000
South Carolina Economic Development
Authority RB (Catholic Diocese Project)
Series 1998 DN
3.85%** 10/07/99 2,300 2,300,000
--------------
4,600,000
--------------
TENNESSEE--2.8%
Cleveland IDRB (YMCA of Metropolitan
Chattanooga Project) Series 1999 DN
3.80%** 10/07/99 6,500 6,500,000
Tennessee State School Board Authority
Higher Educational Facilities RB
Series 1999 TECP
3.30% 10/14/99 4,600 4,600,000
--------------
11,100,000
--------------
Par
Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS (CONTINUED)
TEXAS--2.4%
Comal County IDRB (Simpson Co. Project)
Series 1996 DN
4.00%** 10/07/99 $ 2,600 $ 2,600,000
Harris County GO Series 1999 TAN
4.00% 02/29/00 2,000 2,004,222
Texas RB Series 1999A TRAN
4.50% 08/31/00 5,000 5,035,381
--------------
9,639,603
--------------
VIRGINIA--2.3%
Metropolitan Washington D.C. Airports
Authority Virginia Passenger Facility
Flexible Term Notes Series 1999 TECP
3.85% 01/24/00 9,000 9,000,000
--------------
WASHINGTON--0.3%
Yakima County Public Corp. RB (Jeld-Wen
Income Project) Series 1988 DN
3.79%** 10/07/99 1,340 1,340,000
--------------
WISCONSIN--0.4%
Wisconsin Housing and Economic
Development Authority Home
Ownership RB Series 1999I MB
3.55% 08/15/00 1,500 1,500,000
--------------
TOTAL INVESTMENTS IN SECURITIES
(Cost $394,415,445*) 100.0% 394,415,445
LIABILITIES IN EXCESS
OF OTHER ASSETS 0.0% (168,020)
-------- --------------
NET ASSETS (Equivalent to $1.00 per share
based on 238,279,423 Institutional
shares, 151,290,528 Service shares and
4,705,370 Investor A shares outstanding) 100.0% $ 394,247,425
======== ==============
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE PER
INSTITUTIONAL, SERVICE AND
INVESTOR A SHARE
($394,247,425 (DIVIDE) 394,275,321) $1.00
=====
- ---------------------
* Aggregate cost for Federal tax purposes.
** Rates shown are the rates as of September 30, 1999 and maturities shown are
the longer of the next interest readjustment date or the date the principal
owed can be recovered through demand.
See accompanying notes to financial statements.
9
<PAGE>
BLACKROCK FUNDS
STATEMENT OF NET ASSETS
NEW JERSEY MUNICIPAL MONEY MARKET PORTFOLIO
Par
AS OF SEPTEMBER 30, 1999 Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS--99.5%
NEW JERSEY--97.7%
Atlantic City Board of Education RB
Series 1999 MB
4.00% 05/01/00 $ 375 $ 375,839
Barnegat Township GO Series 1999 BAN
3.93% 01/10/00 2,000 2,001,515
Bergen County General Improvement
Notes GO Series 1998 MB
4.00% 11/15/99 1,000 1,001,387
Bergen County Utilities Authority RB
Series 1978 MB
6.15% 12/15/99 1,020 1,025,931
Camden County Improvement
Authority RB (Jewish Community
Center Project) Series 1995 DN
3.80%** 10/07/99 750 750,000
Cedar Grove Township GO
Series 1999 BAN
3.50% 03/07/00 1,000 1,001,671
Clark Township GO Series 1999 BAN
3.28% 01/05/00 2,000 2,000,753
Cranford Township GO Series 1999 BAN
3.63% 01/18/00 2,050 2,052,996
Essex County Public Improvement
Authority RB (County Asset Sale
Project) Series 1995 DN
3.70%** 10/07/99 2,700 2,700,000
Essex Fells GO Series 1999 BAN
4.25% 03/10/00 4,566 4,578,584
Fanwood GO Series 1999 BAN
3.98% 01/05/00 700 701,389
Gloucester County Industrial Pollution
Control Financing Authority Refunding
RB (Mobil Oil Refining Co. Project)
Series 1993 DN
3.40%** 10/07/99 2,810 2,810,000
Hopewell Township GO Series 1998 BAN
3.80% 03/22/00 2,307 2,311,947
Hudson County Certificates of
Participation Series 1992A-9 DN
3.60%** 10/07/99 6,000 6,000,000
Jackson Township GO Series 1998 BAN
3.25% 12/14/99 3,029 3,030,189
Jefferson Township GO Series 1998 BAN
3.25% 02/17/00 1,000 1,001,108
Jersey City Municipal Utilities Authority
Project Notes RB Series 1999 MB
4.38% 07/28/00 2,000 2,007,504
Kinnelon GO Series 1999 BAN
4.00% 01/14/00 952 954,123
4.00% 02/04/00 952 954,706
Mercer County Improvement Authority RB
(Atlantic Financial and Johnson Project)
Series 1998 DN
3.70%** 10/07/99 3,000 3,000,000
New Jersey Economic Development
Authority Multi-Mode IDRB (V and
S Amboy Galvanizing LLC Project)
Series 1999 DN
4.00%** 10/07/99 3,600 3,600,000
New Jersey Economic Development
Authority PCRB (Public Service
Electric and Gas Co. Project)
Series 1995A DN
3.40%** 10/07/99 300 300,000
Par
Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS (CONTINUED)
NEW JERSEY (CONTINUED)
New Jersey Economic Development
Authority PCRB (Public Service
Electric and Gas Co. Project)
Series 1996 DN
3.50%** 10/07/99 $ 400 $ 400,000
New Jersey Economic Development
Authority RB (Airis Newark LLC
Project) Series 1998 DN
3.80%** 10/07/99 800 800,000
New Jersey Economic Development
Authority RB (Bethany Baptist
Church Project) Series 1998 DN
3.65%** 10/07/99 100 100,000
New Jersey Economic Development
Authority RB (Chambers Cogen Project)
Series 1991 MB
3.55% 01/20/00 3,700 3,700,000
New Jersey Economic Development
Authority RB (Facile Holdings, Inc.
Project) Series 1998 DN
3.70%** 10/07/99 480 480,000
New Jersey Economic Development
Authority RB (Far Sighted Investment
LLC Project) Series 1998A DN
3.80%** 10/07/99 1,180 1,180,000
New Jersey Economic Development
Authority RB (J. James Realty Co.
Project) Series 1998 DN
3.80%** 10/07/99 570 570,000
New Jersey Economic Development
Authority RB (Kenwood USA Corp.
Project) Series 1985 DN
3.55%** 10/07/99 2,800 2,800,000
New Jersey Economic Development
Authority RB (Local Housing Project)
Series 1992D-1 DN
3.75%** 10/07/99 1,285 1,285,000
New Jersey Economic Development
Authority RB (Nandan Co. Project)
Series 1995 DN
3.85%** 10/07/99 2,015 2,015,000
New Jersey Economic Development
Authority RB (Newark Fibers, Inc.
Project) Series 1998 DN
3.90%** 10/07/99 3,000 3,000,000
New Jersey Economic Development
Authority RB (Ninette Group LP
Project) Series 1998 DN
3.80%** 10/07/99 900 900,000
New Jersey Economic Development
Authority RB (Ocean Spray
Cranberries, Inc. Project)
Series 1987 MB
3.70% 07/01/00 1,500 1,500,000
New Jersey Economic Development
Authority RB (St. James Prep. and
Social Service Project) Series 1998 DN
3.65%** 10/07/99 1,000 1,000,000
New Jersey Economic Development
Authority RB (Thermal Energy LP
Project) Series 1995 DN
3.70%** 10/07/99 6,000 6,000,000
New Jersey Economic Development
Authority RB (United Water, Inc.
Project) Series 1996B DN
4.20%** 10/01/99 200 200,000
See accompanying notes to financial statements.
10
<PAGE>
BLACKROCK FUNDS
STATEMENT OF NET ASSETS
NEW JERSEY MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)
Par
AS OF SEPTEMBER 30, 1999 Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS (CONTINUED)
NEW JERSEY (CONTINUED)
New Jersey Economic Development
Authority RB (Venice Maid Foods
Project) Series 1997 DN
3.80%** 10/07/99 $1,000 $ 1,000,000
New Jersey Economic Development
Authority RB (Wechsler Coffee Corp.
Project) Series 1998 DN
3.75%** 10/07/99 1,370 1,370,000
New Jersey Economic Development
Authority RB (Wood Hollow Associates
Project) Series 1997 DN
3.80%** 10/07/99 2,415 2,415,000
New Jersey Economic Development
Authority Refunding RB (New Jersey
Natural Gas Co. Project)
Series 1998B DN
3.60%** 10/07/99 1,000 1,000,000
New Jersey Economic Development
Authority Refunding RB (New Jersey
Natural Gas Co. Project)
Series 1998C DN
3.60%** 10/07/99 1,700 1,700,000
New Jersey Economic Development
Authority Tax-Exempt RB (Pennington
Montessori School Project)
Series 1998 DN
3.80%** 10/07/99 1,370 1,370,000
New Jersey Housing and Mortgage
Finance Agency RB Series 1999 MB
3.75% 09/14/00 1,000 1,000,000
New Jersey Housing and Mortgage
Finance Agency Tax-Exempt Eagle
Trust Certificates Series 1997A DN
3.84%** 10/07/99 3,900 3,900,000
New Jersey Sports and Exposition
Authority RB Series 1992C DN
3.75%** 10/07/99 975 975,000
New Jersey Sports and Exposition
Authority State Contract Municipal
Trust Certificates Series 1998A DN
3.82%** 10/07/99 4,875 4,875,000
New Jersey Sports and Exposition
Authority RB Series 1998A DN
3.82%** 10/07/99 4,780 4,780,000
New Jersey State Educational Facilities
Authority RB (College of New Jersey
Project) Series 1999A DN
3.65%** 10/07/99 2,000 2,000,000
New Jersey State GO Series 1998 BAN
6.20% 01/15/00 1,000 1,007,436
New Jersey Transportation Trust Fund
Authority Trust Receipts RB
(Transportation System Project)
Series 1996A DN
3.90%** 10/07/99 3,200 3,200,000
New Jersey Turnpike Authority RB
Series 1991D DN
3.65%** 10/07/99 1,500 1,500,000
North Bergen Township GO
Series 1999 MB
3.75% 11/01/99 1,165 1,165,628
Par
Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS (CONTINUED)
NEW JERSEY (CONTINUED)
Peapack Gladstone GO
Series 1999 BAN
3.50% 05/12/00 $2,215 $ 2,219,324
Pequannock Township GO
Series 1998 BAN
3.25% 12/03/99 1,000 1,000,334
Port Authority of New Jersey and
New York RB Series 1999 MB
3.25% 10/15/99 2,000 2,000,000
3.10% 10/21/99 2,500 2,500,000
Riverdale Boro GO Series 1999 BAN
3.50% 05/12/00 2,300 2,304,090
Salem County Pollution Control
Financing Authority PCRB (Atlantic
City Electric Co. Project)
Series 1997B DN
3.60%** 10/07/99 1,000 1,000,000
Salem County Pollution Control
Financing Authority PCRB (E.I.
DuPont de Nemours & Co. Project)
Series 1982A DN
3.40%** 10/07/99 8,800 8,800,000
Salem County Pollution Control
Financing Authority PCRB (Public
Service Electric and Gas Co. Project)
Series 1997 DN
3.60%** 10/07/99 1,400 1,400,000
Sea Isle City Unlimited Tax GO
Series 1998 MB
4.00% 10/01/99 200 200,000
Seaside Heights GO Series 1999 BAN
3.60% 02/18/00 1,964 1,968,135
Union Township GO Series 1999 BAN
3.75% 04/08/00 1,100 1,102,756
Washington Township Municipal Utilities
Authority Utility Systems RB
Series 1999 MB
3.85% 02/01/00 200 200,427
West Caldwell Township GO
Series 1999 BAN
3.94% 09/12/00 2,204 2,208,032
West Deptford Township GO
Series 1999 BAN
4.25% 01/18/00 2,000 2,003,799
West Orange GO Series 1998 BAN
3.25% 11/16/99 1,650 1,650,565
Wildwood Crest GO Series 1999 BAN
3.45% 05/25/00 2,000 2,002,253
--------------
135,907,421
--------------
GUAM--1.8%
Guam Power Authority RB
Series 1998 TECP
3.05% 10/13/99 2,500 2,500,000
--------------
See accompanying notes to financial statements.
11
<PAGE>
BLACKROCK FUNDS
STATEMENT OF NET ASSETS
NEW JERSEY MUNICIPAL MONEY MARKET PORTFOLIO (CONCLUDED)
AS OF SEPTEMBER 30, 1999 Value
--------------
TOTAL INVESTMENTS IN SECURITIES
(Cost $138,407,421*) 99.5% $ 138,407,421
OTHER ASSETS IN EXCESS
OF LIABILITIES 0.5% 650,545
-------- --------------
NET ASSETS (Equivalent to $1.00 per share
based on 79,567,930 Institutional
shares, 37,142,031 Service shares,
22,365,342 Investor A shares and 52
Investor B shares outstanding) 100.0% $ 139,057,966
======== ==============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
INSTITUTIONAL, SERVICE,
INVESTOR A AND INVESTOR B
SHARE
($139,057,966 (DIVIDE) 139,075,355) $1.00
=====
- ----------------------
* Aggregate cost for Federal tax purposes.
** Rates shown are the rates as of September 30, 1999, and maturities shown
are the longer of the next interest readjustment date or the date the
principal owed can be recovered through demand.
See accompanying notes to financial statements.
12
<PAGE>
BLACKROCK FUNDS
STATEMENT OF NET ASSETS
NORTH CAROLINA MUNICIPAL MONEY MARKET PORTFOLIO
Par
AS OF SEPTEMBER 30, 1999 Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS--99.7%
NORTH CAROLINA--99.4%
Asheville Certificates of Participation
Series 1993A DN
3.80%** 10/07/99 $ 500 $ 500,000
Bertie County Water District IV GO
Series 1999 BAN
3.12% 10/20/99 2,031 2,030,458
Buncombe County GO Series 1997 DN
3.85%** 10/07/99 5,605 5,605,000
Buncombe County Industrial Facilities
and Pollution Control Financing
Authority RB (Lustar Dyeing, Inc.
Project) Series 1998 DN
3.95%** 10/07/99 2,880 2,880,000
Cabarrus County Development Corp.
Installment Payment RB (North
Carolina Installment Financing
Contract Project) Series 1999 MB
4.60% 06/01/00 950 957,688
Charlotte Water and Sewer Authority GO
Series 1994 MB
5.70% 02/01/00 2,000 2,017,000
Charlotte-Mecklenburg Hospital
Authority RB (Health Care System
Project) Series 1996C DN
3.70%** 10/07/99 1,600 1,600,000
Charlotte-Mecklenburg Hospital
Authority RB (Health Care System
Project) Series 1996D DN
3.65%** 10/07/99 1,000 1,000,000
Cumberland County Industrial Facilities
and Pollution Control Financing
Authority IDRB (BG Properties, LLC
Project) Series 1998 DN
3.85%** 10/07/99 1,450 1,450,000
Dare County GO Series 1990 MB
6.90% 03/01/00 500 517,364
Durham GO Series 1993 DN
3.65%** 10/07/99 5,635 5,635,000
Fayetteville GO Series 1990 MB
6.60% 10/07/99 1,000 1,039,221
Fayetteville Public Works Commission RB
Series 1990 MB
6.50% 03/01/00 400 413,253
7.00% 03/01/00 1,000 1,035,593
Gaston County Industrial Facilities and
Pollution Control Financing Authority RB
(Gold Medal Homes Project)
Series 1996 DN
3.85%** 10/07/99 1,980 1,980,000
Gaston County Recreational Facilities RB
(Gaston County Family Young Men's
Christian Association Project)
Series 1998 DN
3.75%** 10/07/99 900 900,000
Gates County Industrial Facilities and
Pollution Control Financing Authority
IDRB (Coxe-Lewis Corp. Project)
Series 1999 DN
3.95%** 10/07/99 2,090 2,090,000
Par
Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS (CONTINUED)
NORTH CAROLINA (CONTINUED)
Green County Industrial Facilities
and Pollution Control Financing
Authority IDRB (Federal Paper
Board Co., Inc. Project)
Series 1989 DN
3.85%** 10/07/99 $ 1,100 $ 1,100,000
Green County Industrial Facilities and
Pollution Control Financing Authority
IDRB (Snow Hill Tape Corp. Project)
Series 1995 DN
3.85%** 10/07/99 2,000 2,000,000
Greensboro Certificates of Participation
(Greensboro Coliseum Complex
Improvement Project) Series 1995A DN
3.70%** 10/07/99 100 100,000
Greensboro Public Improvement GO
Series 1998 DN
3.70%** 10/07/99 2,560 2,560,000
Guilford County Industrial Facilities and
Pollution Control Financing Authority
IDRB (U.S. Label Corp. Project)
Series 1995 DN
3.85%** 10/07/99 2,500 2,500,000
Guilford County Industrial Facilities and
Pollution Control Financing Authority
RB (L&E Packaging, Inc. Project)
Series 1996 DN
3.85%** 10/07/99 1,550 1,550,000
Haywood Regional Medical Center RB
Series 1997 DN
3.75%** 10/07/99 1,600 1,600,000
Lee County Industrial Facilities and
Pollution Control Financing Authority
Refunding IDRB (Trion, Inc. Project)
Series 1995 DN
3.75%** 10/07/99 1,700 1,700,000
Lee County Industrial Facilities and
Pollution Control Financing Authority RB
(Var-Arden Corp Project)
Series 1999 DN
3.85%** 10/07/99 5,000 5,000,000
Mecklenburg County GO
Series 1991 MB
6.10% 04/01/00 1,840 1,866,575
Mecklenburg County GO
Series 1996C DN
3.70%** 10/07/99 300 300,000
Mecklenburg County GO
Series 1998C DN
3.75%** 10/07/99 3,095 3,095,000
Mecklenburg County Industrial Facilities
and Pollution Control Financing
Authority IDRB (Griffith Micro Science
Project) Series 1995 DN
3.85%** 10/07/99 1,500 1,500,000
Mecklenburg County Industrial Facilities
and Pollution Control Financing
Authority IDRB (Otto Industries, Inc.
