Rule 497(e)
33-26305
BLACKROCK FUNDS /SM/
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION
DATED JANUARY 28, 1999
The section "Investment Policies--Additional Information on Investment
Strategy--Balanced Portfolio" is amended by adding the following after the
first paragraph:
The Balanced Portfolio may invest in the stocks of mid-capitalization
companies, which the portfolio defines as companies with market
capitalizations of from $2 billion to $10 billion. There is more
business risk in investing in mid-capitalization companies than in
larger, better capitalized companies. These organizations will normally
have more limited product lines, markets and financial resources and
will be dependent upon a more limited management group than larger
capitalized companies.
The section "Investment Policies--Additional Information on Portfolio
Investments" is amended as follows:
The last sentence of the third paragraph under "Variable and Floating
Rate Instruments" has been deleted.
The last sentence of the first paragraph under "Money Market Obligations
of Domestic Banks, Foreign Banks and Foreign Branches of U.S. Banks" has
been deleted.
The last sentence of the second paragraph under "U.S. Government
Obligations" has been deleted.
The last sentence under "Supranational Organization Obligations" has
been deleted.
The last sentence of the second paragraph under "Commercial Paper" has
been deleted.
The section "Purchase and Redemption Information--Sales Charge Waivers For
Each of the Equity and Bond Portfolios--Investor A Shares" is amended as
follows:
The second sentence under "Other" has been amended to read in its
entirety as follows:
The following persons may also buy Investor A Shares without paying
a sales charge: (a) persons investing through an authorized
payroll deduction plan; (b) persons investing through an authorized
investment plan for organizations which operate under Section
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501(c)(3) of the Internal Revenue Code; (c) registered investment
advisers, trust companies and bank trust departments exercising
discretionary investment authority with respect to amounts to be
invested in a Portfolio, provided that the aggregate amount
invested pursuant to this exemption in Investor A Shares that would
otherwise be subject to front-end sales charges equals at least
$250,000; (d) persons participating in a "wrap account" or similar
program under which they pay advisory fees to a broker-dealer or
other financial institution; and (e) persons participating in an
account or program under which they pay fees to a broker-dealer or
other financial institution for providing transaction processing
and other administrative services, but not investment advisory
services.
This Supplement is dated November 22, 1999.
