September 30, 2000
Money Market
Portfolios
ANNUAL REPORT
TO SHAREHOLDERS
Not FDIC Insured
May Lose Value
No Bank Guarantee
[GRAPHIC OF BLACK ROCK FUNDS LOGO OMITTED]
<PAGE>
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BLACKROCK FUNDS
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MONEY MARKET PORTFOLIOS
* Money Market * Ohio Municipal Money Market
* U.S. Treasury Money Market * Pennsylvania Municipal Money Market
* Municipal Money Market * Virginia Municipal Money Market
* New Jersey Municipal Money Market
* North Carolina Municipal Money Market
--------------------------------------------------------------------------------
TABLE OF CONTENTS
--------------------------------------------------------------------------------
SHAREHOLDER LETTER...........................................................1
STATEMENT OF NET ASSETS/SCHEDULE OF INVESTMENTS
Money Market...........................................................2
U.S. Treasury Money Market.............................................4
U.S. Treasury Money Market Statement of Assets & Liabilities...........5
Municipal Money Market.................................................6
New Jersey Municipal Money Market.....................................12
North Carolina Municipal Money Market.................................15
Ohio Municipal Money Market...........................................18
Pennsylvania Municipal Money Market...................................21
Virginia Municipal Money Market.......................................25
Virginia Municipal Money Market Statement of Assets & Liabilities.....27
PORTFOLIO FINANCIAL STATEMENTS
Statements of Operations...........................................28-29
Statements of Changes in Net Assets................................30-31
Financial Highlights...............................................32-39
NOTES TO FINANCIAL STATEMENTS............................................40-47
REPORT OF INDEPENDENT ACCOUNTANTS...........................................48
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PRIVACY PRINCIPLES OF BLACKROCK FUNDS
BLACKROCK FUNDS IS COMMITTED TO MAINTAINING THE PRIVACY OF ITS SHAREHOLDERS AND
TO SAFEGUARDING THEIR NONPUBLIC PERSONAL INFORMATION. THE FOLLOWING INFORMATION
IS PROVIDED TO HELP YOU UNDERSTAND WHAT PERSONAL INFORMATION BLACKROCK FUNDS
COLLECTS, HOW WE PROTECT THAT INFORMATION, AND WHY IN CERTAIN CASES WE MAY
SHARE SUCH INFORMATION WITH SELECT OTHER PARTIES. BLACKROCK FUNDS DOES NOT
RECEIVE ANY NONPUBLIC PERSONAL INFORMATION RELATING TO ITS SHAREHOLDERS WHO
PURCHASE SHARES THROUGH THEIR BROKER-DEALERS. IN THE CASE OF SHAREHOLDERS WHO
ARE RECORD OWNERS OF BLACKROCK FUNDS, BLACKROCK FUNDS RECEIVES NONPUBLIC
PERSONAL INFORMATION ON ACCOUNT APPLICATIONS OR OTHER FORMS. WITH RESPECT TO
THESE SHAREHOLDERS, BLACKROCK FUNDS ALSO HAS ACCESS TO SPECIFIC INFORMATION
REGARDING THEIR TRANSACTIONS IN BLACKROCK FUNDS. BLACKROCK FUNDS DOES NOT
DISCLOSE ANY NONPUBLIC PERSONAL INFORMATION ABOUT ITS SHAREHOLDERS OR FORMER
SHAREHOLDERS TO ANYONE, EXCEPT AS PERMITTED BY LAW OR AS IS NECESSARY IN ORDER
TO SERVICE OUR SHAREHOLDERS' ACCOUNTS (FOR EXAMPLE, TO A TRANSFER AGENT).
BLACKROCK FUNDS RESTRICTS ACCESS TO NONPUBLIC PERSONAL INFORMATION ABOUT ITS
SHAREHOLDERS TO BLACKROCK EMPLOYEES WITH A LEGITIMATE BUSINESS NEED FOR THE
INFORMATION. BLACKROCK FUNDS MAINTAINS PHYSICAL, ELECTRONIC AND PROCEDURAL
SAFEGUARDS DESIGNED TO PROTECT THE NONPUBLIC PERSONAL INFORMATION OF OUR
SHAREHOLDERS.
--------------------------------------------------------------------------------
BLACKROCK FUNDS
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<PAGE>
September 30, 2000
Dear Shareholder:
We are pleased to present the Annual Report for the BlackRock Funds for
the 12 months ending September 30, 2000.
Since our Semi-Annual report of March 31, 2000, the stock market as
measured by the S&P 500 returned -4.14%, the NASDAQ returned -18.81% and the
Lehman Aggregate Index returned 4.81%. So in this first year of the millennium,
at a time in history when there is more media attention about the stock market
than ever before, stocks actually under-performed bonds.
It has been a year of extremes. When we reported to you one year ago, it
was the dawn of a new millennium and there was plenty of concern about Y2K and
the devastation that it could wreak on capital markets and world economies. Yet
while the media bombarded us with concerns about Y2K, the investment world was
investing in technology and the Internet with an enthusiasm that could only be
described as fervent. There was much talk of a "new economy" and Internet shares
shot skyward. Share prices climbed so quickly that analysts continue to search
for new and improved ways to measure value.
Now, a year later, we can all be relieved that Y2K has come and gone with
small incident. And, while it is clear that the Internet will become an
important part of our economy, the boundless enthusiasm for Internet stocks has
moderated to the extent that the Goldman Sachs Technology Industry Internet
Index fell nearly 35% in the last six months. In fact, we were reminded of the
long-term lessons of investing.
The truth of the matter is that successful investing is a long-term
process and the best strategy for most investors is to work with your financial
advisor to set your goals, plan and implement an asset allocation that is
customized to your goals AND your personal needs for certain levels of risk --
and then to stay the course despite short term volatility in the markets.
We continue to believe that mutual funds, which provide diversification,
professional management and ease and flexibility of use, are an appropriate
investment vehicle for individual investors.
We are proud to be able to offer our shareholders a full range of funds to
meet virtually any investment need. In the past year, we added three specialized
portfolios: Global Science & Technology, European Equity and Asia Pacific
Equity. You can now choose from 39 different BlackRock Funds.
Thank you for your confidence in BlackRock Funds. We appreciate the opportunity
to help you achieve your long-term investment goals.
Sincerely,
/S/SIGNATURE
Karen H. Sabath
MANAGING DIRECTOR
BLACKROCK ADVISORS, INC.
1
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
MONEY MARKET PORTFOLIO
PAR
AS OF SEPTEMBER 30, 2000 MATURITY (000) VALUE
-------- ----- -------------
CERTIFICATES OF DEPOSIT--9.6%
DOMESTIC--0.7%
Wilmington Trust Co.
6.68% 10/11/00 $24,500 $ 24,500,000
------------
YANKEE DOLLAR--8.9%
Dai-Ichi Kangyo Bank
6.61% 10/13/00 74,400 74,400,247
6.61% 10/19/00 40,000 40,000,000
6.61% 11/02/00 50,000 50,000,000
Industrial Bank of Japan
6.67% 10/02/00 69,700 69,700,000
6.69% 10/02/00 69,700 69,700,019
------------
303,800,266
------------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $328,300,266) 328,300,266
------------
COMMERCIAL PAPER--60.0%
ASSET BACKED SECURITIES--19.1%
BASF (AG)
6.51% 02/27/01 25,000 24,326,396
6.43% 04/05/01 35,000 33,837,242
Corporate Receivable Corp.
6.50% 12/20/00 25,000 24,638,889
Fairway Finance Ltd.
6.59% 10/25/00 704 700,902
6.50% 12/14/00 30,000 29,599,167
6.49% 12/15/00 19,034 18,776,248
6.48% 12/19/00 36,565 36,044,243
K2 (USA) LLC
6.61% 02/01/01 28,600 27,953,116
Moriarty Ltd.
6.69% 12/15/00 35,000 34,512,187
6.59% 01/11/01 39,700 38,957,610
6.50% 03/07/01 79,400 77,149,231
New Castle Certificates Program
6.65% 10/16/00 30,000 29,916,875
Pooled Account Receivable Capital Corp.
6.51% 10/12/00 20,000 19,960,156
Sigma Finance, Inc.
6.66% 12/15/00 58,400 57,588,483
6.59% 01/05/01 44,600 43,815,040
Special Purpose Accounts Receivable
6.60% 10/06/00 40,000 39,963,333
6.50% 12/04/00 25,888 25,588,850
Trident Capital Finance, Inc.
6.51% 11/08/00 50,000 49,656,417
6.50% 11/13/00 41,728 41,403,530
------------
654,387,915
------------
BANKS--12.0%
AB Spintab
6.59% 01/09/01 49,500 48,592,500
Banco Santander Puerto Rico
6.53% 10/05/00 43,300 43,268,583
Banque Et Caisse Luxembourg
6.51% 02/15/01 59,400 57,926,154
Deutsche Bank Financial, Inc.
6.53% 10/10/00 50,000 49,918,375
Forrestal Funding Master Trust
6.57% 11/09/00 86,507 85,891,286
HSBC USA, Inc.
6.67% 03/09/01 64,500 62,599,599
PAR
MATURITY (000) VALUE
-------- ----- -------------
COMMERCIAL PAPER (CONTINUED)
BANKS (CONTINUED)
Santander Hispano Finance
Delaware, Inc.
6.53% 02/07/01 $40,000 $39,062,600
Svenska Handelsbanken, Inc.
6.49% 12/11/00 25,000 24,680,007
------------
411,939,104
------------
COMMUNICATION EQUIPMENT--1.4%
Alcatel SA
6.63% 02/28/01 49,650 48,278,419
------------
ELECTRICAL INDUSTRIAL APPARATUS--0.7%
Cooper Industries
6.54% 11/13/00 25,000 24,804,708
------------
MOTOR VEHICLES--0.6%
Daimler-Benz North America Corp.
6.50% 02/26/01 20,000 19,465,556
------------
PERSONAL CREDIT INSTITUTIONS--0.6%
Household International, Inc.
6.57% 10/12/00 20,150 20,109,549
------------
PHARMACEUTICALS--1.0%
Baxter International, Inc.
6.52% 10/16/00 35,000 34,904,771
------------
PRIMARY PRODUCTION OF ALUMINUM--2.2%
Alcoa, Inc.
6.63% 10/05/00 74,500 74,445,118
------------
RADIO & TV BROADCASTING &
COMMUNICATION EQUIPMENT--2.0%
Motorola, Inc.
6.46% 12/21/00 70,820 69,790,631
------------
RETAIL MERCHANDISING--1.0%
St. Michael Finance Ltd.
6.54% 10/26/00 33,904 33,750,019
------------
SECURITY BROKERS & DEALERS--8.5%
Bear Stearns Co., Inc.
6.54% 10/26/00 70,000 69,682,083
Lehman Brothers Holdings, Inc.
6.75% 12/11/00 75,000 74,001,562
6.72% 12/15/00 16,000 15,776,000
Salomon Smith Barney Holdings, Inc.
6.49% 10/23/00 50,000 49,801,389
6.48% 11/01/00 35,000 34,804,399
6.48% 11/16/00 50,000 49,586,000
------------
293,651,433
------------
SHORT-TERM BUSINESS CREDIT INSTITUTIONS--9.1%
Associates First Capital BV
6.53% 10/10/00 29,500 29,451,841
6.53% 01/22/01 50,000 48,975,153
General Electric Capital International
6.49% 10/25/00 60,000 59,740,000
6.52% 02/05/01 50,000 48,849,944
Heller Financial, Inc.
6.62% 10/10/00 40,000 39,933,800
6.55% 11/06/00 25,000 24,836,000
6.59% 11/20/00 50,000 49,542,361
6.54% 12/07/00 10,000 9,878,097
------------
311,207,196
------------
See accompanying notes to financial statements.
2
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
MONEY MARKET PORTFOLIO (CONCLUDED)
PAR
AS OF SEPTEMBER 30, 2000 MATURITY (000) VALUE
-------- ----- -------------
COMMERCIAL PAPER (CONTINUED)
TELECOMMUNICATIONS--1.8%
Verizon Global Funding
6.50% 10/20/00 $30,889 $ 30,783,034
6.50% 10/23/00 30,000 29,880,833
--------------
60,663,867
--------------
TOTAL COMMERCIAL PAPER
(Cost $2,057,398,286) 2,057,398,286
--------------
TIME DEPOSITS--1.7%
Suntrust Bank Atlanta
6.68%
(Cost $58,000,000) 10/02/00 58,000 58,000,000
--------------
GUARANTEED INVESTMENT CONTRACT--1.7%
Monumental Life
6.80%**
(Cost $60,000,000) 10/02/00 60,000 60,000,000
--------------
MEDIUM TERM NOTES--4.2%
Goldman Sachs Group, Inc.