Project) Series 1988 DN
3.90%** 10/07/99 2,950 2,950,000
Mecklenburg County Industrial Facilities
and Pollution Control Financing
Authority RB (Piedmont Plastics
Project) Series 1997 DN
4.00%** 10/07/99 4,700 4,700,000
See accompanying notes to financial statements.
13
<PAGE>
BLACKROCK FUNDS
STATEMENT OF NET ASSETS
NORTH CAROLINA MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)
Par
AS OF SEPTEMBER 30, 1999 Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS (CONTINUED)
NORTH CAROLINA (CONTINUED)
Mecklenburg County Public Improvement
GO Series 1994 MB
5.40% 04/01/00 $ 1,000 $ 1,011,230
Mecklenburg County Public Improvement
GO Series 1998B MB
4.25% 02/01/00 2,700 2,710,592
New Hanover County GO Series 1998 MB
4.75% 02/01/00 1,650 1,658,332
New Hanover County Hospital RB (New
Hanover Regional Medical Center
Project) Series 1996 MB
4.40% 10/01/99 725 725,000
New Hanover County Industrial Facilities
IDRB (Interroll Corp. Project)
Series 1989 DN
3.90%** 10/07/99 995 995,000
North Carolina Agricultural Finance
Authority Agricultural Development RB
(Harvey Fertilizer & Gas Co. Project)
Series 1995 DN
3.85%** 10/07/99 1,540 1,540,000
North Carolina Eastern Municipal Power
Agency Power System RB
Series 1999A MB
4.25% 01/01/00 15,135 15,181,666
North Carolina Eastern Municipal Power
Agency RB Series 1999 TECP
3.50% 10/07/99 9,500 9,500,000
3.40% 10/07/99 7,000 7,000,000
North Carolina Educational Facilities
Finance Agency RB (Duke University
Project) Series 1991B DN
3.65%** 10/07/99 2,000 2,000,000
North Carolina Educational Facilities
Finance Agency RB (Duke University
Project) Series 1992A DN
3.65%** 10/07/99 100 100,000
North Carolina Educational Facilities
Finance Agency RB (Greensboro
College Project) Series 1997 DN
3.65%** 10/07/99 500 500,000
North Carolina Educational Facilities
Finance Agency RB (Guilford College
Project) Series 1997 DN
3.80%** 10/07/99 280 280,000
North Carolina Educational Facilities
Finance Agency RB (The Bowman
Gray School of Medicine Project)
Series 1990 DN
3.77%** 10/07/99 800 800,000
North Carolina Educational Facilities
Finance Agency RB (The Bowman
Gray School of Medicine Project)
Series 1996 DN
3.77%** 10/07/99 1,000 1,000,000
North Carolina GO Series 1992A MB
6.10% 03/01/00 1,975 1,999,942
North Carolina GO Series 1997A MB
5.10% 03/01/00 4,000 4,031,781
Par
Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS (CONTINUED)
NORTH CAROLINA (CONTINUED)
North Carolina Medical Care
Commission Health Care Facility RB
(Lutheran Services for the Aging
Project) Series 1998 DN
3.80%** 10/07/99 $ 3,175 $ 3,175,000
North Carolina Medical Care Commission
Health Care Facility RB (Methodist
Home Project) 1988 DN
3.40%** 10/07/99 2,500 2,500,000
North Carolina Medical Care Commission
Hospital RB (Angel Medical Center,
Inc. Project) Series 1997 DN
3.75%** 10/07/99 2,900 2,900,000
North Carolina Medical Care Commission
Hospital RB (Baptist Hospital Project)
Series 1996 DN
3.85%** 10/07/99 1,600 1,600,000
North Carolina Medical Care Commission
Hospital RB (Duke University Hospital
Project) Series 1985B DN
3.65%** 10/07/99 4,400 4,400,000
North Carolina Medical Care Commission
Hospital RB (Duke University Hospital
Project) Series 1985D DN
3.65%** 10/07/99 1,000 1,000,000
North Carolina Medical Care Commission
Hospital RB (Duke University Hospital
Project) Series 1993A DN
3.65%** 10/07/99 1,500 1,500,000
North Carolina Medical Care Commission
Hospital RB (Luthern Retirement
Project) Series 1999 DN
3.80%** 10/07/99 300 300,000
North Carolina Medical Care Commission
Hospital RB (Moses Cone Memorial
Hospital System Project) Series 1995 DN
3.85%** 10/07/99 1,700 1,700,000
North Carolina Medical Care Commission
Hospital RB (Park Ridge Hospital
Project) Series 1988 DN
3.75%** 10/07/99 3,700 3,700,000
North Carolina Medical Care Commission
Hospital RB (Pooled Equipment
Financing Project) Series 1985 DN
3.70%** 10/07/99 1,150 1,150,000
North Carolina Municipal Power
Agency RB (Catawba Project)
Series 1993 TECP
3.60% 10/08/99 6,500 6,500,000
4.00 10/08/99 2,300 2,300,000
North Carolina Municipal Power
Agency RB (Catawba Project)
Series 1999A MB
7.00% 01/01/00 3,435 3,535,932
Pitt County Certificates of Participation
Series 1991 MB
6.90% 04/01/00 1,150 1,193,410
See accompanying notes to financial statements.
14
<PAGE>
BLACKROCK FUNDS
STATEMENT OF NET ASSETS
NORTH CAROLINA MUNICIPAL MONEY MARKET PORTFOLIO (CONCLUDED)
Par
AS OF SEPTEMBER 30, 1999 Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS (CONTINUED)
NORTH CAROLINA (CONTINUED)
Pitt County RB (Pitt County Memorial
Hospital Project) Series 1995 MB
4.20% 12/01/99 $ 725 $ 726,374
Raleigh GO Series 1991 MB
6.30% 03/01/00 600 607,550
Raleigh-Durham Airport Authority
Special Facility Refunding RB
(American Airlines, Inc. Project)
Series 1995B DN
3.90%** 10/01/99 200 200,000
Randolph County Industrial Facilities
and Pollution Control Finance
Authority RB (Jowat Corp. Project)
Series 1999 DN
3.85%** 10/01/99 3,000 3,000,000
Rockingham County Industrial Facilities
and Pollution Control Finance
Authority RB (Medibeg U.S.A., Inc.
Project) Series 1997 DN
3.85%** 10/07/99 2,900 2,900,000
Rockingham County Industrial Facilities
and Pollution Control Finance
Authority RB (Whiteridge, Inc.
Project) Series 1998 DN
4.00%** 10/07/99 1,400 1,400,000
Rutherford County Industrial Facilities
and Pollution Control Finance
Authority RB (Thieman Metal
Technologies LLC Project)
Series 1998 DN
4.00%** 10/07/99 2,850 2,850,000
Sampson County Industrial Facilities
and Pollution Control Financing
Authority IDRB (Dubose Strapping,
Inc. Project) Series 1997 DN
4.00%** 10/07/99 1,800 1,800,000
Union County Industrial Facilities and
Pollution Control Financing Authority
IDRB (Rock-Tenn Converting Co.
Project) Series 1997 DN
3.90%** 10/07/99 1,750 1,750,000
University of North Carolina RB (Chapel
Parking System Board of Governors
of the UNC Project) Series 1997C DN
3.70%** 10/07/99 200 200,000
University of North Carolina System
Pool RB Series 1998B MB
3.25% 10/01/99 2,420 2,420,000
Wake County Industrial Facilities and
Pollution Control Financing
Authority RB (Carolina Power & Light
Co. Project) Series 1985A DN
3.77%** 10/07/99 1,580 1,580,000
Wake County Industrial Facilities and
Pollution Control Financing
Authority PCRB (Carolina Power &
Light Co. Project) Series 1985B DN
3.70%** 10/07/99 1,000 1,000,000
Par
Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS (CONTINUED)
NORTH CAROLINA (CONTINUED)
Warren County Industrial Facilities
and Pollution Control Financing
Authority PCRB (Glen Raven
Mills, Inc. Project) Series 1997 DN
3.85%** 10/07/99 $ 1,500 $ 1,500,000
Washington County Industrial Facilities
Pollution Control Financing
Authority PCRB (Mackeys Ferry
Sawmill, Inc. Project) Series 1997 DN
3.85%** 10/07/99 3,100 3,100,000
Wilkes County Industrial Facilities and
Pollution Control Financing
Authority PCRB (Schas Circular
Industries, Inc. Project)
Series 1997A DN
3.95%** 10/07/99 890 890,000
Winston-Salem Certificates of
Participation RB (Risk Acceptance
Management Corp. Project)
Series 1988 DN
3.85%** 10/07/99 415 415,000
--------------
178,998,961
--------------
PUERTO RICO--0.3%
Puerto Rico Industrial, Medical and
Environmental Pollution Control
Facilities Financing Authority RB
(Ana G. Mendez Foundation Project)
Series 1985 DN
3.80%** 10/07/99 545 545,000
--------------
TOTAL INVESTMENTS IN SECURITIES
(Cost $179,543,961*) 99.7% 179,543,961
OTHER ASSETS IN EXCESS
OF LIABILITIES 0.3% 522,740
------ --------------
NET ASSETS (Equivalent to $1.00 per share
based on 178,058,021 Institutional
shares, 1,638,702 Service shares and
369,220 Investor A shares outstanding) 100.0% $ 180,066,701
====== ==============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
INSTITUTIONAL, SERVICE AND
INVESTOR A SHARE
($180,066,701 (DIVIDE) 180,065,943) $1.00
=====
- ---------------------
* Aggregate cost for Federal tax purposes.
** Rates shown are the rates as of September 30, 1999, and maturities shown
are the longer of the next interest readjustment date or the date the
principal owed can be recovered through demand.
See accompanying notes to financial statements.
15
<PAGE>
BLACKROCK FUNDS
STATEMENT OF NET ASSETS
OHIO MUNICIPAL MONEY MARKET PORTFOLIO
Par
AS OF SEPTEMBER 30, 1999 Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS--99.5%
OHIO--99.5%
Avon GO Series 1999 BAN
3.75% 07/23/00 $1,190 $ 1,191,848
Bellbrook GO Series 1998 BAN
3.55% 10/21/99 1,800 1,800,190
Brecksville GO Series 1998 BAN
3.40% 12/15/99 490 490,152
Butler County GO Series 1998 BAN
3.55% 10/21/99 1,000 1,000,212
3.67% 03/16/00 750 751,566
Cincinnati School District GO
Series 1999 BAN
3.90% 05/19/00 2,000 2,006,101
Clermont County Health Facilities
Authority RB (Mercy Health System
Project) Series 1996A DN
3.75%** 10/07/99 100 100,000
Cuyahoga County Hospital RB
(Cleveland Clinic Foundation Project)
Series 1997A DN
3.80%** 10/01/99 200 200,000
Cuyahoga County Hospital RB
(Cleveland Clinic Foundation Project)
Series 1998A DN
3.80%** 10/07/99 700 700,000
Cuyahoga County Hospital Refunding RB
(Metrohealth Systems Project)
Series 1997 MB
5.00% 02/15/00 1,000 1,007,112
Cuyahoga County IDRB (Actron
Manufacturing Project)
Series 1998 DN
4.00%** 10/01/99 1,320 1,320,000
Cuyahoga County IDRB (Cleveland Gear
Co., Inc. Project) Series 1998 DN
4.00%** 10/01/99 2,900 2,900,000
Cuyahoga County IDRB (Northstar
Project) Series 1998 DN
4.00%** 10/01/99 3,555 3,555,000
Cuyahoga County IDRB (Pleasant Lake
Associates Project) Series 1995 DN
3.85%** 10/07/99 855 855,000
Delaware County IDRB (Air Waves, Inc.
Project) Series 1995 DN
4.00%** 10/07/99 935 935,000
Edgewood School District GO
Series 1999 MB
3.30% 12/01/99 975 975,000
Erie County IDRB (Brighton Manor Co.
Project) Series 1986 DN
3.95%** 10/07/99 3,700 3,700,000
Franklin County Hospital Refunding RB
(U.S. Health Corp. of Columbus
Project) Series 1996A DN
3.75%** 10/07/99 450 450,000
Franklin County IDRB (Alco Standard
Corp. Project) Series 1994 DN
3.85%** 10/07/99 200 200,000
Green County GO Series 1999 BAN
3.15% 12/01/99 930 930,000
Greene County Economic
Development RB (Ashford Center
Project) Series 1995 DN
3.85%** 10/07/99 1,825 1,825,000
Par
Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS (CONTINUED)
OHIO (CONTINUED)
Greene County IDRB (AFC Stamping &
Production, Inc., Barsplice Products
Project) Series 1995 DN
4.00%** 10/07/99 $ 935 $ 935,000
Greene County IDRB (Antioch Publishing
Co. Project) Series 1996 DN
4.00%** 10/07/99 1,800 1,800,000
Hamilton County Hospital Facilities RB
(Beechwood Home Project)
Series 1997 DN
3.92%** 10/01/99 4,000 4,000,000
Hilliard GO Series 1999 BAN
3.85% 09/07/00 2,100 2,104,722
Indian Hill Village Economic
Development RB (Cincinnati Country
Day School Project) Series 1999 DN
3.85%** 10/01/99 2,000 2,000,000
Lakewood GO Series 1999 BAN
3.25% 03/10/00 2,870 2,873,674
Montgomery County Healthcare
Facilities RB Series 1998 DN
3.85%** 10/07/99 200 200,000
New London Local School District GO
Series 1999 BAN
3.35% 10/08/99 3,152 3,152,148
North Royalton GO Series 1999 BAN
3.95% 09/21/00 1,000 1,001,404
Oakwood GO Series 1998 BAN
3.50% 12/29/99 1,858 1,858,874
Ohio Air Quality Development Authority
PCRB (JMG Funding Ltd. Partnership
Project) Series 1995B DN
3.75%** 10/07/99 3,000 3,000,000
Ohio Air Quality Development Authority
PCRB (Pennsylvania Power Co.
Project) Series 1997 DN
3.85%** 10/07/99 3,400 3,400,000
Ohio Air Quality Development Authority
PCRB (PPG Industries, Inc. Project)
Series 1988A DN
4.00%** 10/01/99 6,500 6,500,000
Ohio Air Quality Development Authority
PCRB (Timken Co. Project)
Series 1999 DN
3.80%** 10/01/99 900 900,000
Ohio Housing Finance Agency
Multi-Family Housing RB (Lincoln Park
Association Project) Series 1985 MB
3.15% 11/01/99 755 755,000
Ohio Housing Finance Agency
Multi-Family Housing RB (The Club at
Spring Valley Apartments Project)
Series 1996A DN
3.85%** 10/07/99 800 800,000
Ohio IDRB (Anomatic Corp. Project)
Series 1994 DN
4.00%** 10/07/99 1,165 1,165,000
Ohio IDRB (Ashley Ward, Inc. Project)
Series 1997 DN
3.95%** 10/07/99 1,670 1,670,000
Ohio Liquor Profits RB Series 1998 MB
6.85% 03/01/00 1,000 1,015,844
See accompanying notes to financial statements.
