Rule 497(e)
File No. 33-26305
BLACKROCK FUNDS(SM)
SUPPLEMENT TO THE STATEMENT OF ADDITIONAL INFORMATION
DATED JANUARY 28, 1999
The section "Investment Advisory, Administration, Distribution and Servicing
Arrangements" is amended as follows:
The following is added after the first paragraph under "Administration
Agreement":
Under the Administration Agreement, the Fund pays to BAI and PFPC on
behalf of each Portfolio a fee, computed daily and payable monthly, at
an aggregate annual rate of (i) .085% of the first $500 million of each
Portfolio's average daily net assets, .075% of the next $500 million of
each Portfolio's average daily net assets and .065% of the average daily
net assets of each Portfolio in excess of $1 billion and (ii) .145% of
the first $500 million of average daily net assets allocated to each
class of shares of each Portfolio (.035% with respect to BlackRock
Shares), .135% of the next $500 million of such average daily net assets
(.025% with respect to BlackRock Shares) and .125% of the average daily
net assets allocated to each class of shares of each Portfolio in excess
of $1 billion (.015% with respect to BlackRock Shares).
The section "Purchase and Redemption Information" is amended as follows:
The following is added under "Dealer Reallowances":
Index Equity Portfolio:
Amount of Transaction Reallowance or Placement Fees
at Offering Price to Dealers (as % of Offering Price)
Less than $25,000 2.50 %
$25,000 but less than $50,000 2.25
$50,000 but less than $100,000 2.00
$100,000 but less than $250,000 1.75
$250,000 but less than $500,000 1.25
$500,000 but less than $1,000,000 0.75
$1 million and above 0.00
This Supplement is dated February 5, 1999