6.73% 12/20/00 50,000 50,000,000
6.81% 01/08/01 25,000 25,000,000
6.81% 01/10/01 70,000 70,000,000
--------------
(Cost $145,000,000) 145,000,000
--------------
VARIABLE RATE OBLIGATIONS--24.6%
AIRCRAFT PARTS & AUXILIARY EQUIPMENT--2.9%
Textron Financial Corp.
6.57%** 10/27/00 55,000 54,739,025
6.74%** 11/02/00 44,600 44,600,000
--------------
99,339,025
--------------
ASSET BACKED SECURITIES--0.3%
Main Place Real Estate Investment Trust
6.88%** 10/25/00 10,000 10,000,451
--------------
BANKS--11.4%
American Express Centurion Bank
6.67%** 10/02/00 28,650 28,650,000
Bayerische Landesbank Girozentrale
6.54%** 10/30/00 49,700 49,690,029
First Union National Bank
6.62%** 10/18/00 75,000 75,000,000
SMM Trust
6.64%** 10/13/00 90,000 90,000,000
6.69%** 12/04/00 70,000 70,000,000
Westdeutsche Landesbank New York
6.54%** 10/25/00 29,500 29,494,146
Westpac Banking Corp.
6.66%** 10/04/00 50,000 49,999,774
--------------
392,833,94
--------------
FINANCE SERVICES--0.7%
7 World Trade Center, Inc.
6.85%** 12/01/00 25,000 25,000,000
--------------
PAR
MATURITY (000) VALUE
-------- ----- -------------
VARIABLE RATE OBLIGATIONS (CONTINUED)
PERSONAL CREDIT INSTITUTIONS--2.2%
American Honda Finance Corp.
6.62%** 10/12/00 $24,200 $24,200,000
Associates Corp. of North America
6.65%** 12/29/00 50,000 50,000,000
--------------
74,200,000
--------------
SECURITY BROKERS & DEALERS--1.5%
Merrill Lynch & Co., Inc.
6.69%** 10/12/00 50,000 49,994,677
--------------
SHORT TERM BUSINESS CREDIT INSTITUTIONS--1.7%
CIT Group Inc.
6.60%** 10/02/00 59,500 59,476,608
--------------
TELECOMMUNICATIONS--3.9%
AT & T Corp.
6.75%** 10/13/00 49,200 49,200,000
6.49%** 02/08/01 40,000 39,062,556
Vodafone Airtouch PLC
6.75%** 12/21/00 45,000 44,998,027
--------------
133,260,583
--------------
TOTAL VARIABLE RATE OBLIGATIONS
(Cost $844,105,293) 844,105,293
--------------
SHARES
----------
SHORT TERM INVESTMENTS--0.0%
Paine Webber Liquid Institutional
Reserves Money Market Fund
(Cost $1,770,522) 1,770,522 1,770,522
--------------
TOTAL INVESTMENTS IN SECURITIES
(Cost $3,494,574,367*) 101.8% 3,494,574,367
LIABILITIES IN EXCESS
OF OTHER ASSETS (1.8%) (62,877,316)
---------- ---------------
NET ASSETS (Equivalent to $1.00 per share
based on 2,231,467,458 Institutional
shares, 629,795,963 Service shares,
154,282,769 Hilliard Lyons shares,
405,772,063 Investor A shares,
6,371,269 Investor B shares and
4,134,335
Investor C shares outstanding) 100.0% $3,431,697,051
====== ==============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
INSTITUTIONAL, SERVICE, HILLIARD
LYONS, INVESTOR A, INVESTOR B
AND INVESTOR C SHARE
($3,431,697,051 [DIVIDE] 3,431,823,857 $1.00
=====
--------------------------------------------------------------------------------
* Aggregate cost for Federal tax purposes.
** Rates shown are the rates as of September 30, 2000 and maturities shown are
the next interest readjustment date.
See accompanying notes to financial statements.
3
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
U.S. TREASURY MONEY MARKET PORTFOLIO
PAR
AS OF SEPTEMBER 30, 2000 MATURITY (000) VALUE
-------- ----- -------------
U.S. TREASURY OBLIGATIONS--5.2%
U.S. Treasury Notes
4.00% 10/31/00 $ 5,000 $ 4,991,761
5.00% 04/30/01 8,000 7,939,081
5.62% 05/15/01 5,000 4,976,287
5.25% 05/31/01 8,000 7,932,778
6.50% 05/31/01 10,000 9,989,017
-----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $35,828,924) 35,828,924
-----------
REPURCHASE AGREEMENTS--94.8%
Barclay Investments
6.50% 10/02/00 36,000 36,000,000
(Agreement dated 09/29/00 to
be repurchased at $36,019,500.
Collateralized by $28,665,000
U.S. Treasury Bonds 8.50% due
02/15/20. The value of the
collateral is $36,610,580.)
Bear Stearns, Inc.
6.48% 10/02/00 36,000 36,000,000
(Agreement dated 09/29/00 to
be repurchased at $36,019,440.
Collateralized by $69,670,000
U.S. Treasury Strips 0.00% due
05/15/11. The value of the
collateral is $36,723,057.)
Deutsche Bank Securities, Inc.
6.48% 10/02/00 36,000 36,000,000
(Agreement dated 09/29/00 to
be repurchased at $36,019,440.
Collateralized by $30,337,000
U.S. Treasury Bonds 7.875% due
02/15/21. The value of the
collateral is $36,720,231.)
Goldman Sachs & Co.
6.50% 01/08/01+ 10,000 10,000,000
(Agreement dated 07/12/00 to
be repurchased at $10,325,000.
Collateralized by $7,793,000
U.S. Treasury Bonds 8.875% due
02/15/19. The value of the
collateral is $10,200,254.)
Greenwich Capital Markets
6.50% 10/02/00 36,000 36,000,000
(Agreement dated 09/29/00 to
be repurchased at $36,019,500.
Collateralized by $98,592,000
U.S. Treasury Strips -11.625%
due 11/15/04 to 02/15/29. The
value of the collateral is
$36,721,137.)
J.P. Morgan Securities
6.45% 10/02/00 21,200 21,200,000
(Agreement dated 09/29/00 to
be repurchased at $21,211,395.
Collateralized by $21,417,000
U.S. Treasury Notes 5.75% due
06/30/01. The value of the
collateral is $21,624,718.)
Lehman Brothers
6.49% 10/02/00 36,000 36,000,000
(Agreement dated 09/29/00 to
be repurchased at $36,019,470.
Collateralized by $105,273,000
U.S. Treasury Strips -11.75%
due 1/15/12 to 02/15/26. The
value of the collateral is
$36,721,186.)
PAR
MATURITY (000) VALUE
-------- ----- -------------
REPURCHASE AGREEMENTS (CONTINUED)
Merrill Lynch, Inc.
6.40% 10/23/00+ $100,000 $100,000,000
(Agreement dated 09/19/00 to
be repurchased at
$100,586,667. Collateralized
by $237,506,000 U.S. Treasury
Strips -11.75% due 11/05/05 to
02/15/29. The value of the
collateral is $102,001,478.)
Merrill Lynch, Inc.
6.48% 02/07/01+ 40,000 40,000,000
(Agreement dated 08/10/00 to
be repurchased at $41,296,000.
Collateralized by $144,286,000
U.S. Treasury Strips -8.75%
due 05/15/16 to 02/15/24. The
value of the collateral is
$40,800,017.)
Merrill Lynch, Inc.
6.49% 02/16/01+ 20,000 20,000,000
(Agreement dated 08/23/00 to
be repurchased at $20,638,183.
Collateralized by $59,101,000
U.S. Treasury Strips -7.625%
due 05/15/11 to 02/15/25. The
value of the collateral is
$20,400,177.)
Morgan Stanley & Co.
6.62% 10/02/00 175,000 175,000,000
(Agreement dated 09/29/00 to
be repurchased at
$175,096,615. Collateralized
by $188,228,000 U.S. Treasury
Strips 0.00% due 07/31/01. The
value of the collateral is
$180,178,241.)
Nesbitt Burns, Inc.
6.50% 10/02/00 36,000 36,000,000
(Agreement dated 09/29/00 to
be repurchased at $36,019,500.
Collateralized by $38,796,000
U.S. Treasury Bills 0.00% due
08/30/01. The value of the
collateral is $36,720,414.)
Salomon Smith Barney, Inc.
6.30% 10/02/00 36,000 36,000,000
(Agreement dated 09/29/00 to
be repurchased at $36,018,900.
Collateralized by $28,150,000
U.S. Treasury Bonds 8.75% due
05/15/17. The value of the
collateral is $36,704,961.)
Warburg, Dillon, Reed
6.50% 02/14/01+ 30,000 30,000,000
------------
(Agreement dated 08/18/00 to
be repurchased at $30,975,000.
Collateralized by $74,860,000
U.S. Treasury Strips 0.00% due
05/15/15. The value of the
collateral is $30,602,021.)
TOTAL REPURCHASE AGREEMENTS
(Cost $648,200,000) 648,200,000
------------
TOTAL INVESTMENTS IN SECURITIES
(Cost $684,028,924*) 100.0% $684,028,924
====== ============
--------------
*Aggregate cost for Federal tax purposes.
+Agreement has a putable option where principal and interest owed can be
recovered through demand in seven days.
See accompanying notes to financial statements.
4
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
U.S. TREASURY MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
SEPTEMBER 30, 2000
<S> <C>
ASSETS
Investments at value .................................................... $684,028,924
Cash .................................................................... 45,352
Interest receivable ..................................................... 2,067,167
Investments sold receivable ............................................. 74,441,250
Maturities receivable ................................................... 5,000,000
Prepaid expenses ........................................................ 5,541
------------
TOTAL ASSETS ..................................................... 765,588,234
------------
LIABILITIES
Distributions payable ................................................... 3,642,409
Advisory fees payable ................................................... 127,528
Administrative fees payable ............................................. 106,482
Transfer agent fees payable ............................................. 41,230
Other accrued expenses payable .......................................... 269,900
------------
TOTAL LIABILITIES ................................................ 4,187,549
------------
NET ASSETS (Equivalent to $1.00 per share based on 317,282,153 Institutional
shares, 412,358,970 Service shares and 31,794,096
Investor A shares outstanding) .......................................... $761,400,685
============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE
PER INSTITUTIONAL, SERVICE AND INVESTOR A SHARE
($761,400,685 [DIVIDE] 761,435,219) ..................................... $1.00
=====
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
MUNICIPAL MONEY MARKET PORTFOLIO
PAR
AS OF SEPTEMBER 30, 2000 MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS--100.2%
ALABAMA--3.1%
Calhoun County Economic
Development Council IDRB
(Craft Corp. Project) DN
5.70%** 10/06/00 $3,015 $ 3,015,000
Columbia Industrial Development
Board PCRB (Alabama Power Co.
Project) Series 1995C DN
5.60%** 10/02/00 2,100 2,100,000
Columbia Industrial Development
Board PCRB (Alabama Power Co.
Project) Series 1998 DN
5.75%** 10/02/00 3,200 3,200,000
Columbia Industrial Development
Board PCRB (Alabama Power Co.
Project) Series 1999A DN
5.60%** 10/02/00 1,400 1,400,000
Eutaw IDRB (Alabama Power Co.