16
<PAGE>
BLACKROCK FUNDS
STATEMENT OF NET ASSETS
OHIO MUNICIPAL MONEY MARKET PORTFOLIO (CONCLUDED)
Par
AS OF SEPTEMBER 30, 1999 Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS (CONTINUED)
OHIO (CONTINUED)
Ohio State Building Authority Facilities RB
Series 1985C MB
7.35% 10/01/99 $ 300 $ 309,000
Ohio State Building Authority RB
(Juvenile Correctional Facilities
Improvement Project)
Series 1999A MB
3.50% 10/01/99 1,675 1,675,000
Ohio State Building Authority RB
(Juvenile Correctional Facilities
Improvement Project)
Series 1999B MB
3.50% 10/01/99 345 345,000
Ohio State Infrastructure RB
Series 1999-1 MB
4.25% 12/15/99 435 435,679
Ohio Water Authority Solid Waste
Disposal RB (American Steel & Wire
Corp. Project) Series 1995 DN
3.95%** 10/07/99 7,800 7,800,000
Ohio Water Development Authority PCRB
(Cleveland Electric Co. Project)
Series 1997B DN
3.80%** 10/07/99 1,700 1,700,000
Ohio Water Development Authority
Refunding RB (Timken Co. Project)
Series 1992 DN
3.80%** 10/07/99 1,800 1,800,000
Olentangy Local School District GO
Series 1997 MB
4.15% 12/01/99 500 500,774
Portage County IDRB (Action Super
Abrasive Project) Series 1996 DN
4.00%** 10/07/99 1,090 1,090,000
Portage County IDRB (Lovejoy Industries
Project) Series 1994 DN
4.00%** 10/07/99 1,325 1,325,000
Scioto County GO Series 1999 BAN
4.06% 07/13/00 1,214 1,216,366
Shaker Heights GO Series 1999 BAN
3.70% 06/01/00 2,845 2,845,000
Solon GO Series 1999 BAN
3.60% 06/15/00 500 501,194
Springboro GO Series 1998 BAN
3.40% 01/27/00 1,200 1,200,938
Stark County GO Series 1999 BAN
3.85% 08/17/00 1,650 1,654,182
Strongsville GO Series 1998 BAN
3.40% 11/04/99 775 775,175
Strongsville IDRB (Web Plastics
Co. Project) Series 1997 DN
4.00%** 10/07/99 1,030 1,030,000
Summit County IDRB (Austin Printing Co.,
Inc. Project) Series 1994 DN
4.00%** 10/07/99 440 440,000
Summit County IDRB (Forest
Manufacturing Project) Series 1994 DN
3.95%** 10/07/99 300 300,000
Par
Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS (CONTINUED)
OHIO (CONTINUED)
Summit County IDRB (JRB Co., Inc.
Project) Series 1997 DN
4.00%** 10/01/99 $3,200 $ 3,200,000
Toledo-Lucas County Port Authority
Development RB (Frostbite Brands, Inc.
Project) Series 1993 DN
4.15%** 10/01/99 940 940,000
Trumbull County Health Care Facilities RB
Series 1998 DN
3.85%** 10/01/99 1,800 1,800,000
Union Township GO Series 1999 BAN
3.77% 05/26/00 1,000 1,002,952
Washington County GO Series 1999 BAN
3.25% 11/18/99 1,550 1,550,600
Westlake Construction Notes GO
Series 1999 MB
3.40% 05/04/00 750 750,854
Westlake Economic Development RB
(Oaks Development Co. Project)
Series 1994 DN
3.85%** 10/07/99 1,815 1,815,000
Westlake GO Series 1999 BAN
3.15% 12/01/99 470 470,000
Youngstown IDRB (Portage Transformer
Co. Project) Series 1996 DN
4.00%** 10/01/99 475 475,000
--------------
TOTAL INVESTMENTS IN SECURITIES
(Cost $104,971,561*) 99.5% 104,971,561
OTHER ASSETS IN EXCESS
OF LIABILITIES 0.5% 478,332
------ --------------
NET ASSETS (Equivalent to $1.00 per
share based on 49,247,676
Institutional shares, 11,303,889
Service shares and 44,933,409
Investor A shares outstanding) 100.0% $ 105,449,893
====== ==============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
INSTITUTIONAL, SERVICE AND
INVESTOR A SHARE
($105,449,893 (DIVIDE) 105,484,974) $1.00
=====
- ---------------------
* Aggregate cost for Federal tax purposes.
** Rates shown are the rates as of September 30, 1999, and maturities shown
are the longer of the next interest readjustment date or the date the
principal owed can be recovered through demand.
See accompanying notes to financial statements.
17
<PAGE>
BLACKROCK FUNDS
STATEMENT OF NET ASSETS
PENNSYLVANIA MUNICIPAL MONEY MARKET PORTFOLIO
Par
AS OF SEPTEMBER 30, 1999 Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS--99.9%
PENNSYLVANIA--97.5%
Allegheny County Higher Education
Building Authority RB (University of
Pittsburgh Project) Series 1985C DN
3.65%** 10/07/99 $ 1,790 $ 1,790,000
Allegheny County IDRB (United Mobile
Video Project) Series 1997 DN
3.80%** 10/07/99 4,000 4,000,000
Allegheny County IDRB (USX Corp.
Project) Series 1998 DN
3.80%** 10/07/99 2,000 2,000,000
Allegheny County IDA Refunding PCRB
(Duquesne Light Co. Project)
Series 1990A MB
3.50% 10/28/99 15,000 15,000,000
Allegheny County IDA Refunding PCRB
(Duquesne Light Co. Project)
Series 1992A MB
3.50% 10/28/99 8,000 8,000,000
Beaver County IDRB (Duquesne Light Co.
Project) Series 1990C TECP
3.45% 10/29/99 1,500 1,500,000
Beaver County IDA Refunding PCRB
(Duquesne Light Co., Beaver Valley
Project) Series 1990A MB
3.35% 10/29/99 16,400 16,400,000
Beaver County IDA Refunding PCRB
(Duquesne Light Co., Mansfield
Project) Series 1990B DN
3.70%** 10/07/99 1,100 1,100,000
Beaver County IDA Refunding PCRB
(Ohio Edison Co. Project)
Series 1992A MB
3.10% 04/01/00 5,400 5,400,000
Bedford County IDRB (Sepa, Inc. Facility
Project) Series 1985 DN
3.75%** 10/07/99 6,100 6,100,000
Berks County IDA (Citizen's Utilities Co.
Project) Series 1996 MB
3.45% 11/09/99 4,100 4,100,000
3.60% 12/10/99 8,400 8,400,000
Berks County IDA Manufacturing
Facilities RB (Grafika Commercial
Printing, Inc. Project) Series 1995 DN
3.95%** 10/07/99 2,330 2,330,000
Berks County IDRB (Beacon Container
Corp. Project) Series 1997A DN
4.00%** 10/07/99 2,165 2,165,000
Berks County IDRB (Berks Products
Project) Series 1996 DN
4.00%** 10/07/99 2,220 2,220,000
Berks County IDRB (Hub Fabricating
Project) Series 1996 DN
3.95%** 10/07/99 4,465 4,465,000
Bethel Park GO Series 1999 TRAN
3.43% 12/31/99 2,000 2,000,867
Bucks County IDRB (LTL Color
Compounders Project)
Series 1999B DN
3.95%** 10/07/99 4,505 4,505,000
Bucks County IDA Environmental
Improvement Refunding RB
(USX Corp. Project) Series 1995 MB
3.10% 11/04/99 6,440 6,440,000
Par
Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS (CONTINUED)
PENNSYLVANIA (CONTINUED)
Bucks County IDRB (SHV Real
Estate, Inc. Project) Series 1985 DN
3.90%** 10/07/99 $ 1,900 $ 1,900,000
Cambria County IDA Resource Recovery
RB (Cambria Cogen Co. Project)
Series 1998 DN
3.80%** 10/07/99 28,195 28,195,000
Carbon County IDA Resource Recovery
RB (Panther Creek Partners Project)
Series 1990A MB
3.45% 10/15/99 13,200 13,200,000
3.35% 11/09/99 3,400 3,400,000
3.60% 11/15/99 3,355 3,355,000
Carbon County IDA Resource Recovery
RB (Panther Creek Partners Project)
Series 1999 TECP
3.45% 10/15/99 6,380 6,380,000
Cumberland County IDRB (Lane
Enterprises, Inc. Project)
Series 1994 DN
3.95%** 10/07/99 605 605,000
Cumberland County IDRB (Lawrence
Schiff Silk Co. Project)
Series 1998 DN
4.00%** 10/07/99 2,015 2,015,000
Cumberland County Municipal Authority
RB (Presbyterian Homes Project)
Series 1993A DN
3.80%** 10/07/99 6,000 6,000,000
Dallastown Area School District GO
Series 1998 DN
3.85%** 10/07/99 5,000 5,000,000
Dauphin County General Authority RB
(Allhealth Pooled Financing Program
Project) Series 1997 DN
3.80%** 10/07/99 7,200 7,200,000
Dauphin County General Authority RB
(Education & Health Loan Program)
Series 1997 DN
3.85%** 10/07/99 4,100 4,100,000
Delaware County IDA Resource
Recovery Facilities Refunding RB
(General Electric Capital Corp. Project)
Series 1997G DN
3.65%** 10/07/99 2,300 2,300,000
Delaware County IDA Solid Waste RB
(Scott Paper Co. Project)
Series 1984A DN
3.80%** 10/07/99 1,600 1,600,000
Delaware County IDA Solid Waste RB
(Scott Paper Co. Project)
Series 1984B DN
3.80%** 10/07/99 2,000 2,000,000
Delaware County IDA Solid Waste RB
(Scott Paper Co. Project)
Series 1984C DN
3.80%** 10/07/99 2,400 2,400,000
Delaware County IDA Solid Waste RB
(Scott Paper Co. Project)
Series 1984D DN
3.80%** 10/07/99 2,900 2,900,000
Delaware County IDA Solid Waste RB
(Scott Paper Co. Project)
Series 1984E DN
3.80%** 10/07/99 1,595 1,595,000
See accompanying notes to financial statements.
18
<PAGE>
BLACKROCK FUNDS
STATEMENT OF NET ASSETS
PENNSYLVANIA MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)
Par
AS OF SEPTEMBER 30, 1999 Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS (CONTINUED)
PENNSYLVANIA (CONTINUED)
Delaware County PCRB (PECO Energy
Co. Project) Series 1988A TECP
3.40% 10/08/99 $ 3,800 $ 3,800,000
Delaware River Port Authority of
Pennsylvania & New Jersey Refunding
Municipal Trust Certificates
Series 1998-12A DN
3.87%** 10/07/99 14,850 14,850,000
Delaware Valley Regional Finance
Authority Local Government RB
Series 1985A DN
3.70%** 10/07/99 1,300 1,300,000
Delaware Valley Regional Finance
Authority Local Government RB
Series 1985B DN
3.70%** 10/07/99 3,000 3,000,000
Delaware Valley Regional Finance
Authority Local Government RB
Series 1985C DN
3.70%** 10/07/99 1,300 1,300,000
Delaware Valley Regional Finance
Authority Local Government RB
Series 1985D DN
3.70%** 10/07/99 3,100 3,100,000
Eastern Pennsylvania Industrial &
Commercial Development Authority
IDRB (Electronic Data Systems Project)
Series 1993 DN
3.80%** 10/07/99 1,000 1,000,000
Elk County IDA Solid Waste RB
(Williamette Industries, Inc. Project)
Series 1992 DN
3.85%** 10/07/99 3,000 3,000,000
Emmaus General Authority RB Pooled
Loan Series 1989F-10 DN
3.80%** 10/07/99 1,000 1,000,000
Emmaus General Authority RB Pooled
Loan Series 1989G-9 DN
3.80%** 10/07/99 1,300 1,300,000
Emmaus General Authority RB Pooled
Loan Series 1996 DN
3.80%** 10/07/99 4,500 4,500,000
Erie County Hospital Authority RB
(Hamot Health Foundation Project)
Series 1998A MB
4.00% 05/15/00 850 851,511
Erie County IDRB (American Turned
Products Project) Series 1997 DN
4.00%** 10/07/99 1,940 1,940,000
Erie County IDRB (Reed Manufacturing
Project) Series 1997 DN
4.00%** 10/07/99 1,500 1,500,000
Geisinger Health System Authority RB
(Penn State Health Systems Project)
Series 1998B DN
3.90%** 10/01/99 500 500,000
Indiana County IDRB (Conemaugh
Project) Series 1997A DN
3.75%** 10/07/99 2,310 2,310,000
Lawrence County IDRB (L and N
Metallurgical Products Project)
Series 1996 DN
4.15%** 10/07/99 3,600 3,600,000
Par
Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS (CONTINUED)
PENNSYLVANIA (CONTINUED)
Lehigh County General Purpose
Authority Hospital RB (Lehigh Valley
Health Network Project)
Series 1999B DN
3.75%** 10/07/99 $ 1,400 $ 1,400,000
Lehigh County IDA PCRB (Allegheny
Electric Co-op, Inc. Project)
Series 1984 DN
3.40%** 10/07/99 800 800,000
Lehigh County IDA PCRB (Allegheny
Electric Co-op, Inc. Project)
Series 1985A DN
3.90%** 10/07/99 4,600 4,600,000
Lehigh County Sewer Authority RB
Series 1985B DN
3.65%** 10/07/99 1,570 1,570,000
Lehigh County Water Authority RB
Series 1984 DN
3.65%** 10/07/99 4,545 4,545,000
Littlestown IDA Refunding RB (Hanover
House Industries Project)
Series 1987 DN
3.80%** 10/07/99 8,000 8,000,000
Luzerne County IDRB (Nardone
Brothers Baking Project)
Series 1999 DN
3.95%** 10/07/99 7,535 7,535,000
Lycoming County IDRB (Brodart Co.
Project) Series 1998A DN
4.00%** 10/07/99 1,905 1,905,000
Lycoming County IDRB (Brodart Co.
Project) Series 1998C DN
4.05%** 10/07/99 1,000 1,000,000
Montgomery County Higher Education
and Health Authority Hospital RB
(Bryn Mawr Hospital Project)
Series 1990 DN
7.38%** 10/07/99 1,050 1,089,598
Montgomery County IDA Manufacturing
Facilities RB (H.P. Cadwallander, Inc.
Project) Series 1995 DN
4.00%** 10/07/99 700 700,000
Montgomery County IDRB (Apple Fresh
Foods Ltd. Project) Series 1996 DN
3.95%** 10/07/99 935 935,000
Montgomery County IDRB (Philadelphia
Electric Co. Project) Series 1996A MB
3.40% 10/08/99 1,600 1,600,000
Neshaminy School District GO
Series 1998 TRAN
3.85% 06/30/00 4,637 4,649,173
Northampton County IDRB (Accu
Machining Center, Inc. Project)
Series 1998B DN
4.00%** 10/07/99 2,290 2,290,000
Northampton County IDRB (Accu
Machining Center, Inc. Project)
Series 1998C DN
4.00%** 10/07/99 1,065 1,065,000
Northampton County IDRB (Citizens
Utilities Co. Project) Series 1991 MB
3.60% 12/10/99 4,000 4,000,000
Northampton County IDRB (Citizens
Utilities Co. Project) Series 1996 DN
3.90%** 10/07/99 10,500 10,500,000
See accompanying notes to financial statements.
19
<PAGE>
BLACKROCK FUNDS
STATEMENT OF NET ASSETS
PENNSYLVANIA MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)
Par
AS OF SEPTEMBER 30, 1999 Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS (CONTINUED)
PENNSYLVANIA (CONTINUED)
Northeastern Hospital and Education
Authority Health Care RB (Wyoming
Valley Health Care Project)
Series 1994A DN
3.75%** 10/07/99 $ 2,700 $ 2,700,000
Northumberland County IDA Resource
Recovery RB (Foster Wheeler Mt.
Carmel Project) Series 1987A DN
3.90%** 10/07/99 22,185 22,185,000
Northumberland County IDA Resource
Recovery RB (Foster Wheeler Mt.
Carmel Project) Series 1987B DN
3.90%** 10/07/99 590 590,000
Northumberland County IDRB (Furman
Farms, Inc. Project) Series 1995A DN
3.95%** 10/07/99 1,225 1,225,000
Pennsylvania Economic Development
Financing Authority RB (Wengers
Feed Mill, Inc. Project)
Series 1999B-1 DN
3.95%** 10/07/99 1,400 1,400,000
Pennsylvania Economic Development
Financing Authority Retirement Facility
RB (Homewood Retirement Centers
Project) Series 1992 DN
3.83%** 10/07/99 6,025 6,025,000
Pennsylvania Energy Development
Authority RB (B&W Ebensburg Project)
Series 1986 DN
3.75%** 10/07/99 1,810 1,810,000
Pennsylvania Energy Development
Authority RB (B&W Ebensburg Project)
Series 1988 DN
3.75%** 10/07/99 2,900 2,900,000
Pennsylvania Energy Development
Authority RB (Piney Creek Project)
Series 1986A DN
3.75%** 10/07/99 14,650 14,650,000
Pennsylvania Energy Development
Authority RB (Piney Creek Project)
Series 1986C DN
3.75%** 10/07/99 3,800 3,800,000
Pennsylvania Higher Education Assistance
Agency Student Loan RB
Series 1988B DN
3.90%** 10/07/99 2,300 2,300,000
Pennsylvania Higher Education Assistance
Agency Student Loan RB
Series 1988C DN
3.90%** 10/07/99 7,300 7,300,000
Pennsylvania Higher Education Assistance
Agency Student Loan RB
Series 1988E DN
3.90%** 10/07/99 100 100,000
Pennsylvania Higher Education Assistance
Agency Student Loan RB
Series 1994A DN
3.90%** 10/07/99 3,050 3,050,000
Pennsylvania Higher Education Assistance
Agency Student Loan RB
Series 1995A DN
3.90%** 10/07/99 3,600 3,600,000
Par
Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS (CONTINUED)
PENNSYLVANIA (CONTINUED)
Pennsylvania Higher Educational
Facilities Authority RB (The University
of Pennsylvania Health Services
Project) Series 1994B DN
3.85%** 10/07/99 $22,900 $ 22,900,000
Pennsylvania Higher Educational
Facilities Authority RB (The University
of Pennsylvania Health Services
Project) Series 1996C DN
3.85%** 10/07/99 14,575 14,575,000
Pennsylvania Higher Educational
Facilities Authority RB (The University
of Pennsylvania Health Services
Project) Series 1998B DN
3.85%** 10/07/99 31,230 31,230,000
Pennsylvania Higher Educational
Facilities Authority Refunding RB
(Carnegie Mellon University Project)
Series 1995B DN
3.90%** 10/01/99 1,700 1,700,000
Pennsylvania Higher Educational
Facilities Authority Refunding RB
(Carnegie Mellon University Project)
Series 1995C DN
3.90%** 10/07/99 1,700 1,700,000
Pennsylvania Intergovernmental Co-op
Authority Special Tax RB (City of
Philadelphia Funding Project)
Series 1992 MB
6.00% 06/15/00 9,755 9,944,225
Philadelphia Gas Works RB
Series 1999-2 MB
4.25% 07/01/00 1,720 1,731,291
Philadelphia GO Series 1999A TRAN
4.25% 06/30/00 10,000 10,054,150
Philadelphia Hospital and Higher
Education Facilities Authority RB
(Children's Hospital of Philadelphia
Project) Series 1992 DN
3.90%** 10/01/99 2,300 2,300,000
Philadelphia Hospital and Higher
Education Facilities Authority RB
(Children's Hospital of Philadelphia
Project) Series 1996A DN
3.90%** 10/01/99 1,700 1,700,000
Philadelphia IDRB (30th Street Station
Project) Series 1987 DN
3.50%** 10/07/99 6,900 6,900,000
Philadelphia IDRB (GDL Estates Corp.
Project) Series 1998B DN
3.85%** 10/07/99 3,565 3,565,000
Philadelphia Municipal Authority
Prerefunded RB Series 1988 MB
7.80% 04/01/00 545 556,420
Philadelphia School District GO
Series 1999B TRAN
4.00% 06/30/00 10,000 10,039,750
See accompanying notes to financial statements.
20
<PAGE>
BLACKROCK FUNDS
STATEMENT OF NET ASSETS
PENNSYLVANIA MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)
Par
AS OF SEPTEMBER 30, 1999 Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS (CONTINUED)
PENNSYLVANIA (CONTINUED)
Philadelphia Water and Sewer RB
Series 1989-14 MB
6.90% 10/01/99 $ 1,000 $ 1,020,000
Reading Regional Airport Authority RB
Series 1998A DN
3.95%** 10/07/99 1,500 1,500,000
Rose Tree Media School District GO
Series 1999 MB
3.00% 02/15/00 1,085 1,085,000
Sayre Health Care Facilities Authority
RB (VHA Capital Financing Project)
Series 1985A DN
3.80%** 10/07/99 1,600 1,600,000
Sayre Health Care Facilities Authority
RB (VHA Capital Financing Project)
Series 1985H DN
3.80%** 10/07/99 900 900,000
Sayre Health Care Facilities Authority
RB (VHA Capital Financing Project)
Series 1985L DN
3.80%** 10/07/99 3,000 3,000,000
Sayre Health Care Facilities Authority
RB (VHA Capital Financing Project)
Series 1985M DN
3.80%** 10/07/99 1,000 1,000,000
Schuylkill County IDA Resource Recovery
RB (Gilberton Power Project)
Series 1985 DN
3.70%** 10/07/99 1,000 1,000,000
Schuylkill County IDRB (Kaytee Products,
Inc. Project) Series 1995 DN
3.95%** 10/07/99 3,390 3,390,000
Scranton School District GO
Series 1999 TRAN
3.30% 12/31/99 4,900 4,901,165
Scranton-Lackawana Health and Welfare
Authority RB (Mercy Health System
Project) Series 1996A DN
3.75%** 10/07/99 3,300 3,300,000
Southeastern Pennsylvania Transportation
Authority RB Series 1999A MB
3.25% 03/01/00 1,805 1,807,648
Union County IDRB (Playworld Systems,
Inc. Project) Series 1999 DN
4.05%** 10/07/99 1,000 1,000,000
Venango IDA Resource Recovery RB
(Scrubgrass Project) Series 1990A MB
3.60% 11/15/99 300 300,000
Venango IDA Resource Recovery RB
(Scrubgrass Project) Series 1990B MB
4.20% 10/12/99 10,000 10,000,000
3.60% 11/12/99 9,365 9,365,000
3.55% 02/15/00 3,300 3,300,000
Venango IDA Resource Recovery RB
(Scrubgrass Project) Series 1993 MB
3.60% 11/15/99 8,385 8,385,000
Washington County Authority Higher
Education Pooled Equipment Lease RB
Series 1985 DN
3.85%** 10/07/99 5,200 5,200,000
Par
Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS (CONTINUED)
PENNSYLVANIA (CONTINUED)
Washington County Authority Lease RB
Series 1985B-1 DN
3.85%** 10/07/99 $ 1,278 $ 1,278,000
Westmoreland County IDRB (Elizabeth
Carbide Die Co. Project)
Series 1998B DN
4.00%** 10/07/99 3,500 3,500,000
York County General Authority Pooled
Financing RB Series 1996 DN
3.85%** 10/07/99 2,320 2,320,000
York County Hospital Authority RB
(Homewood Retirement Centers of
The United Church of Christ, Inc.
Project) Series 1990 DN
3.83%** 10/07/99 7,550 7,550,000
York County IDA PCRB (PECO Energy
Co. Project) Series 1993A DN
3.85%** 10/07/99 500 500,000
York County IDRB (Allied Signal, Inc.
Project) Series 1993 DN
3.95%** 10/07/99 1,000 1,000,000
York County IDRB (York Sheet Metal,
Inc. Project) Series 1998 DN
3.95%** 10/07/99 3,375 3,375,000
--------------
573,203,798
--------------
PUERTO RICO--2.4%
Puerto Rico Electric Power Authority
Trust Receipts Series 1998A DN
3.60%** 10/07/99 2,300 2,300,000
Puerto Rico Government Development
Bank Refunding RB Series 1985 DN
3.10%** 10/07/99 1,100 1,100,000
Puerto Rico Government Development
Bank RB Series 1999 TECP
3.00% 10/07/99 1,000 1,000,000
Puerto Rico Industrial, Medical and
Environmental Pollution Control
Facilities Financing Authority RB
(Ana G. Mendez Foundation Project)
Series 1985 DN
3.80%** 10/07/99 1,700 1,700,000
Puerto Rico Industrial, Medical and
Environmental Pollution Control
Facilities Financing Authority RB
(Reynolds Metals Co. Project)
Series 1983 MB
3.50% 09/01/00 3,850 3,850,000
Puerto Rico Industrial, Tourist,
Education, Medical and Environmental
Control Finance Authority RB
(Ana G. Mendez University System
Project) Series 1998 DN
3.70%** 10/07/99 4,000 4,000,000
--------------
13,950,000
--------------
See accompanying notes to financial statements.
21
<PAGE>
BLACKROCK FUNDS
STATEMENT OF NET ASSETS
PENNSYLVANIA MUNICIPAL MONEY MARKET PORTFOLIO (CONCLUDED)
AS OF SEPTEMBER 30, 1999 Value
--------------
TOTAL INVESTMENTS IN SECURITIES
(Cost $587,153,798*) 99.9% $ 587,153,798
OTHER ASSETS IN EXCESS
OF LIABILITIES 0.1% 762,451
------ --------------
NETASSETS (Equivalent to $1.00 per share
based on 376,404,075 Institutional
shares, 76,184,192 Service shares and
135,340,861 Investor A shares
outstanding) 100.0% $ 587,916,249
====== ==============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
INSTITUTIONAL, SERVICE AND
INVESTOR A SHARE
($587,916,249 (DIVIDE) 587,929,128) $1.00
=====
- ----------------------
* Aggregate cost for Federal tax purposes.
** Rates shown are the rates as of September 30, 1999, and maturities shown
are the longer of the next interest readjustment date or the date the
principal owed can be recovered through demand.
See accompanying notes to financial statements.
22
<PAGE>
BLACKROCK FUNDS
STATEMENT OF NET ASSETS
VIRGINIA MUNICIPAL MONEY MARKET PORTFOLIO
Par
AS OF SEPTEMBER 30, 1999 Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS--99.9%
VIRGINIA--90.3%
Albemarle County IDRB (University of
Virginia Health Services Foundation
Project) Series 1998 DN
3.80%** 10/01/99 $2,000 $ 2,000,000
Alexandria IDRB (Young Men's Christian
Association of Metropolitan
Washington Project) Series 1998 DN
3.93%** 10/07/99 1,955 1,955,000
Amelia County IDA Exempt Facility RB
(Chambers Waste System of Virginia,
Inc. Project) Series 1991 DN
3.90%** 10/07/99 1,710 1,710,000
Brunswick County IDA Exempt Facility
RB (Aegis Waste Solutions, Inc.
Project) Series 1996 DN
3.90%** 10/07/99 1,000 1,000,000
Campbell County IDRB (Hadson Power
12 Altavista Project) Series 1990A DN
4.10%** 10/01/99 300 300,000
Capital Region Airport Commission RB
(Richmond International Airport
Project) Series 1995C DN
3.80%** 10/07/99 400 400,000
Chesterfield County IDA PCRB (Virginia
Electric & Power Co. Project)
Series 1985 MB
3.50% 10/01/99 500 500,000
Chesterfield County IDA PCRB (Virginia
Electric & Power Co. Project)
Series 1985 MB
3.55% 02/09/00 1,000 1,000,000
Chesterfield County IDRB (Blueprint
Holding, Inc. Project) Series 1997 DN
3.85%** 10/07/99 2,000 2,000,000
City of Newport News GO Series 1999 MB
4.50% 03/01/00 2,215 2,227,355
City of Virginia Beach Development
Authority RB (Ocean Ranch Motel
Corp. Project) Series 1998 DN
3.85%** 10/01/99 1,000 1,000,000
Dinwiddie County IDA Exempt Facility
RB (Chaparral Steel Virginia Project)
Series 1998 DN
3.95%** 10/07/99 1,400 1,400,000
Fairfax County IDRB (Fairfax Hospital
System Project) Series 1988A DN
3.75%** 10/07/99 1,000 1,000,000
Fairfax County IDRB (Fairfax Hospital
System Project) Series 1988C DN
3.75%** 10/07/99 300 300,000
Fairfax County Water Authority RB
Series 1989 MB
7.30% 01/01/00 265 272,931
Greensville County IDRB (Perdue Farms,
Inc. Project) Series 1986 DN
3.90%** 10/01/99 1,600 1,600,000
Halifax County IDA PCRB (Virginia
Electric and Power Co. Project)
Series 1992 MB
3.55% 11/05/99 2,000 2,000,000
Hampton Redevelopment & Housing
Authority Multi-Family Housing
Refunding RB (Avalon at Hampton
Project) Series 1996A DN
3.70%** 10/07/99 200 200,000
Par
Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS (CONTINUED)
VIRGINIA (CONTINUED)
King George County IDA Exempt Facility
RB (Birchwood Power Partners
Project) Series 1995 DN
3.95%** 10/01/99 $1,100 $ 1,100,000
King George County IDA Exempt Facility
RB (Birchwood Power Partners Project)
Series 1996 DN
3.95%** 10/01/99 700 700,000
King George County IDA Exempt Facility
RB (Birchwood Power Partners Project)
Series 1997 DN
3.95%** 10/01/99 900 900,000
Louisa County IDRB (Pooled Financing
Project) Series 1995 DN
3.80%** 10/07/99 400 400,000
Lynchburg GO Series 1990 MB
7.00% 04/01/00 800 830,570
Manassas GO Series 1999 MB
5.00% 05/01/00 525 530,213
Metropolitan Washington D.C. Airports
Authority Virginia Passenger Facility
Flexible Term Notes Series 1999 TECP
3.85% 01/24/00 2,500 2,500,000
Nelson County IDA Industrial
Development RB (Taylor Ramsey
Corp. Project) Series 1999 DN
3.90%** 10/07/99 1,000 1,000,000
Norfolk Airport Authority TECP
Series 1999 MB
3.45% 03/07/00 1,500 1,500,000
Norfolk IDRB (2F Realty Co. Project)
Series 1998 DN
3.85%** 10/07/99 1,400 1,400,000
Norfolk IDRB (Children's Hospital of the
King's Daughters Project)
Series 1998 DN
3.80%** 10/07/99 600 600,000
Peninsula Port Authority of Virginia Coal
Terminal RB (Dominion Terminal
Associates Project) Series 1987D DN
3.90%** 10/01/99 400 400,000
Peninsula Port Authority of Virginia IDRB
(Allied-Signal, Inc. Project)
Series 1993 DN
3.95%** 10/07/99 1,000 1,000,000
Peninsula Port Authority of Virginia Port
Facility Refunding RB (CSX
Transportation, Inc.) Series 1992 MB
3.45% 11/05/99 1,000 1,000,000
Prince William County IDA PCRB (Virginia
Electric & Power Co. Project)
Series 1986 MB
3.50% 10/07/99 300 300,000
Prince William County IDRB (Colonial
Investments Facility Project)
Series 1996 DN
4.05%** 10/07/99 3,085 3,085,000
Richmond IDRB (PM Beef Project)
Series 1997 DN
4.00%** 10/07/99 2,900 2,900,000
State of Virginia GO Series 1994 MB
6.00% 06/01/00 1,600 1,625,220
Virginia College Building Authority
Educational Facilities RB (University
of Richmond Project) Series 1996 DN
3.80%** 10/07/99 1,000 1,000,000
See accompanying notes to financial statements.
23
<PAGE>
BLACKROCK FUNDS
STATEMENT OF NET ASSETS
VIRGINIA MUNICIPAL MONEY MARKET PORTFOLIO (CONCLUDED)
Par
AS OF SEPTEMBER 30, 1999 Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS (CONTINUED)
VIRGINIA (CONTINUED)
Virginia Commonwealth GO
Series 1999 TECP
3.25% 10/08/99 $1,000 $ 1,000,000
Virginia Education Loan Authority RB
(Guaranteed Student Loan Program)
Series 1992F MB
6.10% 03/01/00 915 925,943
Virginia Resource Authority RB (Henrico
County Project) Series 1997 DN
3.90%** 10/07/99 2,000 2,000,000
Virginia Small Business Financing
Authority RB (Ennstone, Inc. Project)
Series 1999 DN
3.85%** 10/01/99 1,000 1,000,000
Virginia Small Business Financing
Authority IDRB (Coastal Development
Group Project) Series 1989 DN
4.30%** 10/07/99 195 195,000
Virginia State Public School Authority RB
Series 1991B MB
6.10% 01/01/00 1,000 1,027,374
York County IDA PCRB (Virginia Electric
and Power Co. Project) Series 1985 MB
3.50% 11/05/99 200 200,000
--------------
49,984,606
--------------
PUERTO RICO--9.6%
Puerto Rico Government Development
Bank Refunding RB Series 1985 DN
3.10%** 10/07/99 200 200,000
Puerto Rico Government Development
Bank TECP Series 1999 MB
3.45% 02/08/00 1,300 1,300,000
Puerto Rico Industrial, Medical and
Environmental Pollution Control
Facilities Financing Authority RB
(Ana G. Mendez Foundation Project)
Series 1985 DN
3.80%** 10/07/99 2,900 2,900,000
Puerto Rico Industrial, Medical and
Environmental Pollution Control
Facilities Financing Authority RB
(Reynolds Metals Co. Project)
Series 1983 MB
3.50% 09/01/00 600 600,000
Par
Maturity (000) Value
-------- ----- --------------
MUNICIPAL BONDS (CONTINUED)
PUERTO RICO (CONTINUED)
Puerto Rico Industrial, Tourist,
Education, Medical and Environmental
Control Finance Authority RB
(Ana G. Mendez University System
Project) Series 1998 DN
3.70%** 10/07/99 $ 300 $ 300,000
--------------
5,300,000
--------------
TOTAL INVESTMENTS IN SECURITIES
(Cost $55,284,606*) 99.9% 55,284,606
OTHER ASSETS IN EXCESS
OF LIABILITIES 0.1% 63,884
------ --------------
NET ASSETS (Equivalent to $1.00 per
share based on 51,302,048 Institutional
shares, 2,785,928 Service shares and
1,261,106 Investor A shares outstanding) 100.0% $ 55,348,490
====== ==============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
INSTITUTIONAL, SERVICE AND
INVESTOR A SHARE
($55,348,490 (DIVIDE) 55,349,082) $1.00
=====
- ---------------------
* Aggregate cost for Federal tax purposes.
** Rates shown are the rates as of September 30, 1999, and maturities shown
are the longer of the next interest readjustment date or the date the
principal owed can be recovered through demand.