Project) Series 1998 DN
5.60%** 10/02/00 2,000 2,000,000
Homewood Educational Development
Authority RB (Samford University
Project) Series 1999 DN
5.60%** 10/02/00 3,200 3,200,000
Montgomery Special Care Facilities
Financing Authority RB
Series 1985A DN
5.70%** 10/06/00 1,900 1,900,000
-----------
16,815,000
------------
ALASKA--0.6%
Anchorage GO Series 2000 TAN
4.75% 02/02/01 3,000 3,006,339
-----------
ARIZONA--0.6%
Apache County IDRB (Tucson Electric
Power Co. Project) Series 1983C DN
5.50%** 10/06/00 3,000 3,000,000
-----------
ARKANSAS--0.4%
Hope City Temple Inland GO
Series 2000 TECP
4.65% 10/13/00 2,000 2,000,000
-----------
CALIFORNIA--0.4%
California Higher Education Student
Loan Authority, Inc. RB
Series 1992 MB
4.35% 04/01/01 2,425 2,425,000
-----------
COLORADO--1.2%
Colorado Educational and Cultural
Facilities Authority RB
Series 1999 DN
5.60%** 10/06/00 2,700 2,700,000
Smith Creek Metropolitan District RB
Series 1995 DN
5.55%** 10/06/00 3,800 3,800,000
-----------
6,500,000
-----------
DELAWARE--1.2%
Delaware Economic Development
Authority RB (Normaco Income
Project) Series 1984 DN
5.75%** 10/06/00 6,600 6,600,000
-----------
PAR
MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
DISTRICT OF COLUMBIA--1.8%
District of Columbia GO (General
Fund Recovery Project)
Series 1991B DN
5.60%** 10/02/00 $4,300 $ 4,300,000
District of Columbia GO
Series 1991B-3 DN
5.60%** 10/02/00 5,600 5,600,000
-----------
9,900,000
-----------
FLORIDA--2.7%
Capital Projects Finance Authority RB
(Florida Hospital Association -
Capital Loan Program Project)
Series 1998A DN
5.50%** 10/06/00 2,495 2,495,000
Greater Orlando Airport Authority GO
Series 2000 TECP
4.30% 02/16/01 7,000 7,000,000
St. Lucie PCRB Series 1993 MB
4.30% 12/22/00 5,000 5,000,000
-----------
14,495,000
-----------
GEORGIA--1.5%
Burke County Development Authority
PCRB Series 1992 DN
5.60%** 10/02/00 1,155 1,155,000
Burke County PCRB Series 2000 TECP
4.30% 12/07/00 5,000 5,000,000
McDuffie County Temple-Inland PCRB
Series 2000 TECP
4.65% 10/13/00 1,500 1,500,000
Monroe County Development Authority
PCRB (Georgia Power Co. Plant
Scherer Project) Series 1995 DN
5.60%** 10/02/00 200 200,000
-----------
7,855,000
-----------
HAWAII--2.6%
Hawaii Department of Budget &
Finance GO Series 2000 TECP
4.60% 12/08/00 3,500 3,500,000
Hawaii Housing Development Finance
Corporation RB Series 1990B DN
5.95%** 10/06/00 9,500 9,500,000
Honolulu GO Series 1993B MB
4.80% 10/02/00 1,000 1,004,323
-----------
14,004,323
-----------
IDAHO--0.5%
Idaho GO Series 2000 TAN
5.37% 06/29/01 2,500 2,517,867
-----------
ILLINOIS--10.7%
Chicago GO Series 2000 DN
5.70%** 10/06/00 10,000 10,000,000
Chicago RB Series 2000 DN
4.40%** 10/02/00 2,000 2,000,000
Chicago Skyway Toll Bridge RB
Series 2000 DN
5.62%** 10/06/00 5,000 5,000,000
Illinois Development Finance Authority
IDRB Series 1996 DN
5.75%** 10/06/00 1,420 1,420,000
See accompanying notes to financial statements.
6
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)
PAR
AS OF SEPTEMBER 30, 2000 MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
ILLINOIS (CONTINUED)
Illinois Development Finance Authority
IDRB (Royal Continental Box Co.
Project) Series 1995A DN
5.67%** 10/06/00 $ 600 $ 600,000
Illinois Development Finance Authority
IDRB (Royal Continental Box Co.
Project) Series 1995B DN
5.67%** 10/06/00 2,850 2,850,000
Illinois Development Finance Authority
PCRB (Illinois Power Co. Project)
Series 1993 MB
4.35% 12/15/00 4,000 4,000,000
Illinois Educational Facilities Authority
RB (National Louis University
Project) Series 1999A DN
5.63%** 10/06/00 1,960 1,960,000
Illinois Health Facilities Authority RB
(Evanston Hospital Corp. Project)
Series 1990A MB
4.45% 07/31/01 8,000 8,000,000
Illinois Health Facilities Authority RB
(Northwestern Memorial Hospital
Project) Series 1995 DN
5.60%** 10/02/00 300 300,000
Illinois Health Facilities Authority
Revolving Fund Pooled Financing
Program RB (The University of
Chicago Project) Series 1994 MB
4.35% 03/07/01 4,800 4,800,000
Illinois Housing Development Finance
Authority RB Series 2000V DN
5.55%** 10/06/00 2,000 2,000,000
Illinois Sales Tax RB Series 1991O MB
6.00% 06/15/01 1,495 1,511,774
Illinois Student Loan Authority RB
Series 1996A DN
5.65%** 10/06/00 1,200 1,200,000
Naperville Economic Development
Authority RB (Independence Village
Associates Project) Series 1994 DN
5.55%** 10/06/00 2,555 2,555,000
Quad Cities Regional Economic
Development Authority RB (Whitey's
Ice Cream Manufacturing Project)
Series 1995 DN
5.75%** 10/06/00 1,430 1,430,000
Rockford RB (Fairhaven Christian
Center Project) Series 2000 DN
5.60%** 10/06/00 2,500 2,500,000
Roselle Village IDRB (Abrasive-Form,
Inc. Project) Series 1995 DN
6.00%** 10/06/00 1,600 1,600,000
Village of Schiller Park IDRB (Victor
Products Corp. Project)
Series 1995 DN
6.00%** 10/06/00 300 300,000
Winnebago County RB (Mill Project)
Series 1996 DN
5.60%** 10/06/00 3,770 3,770,000
-----------
57,796,774
-----------
PAR
MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
INDIANA--2.1%
Indiana Development Finance Authority
IDRB Series 2000 DN
5.75%** 10/06/00 $4,000 $ 4,000,000
Indiana Educational Facilities Authority
RB Series 2000 BAN
4.85% 05/03/01 3,000 3,005,953
Knox Economic Development RB
(J.W. Hicks Project) Series 1998 DN
5.75%** 10/06/00 2,100 2,100,000
Monroe County IDRB (Griner
Engineering, Inc. Project)
Series 1997 DN
5.60%** 10/06/00 1,979 1,979,000
-----------
11,084,953
-----------
IOWA--2.7%
Iowa Finance Authority IDRB
(Sauer-Sundstrand Co. Project)
Series 1996 DN
5.60%** 10/06/00 2,800 2,800,000
Iowa Financial Authority Economic
Development RB (Easter Seal
Society Project) Series 1999 DN
5.65%** 10/06/00 3,200 3,200,000
Iowa Financial Authority Hospital
Facility RB (Iowa Health System
Project) Series 1998B DN
5.60%** 10/06/00 4,605 4,605,000
Iowa School Corp. Revenue Anticipation
Warrants (Iowa School Cash
Anticipation Progam Project)
Series 2000A MB
5.50% 06/22/01 4,000 4,027,948
-----------
14,632,948
-----------
KANSAS--1.6%
Shawnee Private Activity RB (Simmons
County Project) Series 1996 DN
5.70%** 10/06/00 4,800 4,800,000
Wyandotte County GO Series 2000 BAN
4.30% 02/01/01 2,337 2,336,500
Wyandotte County GO Series 2000 MB
4.70% 05/01/01 1,555 1,556,607
-----------
8,693,10
-----------
KENTUCKY--4.5%
Jefferson County PCRB Series 2000
TECP
4.45% 11/20/00 3,000 3,000,000
4.45% 01/17/01 8,200 8,200,000
Jeffersontown Lease Program RB
Series 2000 DN
5.55%** 10/06/00 2,000 2,000,000
Kentucky Interlocal School
Transportation Association GO
Series 2000 TAN
5.00% 06/29/01 5,000 5,021,320
Maysville Solid Waste Disposal
Facilities RB (Inland Container Corp.
Project) Series 1992 MB
4.65% 10/17/00 500 500,000
See accompanying notes to financial statements.
7
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)
PAR
AS OF SEPTEMBER 30, 2000 MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
KENTUCKY (CONTINUED)
Pulaski County Solid Waste Disposal
RB (National Rural Utilities for
East Kentucky Power Project)
Series 1993B MB
4.30% 02/15/01 $2,500 $ 2,500,000
Trimble County PCRB
Series 2000 TECP
4.45% 01/17/01 3,000 3,000,000
-----------
24,221,320
-----------
LOUISIANA--4.4%
Plaquemines Port Harbor GO
Series 2000 MB
4.35% 12/08/00 8,000 8,000,000
4.45% 02/08/01 15,600 15,600,000
-----------
23,600,000
-----------
MARYLAND--8.4%
Anne Arundel County RB (Mountain
Ridge Apartments Project)
Series 1996 DN
4.55%** 10/04/00 6,025 6,025,000
Baltimore County RB (Saint James
Academy Facilities Project)
Series 1999 DN
4.44%** 10/06/00 4,500 4,500,000
Baltimore County RB (Shade Tree
Trace Project) Series 1996 DN
4.55%** 10/06/00 6,340 6,340,000
Frederick County RB (Manekin-Freder
Facilities Project) Series 2000 DN
5.72%** 10/06/00 3,500 3,500,000
Maryland Economic Development
Authority RB (Association of Catholic
Charities Project) Series 1999A DN
5.62%** 10/06/00 3,045 3,045,000
Maryland Economic Development
Authority RB (Association of Catholic
Charities Project) Series 1999B DN
5.70%** 10/06/00 1,800 1,800,000
Maryland Finance IDRB (Baltimore
International Culinary Project)
Series 1994 DN
5.70%** 10/06/00 3,410 3,410,000
Maryland Finance IDRB (Brass Mill
Road LP Facility Project)
Series 1995 DN
4.55%** 10/06/00 2,790 2,790,000
Maryland Finance IDRB (Patapsco
Associates LP Facility Project)
Series 1995 DN
4.55%** 10/06/00 1,910 1,910,000
Maryland Health and Higher Education
Authority RB (Doctors' Community
Hospital Project) Series 1997 DN
4.44%** 10/06/00 1,905 1,905,000
Montgomery County Economic
Development RB (Brooke Grove
Foundation, Inc. Project)
Series 1998 DN
4.49%** 10/06/00 7,350 7,350,000
PAR
MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
MARYLAND (CONTINUED)
Montgomery County RB (Ivymount
School Income Facility Project)
Series 2000 DN
5.67%** 10/06/00 $3,000 $ 3,000,000
-----------
45,575,000
-----------
MICHIGAN--2.8%
Elk Rapids School District GO
Series 2000 MB
4.75% 06/29/01 1,850 1,853,279
Michigan Housing Development
Authority RB (Jas Nonprofit Housing
Corp. Project) Series 2000 DN
5.55%** 10/06/00 8,700 8,700,000
Michigan Strategic Fund Limited
Obligation RB (Kay Screen Printing,
Inc. Project) Series 2000 DN
5.75%** 10/06/00 2,600 2,600,000
Michigan Strategic Fund RB
(True Industrial-Warren Project)
Series 2000 DN
5.65%** 10/05/00 1,700 1,700,000
-----------
14,853,279
-----------
MINNESOTA--4.9%
Hennepin County RB Series 2000B DN
5.45%** 10/06/00 9,000 9,000,000
Minneapolis GO (Convention Center
Project) Series 1999 DN
5.45%** 10/06/00 5,000 5,000,000
Minneapolis GO Series 1999A DN
5.45%** 10/06/00 8,500 8,500,000
Minnesota School District Tax and Aid
Certificates of Participation
Series 2000A MB
5.00% 08/09/01 1,000 1,005,736
Southern Minnesota Power Agency GO
Series 2000 TECP
4.10% 10/12/00 3,000 3,000,000
-----------
26,505,736
-----------
MISSOURI--1.0%
Kansas City Hospital IDRB (Research
Health Services System Project)
Series 1985 DN
5.55%** 10/02/00 700 700,000
Kansas City Hospital IDRB
Series 1985 DN
5.55%** 10/02/00 3,000 3,000,000
Missouri Environmental Improvement
and Energy Resource Authority RB
(Monsanto Co. Project)
Series 1988 DN
5.65%** 10/06/00 1,700 1,700,000
-----------
5,400,000
-----------
NEVADA--0.3%
Clark County Economic Development
RB (Lutheran Secondary School
Association Project) Series 2000 DN
5.70%** 10/06/00 1,600 1,600,000
-----------
See accompanying notes to financial statements.