INVESTMENT ABBREVIATIONS
BAN.................................Bond Anticipation Note
DN.............................................Demand Note
GO......................................General Obligation
IDA.......................Industrial Development Authority
IDRB...................Industrial Development Revenue Bond
MB..........................................Municipal Bond
PCRB........................Pollution Control Revenue Bond
RB............................................Revenue Bond
TAN..................................Tax Anticipation Note
TECP...........................Tax-Exempt Commercial Paper
TRAN.....................Tax and Revenue Anticipation Note
See accompanying notes to financial statements.
24
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
BLACKROCK FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
U.S. Treasury Municipal
Money Market Money Market Money Market
FOR THE YEAR ENDED SEPTEMBER 30, 1999 Portfolio Portfolio Portfolio
------------ ----------- -----------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest ............................................................... $173,302,056 $48,646,339 $14,800,313
------------ ----------- -----------
EXPENSES:
Investment advisory fee ................................................ 13,414,598 4,423,266 2,064,943
Administration fee ..................................................... 5,027,901 1,684,827 825,165
Custodian fee .......................................................... 383,036 143,105 84,927
Transfer agent fee ..................................................... 927,376 324,028 143,438
Shareholder servicing fees ............................................. 2,395,048 1,024,118 273,316
Shareholder processing fees ............................................ 1,907,755 957,985 265,817
Distribution fees ...................................................... 34,135 163 403
Legal and audit ........................................................ 149,258 53,170 24,361
Printing ............................................................... 175,599 47,587 28,676
Registration fees and expenses ......................................... 82,721 43,032 44,413
Trustees' fees and officer's salary .................................... 50,170 17,107 7,819
Other .................................................................. 100,553 22,495 16,062
------------ ----------- -----------
24,648,150 8,740,883 3,779,340
Less fees waived ....................................................... (6,362,185) (2,693,290) (1,307,327)
------------ ----------- -----------
Total expenses ...................................................... 18,285,965 6,047,593 2,472,013
------------ ----------- -----------
Net investment income .................................................. 155,016,091 42,598,746 12,328,300
------------ ----------- -----------
Net realized gain (loss)
on investments ...................................................... (68,603) 29,066 4,275
------------ ----------- -----------
Net increase in net assets resulting from
operations .......................................................... $154,947,488 $42,627,812 $12,332,575
============ =========== ===========
</TABLE>
<TABLE>
<CAPTION>
New Jersey North Carolina Ohio Pennsylvania Virginia
Municipal Municipal Municipal Municipal Municipal
Money Market Money Market Money Market Money Market Money Market
FOR THE YEAR ENDED SEPTEMBER 30, 1999 Portfolio Portfolio Portfolio Portfolio Portfolio
---------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest ..................................... $4,775,354 $7,446,936 $3,816,918 $20,167,935 $2,021,210
---------- ---------- ---------- ----------- ----------
EXPENSES:
Investment advisory fee ...................... 675,680 1,054,699 516,814 2,822,483 279,988
Administration fee ........................... 270,279 411,350 206,726 1,107,540 111,988
Custodian fee ................................ 30,938 43,678 29,536 110,342 20,050
Transfer agent fee ........................... 58,434 78,154 54,563 201,957 20,427
Shareholder servicing fees ................... 141,966 19,487 120,146 451,518 6,786
Shareholder processing fees .................. 111,940 19,105 91,491 333,153 5,900
Distribution fees ............................ 22,917 -- 2,866 78,692 886
Legal and audit .............................. 7,764 12,938 8,072 31,966 3,557
Printing ..................................... 9,140 18,184 6,148 37,627 7,187
Registration fees and expenses ............... 7,651 11,011 8,684 14,449 13,033
Trustees' fees and officer's salary .......... 2,833 3,808 2,309 10,274 1,584
Other ........................................ 9,907 12,033 4,805 19,525 6,854
---------- ---------- ---------- ----------- ----------
1,349,449 1,684,447 1,052,160 5,219,526 478,240
Less fees waived ............................. (473,682) (932,472) (370,269) (1,739,071) (274,654)
---------- ---------- ---------- ----------- ----------
Total expenses ............................ 875,767 751,975 681,891 3,480,455 203,586
---------- ---------- ---------- ----------- ----------
Net investment income ........................ 3,899,587 6,694,961 3,135,027 16,687,480 1,817,624
---------- ---------- ---------- ----------- ----------
Net realized gain (loss)
on investments ............................ 870 (579) (6,193) 558 --
---------- ---------- ---------- ----------- ----------
Net increase in net assets resulting from
operations ................................ $3,900,457 $6,694,382 $3,128,834 $16,688,038 $1,817,624
========== ========== ========== =========== ==========
</TABLE>
See accompanying notes to financial statements.
26-27
<PAGE>
BLACKROCK FUNDS
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
U.S. Treasury Municipal
Money Market Portfolio Money Market Portfolio Money Market Portfolio
------------------------------ ---------------------------- --------------------------
For the For the For the For the For the For the
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
9/30/99 9/30/98 9/30/99 9/30/98 9/30/99 9/30/98
-------------- -------------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income ................ $ 155,016,091 $ 149,800,719 $ 42,598,746 $ 49,555,191 $ 12,328,300 $ 14,459,939
Net realized gain (loss) on
investments ....................... (68,603) 88,296 29,066 159,097 4,275 (3,165)
-------------- -------------- ------------ -------------- ------------ ------------
Net increase in net assets resulting
from operations ...................... 154,947,488 149,889,015 42,627,812 49,714,288 12,332,575 14,456,774
-------------- -------------- ------------ -------------- ------------ ------------
Distributions to shareholders from:
Net investment income:
Institutional Class .................. (98,261,892) (49,337,129) (15,659,093) (9,436,685) (7,889,717) (3,592,924)
Service Class ........................ (35,699,099) (85,254,049) (24,215,597) (37,061,973) (4,264,538) (10,687,842)
Investor A Class ..................... (20,886,959) (15,177,945) (2,723,328) (3,056,533) (173,039) (178,559)
Investor B Class ..................... (122,431) (21,163) -- -- -- --
Investor C Class ..................... (45,710) (10,433) (728) -- (1,006) (614)
-------------- -------------- ------------ -------------- ------------ ------------
Total distribution from net
investment income .................. (155,016,091) (149,800,719) (42,598,746) (49,555,191) (12,328,300) (14,459,939)
-------------- -------------- ------------ -------------- ------------ ------------
Capital share transactions ............... 285,875,157 289,478,727 (71,420,053) (76,171,119) (2,177,494) 1,286,625
-------------- -------------- ------------ -------------- ------------ ------------
Total increase (decrease) in
net assets ......................... 285,806,554 289,567,023 (71,390,987) (76,012,022) (2,173,219) 1,283,460
Net assets:
Beginning of period .................... 3,034,727,064 2,745,160,041 965,615,540 1,041,627,562 396,420,644 395,137,184
-------------- -------------- ------------ -------------- ------------ ------------
End of period .......................... $3,320,533,618 $3,034,727,064 $894,224,553 $ 965,615,540 $394,247,425 $396,420,644
============== ============== ============ ============== ============ ============
</TABLE>
<TABLE>
<CAPTION>
New Jersey Municipal North Carolina Municipal Ohio Municipal
Money Market Portfolio Money Market Portfolio Money Market Portfolio
-------------------------- -------------------------- --------------------------
For the For the For the For the For the For the
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
9/30/99 9/30/98 9/30/99 9/30/98 9/30/99 9/30/98
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income ................. $ 3,899,587 $3,978,699 $ 6,694,961 $ 6,233,223 $ 3,135,027 $ 4,005,147
Net realized gain (loss) on investments 870 462 (579) 1,458 (6,193) (16,540)
------------ ---------- ------------ ------------ ------------ ------------
Net increase in net assets resulting
from operations ....................... 3,900,457 3,979,161 6,694,382 6,234,681 3,128,834 3,988,607
------------ ---------- ------------ ------------ ------------ ------------
Distributions to shareholders from:
Net investment income:
Institutional Class ................... (2,210,426) (446,371) (6,365,924) (5,484,220) (1,583,637) (1,363,131)
Service Class ......................... (806,717) (2,668,058) (319,883) (741,593) (857,398) (2,124,586)
Investor A Class ...................... (882,443) (864,269) (9,154) (7,410) (693,992) (517,430)
Investor B Class ...................... (1) (1) -- -- -- --
Investor C Class ...................... -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Total distribution from net
investment income ................... (3,899,587) (3,978,699) (6,694,961) (6,233,223) (3,135,027) (4,005,147)
------------ ------------ ------------ ------------ ------------ ------------
Capital share transactions ................ (8,860,468) 17,499,690 (21,467,926) 29,868,127 (17,138,785) 24,836,540
------------ ------------ ------------ ------------ ------------ ------------
Total increase (decrease) in
net assets .......................... (8,859,598) 17,500,152 (21,468,505) 29,869,585 (17,144,978) 24,820,000
Net assets:
Beginning of period ..................... 147,917,564 130,417,412 201,535,206 171,665,621 122,594,871 97,774,871
------------ ------------ ------------ ------------ ------------ ------------
End of period ........................... $139,057,966 $147,917,564 $180,066,701 $201,535,206 $105,449,893 $122,594,871
============ ============ ============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
Pennsylvania Municipal Virginia Municipal
Money Market Portfolio Money Market Portfolio
-------------------------- ------------------------
For the For the For the For the
Year Ended Year Ended Year Ended Year Ended
9/30/99 9/30/98 9/30/99 9/30/98
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income ................. $ 16,687,480 $ 18,261,199 $ 1,817,624 $ 2,395,730
Net realized gain (loss) on investments 558 1,531 -- (422)
------------ ------------ ----------- -----------
Net increase in net assets resulting
from operations ....................... 16,688,038 18,262,730 1,817,624 2,395,308
------------ ------------ ----------- -----------
Distributions to shareholders from:
Net investment income:
Institutional Class ................... (11,581,237) (8,341,719) (1,715,802) (2,187,105)
Service Class ......................... (2,012,057) (6,846,156) (80,532) (182,287)
Investor A Class ...................... (3,094,186) (3,073,324) (21,290) (26,338)
Investor B Class ...................... -- -- -- --
Investor C Class ...................... -- -- -- --
------------ ------------ ----------- -----------
Total distribution from net
investment income ................... (16,687,480) (18,261,199) (1,817,624) (2,395,730
------------ ------------ ----------- -----------
Capital share transactions ................ 53,072,152 (27,011,532) (26,511,446) 12,686,340
------------ ------------ ----------- -----------
Total increase (decrease) in
net assets .......................... 53,072,710 (27,010,001) (26,511,446) 12,685,918
Net assets:
Beginning of period ..................... 534,843,539 561,853,540 81,859,936 69,174,018
------------ ------------ ----------- -----------
End of period ........................... $587,916,249 $534,843,539 $55,348,490 $81,859,936
============ ============ =========== ===========
</TABLE>
See accompanying notes to financial statements.
28-29
<PAGE>
BlackRock Funds
FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout Each Period
<TABLE>
<CAPTION>
NET DISTRIBUTIONS NET
ASSET DISTRIBUTIONS FROM NET ASSET
VALUE NET FROM NET REALIZED VALUE
BEGINNING INVESTMENT INVESTMENT CAPITAL END OF
OF PERIOD INCOME INCOME GAINS PERIOD
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- ----------------------
MONEY MARKET PORTFOLIO
- ----------------------
INSTITUTIONAL CLASS
9/30/99 $1.00 $0.0478 $(0.0478) $0.00 $1.00
9/30/98 1.00 0.0532 (0.0532) 0.00 1.00
9/30/97 1.00 0.0529 (0.0529) 0.00 1.00
9/30/96 1.00 0.0533 (0.0533) 0.00 1.00
9/30/95 1.00 0.0564 (0.0564) 0.00 1.00
SERVICE CLASS
9/30/99 $1.00 $0.0448 $(0.0448) $0.00 $1.00
9/30/98 1.00 0.0502 (0.0502) 0.00 1.00
9/30/97 1.00 0.0499 (0.0499) 0.00 1.00
9/30/96 1.00 0.0503 (0.0503) 0.00 1.00
9/30/95 1.00 0.0534 (0.0534) 0.00 1.00
INVESTOR A CLASS
9/30/99 $1.00 $0.0441 $(0.0441) $0.00 $1.00
9/30/98 1.00 0.0495 (0.0495) 0.00 1.00
9/30/97 1.00 0.0491 (0.0491) 0.00 1.00
9/30/96 1.00 0.0485 (0.0485) 0.00 1.00
9/30/95 1.00 0.0511 (0.0511) 0.00 1.00
INVESTOR B CLASS
9/30/99 $1.00 $0.0371 $(0.0371) $0.00 $1.00
9/30/98 1.00 0.0426 (0.0426) 0.00 1.00
9/30/97 1.00 0.0424 (0.0424) 0.00 1.00
9/30/96 1.00 0.0426 (0.0426) 0.00 1.00
9/15/95 1 through 9/30/95 1.00 0.0020 (0.0020) 0.00 1.00
INVESTOR C CLASS
9/30/99 $1.00 $0.0371 $(0.0371) $0.00 $1.00
9/30/98 1.00 0.0426 (0.0426) 0.00 1.00
10/17/96 1 through 9/30/97 1.00 0.0390 (0.0390) 0.00 1.00
- ------------------------------------
U.S. TREASURY MONEY MARKET PORTFOLIO
- ------------------------------------
INSTITUTIONAL CLASS
9/30/99 $1.00 $0.0453 $(0.0453) $0.00 $1.00
9/30/98 1.00 0.0519 (0.0519) 0.00 1.00
9/30/97 1.00 0.0515 (0.0515) 0.00 1.00
9/30/96 1.00 0.0519 (0.0519) 0.00 1.00
9/30/95 1.00 0.0555 (0.0555) 0.00 1.00
SERVICE CLASS
9/30/99 $1.00 $0.0423 $(0.0423) $0.00 $1.00
9/30/98 1.00 0.0489 (0.0489) 0.00 1.00
9/30/97 1.00 0.0485 (0.0485) 0.00 1.00
9/30/96 1.00 0.0489 (0.0489) 0.00 1.00
9/30/95 1.00 0.0525 (0.0525) 0.00 1.00
INVESTOR A CLASS
9/30/99 $1.00 $0.0412 $(0.0412) $0.00 $1.00
9/30/98 1.00 0.0476 (0.0476) 0.00 1.00
9/30/97 1.00 0.0468 (0.0468) 0.00 1.00
9/30/96 1.00 0.0467 (0.0467) 0.00 1.00
9/30/95 1.00 0.0501 (0.0501) 0.00 1.00
INVESTOR C CLASS
12/8/98 1 through 5/25/99 $1.00 $0.0138 $(0.0138) $0.00 $1.00
</TABLE>
<TABLE>
<CAPTION>
RATIO OF NET
NET RATIO OF EXPENSES INVESTMENT INCOME
ASSETS RATIO OF TO AVERAGE RATIO OF NET TO AVERAGE
END OF EXPENSES TO NET ASSETS INVESTMENT INCOME NET ASSETS
TOTAL PERIOD AVERAGE NET (EXCLUDING TO AVERAGE NET (EXCLUDING
RETURN (000) ASSETS WAIVERS) ASSETS WAIVERS)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- ----------------------
MONEY MARKET PORTFOLIO
- ----------------------
INSTITUTIONAL CLASS
9/30/99 4.89% $2,076,083 0.42% 0.61% 4.78% 4.59%
9/30/98 5.46 1,858,165 0.39 0.63 5.32 5.08
9/30/97 5.42 878,566 0.32 0.65 5.30 4.97
9/30/96 5.46 587,730 0.29 0.65 5.34 4.98
9/30/95 5.79 654,157 0.27 0.64 5.66 5.28
SERVICE CLASS
9/30/99 4.58% $ 748,191 0.72% 0.91% 4.48% 4.29%
9/30/98 5.14 808,962 0.69 0.93 5.03 4.79
9/30/97 5.11 1,610,315 0.61 0.94 4.99 4.66
9/30/96 5.15 1,575,064 0.59 0.95 5.00 4.64
9/30/95 5.48 1,194,017 0.57 0.94 5.35 4.98
INVESTOR A CLASS
9/30/99 4.50% $ 486,578 0.80% 0.99% 4.40% 4.21%
9/30/98 5.06 365,458 0.77 1.01 4.94 4.70
9/30/97 5.02 256,039 0.70 1.03 4.92 4.59
9/30/96 4.96 162,099 0.74 1.10 4.81 4.45
9/30/95 5.23 10,185 0.81 1.19 5.15 4.78
INVESTOR B CLASS
9/30/99 3.77% $ 5,414 1.49% 1.68% 3.71% 3.52%
9/30/98 4.34 1,805 1.48 1.72 4.22 3.98
9/30/97 4.32 238 1.39 1.72 4.26 3.93
9/30/96 4.34 138 1.36 1.73 4.18 3.82
9/15/95 1 through 9/30/95 0.20 27 1.34 2 1.72 2 4.58 2 4.20 2
INVESTOR C CLASS
9/30/99 3.77% $ 4,268 1.49% 1.68% 3.71% 3.52%
9/30/98 4.34 337 1.49 1.73 4.22 3.98
10/17/96 1 through 9/30/97 3.97 2 1.50 2 1.83 2 4.01 2 3.68 2
- ------------------------------------
U.S. TREASURY MONEY MARKET PORTFOLIO
- ------------------------------------
INSTITUTIONAL CLASS
9/30/99 4.63% $ 324,879 0.41% 0.68% 4.53% 4.26%
9/30/98 5.32 297,161 0.38 0.69 5.19 4.88
9/30/97 5.27 162,052 0.31 0.69 5.15 4.77
9/30/96 5.32 167,193 0.29 0.69 5.18 4.78
9/30/95 5.69 120,540 0.27 0.69 5.64 5.22
SERVICE CLASS
9/30/99 4.31% $ 524,122 0.71% 0.98% 4.23% 3.96%
9/30/98 5.00 596,644 0.68 0.99 4.90 4.59
9/30/97 4.93 836,151 0.61 0.99 4.85 4.47
9/30/96 5.00 955,454 0.59 0.99 4.84 4.45
9/30/95 5.38 550,959 0.57 0.98 5.27 4.85
INVESTOR A CLASS
9/30/99 4.20% $ 45,224 0.82% 1.09% 4.12% 3.85%
9/30/98 4.87 71,811 0.81 1.12 5.57 5.26
9/30/97 4.75 43,425 0.78 1.16 4.70 4.32
9/30/96 4.77 10,630 0.79 1.19 4.60 4.20
9/30/95 5.13 1,285 0.80 1.21 5.03 4.62
INVESTOR C CLASS
12/8/98 1 through 5/25/99 1.39% $ -- 3 1.48% 2 1.75% 2 3.46% 2 3.19% 2
</TABLE>
See accompanying notes to financial statements.
30-31
<PAGE>
BLACKROCK FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
For a Share Outstanding Throughout Each Period
<TABLE>
<CAPTION>
NET DISTRIBUTIONS NET
ASSET DISTRIBUTIONS FROM NET ASSET
VALUE NET FROM NET REALIZED VALUE
BEGINNING INVESTMENT INVESTMENT CAPITAL END OF
OF PERIOD INCOME INCOME GAINS PERIOD
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- --------------------------------
MUNICIPAL MONEY MARKET PORTFOLIO
- --------------------------------
INSTITUTIONAL CLASS
9/30/99 $1.00 $0.0281 $(0.0281) $0.00 $1.00
9/30/98 1.00 0.0327 (0.0327) 0.00 1.00
9/30/97 1.00 0.0337 (0.0337) 0.00 1.00
9/30/96 1.00 0.0339 (0.0339) 0.00 1.00
9/30/95 1.00 0.0364 (0.0364) 0.00 1.00
SERVICE CLASS
9/30/99 $1.00 $0.0252 $(0.0252) $0.00 $1.00
9/30/98 1.00 0.0297 (0.0297) 0.00 1.00
9/30/97 1.00 0.0307 (0.0307) 0.00 1.00
9/30/96 1.00 0.0309 (0.0309) 0.00 1.00
9/30/95 1.00 0.0334 (0.0334) 0.00 1.00
INVESTOR A CLASS
9/30/99 $1.00 $0.0235 $(0.0235) $0.00 $1.00
9/30/98 1.00 0.0280 (0.0280) 0.00 1.00
9/30/97 1.00 0.0290 (0.0290) 0.00 1.00
9/30/96 1.00 0.0288 (0.0288) 0.00 1.00
9/30/95 1.00 0.0311 (0.0311) 0.00 1.00
INVESTOR C CLASS
10/1/98 through 12/18/98 $1.00 $0.0040 $(0.0040) $0.00 $1.00
9/30/98 6 1.00 0.0133 (0.0133) 0.00 1.00
9/12/97 1 through 9/30/97 1.00 0.0013 (0.0013) 0.00 1.00
- -------------------------------------------
NEW JERSEY MUNICIPAL MONEY MARKET PORTFOLIO
- -------------------------------------------
INSTITUTIONAL CLASS
9/30/99 $1.00 $0.0279 $(0.0279) $0.00 $1.00
9/30/98 1.00 0.0319 (0.0319) 0.00 1.00
9/30/97 1.00 0.0323 (0.0323) 0.00 1.00
2/1/96 through 9/30/96 1.00 0.0207 (0.0207) 0.00 1.00
1/16/96 1 through 1/31/96 1.00 0.0000 (0.0000) 0.00 1.00
SERVICE CLASS
9/30/99 $1.00 $0.0249 $(0.0249) $0.00 $1.00
9/30/98 1.00 0.0289 (0.0289) 0.00 1.00
9/30/97 1.00 0.0293 (0.0293) 0.00 1.00
2/1/96 through 9/30/96 1.00 0.0187 (0.0187) 0.00 1.00
3/1/95 through 1/31/96 1.00 0.0300 (0.0300) 0.00 1.00
2/28/95 1.00 0.0200 (0.0200) 0.00 1.00
INVESTOR A CLASS
9/30/99 $1.00 $0.0227 $(0.0227) $0.00 $1.00
9/30/98 1.00 0.0265 (0.0265) 0.00 1.00
9/30/97 1.00 0.0268 (0.0268) 0.00 1.00
2/1/96 through 9/30/96 1.00 0.0175 (0.0175) 0.00 1.00
1/16/96 1 through 1/31/96 1.00 0.0000 (0.0000) 0.00 1.00
INVESTOR B CLASS
9/30/99 $1.00 $0.0094 $(0.0094) $0.00 $1.00
5/13/98 5 through 9/30/98 1.00 0.0079 (0.0079) 0.00 1.00
3/20/97 1 through 7/17/97 1.00 0.0077 (0.0077) 0.00 1.00
</TABLE>
<TABLE>
<CAPTION>
RATIO OF NET
NET RATIO OF EXPENSES INVESTMENT INCOME
ASSETS RATIO OF TO AVERAGE RATIO OF NET TO AVERAGE
END OF EXPENSES TO NET ASSETS INVESTMENT INCOME NET ASSETS
TOTAL PERIOD AVERAGE NET (EXCLUDING TO AVERAGE NET (EXCLUDING
RETURN (000) ASSETS WAIVERS) ASSETS WAIVERS)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------
MUNICIPAL MONEY MARKET PORTFOLIO
- --------------------------------
INSTITUTIONAL CLASS
9/30/99 2.85% $ 238,281 0.42% 0.70% 2.80% 2.52%
9/30/98 3.32 246,733 0.39 0.71 3.25 2.93
9/30/97 3.42 58,747 0.31 0.72 3.36 2.95
9/30/96 3.41 43,936 0.29 0.73 3.37 2.93
9/30/95 3.70 53,778 0.27 0.71 3.64 3.20
SERVICE CLASS
9/30/99 2.54% $ 151,261 0.72% 1.00% 2.50% 2.22%
9/30/98 3.01 140,155 0.69 1.01 2.96 2.64
9/30/97 3.11 327,910 0.61 1.02 3.06 2.65
9/30/96 3.10 261,617 0.59 1.03 3.08 2.64
9/30/95 3.39 265,629 0.57 1.01 3.35 2.91
INVESTOR A CLASS
9/30/99 2.37% $ 4,705 0.89% 1.17% 2.33% 2.05%
9/30/98 2.83 9,227 0.86 1.18 2.80 2.48
9/30/97 2.93 8,468 0.79 1.20 2.92 2.51
9/30/96 2.88 1,851 0.77 1.21 2.80 2.36
9/30/95 3.15 20 0.79 1.23 3.08 2.64
INVESTOR C CLASS
10/1/98 through 12/18/98 0.40% $ -- 3 1.49%2 1.77%2 1.73%2 1.45%2
9/30/98 6 1.34 306 1.47 1.79 2.08 1.76
9/12/97 1 through 9/30/97 0.13 12 1.32 2 1.73 2 2.63 2 2.22 2
- -------------------------------------------
NEW JERSEY MUNICIPAL MONEY MARKET PORTFOLIO
- -------------------------------------------
INSTITUTIONAL CLASS
9/30/99 2.83% $ 79,568 0.39% 0.71% 2.79% 2.47%
9/30/98 3.24 68,771 0.38 0.75 3.17 2.80
9/30/97 3.28 7,432 0.32 0.76 3.27 2.83
2/1/96 through 9/30/96 2.09 614 0.29 2 0.78 2 3.07 2 2.58 2
1/16/96 1 through 1/31/96 3.07 4,195 0.29 2 0.78 2 3.07 2 2.58 2
SERVICE CLASS
9/30/99 2.52% $ 37,120 0.69% 1.01% 2.49% 2.17%
9/30/98 2.93 35,152 0.67 1.04 2.89 2.52
9/30/97 2.96 101,294 0.61 1.05 2.93 2.49
2/1/96 through 9/30/96 1.89 68,139 0.59 2 1.08 2 2.82 2 2.33 2
3/1/95 through 1/31/96 3.23 56,958 0.70 2 0.74 2 3.17 2 3.13 2
2/28/95 2.46 43,610 0.63 0.70 2.46 2.39
INVESTOR A CLASS
9/30/99 2.30% $ 22,370 0.91% 1.23% 2.27% 1.95%
9/30/98 2.68 43,995 0.91 1.28 2.64 2.27
9/30/97 2.71 21,691 0.86 1.30 2.68 2.24
2/1/96 through 9/30/96 1.76 17,314 0.78 2 1.27 2 2.63 2 2.15 2
1/16/96 1 through 1/31/96 2.66 21,662 0.71 2 1.20 2 2.66 2 2.17 2
INVESTOR B CLASS
9/30/99 0.94% $ -- 1.46% 1.78% 1.72% 1.40%
5/13/98 5 through 9/30/98 0.79 -- 1.44 2 1.81 2 2.12 2 1.75 2
3/20/97 1 through 7/17/97 0.77 --4 1.37 2 1.81 2 2.35 2 1.91 2
</TABLE>
See accompanying notes to financial statements.
32-33
<PAGE>
BLACKROCK FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
For a Share Outstanding Throughout Each Period
<TABLE>
<CAPTION>
NET DISTRIBUTIONS NET
ASSET DISTRIBUTIONS FROM NET ASSET
VALUE NET FROM NET REALIZED VALUE
BEGINNING INVESTMENT INVESTMENT CAPITAL END OF
OF PERIOD INCOME INCOME GAINS PERIOD
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------
NORTH CAROLINA MUNICIPAL MONEY MARKET PORTFOLIO
- -----------------------------------------------
INSTITUTIONAL CLASS
9/30/99 $1.00 $0.0288 $(0.0288) $0.00 $1.00
9/30/98 1.00 0.0335 (0.0335) 0.00 1.00
9/30/97 1.00 0.0334 (0.0334) 0.00 1.00
9/30/96 1.00 0.0338 (0.0338) 0.00 1.00
9/30/95 1.00 0.0359 (0.0359) 0.00 1.00
SERVICE CLASS
9/30/99 $1.00 $0.0258 $(0.0258) $0.00 $1.00
9/30/98 1.00 0.0305 (0.0305) 0.00 1.00
9/30/97 1.00 0.0304 (0.0304) 0.00 1.00
9/30/96 1.00 0.0308 (0.0308) 0.00 1.00
11/1/94 5 through 9/30/95 1.00 0.0305 (0.0305) 0.00 1.00
INVESTOR A CLASS
9/30/99 $1.00 $0.0241 $(0.0241) $0.00 $1.00
9/30/98 1.00 0.0288 (0.0288) 0.00 1.00
9/30/97 1.00 0.0287 (0.0287) 0.00 1.00
9/30/96 1.00 0.0286 (0.0286) 0.00 1.00
2/14/95 1 through 9/30/95 1.00 0.0194 (0.0194) 0.00 1.00
- -------------------------------------------
OHIO MUNICIPAL MONEY MONEY MARKET PORTFOLIO
- -------------------------------------------
INSTITUTIONAL CLASS
9/30/99 $1.00 $0.0294 $(0.0294) $0.00 $1.00
9/30/98 1.00 0.0334 (0.0334) 0.00 1.00
9/30/97 1.00 0.0340 (0.0340) 0.00 1.00
9/30/96 1.00 0.0346 (0.0346) 0.00 1.00
9/30/95 1.00 0.0363 (0.0363) 0.00 1.00
SERVICE CLASS
9/30/99 $1.00 $0.0264 $(0.0264) $0.00 $1.00
9/30/98 1.00 0.0304 (0.0304) 0.00 1.00
9/30/97 1.00 0.0310 (0.0310) 0.00 1.00
9/30/96 1.00 0.0316 (0.0316) 0.00 1.00
9/30/95 1.00 0.0333 (0.0333) 0.00 1.00
INVESTOR A CLASS
9/30/99 $1.00 $0.0246 $(0.0246) $0.00 $1.00
9/30/98 1.00 0.0286 (0.0286) 0.00 1.00
9/30/97 1.00 0.0292 (0.0292) 0.00 1.00
9/30/96 1.00 0.0293 (0.0293) 0.00 1.00
9/30/95 1.00 0.0310 (0.0310) 0.00 1.00
- ---------------------------------------------
PENNSYLVANIA MUNICIPAL MONEY MARKET PORTFOLIO
- ---------------------------------------------
INSTITUTIONAL CLASS
9/30/99 $1.00 $0.0280 $(0.0280) $0.00 $1.00
9/30/98 1.00 0.0322 (0.0322) 0.00 1.00
9/30/97 1.00 0.0332 (0.0332) 0.00 1.00
9/30/96 1.00 0.0334 (0.0334) 0.00 1.00
9/30/95 1.00 0.0355 (0.0355) 0.00 1.00
SERVICE CLASS
9/30/99 $1.00 $0.0250 $(0.0250) $0.00 $1.00
9/30/98 1.00 0.0292 (0.0292) 0.00 1.00
9/30/97 1.00 0.0302 (0.0302) 0.00 1.00
9/30/96 1.00 0.0304 (0.0304) 0.00 1.00
9/30/95 1.00 0.0325 (0.0325) 0.00 1.00
</TABLE>
<TABLE>
<CAPTION>
RATIO OF NET
NET RATIO OF EXPENSES INVESTMENT INCOME
ASSETS RATIO OF TO AVERAGE RATIO OF NET TO AVERAGE
END OF EXPENSES TO NET ASSETS INVESTMENT INCOME NET ASSETS
TOTAL PERIOD AVERAGE NET (EXCLUDING TO AVERAGE NET (EXCLUDING
RETURN (000) ASSETS WAIVERS) ASSETS WAIVERS)
- ---------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------
NORTH CAROLINA MUNICIPAL MONEY MARKET PORTFOLIO
- -----------------------------------------------
INSTITUTIONAL CLASS
<S> <C> <C> <C> <C> <C> <C>
9/30/99 2.92% $ 178,059 0.30% 0.70% 2.87% 2.47%
9/30/98 3.40 181,984 0.29 0.74 3.35 2.90
9/30/97 3.39 147,658 0.28 0.73 3.34 2.89
9/30/96 3.43 112,097 0.25 0.74 3.33 2.84
9/30/95 3.65 76,673 0.21 0.74 3.61 3.08
SERVICE CLASS
9/30/99 2.61% $ 1,639 0.60% 1.00% 2.57% 2.17%
9/30/98 3.09 19,306 0.60 1.05 3.04 2.59
9/30/97 3.08 23,704 0.60 1.05 3.04 2.59
9/30/96 3.12 7,463 0.55 1.04 3.06 2.56
11/1/94 5 through 9/30/95 3.11 1,841 0.55 2 1.08 2 3.34 2 2.81 2
INVESTOR A CLASS
9/30/99 2.44% $ 369 0.77% 1.17% 2.40% 2.00%
9/30/98 2.92 245 0.76 1.21 2.88 2.43
9/30/97 2.91 304 0.76 1.21 2.88 2.43
9/30/96 2.90 111 0.76 1.25 2.83 2.34
2/14/95 1 through 9/30/95 1.95 53 0.83 2 1.36 2 3.05 2 2.52 2
- -------------------------------------------
OHIO MUNICIPAL MONEY MONEY MARKET PORTFOLIO
- -------------------------------------------
INSTITUTIONAL CLASS
9/30/99 2.98% $ 49,237 0.39% 0.71% 2.95% 2.63%
9/30/98 3.39 48,614 0.36 0.72 3.36 3.00
9/30/97 3.45 23,739 0.30 0.73 3.37 2.94
9/30/96 3.52 32,944 0.29 0.75 3.47 3.01
9/30/95 3.69 23,679 0.27 0.73 3.66 3.20
SERVICE CLASS
9/30/99 2.67% $ 11,284 0.69% 1.01% 2.65% 2.33%
9/30/98 3.08 58,077 0.67 1.03 3.04 2.68
9/30/97 3.15 58,160 0.61 1.03 3.10 2.68
9/30/96 3.21 45,525 0.59 1.05 3.17 2.71
9/30/95 3.38 49,857 0.57 1.03 3.35 2.89
INVESTOR A CLASS
9/30/99 2.49% $ 44,929 0.87% 1.19% 2.47% 2.15%
9/30/98 2.90 15,904 0.85 1.21 2.86 2.50
9/30/97 2.96 15,876 0.79 1.21 2.92 2.50
9/30/96 2.98 5,672 0.79 1.25 2.88 2.42
9/30/95 3.15 75 0.80 1.26 3.02 2.56
- ---------------------------------------------
PENNSYLVANIA MUNICIPAL MONEY MARKET PORTFOLIO
- ---------------------------------------------
INSTITUTIONAL CLASS
9/30/99 2.84% $ 376,402 0.42% 0.70% 2.80% 2.52%
9/30/98 3.27 350,249 0.39 0.71 3.19 2.87
9/30/97 3.37 229,164 0.30 0.70 3.31 2.91
9/30/96 3.40 198,822 0.29 0.71 3.34 2.92
9/30/95 3.61 233,414 0.26 0.68 3.54 3.12
SERVICE CLASS
9/30/99 2.53% $ 76,173 0.72% 1.00% 2.50% 2.22%
9/30/98 2.97 73,735 0.69 1.01 2.92 2.60
9/30/97 3.06 234,472 0.61 1.01 3.01 2.61
9/30/96 3.04 224,197 0.59 1.01 3.02 2.59
9/30/95 3.33 147,739 0.57 0.99 3.29 2.87
</TABLE>
See accompanying notes to financial statements.