8
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)
PAR
AS OF SEPTEMBER 30, 2000 MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
NEW HAMPSHIRE--1.2%
New Hampshire Health and Education
Facilities Authority RB (Tilton
School Project) Series 1999 DN
5.60%** 10/06/00 $2,480 $ 2,480,000
New Hampshire Higher Educational
and Health Facilities Authority RB
(Hunt Community Issue Project)
Series 1996 DN
5.60%** 10/06/00 4,000 4,000,000
-----------
6,480,000
-----------
NEW JERSEY--2.3%
Aberdeen Township GO
Series 2000 BAN
4.90% 08/16/01 1,000 1,003,760
Essex County GO Series 2000A BAN
4.75% 07/27/01 1,000 1,002,891
New Jersey Economic Development
Authority RB (Parke Place
Association Project)
Series 2000 DN
5.77%** 10/06/00 7,000 7,000,000
New Jersey Economic Development
Authority RB (R. Realty Co. Project)
Series 1996 DN
5.30%** 10/06/00 800 800,000
New Jersey Turnpike Authority RB
(Eagle Trust Project)
Series 2000 DN
5.42%** 10/06/00 1,300 1,300,000
Upper Saddle River School District GO
Series 2000 MB
4.85% 07/19/01 322 323,106
Washington Township GO
Series 2000 BAN
5.50% 05/31/01 1,000 1,003,474
-----------
12,433,231
-----------
NEW MEXICO--0.4%
New Mexico Hospital Equipment Loan
Council RB (Pooled Loan Program
Project) Series 2000A DN
5.60%** 10/06/00 2,000 2,000,000
-----------
NORTH CAROLINA--3.2%
Charlotte-Mecklenburg Hospital
Authority RB (Health Care System
Project) Series 1996C DN
5.60%** 10/06/00 400 400,000
Greensboro Certificates of Participation
(Equipment Acquisition Project)
Series 2000 DN
5.60%** 10/06/00 2,500 2,500,000
Mecklenburg County Certificates of
Participation Series 2000 DN
5.70%** 10/06/00 2,000 2,000,000
Mecklenburg County GO
Series 1996B DN
5.60%** 10/06/00 700 700,000
Mecklenburg County GO
Series 1998C DN
5.40%** 10/06/00 2,756 2,756,000
PAR
MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
NORTH CAROLINA (CONTINUED)
Mecklenburg County Industrial
Facilities and Pollution Control
Financing Authority IDRB
(Otto Industries, Inc. Project)
Series 1988 DN
5.70%** 10/06/00 $ 400 $ 400,000
North Carolina Medical Care
Commission Hospital RB (Duke
University Hospital Project)
Series 1985C DN
5.45%** 10/06/00 1,700 1,700,000
North Carolina Medical Care
Commission Hospital RB (Lincoln
Health System Project)
Series 1996A DN
5.70%** 10/06/00 5,100 5,100,000
North Carolina Medical Care
Commission Hospital RB (Pooled
Equipment Financing Project)
Series 1985 DN
4.95%** 10/06/00 600 600,000
Rockingham County Industrial
Facilities and Pollution Control
Finance Authority RB (Whiteridge,
Inc. Project) Series 1998 DN
5.60%** 10/06/00 1,300 1,300,000
Washington County Industrial Facilities
and Pollution Control Financing
Authority RB (Mackeys Ferry Sawmill,
Inc. Project) Series 1997 DN
5.65%** 10/06/00 100 100,000
-----------
17,556,000
-----------
NORTH DAKOTA--1.1%
Fargo IDRB (Owen Industries, Inc.
Project) Series 1997 DN
5.85%** 10/06/00 900 900,000
Mercer County Solid Waste Disposal RB
(National Rural Utilities Project)
Series 1995A MB
4.35% 03/01/01 2,800 2,800,000
North Dakota Housing Finance Agency
RB (Home Mortgage Finance Project)
Series 2000 MB
4.45% 08/27/01 2,000 2,000,000
-----------
5,700,000
-----------
OHIO--7.6%
Cuyahoga County Hospital RB
(Cleveland Clinic Foundation Project)
Series 1997A DN
5.65%** 10/06/00 4,450 4,450,000
East Palestine School District GO
Series 1999 BAN
4.10% 11/09/00 1,500 1,500,337
Goshen School District GO
Series 2000 BAN
4.71% 10/11/00 1,000 1,000,135
Green Health Care RB (Greater Akron-
Canton Project) Series 1999 DN
5.55%** 10/06/00 1,725 1,725,000
See accompanying notes to financial statements.
9
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)
PAR
AS OF SEPTEMBER 30, 2000 MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
OHIO (CONTINUED)
Hamilton County Hospital Facilities RB
(Beechwood Home Project)
Series 1997 DN
5.65%** 10/06/00 $3,900 $ 3,900,000
Harrison County Economic
Development RB (Carriage Inn of
Cadiz Project) Series 1996 DN
5.65%** 10/06/00 1,575 1,575,000
Lucas County GO Series 2000 BAN
4.56% 04/12/01 2,000 2,002,121
Marion County GO Series 2000 BAN
4.50% 11/16/00 1,000 1,000,365
Marysville Village School District GO
Series 2000 BAN
4.79% 03/20/01 3,000 3,007,439
Montgomery County Economic
Development Authority RB (Dayton
Art Institute Project) Series 1996 DN
5.55%** 10/06/00 300 300,000
Montgomery County GO Series 2000
TECP
4.20% 01/17/01 3,250 3,250,000
Ohio Air Quality Development Authority
PCRB (JMG Funding Ltd.
Partnership Project) Series 1995B DN
5.60%** 10/06/00 500 500,000
Ohio Higher Educational Facility
Community RB Series 2000C DN
5.60%** 10/06/00 2,890 2,890,000
Ohio Housing Finance Agency Multi-
Family Housing RB (The Club at
Spring Valley Apartments Project)
Series 1996A DN
5.60%** 10/06/00 3,400 3,400,000
Ohio University RB Series 1999B TECP
4.25% 12/07/00 5,500 5,500,000
Ohio Water Development Authority
Refunding RB (Timken Co. Project)
Series 1992 DN
5.65%** 10/06/00 1,350 1,350,000
Perry County GO Series 2000 BAN
4.75% 04/20/01 1,500 1,502,823
Tiffin GO Series 2000 MB
4.99% 06/28/01 1,200 1,202,030
Union Township GO Series 2000 BAN
4.86% 04/10/01 1,000 1,002,555
-----------
41,057,805
-----------
OKLAHOMA--0.8%
Muskogee Industrial Trust PCRB
(Oklahoma Gas and Electric Co.
Project) Series 1995A DN
5.70%** 10/06/00 1,500 1,500,000
Payne County Economic Development
Authority RB Series 2000A DN
5.60%** 10/06/00 3,000 3,000,000
-----------
4,500,000
-----------
PAR
MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
PENNSYLVANIA--2.6%
Pennsylvania Higher Educational
Facilities Authority Health Services
RB (The University of Pennsylvania
Project) Series 1994B DN
5.50%** 10/06/00 $ 800 $ 800,000
Pennsylvania Higher Educational
Facilities Authority Health Services
RB (The University of Pennsylvania
Project) Series 1996C DN
5.50%** 10/06/00 4,545 4,545,000
Pennsylvania Higher Educational
Facilities Authority Health Services
RB (The University of Pennsylvania
Project) Series 1998B DN
5.50%** 10/06/00 4,200 4,200,000
Philadelphia Hospital and Higher
Education Facilities Authority RB
(Children's Hospital of Philadelphia
Project) Series 1996A DN
5.60%** 10/02/00 4,400 4,400,000
-----------
13,945,000
-----------
RHODE ISLAND--1.2%
Berkeley County IDRB (Nucor Corp.
Project) Series 1998 DN
5.70%** 10/06/00 6,600 6,600,000
-----------
SOUTH CAROLINA--0.5%
South Carolina Economic Development
Authority Hospital Facilities RB
Series 1995B DN
5.40%** 10/02/00 600 600,000
South Carolina Economic Development
Authority RB (Catholic Diocese
Project) Series 1998 DN
5.75%** 10/06/00 2,300 2,300,000
-----------
2,900,000
-----------
SOUTH DAKOTA--0.4%
South Dakota Housing Development
Authority RB Series 2000 DN
5.55%** 10/06/00 2,000 2,000,000
-----------
TENNESSEE--2.9%
Cleveland IDRB (Young Men's
Christian Association of Metropolitan
Chattanooga Project) Series 1999 DN
5.60%** 10/06/00 3,200 3,200,000
Montgomery County Public Building
Authority Pooled Financing RB
(Montgomery County Loan Project)
Series 1995 DN
5.70%** 10/06/00 7,920 7,920,000
Nashville and Davidson County IDRB
Series 1989 DN
5.15%** 10/06/00 2,805 2,805,000
Williamson County IDRB (Numatics,
Inc. Project) Series 1996 DN
5.75%** 10/06/00 2,000 2,000,000
-----------
15,925,000
-----------
See accompanying notes to financial statements.
10
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
MUNICIPAL MONEY MARKET PORTFOLIO (CONCLUDED)
PAR
AS OF SEPTEMBER 30, 2000 MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
TEXAS--7.8%
Austin Apartment Systems RB
Series 2000J DN
5.55%** 10/06/00 $2,000 $ 2,000,000
Austin Water and Wastewater Systems
RB Series 2000 DN
5.50%** 10/06/00 2,500 2,500,000
Comal County IDRB (Simpson Co.
Project) Series 1996 DN
5.60%** 10/06/00 2,400 2,400,000
Harris County Health Facilities RB
(St. Luke's Episcopal Hospital
Project) Series 1997B DN
5.50%** 10/02/00 600 600,000
Harris County Toll Road Unlimited Tax
and Subordinate Lien RB
Series 1994F DN
5.45%** 10/06/00 2,000 2,000,000
Katy School District GO
Series 1998B MB
4.20% 02/15/01 4,000 4,000,552
Lower Colorado River Authority RB
Series 2000 MB
4.40% 01/01/01 1,900 1,900,000
4.40% 09/04/01 2,550 2,550,000
San Antonio Water System
Improvement and Refunding RB
Series 1996 DN
5.70%** 10/06/00 10,430 10,430,000
Texas RB Series 2000 DN
5.60%** 10/06/00 13,700 13,700,000
-----------
42,080,552
-----------
UTAH--2.1%
Intermountain Power Agency Supply
RB Series 1985F MB
4.22% 03/15/01 5,000 5,000,000
Salt Lake City RB (Pooled Hospital
Financing Program)
Series 1998A-55 DN
5.55%** 10/06/00 4,900 4,900,000
Salt Lake County GO Series 2000 TAN
5.00% 12/29/00 1,500 1,502,210
-----------
11,402,210
-----------
VIRGINIA--1.9%
Amelia County IDA Exempt Facility RB
(Chambers Waste System of Virginia,
Inc. Project) Series 1991 DN
5.50%** 10/06/00 1,710 1,710,000
Fairfax County IDRB (Inova Health
Systems Project) Series 2000 DN
5.50%** 10/06/00 1,700 1,700,000
Hanover County IDA Residential Care
Facility RB (Covenent Woods Project)
Series 1999 DN
5.50%** 10/06/00 1,600 1,600,000
Lynchburg IDA Hospital Facilities RB
(VHA Mid-Atlantic States Capital
Asset Finance Program)
Series 1985B DN
5.70%** 10/06/00 200 200,000
PAR
MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
VIRGINIA (CONTINUED)
Metropolitan Washington D.C. Airport
Authority GO Series 2000 TECP
4.50% 01/10/01 $5,000 $ 5,000,000
-----------
10,210,000
-----------
WASHINGTON--0.3%
Port Seattle RB Series 1995A MB
6.00% 02/01/01 1,000 1,005,862
Yakima County Public Corp. RB
(Jeld-Wen Income Project)
Series 1988 DN
5.63%** 10/06/00 740 740,000
-----------
1,745,862
-----------
WISCONSIN--3.9%
Amery IDRB (Plastech Corp. Project)
Series 1997 DN
6.00%** 10/06/00 2,000 2,000,000
Southeast Wisconsin Professional
Baseball Park RB Series 2000Y DN
5.50%** 10/06/00 2,280 2,280,000
Wisconsin GO Series 2000 TECP
4.30% 12/12/00 5,000 5,000,000
Wisconsin Housing and Economic
Development Authority Single
Family Housing RB Series 1999 DN
5.72%** 10/06/00 12,045 12,045,000
-----------
21,325,000
-----------
TOTAL INVESTMENTS IN SECURITIES
(Cost $540,942,306*) 100.2% 540,942,306
LIABILITIES IN EXCESS OF
OTHER ASSETS (0.2%) (860,324)
------ -----------
NET ASSETS (Equivalent to $1.00 per share
based on 314,316,867 Institutional shares,
112,840,862 Service shares, 105,575,615
Hilliard Lyons shares and 7,396,457
Investor A shares outstanding) 100.0% $540,081,982
====== ============
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE PER
INSTITUTIONAL, SERVICE,
HILLIARD LYONS AND
INVESTOR A SHARE
($540,081,982 [DIVIDE] 540,129,801) $1.00
=====
--------------
* Aggregate cost for Federal tax purposes.