34-35
<PAGE>
BLACKROCK FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
For a Share Outstanding Throughout Each Period
<TABLE>
<CAPTION>
NET DISTRIBUTIONS NET
ASSET DISTRIBUTIONS FROM NET ASSET
VALUE NET FROM NET REALIZED VALUE
BEGINNING INVESTMENT INVESTMENT CAPITAL END OF
OF PERIOD INCOME INCOME GAINS PERIOD
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------
PENNSYLVANIA MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)
- ---------------------------------------------
INVESTOR A CLASS
9/30/99 $1.00 $0.0235 $(0.0235) $0.00 $1.00
9/30/98 1.00 0.0276 (0.0276) 0.00 1.00
9/30/97 1.00 0.0285 (0.0285) 0.00 1.00
9/30/96 1.00 0.0281 (0.0281) 0.00 1.00
9/30/95 1.00 0.0302 (0.0302) 0.00 1.00
- -----------------------------------------
VIRGINIA MUNICIPAL MONEY MARKET PORTFOLIO
- -----------------------------------------
INSTITUTIONAL CLASS
9/30/99 $1.00 $0.0294 $(0.0294) $0.00 $1.00
9/30/98 1.00 0.0338 (0.0338) 0.00 1.00
9/30/97 1.00 0.0347 (0.0347) 0.00 1.00
9/30/96 1.00 0.0348 (0.0348) 0.00 1.00
9/30/95 1.00 0.0368 (0.0368) 0.00 1.00
SERVICE CLASS
9/30/99 $1.00 $0.0264 $(0.0264) $0.00 $1.00
9/30/98 1.00 0.0308 (0.0308) 0.00 1.00
9/30/97 1.00 0.0317 (0.0317) 0.00 1.00
9/30/96 1.00 0.0318 (0.0318) 0.00 1.00
10/11/94 1 through 9/30/95 1.00 0.0330 (0.0330) 0.00 1.00
INVESTOR A CLASS
9/30/99 $1.00 $0.0237 $(0.0237) $0.00 $1.00
9/30/98 1.00 0.0280 (0.0280) 0.00 1.00
5/27/97 1 through 9/30/97 1.00 0.0102 (0.0102) 0.00 1.00
</TABLE>
<TABLE>
<CAPTION>
RATIO OF NET
NET RATIO OF EXPENSES INVESTMENT INCOME
ASSETS RATIO OF TO AVERAGE RATIO OF NET TO AVERAGE
END OF EXPENSES TO NET ASSETS INVESTMENT INCOME NET ASSETS
TOTAL PERIOD AVERAGE NET (EXCLUDING TO AVERAGE NET (EXCLUDING
RETURN (000) ASSETS WAIVERS) ASSETS WAIVERS)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------
PENNSYLVANIA MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)
- ---------------------------------------------------------
INVESTOR A CLASS
9/30/99 2.37% $ 135,341 0.88% 1.16% 2.34% 2.06%
9/30/98 2.80 110,860 0.85 1.17 2.75 2.43
9/30/97 2.89 98,218 0.77 1.17 2.85 2.45
9/30/96 2.90 63,424 0.81 1.23 2.81 2.39
9/30/95 3.06 750 0.82 1.24 3.03 2.61
- -----------------------------------------
VIRGINIA MUNICIPAL MONEY MARKET PORTFOLIO
- -----------------------------------------
INSTITUTIONAL CLASS
9/30/99 2.98% $ 51,301 0.30% 0.75% 2.95% 2.50%
9/30/98 3.43 77,812 0.30 0.77 3.37 2.90
9/30/97 3.53 62,834 0.22 0.81 3.49 2.90
9/30/96 3.54 38,553 0.14 0.82 3.47 2.79
9/30/95 3.74 24,409 0.10 0.95 3.71 2.86
SERVICE CLASS
9/30/99 2.68% $ 2,786 0.60% 1.05% 2.65% 2.20%
9/30/98 3.13 3,405 0.60 1.07 3.08 2.61
9/30/97 3.22 5,244 0.48 1.07 3.12 2.53
9/30/96 3.25 14,968 0.45 1.12 3.05 2.38
10/11/94 1 through 9/30/95 3.35 821 0.40 2 1.25 2 3.50 2 2.65 2
INVESTOR A CLASS
9/30/99 2.40% $ 1,261 0.87% 1.32% 2.38% 1.93%
9/30/98 2.84 643 0.87 1.34 2.85 2.38
5/27/97 1 through 9/30/97 1.03 1,096 0.86 2 1.45 2 2.95 2 2.36 2
</TABLE>
1 Commencement of operations of share class.
2 Annualized.
3 There were no Investor C shares outstanding as of September 30, 1999.
4 There were no Investor B shares outstanding as of September 30, 1997.
5 Reissuance of shares.
6 This class has opened, closed and then reopened during the fiscal year. The
financial highlights are reflective of the cummulative periods that the
class was opened.
See accompanying notes to financial statements.
36-37
<PAGE>
BLACKROCK FUNDS
NOTES TO FINANCIAL STATEMENTS
BlackRock Funds SM ("the Fund") was organized on December 22, 1988 as a
Massachusetts business trust and is registered under the Investment Company Act
of 1940, as amended, as an open-end management investment company. The Fund
currently has 36 publicly-offered portfolios, eight of which are included in
these financial statements (the "Portfolios"). Each Portfolio is authorized to
issue an unlimited number of shares with a par value of $0.001. Each portfolio
of the Fund may offer as many as six classes of shares. Shares of all classes of
a Portfolio represent equal pro rata interests in such Portfolio, except that
each class bears different expenses which reflect the difference in the range of
services provided to them. The following table provides a list of the Portfolios
included in this report along with a summary of their respective class-specific
fee arrangements as provided under the Fund's Amended and Restated Distribution
and Service Plan (the "Plan"). Fees are expressed as a percentage of average
daily net asset values of the respective classes.
<TABLE>
<CAPTION>
Portfolio Share Classes
- ---------------------------------------------------------------------------------------------------------------------------------
Institutional Service Investor A Investor B Investor C
- ---------------------------------------------------------------------------------------------------------------------------------
Contractual Actual Contractual Actual Contractual Actual Contractual Actual Contractual Actual
Fees Fees(4) Fees(1) Fees(4) Fees(1) Fees(4) Fees(1) Fees(4) Fees(1) Fees(4)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Money Market None None 0.30% 0.30% 0.50% 0.40% 1.15% 1.00% 1.15% 1.00%
- ---------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Money Market None None 0.30% 0.30% 0.50% 0.40% 1.15% N/A 1.15% 1.00%
- ---------------------------------------------------------------------------------------------------------------------------------
Municipal Money Market None None 0.30% 0.30% 0.50% 0.40% 1.15% N/A 1.15% N/A
- ---------------------------------------------------------------------------------------------------------------------------------
New Jersey Municipal
Money Market None None 0.30% 0.30% 0.50% 0.48% 1.15% 1.00% 1.15% N/A
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Municipal
Money Market None None 0.30% 0.30% 0.50% 0.40% 1.15% N/A 1.15% N/A
- ---------------------------------------------------------------------------------------------------------------------------------
Ohio Municipal Money Market None None 0.30% 0.30% 0.50% 0.41% 1.15% N/A 1.15% N/A
- ---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Municipal
Money Market None None 0.30% 0.30% 0.50% 0.47% 1.15% N/A 1.15% N/A
- ---------------------------------------------------------------------------------------------------------------------------------
Virginia Municipal
Money Market None None 0.30% 0.30% 0.50% 0.50% 1.15% N/A 1.15% N/A
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) -- the maximum annual contractual fees are comprised of a .15% service fee
and .15% shareholder processing fee.
(2) -- the maximum annual contractual fees are comprised of a .10% distribution
fee, .25% service fee and .15% shareholder processing fee.
(3) -- the maximum annual contractual fees are comprised of a .75% distribution
fee, .25% service fee and .15% shareholder processing fee.
(4) -- the actual fees are as of September 30, 1999.
In addition, Institutional and Service shares bear a Transfer Agent fee at an
annual rate not to exceed .03% and Investor A, Investor B and Investor C shares
bear a Transfer Agent fee at an annual rate not to exceed .10% of the average
daily net assets of such respective classes.
(A) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Fund in the preparation of its financial statements. The preparation of
financial statements in conformity with generally accepted accounting principles
requires the use of management estimates. Actual results could differ from these
estimates.
SECURITY VALUATION -- Portfolio securities are valued under the amortized
cost method which approximates current market value. Under this method,
securities are valued at cost when purchased and thereafter, a constant
proportionate amortization of any discount or premium is recorded until the
maturity of the security. Regular review and monitoring of the valuation is
performed in an attempt to avoid dilution or other unfair results to
shareholders. The Fund seeks to maintain the net asset value per share of each
Portfolio at $1.00.
DIVIDENDS TO SHAREHOLDERS -- Dividends from net investment income are
declared daily and paid monthly. Net realized capital gains, if any, are
distributed at least annually.
FEDERAL TAXES -- No provision is made for federal taxes as it is the Fund's
intention to have each Portfolio continue to qualify for and elect the tax
treatment applicable to regulated investment companies under subchapter M of the
Internal Revenue Code of 1986, as amended, and to make the requisite
distributions to its shareholders which will be sufficient to relieve it from
federal income and excise taxes.
38
<PAGE>
BLACKROCK FUNDS
SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Investment transactions are
accounted for on the trade date. The cost of investments sold is determined by
use of the specific identification method for both financial reporting and
federal income tax purposes. Interest income is recorded on the accrual basis.
Expenses not directly attributable to a specific Portfolio or class are
allocated among all of the Portfolios or classes of the Fund based on their
relative net assets.
REPURCHASE AGREEMENTS -- Money market instruments may be purchased from
banks and non-bank dealers subject to the seller's agreement to repurchase them
at an agreed upon date and price. Collateral for repurchase agreements may have
longer maturities than the maximum permissible remaining maturity of portfolio
investments. The seller is required on a daily basis to maintain the value of
the securities subject to the agreement at not less than the repurchase price.
The agreements are conditioned upon the collateral being deposited under the
Federal Reserve book-entry system or held in a separate account by the Fund's
custodian or an authorized securities depository.
(B) TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Pursuant to an Investment Advisory Agreement, BlackRock Advisors, Inc.
("BlackRock"), a wholly-owned subsidiary of BlackRock, Inc., serves as
investment adviser to the Portfolios. BlackRock Institutional Management
Corporation ("BIMC"), a wholly-owned subsidiary of BlackRock, serves as
sub-adviser to the Portfolios. BlackRock, Inc. is an indirect majority-owned
subsidiary of PNC Bank Corp.
For its advisory services, BlackRock is entitled to receive fees at the
following annual rates, computed daily and payable monthly, based on each
Portfolio's average net assets: .45% of the first $1 billion, .40% of the next
$1 billion, .375% of the next $1 billion and .35% of net assets in excess of $3
billion.
For the year ended September 30, 1999, advisory fees and waivers for each
Portfolio were as follows:
<TABLE>
<CAPTION>
Gross Net
Advisory Fee Waiver Advisory Fee
------------ ---------- ------------
<S> <C> <C> <C>
Money Market Portfolio ........................... $13,414,598 $5,765,498 $7,649,100
U.S. Treasury Money Market Portfolio ............. 4,423,266 2,422,585 2,000,681
Municipal Money Market Portfolio ................. 2,064,943 1,216,331 848,612
New Jersey Municipal Money Market Portfolio ...... 675,680 441,529 234,151
North Carolina Municipal Money Market Portfolio .. 1,054,699 861,367 193,332
Ohio Municipal Money Market Portfolio ............ 516,814 347,740 169,074
Pennsylvania Municipal Money Market Portfolio .... 2,822,483 1,613,015 1,209,468
Virginia Municipal Money Market Portfolio ........ 279,988 250,140 29,848
</TABLE>
PFPC Inc. ("PFPC"), an indirect wholly-owned subsidiary of PNC Bank Corp.,
BlackRock, and BlackRock Distributors, Inc. ("BDI") act as co-administrators for
the Fund. For these services, the co-administrators receive a combined
administration fee computed daily and payable monthly, based on a percentage of
the average daily net assets of each Portfolio, at the following annual rates:
.085% of the first $500 million, .075% of the next $500 million and .065% of
assets in excess of $1 billion. In addition, each of the classes are charged an
administration fee based on the following percentage of average daily net assets
of each respective class: .095% of the first $500 million, .085% of the next
$500 million and .075% of assets in excess of $1 billion.
For the year ended September 30, 1999, administration fees and waivers for
each Portfolio were as follows:
<TABLE>
<CAPTION>
Gross Net
Administration Administration
Fee Waiver Fee
-------------- -------- --------------
<S> <C> <C> <C>
Money Market Portfolio $5,027,901 $596,687 $4,431,214
U.S. Treasury Money Market Portfolio 1,684,827 270,705 1,414,122
Municipal Money Market Portfolio 825,165 90,996 734,169
New Jersey Municipal Money Market Portfolio 270,279 32,153 238,126
North Carolina Municipal Money Market Portfolio 411,350 71,105 340,245
Ohio Municipal Money Market Portfolio 206,726 22,529 184,197
Pennsylvania Municipal Money Market Portfolio 1,107,540 126,056 981,484
Virginia Municipal Money Market Portfolio 111,988 24,514 87,474
</TABLE>
39
<PAGE>
BLACKROCK FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(B) TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED)
Prior to February 1, 1999, BlackRock may have, at its discretion, waived
all or any portion of its advisory fees for any Portfolio. In addition, PFPC,
BlackRock and BDI may have, at their discretion, voluntarily waived all or any
portion of their administration fees for any Portfolio.
In the interest of limiting the expenses of the Portfolios, BlackRock and
the Fund have entered into an expense limitation agreement effective February 1,
1999. The agreement sets a limit on certain of the operating expenses of each
Portfolio for the next year and requires BlackRock to waive or reimburse fees or
expenses if these operating expenses exceed that limit. These expense limits
apply to expenses charged on Portfolio assets as a whole, but not expenses
separately charged to the different share classes of a Portfolio.
If in the following two years the operating expenses of a Portfolio that
previously received a waiver or reimbursement from BlackRock are less than the
expense limit for that Portfolio, the Portfolio is required to repay BlackRock
up to the amount of fees waived or expenses reimbursed under the agreement if:
(1) the Portfolio has more than $50 million in assets, (2) BlackRock continues
to be the Portfolio's investment adviser and (3) the Board of Trustees of the
Fund has approved the payments to BlackRock on a quarterly basis.
The expense limits as a percentage of average daily net assets and amounts
subject to possible reimbursement under the expense limitation agreement were as
follows:
Money Market ............................ .310% $4,299,087
U.S. Treasury Money Market .............. .295% 1,760,437
Municipal Money Market .................. .295% 848,877
New Jersey Municipal Money Market ....... .265% 312,896
North Carolina Municipal Money Market ... .195% 670,637
Ohio Municipal Money Market ............. .265% 240,803
Pennsylvania Municipal Money Market ..... .295% 1,142,123
Virginia Municipal Money Market ......... .205% 172,235
PFPC Trust Co. (formerly PNC Bank, National Association) serves as
custodian for each of the Fund's Portfolios. PFPC serves as transfer agent and
dividend disbursing agent.
Under the Fund's Distribution and Service Plan (the "Plan"), Investor
Shares of the Portfolios bear the expense of payments ("distribution fees") made
to BDI as the Fund's distributor (the "Distributor"), or affiliates of PNC Bank,
for distribution and sales support services. Under the Plan, the Fund has
entered into service agreements with service organization (including PNC Bank
and its affiliates) that provide support services to their customers who are the
beneficial owners of shares in each Investor Class and the Service Class. Refer
to the fee table in the "Notes to Financial Statements" for fee information.
40
<PAGE>
BLACKROCK FUNDS
(C) CAPITAL SHARES
Because the Portfolios have each sold and redeemed shares only at a
constant net asset value of $1.00 per share, the number of shares represented by
such sales, acquisitions, reinvestments, and redemptions is the same as the
dollar amounts shown below for such transactions.
Transactions in capital shares for each period were as follows:
Money Market Portfolio
------------------------------------
For the Year For the Year
Ended Ended
9/30/99 9/30/98
--------------- ---------------
Shares sold:
Institutional Class ................ $ 2,723,434,142 $2,510,904,701
Service Class ...................... 2,720,807,611 3,267,936,137
Investor A Class ................... 2,512,122,406 676,723,074
Investor B Class ................... 12,639,333 2,530,449
Investor C Class ................... 22,030,422 946,664
Shares issued in reinvestment
of dividends:
Institutional Class ................ 466,421 306,762
Service Class ...................... 6,670,890 7,205,011
Investor A Class ................... 18,658,333 14,652,032
Investor B Class ................... 93,558 15,628
Investor C Class ................... 31,755 8,209
Shares redeemed:
Institutional Class ................ (2,505,940,526) (1,531,603,582)
Service Class ...................... (2,788,232,297) (4,076,598,378)
Investor A Class ................... (2,409,651,253) (581,949,740)
Investor B Class ................... (9,124,279) (978,676)
Investor C Class ................... (18,131,359) (619,564)
--------------- ---------------
Net increase ............................ $ 285,875,157 $ 289,478,727
=============== ===============
U.S. Treasury Money
Market Portfolio
------------------------------------
For the Year For the Year
Ended Ended
9/30/99 9/30/98
--------------- ---------------
Shares sold:
Institutional Class ................ $ 910,330,259 $ 832,070,282
Service Class ...................... 2,196,002,421 2,146,642,590
Investor A Class ................... 204,846,376 171,010,303
Investor C Class ................... 54,331 --
Shares issued in reinvestment
of dividends:
Institutional Class ................ 9,442 43,378
Service Class ...................... 2,493,676 2,692,251
Investor A Class ................... 2,629,147 2,912,580
Investor C Class ................... 722 --
Shares redeemed:
Institutional Class ................ (882,632,578) (697,032,232)
Service Class ...................... (2,271,034,326) (2,388,962,298)
Investor A Class ................... (234,064,470) (145,547,973)
Investor C Class ................... (55,053) --
--------------- ---------------
Net decrease ............................ $ (71,420,053) $ (76,171,119)
=-============= ===============
41
<PAGE>
BLACKROCK FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Municipal Money
Market Portfolio
----------------------------------
For the Year For the Year
Ended Ended
9/30/99 9/30/98
------------- ---------------
Shares sold:
Institutional Class .................. $ 626,515,555 $ 546,473,646
Service Class ........................ 758,806,431 1,026,869,769
Investor A Class ..................... 22,899,335 39,593,819
Investor C Class ..................... 115 305,586
Shares issued in reinvestment
of dividends:
Institutional Class .................. -- --
Service Class ........................ 1,063,097 2,065,608
Investor A Class ..................... 167,158 179,254
Investor C Class ..................... 1,397 119
Shares redeemed:
Institutional Class .................. (634,971,125) (358,486,165)
Service Class ........................ (748,764,662) (1,216,688,846)
Investor A Class ..................... (27,587,702) (39,014,287)
Investor C Class ..................... (307,093) (11,878)
------------- ---------------
Net increase (decrease) ................... $ (2,177,494) $ 1,286,625
============= ===============
New Jersey Municipal
Money Market Portfolio
-----------------------------------
For the Year For the Year
Ended Ended
9/30/99 9/30/98
------------- --------------
Shares sold:
Institutional Class .................. $ 159,417,665 $ 116,435,928
Service Class ........................ 40,346,284 124,130,716
Investor A Class ..................... 126,463,562 125,044,352
Investor B Class ..................... -- 100
Shares issued in reinvestment
of dividends:
Institutional Class .................. 50,493 57,896
Service Class ........................ 83,193 99,423
Investor A Class ..................... 823,079 845,821
Investor B Class ..................... 1 1
Shares redeemed:
Institutional Class .................. (148,671,242) (55,155,262)
Service Class ........................ (38,461,030) (190,373,134)
Investor A Class ..................... (148,912,473) (103,586,101)
Investor B Class ..................... -- (50)
------------- -------------
Net increase (decrease) ................... $ (8,860,468) $ 17,499,690
============= =============
42
<PAGE>
BLACKROCK FUNDS
North Carolina Municipal
Money Market Portfolio
-----------------------------------
For the Year For the Year
Ended Ended
9/30/99 9/30/98
------------- --------------
Shares sold:
Institutional Class .................. $ 535,254,134 $ 545,618,487
Service Class ........................ 56,837,213 72,622,006
Investor A Class ..................... 190,110 7,409,137
Shares issued in reinvestment
of dividends:
Institutional Class .................. 4,403 --
Service Class ........................ 36,151 71,644
Investor A Class ..................... 9,128 7,434
Shares redeemed:
Institutional Class .................. (539,183,661) (511,293,347)
Service Class ........................ (74,540,755) (77,091,688)
Investor A Class ..................... (74,649) (7,475,546)
------------- -------------
Net increase (decrease) ................... $ (21,467,926) $ 29,868,127
============= =============
Ohio Municipal
Money Market Portfolio
----------------------------------
For the Year For the Year
Ended Ended
9/30/99 9/30/98
------------- -------------
Shares sold:
Institutional Class .................. $ 182,873,102 $ 414,685,160
Service Class ........................ 110,327,709 159,193,335
Investor A Class ..................... 109,339,237 36,700,772
Shares issued in reinvestment
of dividends:
Institutional Class .................. 2,440 3,769
Service Class ........................ 561,579 848,456
Investor A Class ..................... 663,445 515,271
Shares redeemed:
Institutional Class .................. (182,249,894) (389,809,601)
Service Class ........................ (157,679,961) (160,114,921)
Investor A Class ..................... (80,976,442) (37,185,701)
------------- -------------
Net increase (decrease) ................... $ (17,138,785) $ 24,836,540
============= =============
43
<PAGE>
BLACKROCK FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Pennsylvania Municipal
Money Market Portfolio
------------------------------------
For the Year For the Year
Ended Ended
9/30/99 9/30/98
--------------- ---------------
Shares sold:
Institutional Class ................ $ 1,037,502,953 $ 1,298,202,042
Service Class ...................... 190,803,785 491,105,327
Investor A Class ................... 486,622,487 410,558,185
Shares issued in reinvestment
of dividends:
Institutional Class ................ 67,375 92,480
Service Class ...................... 605,537 783,544
Investor A Class ................... 3,058,878 3,060,363
Shares redeemed:
Institutional Class ................ (1,011,416,929) (1,177,210,499)
Service Class ...................... (188,971,099) (652,626,616)
Investor A Class ................... (465,200,835) (400,976,358)
------------- ---------------
Net increase (decrease) ................. $ 53,072,152 $ (27,011,532)
=============== ===============
Virginia Municipal
Money Market Portfolio
-----------------------------------
For the Year For the Year
Ended Ended
9/30/99 9/30/98
------------- -------------
Shares sold:
Institutional Class ................ $ 121,465,660 $ 153,965,984
Service Class ...................... 8,816,929 14,299,211
Investor A Class ................... 2,752,842 2,052,243
Shares issued in reinvestment
of dividends:
Institutional Class ................ 246,705 412,471
Service Class ...................... 78,555 105,608
Investor A Class ................... 20,870 26,613
Shares redeemed:
Institutional Class ................ (148,222,976) (139,400,364)
Service Class ...................... (9,514,476) (16,243,970)
Investor A Class ................... (2,155,555) (2,531,456)
------------- -------------
Net increase (decrease) ................. $ (26,511,446) $ 12,686,340
============= =============
On September 30, 1999, one shareholder held approximately 28% of the
outstanding shares of the U. S. Treasury Money Market Portfolio, one shareholder
held approximately 13% of the outstanding shares of the New Jersey Municipal
Money Market Portfolio, three shareholders held approximately 92% of the
outstanding shares of the North Carolina Municipal Money Market Portfolio, one
shareholder held approximately 13% of the Pennsylvania Municipal Money Market
Portfolio, and two shareholders held approximately 67% of the outstanding shares
of the Virginia Municipal Money Market Portfolio. Some of the shareholders are
comprised of omnibus accounts, which are held on behalf of several individual
shareholders.
44
<PAGE>
BLACKROCK FUNDS
(D) AT SEPTEMBER 30, 1999, NET ASSETS CONSISTED OF:
<TABLE>
<CAPTION>
U.S. New Jersey
Treasury Municipal Municipal
Money Market Money Market Money Market Money Market
Portfolio Portfolio Portfolio Portfolio
-------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Capital paid-in .......................... $3,320,521,695 $894,177,962 $394,317,042 $139,065,346
Accumulated net realized gain (loss) on
investment transactions ............... 11,923 46,591 (69,617) (7,380)
-------------- ------------ ------------ ------------
$3,320,533,618 $894,224,553 $394,247,425 $139,057,966
============== ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
North
Carolina Ohio Pennsylvania Virginia
Municipal Municipal Municipal Municipal
Money Market Money Market Money Market Money Market
Portfolio Portfolio Portfolio Portfolio
------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Capital paid-in .......................... $180,065,943 $105,484,975 $587,926,210 $55,349,082
Accumulated net realized gain (loss)
on investment transactions ............ 758 (35,082) (9,961) (592)
------------ ------------ ------------ -----------
$180,066,701 $105,449,893 $587,916,249 $55,348,490
============ ============ ============ ===========
</TABLE>
(E) CAPITAL LOSS CARRYOVER
At September 30, 1999, capital loss carryovers were available to offset
possible future realized capital gains as follows:
Capital Loss Year Of
Carryforward Expiration
------------ ----------
Money Market Portfolio: $23,015 2007
Municipal Money Market Portfolio: 15,971 2000
20,433 2001
19,387 2002
12,355 2003
1,471 2006
New Jersey Municipal Money Market Portfolio: 1,262 2001
340 2002
1,288 2006
North Carolina Municipal Money Market Portfolio: 121 2003
Ohio Municipal Money Market Portfolio: 2,285 2002
5,840 2005
4,223 2006
16,541 2007
Pennsylvania Municipal Money Market Portfolio: 191 2002
1,329 2003
3,233 2004
1,626 2005
3,403 2006
Virginia Municipal Money Market Portfolio: 171 2003
401 2007
At September 30, 1999, deferred post-October losses for the Money Market
Portfolio were $45,588, New Jersey Municipal Money Market Portfolio, $4,485
North Carolina Municipal Money Market Portfolio $218 and the Ohio Municipal
Money Market Portfolio were $6,193.
45
<PAGE>
BLACKROCK FUNDS
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
(F) CONVERSION OF COMMON TRUST FUNDS
On January 13, 1998, January 22, 1998 and February 9, 1998 the Board of
Trustees of the Fund, the Board of Directors of PNC Bank and the Board of
Directors of PNC Bank, Delaware, respectively, approved an asset purchase
agreement among the Fund, PNC Bank, Delaware regarding 25 common trust funds for
which either PNC Bank or PNC Bank, Delaware serve as trustee (each a "PNC Common
Trust Fund"). The agreement provided for the acquisition by the Fund of all of
the assets and liabilities of each PNC Common Trust Fund managed by the Advisor
in a tax-free exchange for Institutional shares of the corresponding
portfolio(s) of the Fund and the distribution of such Institutional shares to
the participating trusts of the PNC Common Trust Funds in liquidation of the PNC
Common Trust Funds. The conversion occurred in May, 1998. There were no
BlackRock money market portfolios involved in the PNC Common Trust Fund
conversion.
46
<PAGE>
BLACKROCK FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF THE BLACKROCK FUNDS:
In our opinion, the accompanying statements of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
the Money Market, U.S. Treasury Money Market, Municipal Money Market, New Jersey
Municipal Money Market, North Carolina Municipal Money Market, Ohio Municipal
Money Market, Pennsylvania Municipal Money Market and Virginia Municipal Money
Market Portfolios of the BlackRock Funds (the "Fund") at September 30, 1999, and
the results of each of their operations, the changes in each of their net
assets, and the financial highlights for the periods presented, in conformity
with generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities owned at September 30, 1999 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
November 15, 1999
47
<PAGE>
BLACKROCK FUNDS
Investment Adviser
BlackRock Advisors, Inc.
New York, New York 10154
Sub-Adviser
BlackRock Institutional Management
Corporation
Wilmington, Delaware 19809
Custodian
PFPC Trust Co.
Philadelphia, Pennsylvania 19103
Co-Administrator and Transfer Agent
PFPC Inc.
Wilmington, Delaware 19809
Co-Administrator and Distributor
BlackRock Distributors, Inc.
West Conshohocken, Pennsylvania 19428
Co-Administrator
BlackRock Advisors, Inc.
New York, New York 10154
Counsel
Simpson, Thatcher & Bartlett
New York, New York 10017
(A partnership which includes professional corporations)
Independent Accountants
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania 19103
To reduce expenses, the Fund will mail only one copy of annual and semi-annual
reports and most prospectuses to your household, even if more than one person in
the household has a Fund account. Please call (800) 441-7762 if you would like
to receive additional reports or prospectuses.
<PAGE>
BLACKROCK FUNDS
FUND SPECTRUM
BLACKROCK FUNDS IS A LEADING MUTUAL FUND COMPANY CURRENTLY MANAGING IN EXCESS OF
$25 BILLION IN 36 PORTFOLIOS DESIGNED TO FIT A BROAD RANGE OF INVESTMENT GOALS.
EACH PORTFOLIO IS MANAGED BY RECOGNIZED EXPERTS IN EQUITY, FIXED INCOME,
INTERNATIONAL, AND TAX-FREE INVESTING WHO ADHERE TO A PURE INVESTMENT
STYLE.(REGISTRATION MARK)
STOCK PORTFOLIOS
- ----------------
Large Cap Value Equity Micro-Cap Equity
Large Cap Growth Equity International Equity
Mid-Cap Value Equity International Small Cap Equity
Mid-Cap Growth Equity International Emerging Markets
Small Cap Value Equity Select Equity
Small Cap Growth Equity Index Equity
STOCK & BOND PORTFOLIOS
- -----------------------
Balanced
BOND PORTFOLIOS
Low Duration Bond GNMA
Intermediate Government Bond Managed Income
Intermediate Bond International Bond
Core Bond High Yield Bond
Government Income
TAX-FREE BOND PORTFOLIOS
Tax-Free Income Ohio Tax-Free Income
Pennsylvania Tax-Free Income Delaware Tax-Free Income
New Jersey Tax-Free Income Kentucky Tax-Free Income
MONEY MARKET PORTFOLIOS
Money Market North Carolina Municipal Money Market
U.S. Treasury Money Market Ohio Municipal Money Market
Municipal Money Market Pennsylvania Municipal Money Market
New Jersey Municipal Money Market Virginia Municipal Money Market
SHAREHOLDER PRIVILEGES
24 HOUR ACCOUNT INFORMATION
Call us at 1-800-441-7762, 24 hours a day, 7 days a week to get information
about your account balances, recent transactions and share prices. Note:
Institutional and Service Share Class investors should call 1-800-441-7764. You
can also reach us on the Internet through the World Wide Web by accessing
http://www.blackrock.com.
EXCHANGE PRIVILEGES
Should your investment goals change, shareholders in our Investor Class shares
may exchange all or part of their investments into the same share class of any
other portfolio of BlackRock Funds. (1)
AUTOMATIC INVESTMENT PLANS
Investor Class shareholders who want to invest regularly can arrange to have $50
or more automatically deducted from their checking or savings account and
invested in any of the BlackRock portfolios.
SYSTEMATIC WITHDRAWAL PLANS
Investor Class shareholders can establish a systematic withdrawal plan and
receive periodic payments of $100 or more from their BlackRock portfolios, as
long as their account is at least $1,000.
RETIREMENT PLANS
Shareholders may make investments in conjunction with individual IRA accounts or
rollover IRAs.
GENERAL INFORMATION ABOUT THE BLACKROCK FUNDS
If you would like additional reports or have questions regarding any of the 36
BlackRock Funds, please call 1-800-FUTURE4 (1-800-388-8734).
(1) BLACKROCK FUNDS RESERVES THE RIGHT TO MODIFY OR TERMINATE THE EXCHANGE
PRIVILEGES AT ANY TIME.
<PAGE>
[GRAPHIC OMITTED]
BLACKROCK FUNDS
P.O. Box 8907
Wilmington, DE 19899
Shares of the Fund are not deposits or obligations of, or guaranteed or endorsed
by PNC Bank, National Association or any other bank and shares are not federally
insured by, guaranteed by, obligations of or otherwise supported by the U.S.
Government, the Federal Deposit Insurance Corporation, The Federal Reserve
Board, or any other governmental agency. Investments in shares of the fund
involve investment risks, including the possible loss of the principal amount
invested.
AR 9/30/99 MM