** Rates shown are the rates as of September 30, 2000, 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.
11
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
NEW JERSEY MUNICIPAL MONEY MARKET PORTFOLIO
PAR
AS OF SEPTEMBER 30, 2000 MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS--99.3%
NEW JERSEY--99.2%
Aberdeen Township GO
Series 2000 BAN
4.90% 08/16/01 $ 727 $ 729,804
Bloomfield Township GO
Series 2000 MB
5.20% 06/15/01 1,000 1,006,818
Burlington City GO Series 1999 BAN
4.25% 10/17/00 2,390 2,390,422
Camden County Improvement
Authority RB (Jewish Community
Center Project) Series 1995 DN
5.35%** 10/02/00 565 565,000
Carteret Board of Education GO
Series 2000 MB
4.20% 01/15/01 135 135,000
Closter GO Series 2000 BAN
4.75% 08/17/01 2,000 2,007,049
Cranford Township GO
Series 2000 BAN
4.35% 03/16/01 2,000 2,001,304
East Amwell Township GO
Series 1999 BAN
4.30% 10/28/00 2,521 2,521,394
East Amwell Township GO
Series 2000 BAN
4.62% 04/27/01 2,542 2,545,462
East Rutherford GO Series 1998 BAN
4.20% 01/15/01 115 115,000
Edison Township Board of Education
GO Series 2000 BAN
5.50% 01/01/01 260 260,885
Essex County Public Improvement
Authority RB (County Asset Sale
Project) Series 1995 DN
5.50%** 10/06/00 350 350,000
Essex County RB Series 1990 MB
7.00% 12/01/00 425 432,864
Hammonton School District GO
Series 2000 BAN
4.40% 02/02/01 2,000 2,001,169
Jefferson Township GO
Series 2000 BAN
5.30% 02/01/01 125 125,488
Jersey City GO Series 2000 BAN
4.75% 01/12/01 5,000 5,008,107
Jersey City GO Series 2000A BAN
5.60% 03/01/01 750 754,209
Jersey City Redevelopment Authority
RB (Dixon Multi-family Housing
Project) Series 2000A DN
5.40%** 10/06/00 2,000 2,000,000
Kinnelon GO Series 1999 BAN
4.30% 12/08/00 802 802,429
Lambertville GO Series 2000 BAN
4.75% 04/26/01 1,046 1,047,702
Mantua Township School District GO
Series 2000 BAN
5.70% 03/01/01 500 503,112
Medford Township GO Series 2000 MB
5.30% 07/15/01 300 302,167
Mercer County Improvement Authority
RB (Atlantic Financial and Johnson
Project) Series 1998 DN
5.47%** 10/06/00 3,000 3,000,000
PAR
MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
NEW JERSEY (CONTINUED)
Middlesex County GO Series 2000 BAN
5.25% 01/15/01 $ 880 $ 882,840
Middlesex County Utilities Authority RB
(Solid Waste System Review Project)
Series 1991 MB
6.00% 12/01/00 150 150,435
New Jersey Economic Development
Authority Multi-Mode IDRB (V and S
Amboy Galvanizing LLC Project)
Series 1999 DN
5.70%** 10/06/00 3,600 3,600,000
New Jersey Economic Development
Authority RB (Airis Newark LLC
Project) Series 1998 DN
5.40%** 10/06/00 1,650 1,650,000
New Jersey Economic Development
Authority RB (ARND LLC Project)
Series 2000 DN
5.35%** 10/06/00 2,100 2,100,000
New Jersey Economic Development
Authority RB (Bethany Baptist
Church Project) Series 1998 DN
5.30%** 10/06/00 795 795,000
New Jersey Economic Development
Authority RB (Chambers Cogen
Project) Series 1991 MB
3.70% 10/13/00 4,000 4,000,000
New Jersey Economic Development
Authority RB (Denglas Technologies
Project) Series 2000 DN
5.77%** 10/06/00 4,590 4,590,000
New Jersey Economic Development
Authority RB (Facile Holdings, Inc.
Project) Series 1998 DN
5.30%** 10/06/00 3,445 3,445,000
New Jersey Economic Development
Authority RB (Far Sighted Investment
LLC Project) Series 1998A DN
5.45%** 10/06/00 1,180 1,180,000
New Jersey Economic Development
Authority RB (Hamilton Industrial
Development Project) Series 1998 DN
5.35%** 10/06/00 2,000 2,000,000
New Jersey Economic Development
Authority RB (J. James Realty Co.
Project) Series 1998 DN
5.50%** 10/06/00 780 780,000
New Jersey Economic Development
Authority RB (Jersey Juice, Inc.
Project) Series 1997 DN
5.40%** 10/06/00 3,270 3,270,000
New Jersey Economic Development
Authority RB (Kenwood USA Corp.
Project) Series 1985 DN
5.40%** 10/06/00 6,000 6,000,000
New Jersey Economic Development
Authority RB (Keystone Project)
Series 1992 MB
3.65% 10/10/00 3,000 3,000,000
New Jersey Economic Development
Authority RB (Local Housing Project)
Series 1992D-1 DN
5.55%** 10/06/00 990 990,000
See accompanying notes to financial statements.
12
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
NEW JERSEY MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)
PAR
AS OF SEPTEMBER 30, 2000 MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
NEW JERSEY (CONTINUED)
New Jersey Economic Development
Authority RB (Nandan Co. Project)
Series 1995 DN
5.45%** 10/06/00 $1,865 $ 1,865,000
New Jersey Economic Development
Authority RB (Newark Fibers, Inc.
Project) Series 1998 DN
5.60%** 10/06/00 3,000 3,000,000
New Jersey Economic Development
Authority RB (Ninette Group LP
Project) Series 1998 DN
5.45%** 10/06/00 800 800,000
New Jersey Economic Development
Authority RB (Parke Place
Association Project) Series 2000 DN
5.77%** 10/06/00 700 700,000
New Jersey Economic Development
Authority RB (Pennington Montessori
School Project) Series 1998 DN
5.45%** 10/06/00 1,330 1,330,000
New Jersey Economic Development
Authority RB (R. Realty Co. Project)
Series 1996 DN
5.30%** 10/06/00 2,755 2,755,000
New Jersey Economic Development
Authority RB (St. James Prep. and
Social Service Project)
Series 1998 DN
5.25%** 10/06/00 1,000 1,000,000
New Jersey Economic Development
Authority RB (Thermal Energy LP
Project) Series 1995 DN
5.45%** 10/06/00 6,000 6,000,000
New Jersey Economic Development
Authority RB (Venice Maid Foods
Project) Series 1997 DN
5.40%** 10/06/00 1,000 1,000,000
New Jersey Economic Development
Authority RB (Wechsler Coffee Corp.
Project) Series 1998 DN
5.40%** 10/06/00 1,240 1,240,000
New Jersey Economic Development
Authority RB (Wood Hollow
Associates Project) Series 1997 DN
5.35%** 10/06/00 2,325 2,325,000
New Jersey Educational Authority RB
(Beldar Business Form Manufacturing
Project) Series 1999 DN
5.45%** 10/06/00 1,185 1,185,000
New Jersey Health Care Facilities RB
(Hackettstown Community Hospital
Project) Series 2000 DN
5.35%** 10/06/00 3,000 3,000,000
New Jersey Health Care Facilities RB
(Hospital Capital Asset Financing
Project) Series 1985C DN
5.20%** 10/06/00 3,000 3,000,000
New Jersey Housing and Mortgage
Finance Agency RB Series 1996 DN
5.41%** 10/06/00 7,805 7,805,000
New Jersey Housing and Mortgage
Finance Agency RB Series 1999 DN
5.46%** 10/06/00 2,000 2,000,000
PAR
MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
NEW JERSEY (CONTINUED)
New Jersey Housing and Mortgage
Finance Agency Tax-Exempt Eagle
Trust Certificates Series 1997A DN
5.62%** 10/06/00 $3,750 $ 3,750,000
New Jersey State Educational Facilities
RB (Caldwell College Project)
Series 2000B DN
5.20%** 10/06/00 2,335 2,335,000
New Jersey State GO
Series 1992D BAN
5.25% 02/15/01 350 351,437
New Jersey State Transportation
Corp. RB Series 1997A MB
5.25% 09/01/01 2,000 2,009,210
New Jersey Transit Trust Fund RB
Series 1994A MB
5.20% 12/15/00 200 200,476
New Jersey Transit Trust Fund RB
Series 1998A MB
4.25% 06/15/01 1,000 1,000,000
New Jersey Turnpike Authority RB
(Eagle Trust Project) Series 2000 DN
5.42%** 10/06/00 3,700 3,700,000
Ocean County GO Series 2000 MB
4.50% 09/01/01 300 300,526
Passaic County GO Series 2000 BAN
4.62% 09/21/01 1,000 1,003,492
Paterson Public School District RB
Series 1999 BAN
3.80% 11/01/00 480 480,000
Peapack Gladstone GO
Series 1999 BAN
4.30% 12/08/00 2,000 2,001,069
Rahway Certificates of Participation
Series 2000 MB
4.70% 02/15/01 605 605,000
Salem County Pollution Control
Financing Authority PCRB
(E.I. DuPont de Nemours Project)
Series 1982A DN
4.35%** 10/02/00 9,600 9,600,000
Sussex County GO Series 2000 MB
5.00% 07/15/01 455 457,249
Union County Utilities Authority RB
Series 1998A MB
4.50% 06/01/01 2,380 2,380,714
Upper Saddle River School District
GO Series 2000 MB
4.85% 07/19/01 2,000 2,006,872
Vernon Township School District GO
Series 1999 BAN
5.25% 12/01/00 600 601,409
Washington Township GO
Series 2000 BAN
5.50% 05/31/01 1,385 1,389,812
West Orange Board of Education
Certificates of Participation
Series 1999 MB
3.85% 10/02/00 385 385,000
-----------
142,600,926
-----------
See accompanying notes to financial statements.
13
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
NEW JERSEY MUNICIPAL MONEY MARKET PORTFOLIO (CONCLUDED)
PAR
AS OF SEPTEMBER 30, 2000 MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
PUERTO RICO--0.1%
Puerto Rico Government Development
Bank Refunding RB Series 1985 DN
4.35%** 10/06/00 $ 100 $ 100,000
------------
TOTAL INVESTMENTS IN SECURITIES
(Cost $142,700,926*) 99.3% 142,700,926
OTHER ASSETS IN EXCESS
OF LIABILITIES 0.7% 977,279
------ ------------
NET ASSETS (Equivalent to $1.00 per
share based on 82,077,769
Institutional shares, 55,198,252
Service shares and 6,416,623
Investor A shares outstanding) 100.0% $143,678,205
====== ============
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE PER
INSTITUTIONAL, SERVICE AND
INVESTOR A SHARE
($143,678,205 [DIVIDE] 143,692,644) $1.00
=====
--------------
* Aggregate cost for Federal tax purposes.
** Rates shown are the rates as of September 30, 2000, 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.
14
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
NORTH CAROLINA MUNICIPAL MONEY MARKET PORTFOLIO
PAR
AS OF SEPTEMBER 30, 2000 MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS--101.6%
NORTH CAROLINA--100.9%
Brunswick County GO
Series 2000 MB
5.25% 05/01/01 $ 200 $ 200,838
Buncombe County GO
Series 1993 MB
5.00% 03/01/01 1,000 1,003,079
Buncombe County GO
Series 1997 DN
5.30%** 10/06/00 5,605 5,605,000
Buncombe County Industrial Facilities
and Pollution Control Financing
Authority RB (Lustar Dyeing, Inc.
Project) Series 1998 DN
5.65%** 10/06/00 2,755 2,755,000
Carteret County Certificates of
Participation Series 2000 MB
4.40% 06/01/01 180 180,000
Charlotte Airport Refunding RB
Series 1993A DN
5.40%** 10/06/00 3,800 3,800,000
Charlotte Certificates of Participation
(Equipment Acquisition Project)
Series 2000 MB
5.00% 03/01/01 1,400 1,404,585
Charlotte-Mecklenburg Hospital
Authority RB (Health Care System
Project) Series 1996B DN
5.35%** 10/06/00 1,765 1,765,000
Charlotte-Mecklenburg Hospital
Authority RB (Health Care System
Project) Series 1996C DN
5.60%** 10/06/00 700 700,000
Charlotte Public Improvement GO
Series 1990A MB
6.90% 10/02/00 1,100 1,122,056
Chatham County GO Series 1991 MB
6.25% 05/01/01 125 126,397
Cumberland County Hospital Facilities
RB (Cumberland County Hospital
System Project) Series 1991 MB
6.00% 10/01/01 2,000 2,032,840
Cumberland County GO
Series 2000 MB
5.50% 03/01/01 1,100 1,106,218
Durham Public Improvement GO
Series 2000A MB
5.25% 03/01/01 750 753,455
Forsyth County GO Series 1991 MB
6.10% 03/01/01 250 254,317
6.25% 03/01/01 300 305,162
Gaston County Industrial Facilities
and Pollution Control Financing
Authority RB (Gold Medal Homes
Project) Series 1996 DN
5.55%** 10/06/00 1,790 1,790,000
Green County Industrial Facilities and
Pollution Control Financing Authority
IDRB (Federal Paper Board Co., Inc.
Project) Series 1989 DN
5.65%** 10/06/00 1,100 1,100,000
Green County Industrial Facilities and
Pollution Control Financing Authority
IDRB (Snow Hill Tape Corp. Project)
Series 1995 DN
5.65%** 10/06/00 1,400 1,400,000
PAR
MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
NORTH CAROLINA (CONTINUED)
Greensboro Certificates of Participation
(Equipment Acquisition Project)
Series 2000 DN
5.60%** 10/06/00 $2,800 $ 2,800,000
Greensboro GO Series 1992 MB
4.90% 02/01/01 200 200,506
Guilford County Industrial Facilities
and Pollution Control Financing
Authority IDRB (Quantum Group, Inc.
Project) Series 2000 DN
5.70%** 10/06/00 150 150,000
Guilford County Industrial Facilities and
Pollution Control Financing Authority
IDRB (U.S. Label Corp. Project)
Series 1995 DN
5.65%** 10/06/00 2,500 2,500,000
Iredell County Industrial Facilities and
Pollution Control Financing Authority
RB (B and B Fabricators Project)
Series 1999 DN
5.70%** 10/06/00 1,000 1,000,000
Lee County Industrial Facilities and
Pollution Control Financing Authority
RB (Var-Arden Corp. Project)
Series 1999 DN
5.75%** 10/06/00 4,800 4,800,000
Lee County Industrial Facilities and
Pollution Control Financing Authority
Refunding IDRB (Trion, Inc. Project)
Series 1995 DN
5.70%** 10/06/00 100 100,000
Mecklenburg County GO
Series 1991 MB
6.20% 04/01/01 2,000 2,038,477
Mecklenburg County GO
Series 1991B MB
4.70% 03/01/01 900 901,503
Mecklenburg County GO
Series 1992 MB
5.60% 03/01/01 1,255 1,262,661
Mecklenburg County GO
Series 1998C DN
5.40%** 10/06/00 1,144 1,144,000
Mecklenburg County Industrial
Facilities and Pollution Control
Financing Authority IDRB (Griffith
Micro Science Project)
Series 1995 DN
5.60%** 10/06/00 1,500 1,500,000
Mecklenburg County Industrial
Facilities and Pollution Control
Financing Authority IDRB (Otto
Industries, Inc. Project)
Series 1988 DN
5.70%** 10/06/00 2,390 2,390,000
Mecklenburg County Industrial
Facilities and Pollution Control
Financing Authority IDRB (Piedmont
Plastics Project) Series 1997 DN
5.60%** 10/06/00 4,320 4,320,000
Mecklenburg County Public
Improvement GO Series 2000 MB
5.00% 02/01/01 2,000 2,006,962
See accompanying notes to financial statements.
15
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
NORTH CAROLINA MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)
PAR
AS OF SEPTEMBER 30, 2000 MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
NORTH CAROLINA (CONTINUED)
Mecklenburg County Public
Improvement GO Series 2000C DN
5.40%** 10/06/00 $2,000 $ 2,000,000
New Hanover County Industrial
Facilities IDRB (Interroll Corp.
Project) Series 1989 DN
5.70%** 10/06/00 795 795,000
North Carolina Agricultural Finance
Authority Agricultural Development
RB (Harvey Fertilizer and Gas Co.
Project) Series 1995 DN
5.65%** 10/06/00 1,340 1,340,000
North Carolina Eastern Municipal
Power Agency Power System RB
Series 1995A MB
4.65% 01/01/01 1,000 1,001,089
North Carolina Educational Facilities
Finance Agency RB (Duke University
Project) Series 1991B DN
5.45%** 10/06/00 2,300 2,300,000
North Carolina Educational Facilities
Finance Agency RB (The Bowman
Gray School of Medicine Project)
Series 1990 DN
5.50%** 10/06/00 425 425,000
North Carolina Educational Facilities
Finance Agency RB (The Bowman
Gray School of Medicine Project)
Series 1996 DN
5.50%** 10/06/00 1,800 1,800,000
North Carolina Medical Care
Commission Health Care Facility RB
(Lutheran Services for the Aging
Project) Series 1998 DN
5.50%** 10/06/00 1,050 1,050,000
North Carolina Medical Care
Commission Hospital RB (Angel
Medical Center, Inc. Project)
Series 1997 DN
5.40%** 10/06/00 900 900,000
North Carolina Medical Care
Commission Hospital RB (Baptist
Hospital Project) Series 1992B DN
5.50%** 10/06/00 600 600,000
North Carolina Medical Care
Commission Hospital RB (Baptist
Hospital Project) Series 2000 DN
5.55%** 10/06/00 500 500,000
North Carolina Medical Care
Commission Hospital RB (Duke
University Hospital Project)
Series 1985B DN
5.45%** 10/06/00 1,100 1,100,000
North Carolina Medical Care
Commission Hospital RB (Duke
University Hospital Project)
Series 1985C DN
5.45%** 10/06/00 1,500 1,500,000
North Carolina Medical Care
Commission Hospital RB (Duke
University Hospital Project)
Series 1985D DN
5.45%** 10/06/00 1,500 1,500,000
PAR
MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
NORTH CAROLINA (CONTINUED)
North Carolina Medical Care
Commission Hospital RB (Lutheran
Retirement Project) Series 1999 DN
5.70%** 10/06/00 $1,400 $ 1,400,000
North Carolina Medical Care
Commission Hospital RB (Moses H.
Cone Health System Project)
Series 1998 DN
5.50%** 10/06/00 800 800,000
North Carolina Medical Care
Commission Hospital RB (Moses H.
Cone Memorial Hospital Project)
Series 1995 DN
5.50%** 10/06/00 200 200,000
North Carolina Medical Care
Commission Hospital RB (Pooled
Equipment Financing Project)
Series 1985 DN
4.95%** 10/06/00 2,250 2,250,000
North Carolina Medical Care
Commission Hospital RB (Pooled
Equipment Financing Project)
Series 1991A DN
5.50%** 10/02/00 100 100,000
North Carolina Medical Care
Commission Hospital RB (Pooled
Equipment Financing Project)
Series 1994 DN
5.50%** 10/06/00 800 800,000
North Carolina Medical Care
Commission Hospital RB
(Presbyterian Hospital Project)
Series 1990 MB
7.37% 10/02/00 2,000 2,040,124
North Carolina Medical Care
Commission Hospital RB (Wilson
Memorial Hospital Project)
Series 1990 MB
6.50% 11/01/00 315 321,769
North Carolina State Capital
Improvement GO Series 1994A MB
4.70% 02/01/01 100 100,131
North Carolina State GO
Series 1997A MB
5.10% 03/01/01 2,000 2,008,416
Orange County Public Improvement
GO Series 2000 MB
5.20% 04/01/01 1,200 1,206,070
Raleigh County GO Series 1996 MB
5.20% 06/01/01 300 301,931
Randolph County Industrial Facilities
and Pollution Control Finance
Authority RB (Jowat Corp. Project)
Series 1999 DN
5.65%** 10/06/00 1,000 1,000,000
Rockingham County Industrial Facilities
and Pollution Control Finance
Authority RB (Medibeg, Inc. Project)
Series 1997 DN
5.65%** 10/06/00 2,800 2,800,000
Rutherford County Industrial Facilities
and Pollution Control Finance
Authority RB (All American Homes
Project) Series 1996 DN
5.75%** 10/06/00 1,300 1,300,000
See accompanying notes to financial statements.
16
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
NORTH CAROLINA MUNICIPAL MONEY MARKET PORTFOLIO (CONCLUDED)
PAR
AS OF SEPTEMBER 30, 2000 MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
NORTH CAROLINA (CONTINUED)
Rutherford County Industrial Facilities
and Pollution Control Finance
Authority RB (Thieman Metal
Technologies LLC Project)
Series 1998 DN
5.60%** 10/06/00 $2,700 $ 2,700,000
Sampson County Industrial Facilities
and Pollution Control Financing
Authority IDRB (Dubose Strapping,
Inc. Project) Series 1997 DN
5.65%** 10/06/00 1,660 1,660,000
Union County Industrial Facilities and
Pollution Control Financing Authority
IDRB (Rock-Tenn Converting Co.
Project) Series 1997 DN
5.70%** 10/06/00 1,750 1,750,000
University of North Carolina RB
(Chapel Parking System Board of
Governors of the UNC Project)
Series 1997C DN
5.45%** 10/06/00 1,700 1,700,000
University of North Carolina RB
(Kenan Memorial Stadium Project)
Series 1996 DN
5.70%** 10/06/00 2,650 2,650,000
Warren County Industrial Facilities and
Pollution Control Financing Authority
RB (Glen Raven Mills, Inc. Project)
Series 1997 DN
5.65%** 10/06/00 1,500 1,500,000
Washington County Industrial Facilities
and Pollution Control Financing
Authority RB (Mackeys Ferry Sawmill,
Inc. Project) Series 1997 DN
5.65%** 10/06/00 2,800 2,800,000
Wilkes County Industrial Facilities and
Pollution Control Financing Authority
RB (Schas Circular Industries, Inc.
Project) Series 1997A DN
5.60%** 10/06/00 1,390 1,390,000
-----------
104,107,586
-----------
PAR
MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
PUERTO RICO--0.7%
Puerto Rico Government Development
Bank Refunding RB Series 1985 DN
4.35%** 10/06/00 $ 300 $ 300,000
Puerto Rico Industrial, Medical and
Environmental Pollution Control
Facilities Financing Authority RB
(Ana G. Mendez Foundation Project)
Series 1985 DN
2.80%** 10/06/00 300 300,000
Puerto Rico Industrial, Tourist,
Education, Medical, and
Environmental Control Finance
Authority RB (Ana G. Mendez
University System Project)
Series 1998 DN
2.60%** 10/06/00 100 100,000
-----------
700,000
-----------
TOTAL INVESTMENTS IN SECURITIES
(Cost $104,807,586*) 101.6% 104,807,586
LIABILITIES IN EXCESS
OF OTHER ASSETS (1.6%) (1,639,884)
---- ------------
NET ASSETS (Equivalent to $1.00 per
share based on 102,156,504
Institutional shares, 648,354 Service
shares, 358,221
Investor A shares and 5,528
Investor B shares outstanding) 100.0% $103,167,702
====== ============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
INSTITUTIONAL, SERVICE,
INVESTOR A AND INVESTOR B
SHARE
($103,167,702 [DIVIDE] 103,168,607) $1.00
=====
--------------
* Aggregate cost for Federal tax purposes.
** Rates shown are the rates as of September 30, 2000, 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
OHIO MUNICIPAL MONEY MARKET PORTFOLIO
PAR
AS OF SEPTEMBER 30, 2000 MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS--100.5%
OHIO--100.5%
Allen County GO Series 2000 BAN
4.87% 07/18/01 $ 490 $ 491,022
American Municipal Power, Inc. RB
(Bowling Green Project)
Series 2000 BAN
4.70% 09/07/01 2,450 2,450,000
Butler County GO Series 2000 BAN
4.80% 07/11/01 400 401,188
Champaign County IDRB (Allied
Signal, Inc. Project) Series 1998 DN
5.75%** 10/06/00 1,000 1,000,000
Clermont County Health Facilities
Authority RB (Mercy Health System
Project) Series 1996A DN
5.65%** 10/06/00 300 300,000
Cleveland-Cuyahoga County Port
Authority GO Series 1999 TAN
3.70% 11/15/00 1,120 1,119,322
Clinton County Hospital RB
Series 1999 DN
5.60%** 10/06/00 450 450,000
Cuyahoga County IDRB (Actron
Manufacturing Project)
Series 1998 DN
5.60%** 10/06/00 1,140 1,140,000
Cuyahoga County IDRB (Cleveland
Gear Company, Inc. Project)
Series 1998 DN
5.70%** 10/06/00 1,900 1,900,000
Cuyahoga County IDRB (Northstar
Project) Series 1998 DN
5.70%** 10/06/00 900 900,000
Cuyahoga County IDRB (Pleasant
Lake Associates Project)
Series 1995 DN
5.60%** 10/06/00 850 850,000
Defiance County GO Series 2000A BAN
4.68% 08/02/01 1,075 1,076,059
Delaware County IDRB (Air Waves, Inc.,
Project) Series 1995 DN
5.70%** 10/06/00 820 820,000
Dover Municipal Sewer System
Improvement GO Series 2000 BAN
4.53% 04/12/01 1,100 1,101,003
East Palestine School District GO
Series 1999 BAN
4.10% 11/09/00 1,000 1,000,224
Englewood Water Systems GO
Series 2000 BAN
4.60% 09/20/01 600 601,111
Erie County IDRB (Brighton Manor Co.
Project) Series 1986 DN
5.75%** 10/06/00 750 750,000
Franklin County - Golf Pointe
Multi-Family Housing RB
Series 2000A DN
5.67%** 10/06/00 3,000 3,000,000
Franklin County Convention Facilities
Authority RB Series 1990 RAN
7.00% 12/01/00 500 512,073
Franklin County Economic Development
RB (Ferguson Steel Co., Inc. Project)
Series 1999 DN
5.75%** 10/06/00 1,400 1,400,000
PAR
MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
OHIO (CONTINUED)
Franklin County Hospital Refunding RB
(U.S. Health Corp. of Columbus
Project) Series 1996A DN
5.52%** 10/06/00 $ 745 $ 745,000
Franklin County IDRB (Alco Standard
Corp. Project) Series 1994 DN
5.75%** 10/06/00 1,200 1,200,000
Fulton County IDRB (Haas Door Co.
& Nofziger Doors International, Inc.
Project) Series 1999 DN
5.60%** 10/06/00 1,800 1,800,000
Goshen School District GO
Series 2000 BAN
4.71% 10/11/00 1,000 1,000,135
Greene County Economic Development
RB (Ashford Center Project)
Series 1995 DN
5.55%** 10/06/00 715 715,000
Greene County IDRB (AFC Stamping
& Production, Inc., Barsplice
Products Project) Series 1995 DN
5.70%** 10/06/00 860 860,000
Greene County IDRB (Antioch
Publishing Co. Project)
Series 1996 DN
5.60%** 10/06/00 1,400 1,400,000
Hamilton County Health Care Facilities
RB (Ronald McDonald House
Project) Series 2000 DN
5.63%** 10/06/00 1,740 1,740,000
Hamilton GO Series 2000 BAN
5.25% 04/26/01 600 600,813
Indian Hill Village Economic
Development RB (Cincinnati County
Day School Project) Series 1999 DN
5.35%** 10/06/00 500 500,000
Kings Local School District GO
Series 1995 MB
5.05% 12/01/00 200 200,191
Mahoning County IDRB (Serra Land
Project) Series 1997 DN
5.70%** 10/06/00 1,880 1,880,000
Mahoning County RB (Youngstown
Iron & Metal, Inc. Project)
Series 1997 DN
5.60%** 10/06/00 1,635 1,635,000
Marysville Village School
District GO Series 2000 BAN
4.79% 03/20/01 1,000 1,002,480
Medina County Housing RB (The
Oaks at Medina Project)
Series 1997B DN
5.60%** 10/06/00 500 500,000
Montgomery County Economic
Development Authority RB (Dayton
Art Institute Project) Series 1996 DN
5.55%** 10/06/00 700 700,000
Montgomery County Healthcare
Facilities RB Series 1998 DN
5.55%** 10/06/00 145 145,000
Nordonia Hills School District GO
Series 2000A BAN
4.75% 03/20/01 1,000 1,002,020
See accompanying notes to financial statements.
18
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
OHIO MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)
PAR
AS OF SEPTEMBER 30, 2000 MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
OHIO (CONTINUED)
Ohio Air Quality Development Authority
PCRB (JMG Funding Ltd. Partnership
Project) Series 1995B DN
5.60%** 10/06/00 $1,500 $ 1,500,000
Ohio Air Quality Development Authority
PCRB (Pennsylvania Power Co.
Project) Series 1997 DN
5.60%** 10/06/00 2,900 2,900,000
Ohio Air Quality Development Authority
PCRB (PPG Industries, Inc. Project)
Series 1988A DN
5.80%** 10/06/00 7,000 7,000,000
Ohio Air Quality Development Authority
PCRB (Timken Co. Project)
Series 1992 DN
5.65%** 10/04/00 1,600 1,600,000
Ohio Highway Capital Improvements
GO Series 1999D MB
4.00% 05/01/01 500 498,841
Ohio Housing Finance Agency
Multi-Family Housing RB (Lincoln
Park Association Project)
Series 1985 MB
4.40% 10/06/00 725 725,000
Ohio Housing Finance Authority RB
Series 2000AA DN
5.55%** 10/06/00 2,415 2,415,000
Ohio Housing Finance Agency RB
Series 2000C MB
4.35% 08/30/01 1,000 1,000,000
Ohio IDRB (Anomatic Corp. Project)
Series 1994 DN
5.60%** 10/05/00 1,065 1,065,000
Ohio IDRB (Ashley Ward, Inc. Project)
Series 1997 DN
5.70%** 10/06/00 1,495 1,495,000
Ohio Public Mental Health Facilities RB
Series 1991II-A MB
6.30% 12/01/00 300 306,979
Ohio State Building Authority RB
Series 1999A MB
4.00% 10/02/00 350 350,000
Ohio State Public Facilities
Commission Higher Education RB
Series 1997II-B MB
4.50% 11/01/00 200 200,040
Ohio State Water PCRB - Duquesne
Light Company (Bank of New York
SPA Project) Series 1999 DN
5.65%** 10/06/00 4,500 4,500,000
Ohio Water Authority Solid Waste
Disposal RB (American Steel &
Wire Corp. Project) Series 1995 DN
5.75%** 10/06/00 8,100 8,100,000
Ohio Water Development Authority
Refunding RB (Timken Co. Project)
Series 1992 DN
5.65%** 10/06/00 450 450,000
Olmsted Falls GO Series 2000 BAN
4.60% 10/26/00 1,100 1,100,221
Orange Village GO Series 1999 BAN
4.25% 12/28/00 1,400 1,400,645
Orange Village GO Series 2000 BAN
4.65% 12/28/00 500 500,406
PAR
MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
OHIO (CONTINUED)
Perry County GO Series 2000 BAN
4.75% 04/20/01 $1,000 $ 1,001,882
Portage County IDRB (Action Super
Abrasive Project) Series 1996 DN
5.60%** 10/06/00 1,050 1,050,000
Portage County IDRB (Lovejoy
Industries Project) Series 1994 DN
5.60%** 10/06/00 1,240 1,240,000
Rocky River GO Series 2000 BAN
4.25% 01/26/01 2,950 2,950,721
Rossford GO Series 2000 BAN
5.20% 06/27/01 900 901,894
5.96% 07/30/01 2,400 2,423,002
Sandusky County IDRB (Brighton
Manor Co. Project) Series 1986 DN
5.75%** 10/06/00 1,500 1,500,000
Strongsville GO Series 1999 BAN
3.98% 10/19/00 1,100 1,100,094
Strongsville IDRB (Web Plastics Co.
Project) Series 1997 DN
5.60%** 10/06/00 955 955,000
Summit County IDRB - Sigma Proper
Industrial Development Refunding
RB Series 2000A DN
5.60%** 10/06/00 2,150 2,150,000
Summit County IDRB (Austin Printing
Co., Inc. Project) Series 1994 DN
5.60%** 10/06/00 380 380,000
Summit County IDRB (Forest
Manufacturing Project)
Series 1994 DN
5.55%** 10/05/00 440 440,000
Summit County IDRB (JRB Co. Inc.
Project) Series 1997 DN
5.60%** 10/06/00 3,000 3,000,000
Summit County IDRB (Waltco Truck
Equipment Project) Series 1998 MB
5.00% 01/15/01 735 735,000
Sylvania GO Series 1990 BAN
7.45% 12/01/00 500 512,511
Toledo-Lucas County Port Authority
Development RB (Frostbite Brands,
Inc. Project) Series 1993 DN
5.90%** 10/06/00 880 880,000
Union Township GO Series 2000 BAN
4.75% 03/13/01 2,000 2,003,851
Wapakoneta County GO
Series 2000 BAN
5.20% 09/19/01 355 357,132
Warren County Health Care Facilities
RB (Otterbein Homes Project)
Series 1998B DN
5.65%** 10/06/00 255 255,000
Washington County GO
Series 2000 BAN
4.88% 12/21/00 500 500,707
Youngstown IDRB (Portage
Transformer Co. Project)
Series 1996 DN
5.60%** 10/06/00 3,545 3,545,000
-----------
103,876,567
-----------
See accompanying notes to financial statements.
19
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
OHIO MUNICIPAL MONEY MARKET PORTFOLIO (CONCLUDED)
AS OF SEPTEMBER 30, 2000 VALUE
------------
TOTAL INVESTMENTS IN SECURITIES
(Cost $103,876,567*) 100.5% $103,876,567
LIABILITIES IN EXCESS
OF OTHER ASSETS (0.5%) (487,242)
------ ------------
NET ASSETS (Equivalent to $1.00 per
share based on 52,103,676
Institutional shares, 10,303,416
Service shares and 41,014,103
Investor A shares outstanding) 100.0% $103,389,325
====== ============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
INSTITUTIONAL, SERVICE AND
INVESTOR A SHARE
($103,389,325 [DIVIDE] 103,421,195) $1.00
=====
--------------
* Aggregate cost for Federal tax purposes.
** Rates shown are the rates as of September 30, 2000, 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.
20
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
PENNSYLVANIA MUNICIPAL MONEY MARKET PORTFOLIO
PAR
AS OF SEPTEMBER 30, 2000 MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS--100.5%
PENNSYLVANIA--98.4%
Allegheny County Higher Education
Building Authority RB (University of
Pittsburgh Project) Series 1985C DN
5.50%** 10/06/00 $1,590 $ 1,590,000
Beaver County IDA Refunding PCRB
(Duquesne Light Co., Beaver Valley
Project) Series 1990A DN
5.55%** 10/06/00 13,700 13,700,000
Beaver County IDA Refunding PCRB
(Duquesne Light Co., Beaver Valley
Project) Series 1999D MB
4.25% 10/04/00 5,750 5,750,000
Berks County IDA Manufacturing
Facilities RB (Grafika Commercial
Printing, Inc. Project) Series 1995 DN
5.55%** 10/06/00 2,090 2,090,000
Berks County IDRB (Beacon Container
Corp. Project) Series 1997A DN
5.65%** 10/04/00 1,930 1,930,000
Berks County IDRB (Berks Products
Project) Series 1996 DN
5.55%** 10/06/00 1,940 1,940,000
Berks County IDRB (Citizen's Utilities
Co. Project) Series 1996B MB
5.25% 10/06/00 12,500 12,500,000
Bucks County IDRB (LTL Color
Compounders Project)
Series 1999B DN
5.60%** 10/06/00 4,110 4,110,000
Bucks County IDRB (SHV Real Estate,
Inc. Project) Series 1985 DN
4.45%** 10/06/00 1,900 1,900,000
Cambria County IDA Resource Recovery
RB (Cambria Cogen Co. Project)
Series 1998 DN
5.50%** 10/06/00 21,695 21,695,000
Chartiers Valley Industrial & Commercial
Development Authority RB
Series 2000B DN
5.50%** 10/06/00 4,265 4,265,000
Coatesville School District GO
Series 1991 MB
7.25% 10/02/00 1,000 1,002,739
6.70% 03/01/01 5,200 5,252,758
Council Rock School District GO
Series 1991 MB
6.40% 03/01/01 1,000 1,008,606
Crawford County IDRB Series 2000 DN
5.60%** 10/06/00 500 500,000
Cumberland County IDRB (Lane
Enterprises, Inc. Project)
Series 1994 DN
5.55%** 10/06/00 515 515,000
Cumberland County IDRB (Lawrence
Schiff Silk Co. Project)
Series 1998 DN
5.65%** 10/06/00 1,825 1,825,000
Cumberland County Municipal Authority
RB (Presbyterian Homes Project)
Series 1993A DN
5.50%** 10/06/00 6,000 6,000,000
Dallastown Area School District GO
Series 1998 DN
5.60%** 10/06/00 13,875 13,875,000
PAR
MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
PENNSYLVANIA (CONTINUED)
Dauphin County General Authority RB
(Allhealth Pooled Financing Program
Project) Series 1997 DN
5.65%** 10/06/00 $7,160 $ 7,160,000
Dauphin County General Authority RB
(Education & Health Loan Program)
Series 1997 DN
5.60%** 10/06/00 4,070 4,070,000
Delaware County IDA Airport Facilities
RB (United Parcel Service Project)
Series 1985 MB
4.25% 10/05/00 2,000 2,000,000
Delaware County IDA Environmental
Improvement Refunding RB (Sunoco,
Inc. Project) Series 1998 DN
5.60%** 10/06/00 7,000 7,000,000
Delaware County IDA PCRB (B.P. Oil,
Inc. Project) Series 1985 DN
5.60%** 10/02/00 6,250 6,250,000
Delaware County IDA Refunding PCRB
(PECO Energy Project)
Series 1993A DN
5.55%** 10/02/00 300 300,000
Delaware County IDA Solid Waste RB
(Scott Paper Co. Project)
Series 1984A DN
5.60%** 10/06/00 1,600 1,600,000
Delaware County IDA Solid Waste RB
(Scott Paper Co. Project)
Series 1984B DN
5.60%** 10/06/00 2,000 2,000,000
Delaware County IDA Solid Waste RB
(Scott Paper Co. Project)
Series 1984C DN
5.60%** 10/06/00 2,400 2,400,000
Delaware County IDA Solid Waste RB
(Scott Paper Co. Project)
Series 1984D DN
5.60%** 10/06/00 2,900 2,900,000
Delaware County IDA Solid Waste RB
(Scott Paper Co. Project)
Series 1984E DN
5.60%** 10/06/00 1,595 1,595,000
Delaware County PCRB (PECO Energy
Co. Project) MB
4.20% 10/06/00 4,900 4,900,000
4.20% 01/12/01 2,000 2,000,000
Delaware River & Bay Authority RB
Series 2000B DN
4.10%** 10/06/00 2,500 2,500,000
Delaware Valley Regional Finance
Authority Local Government RB
Series 1985A DN
5.45%** 10/06/00 1,300 1,300,000
Delaware Valley Regional Finance
Authority Local Government RB
Series 1985B DN
5.45%** 10/06/00 3,000 3,000,000
Delaware Valley Regional Finance
Authority Local Government RB
Series 1985C DN
5.45%** 10/06/00 1,300 1,300,000
See accompanying notes to financial statements.
21
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
PENNSYLVANIA MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)
PAR
AS OF SEPTEMBER 30, 2000 MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
PENNSYLVANIA (CONTINUED)
Delaware Valley Regional Finance
Authority Local Government RB
Series 1985D DN
5.45%** 10/06/00 $3,100 $ 3,100,000
Delaware Valley Regional Finance
Authority Local Government RB
Series 1986 DN
5.45%** 10/06/00 1,050 1,050,000
Eastern Pennsylvania Industrial &
Commercial Development Authority
IDRB (Electronic Data Systems
Project) Series 1993 DN
5.60%** 10/06/00 3,900 3,900,000
Elk County IDA Solid Waste RB
(Williamette Industries, Inc. Project)
Series 1992 DN
5.60%** 10/06/00 3,000 3,000,000
Emmaus General Authority Local
Government RB Series 1989 DN
5.65%** 10/06/00 1,100 1,100,000
Erie County IDRB (American Turned
Products Project) Series 1997 DN
5.70%** 10/06/00 1,860 1,860,000
Erie County IDRB (Reed Manufacturing
Project) Series 1997 DN
5.60%** 10/06/00 1,200 1,200,000
Federal Lds. Reuse Authority Bucks
County Guaranteed Project Notes
Series 2000B MB
5.00% 01/15/01 1,625 1,626,099
Franklin County IDA Health Care RB
Series 2000 DN
5.62%** 10/06/00 2,000 2,000,000
Indiana County IDRB (Conemaugh
Project) Series 1997A DN
5.65%** 10/06/00 5,110 5,110,000
Lancaster County RB (Luthercare
Project) Series 1999 DN
5.62%** 10/06/00 9,500 9,500,000
Lancaster County RB (Quarryville
Presbyterian Senior Living Facility
Project) Series 2000 DN
5.75%** 10/06/00 3,000 3,000,000
Lancaster County IDRB (Clean Creek
Partners Project) Series 2000 DN
5.62%** 10/06/00 6,175 6,175,000
Lancaster County IDRB Series 1998 DN
5.75%** 10/06/00 2,600 2,600,000
Lancaster County RB Series 2000 DN
5.60%** 10/06/00 2,500 2,500,000
Lawrence County IDRB (L & N
Metallurgical Products Project)
Series 1996 DN
5.75%** 10/06/00 3,575 3,575,000
Lebanon County Health Facilities RB
Series 1999 DN
5.62%** 10/06/00 3,000 3,000,000
Lehigh County IDA PCRB (Allegheny
Electric Co-op, Inc. Project)
Series 1984 DN
4.35%** 10/06/00 800 800,000
Lehigh County IDA PCRB (Allegheny
Electric Co-op, Inc. Project)
Series 1985A DN
4.45%** 10/06/00 4,700 4,700,000
PAR
MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
PENNSYLVANIA (CONTINUED)
Lehigh County Sewer Authority RB
Series 1985B DN
5.40%** 10/06/00 $1,370 $ 1,370,000
Luzerne County IDRB (Nardone
Brothers Baking Project)
Series 1999 DN
5.55%** 10/06/00 7,020 7,020,000
Lycoming County IDRB (Brodart Co.
Project) Series 1998A DN
5.65%** 10/06/00 1,905 1,905,000
Lycoming County IDRB (Brodart Co.
Project) Series 1998C DN
5.65%** 10/06/00 1,000 1,000,000
Montgomery County IDA Manufacturing
Facilities RB (H.P. Cadwallander, Inc.
Project) Series 1995 DN
5.65%** 10/06/00 600 600,000
Montgomery County IDRB (Apple Fresh
Foods Ltd. Project) Series 1996 DN
5.55%** 10/06/00 900 900,000
Neshaminy School District GO
Series 2000 TRAN
4.90% 06/29/01 5,000 5,008,858
Northhampton County GO
Series 2000 MB
5.25% 10/06/00 4,000 4,000,000
Northampton County IDRB (Accu
Machining Center, Inc. Project)
Series 1998B DN
5.65%** 10/06/00 2,135 2,135,000
Northampton County IDRB (Accu
Machining Center, Inc. Project)
Series 1998C DN
5.65%** 10/06/00 915 915,000
Northampton County IDRB (Citizens
Utilities Co. Project) Series 1996 DN
5.60%** 10/06/00 13,200 13,200,000
Northeastern Hospital and Education
Authority Health Care RB (Wyoming
Valley Health Care Project)
Series 1994A DN
5.80%** 10/06/00 2,700 2,700,000
Northumberland County IDA Resource
Recovery RB (Foster Wheeler Mt.
Carmel Project) Series 1987A DN
5.60%** 10/06/00 19,570 19,570,000
Northumberland County IDA Resource
Recovery RB (Foster Wheeler Mt.
Carmel Project) Series 1987B DN
5.60%** 10/06/00 590 590,000
Northumberland County IDRB (Furman
Farms, Inc. Project) Series 1995A DN
5.55%** 10/06/00 1,225 1,225,000
Pennsylvania Economic Development
Financing Authority RB (Wengers
Feed Mill, Inc. Project)
Series 1999B-1 DN
5.55%** 10/06/00 1,600 1,600,000
Pennsylvania Economic Development
Financing Authority Retirement
Facility RB (Homewood Retirement
Centers Project) Series 1992 DN
4.39%** 10/06/00 5,875 5,875,000
See accompanying notes to financial statements.
22
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
PENNSYLVANIA MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)
PAR
AS OF SEPTEMBER 30, 2000 MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
PENNSYLVANIA (CONTINUED)
Pennsylvania Energy Development
Authority RB (B & W Ebensburg
Project) Series 1986 DN
5.50%** 10/06/00 $2,775 $ 2,775,000
Pennsylvania Energy Development
Authority RB (B & W Ebensburg
Project) Series 1988 DN
5.50%** 10/06/00 2,900 2,900,000
Pennsylvania Energy Development
Authority RB (Piney Creek Project)
Series 1986A DN
5.50%** 10/04/00 14,650 14,650,000
Pennsylvania Energy Development
Authority RB (Piney Creek Project)
Series 1986C DN
5.50%** 10/06/00 3,800 3,800,000
Pennsylvania Higher Education
Assistance Agency Student Loan RB
Series 1985A MB
6.80% 12/01/00 10,195 10,238,668
Pennsylvania Higher Education
Assistance Agency Student Loan RB
Series 1988A DN
5.75%** 10/06/00 1,300 1,300,000
Pennsylvania Higher Education
Assistance Agency Student Loan RB
Series 1988B DN
5.75%** 10/06/00 6,600 6,600,000
Pennsylvania Higher Education
Assistance Agency Student Loan RB
Series 1988C DN
5.75%** 10/06/00 7,300 7,300,000
Pennsylvania Higher Education
Assistance Agency Student Loan RB
Series 1988E DN
5.75%** 10/06/00 100 100,000
Pennsylvania Higher Education
Assistance Agency Student Loan RB
Series 1994A DN
5.75%** 10/04/00 4,050 4,050,000
Pennsylvania Higher Education
Assistance Agency Student Loan RB
Series 1995A DN
5.75%** 10/06/00 3,800 3,800,000
Pennsylvania Higher Educational
Facilities Authority Health Services RB
(The University of Pennsylvania
Project) Series 1994B DN
5.50%** 10/06/00 11,560 11,560,000
Pennsylvania Higher Educational
Facilities Authority Health Services RB
(The University of Pennsylvania
Project) Series 1996C DN
5.50%** 10/06/00 13,455 13,455,000
Pennsylvania Higher Educational
Facilities Authority Health Services RB
(The University of Pennsylvania
Project) Series 1998B DN
5.50%** 10/06/00 16,905 16,905,000
Pennsylvania Higher Educational
Facilities Authority RB (Carnegie
Mellon University Project)
Series 1995C DN
5.60%** 10/02/00 1,600 1,600,000
PAR
MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
PENNSYLVANIA (CONTINUED)
Pennsylvania Higher Educational
Facilities Authority RB
Series 1991A MB
7.37% 03/01/01 $8,000 $ 8,259,251
Pennsylvania Higher Educational
Facilities Authority RB (Temple
University Project) Series 1984 DN
5.50%** 10/02/00 1,855 1,855,000
Pennsylvania Higher Educational
Facilities Authority Refunding RB
(Carnegie Mellon University Project)
Series 1995B DN
5.60%** 10/02/00 1,800 1,800,000
Pennsylvania Housing Finance Agency
RB Series 2000 PT-350 MB
4.50% 10/02/00 8,900 8,900,000
Philadelphia Hospital and Higher
Education Facilities Authority RB
(Children's Hospital of Philadelphia
Project) Series 1996A DN
5.60%** 10/02/00 1,500 1,500,000
Philadelphia IDRB (30th Street Station
Project) Series 1987 DN
4.45%** 10/06/00 6,900 6,900,000
Philadelphia IDRB (GDL Estates Corp.
Project) Series 1998B DN
5.45%** 10/06/00 680 680,000
Philadelphia IDRB (The Fox Chase
Institute for Cancer Research Center
Project) Series 1997 DN
5.60%** 10/02/00 1,200 1,200,000
Philadelphia RB Series 2000 DN
5.40%** 10/06/00 5,000 5,000,000
Philadelphia GO Series 2000A TRAN
5.00% 06/29/01 15,000 15,068,329
Pittsburgh Trust Receipts
Series 1996 SG-71 DN
5.57%** 10/06/00 10,000 10,000,000
Reading Regional Airport Authority RB
Series 1998A DN
5.60%** 10/04/00 1,500 1,500,000
Sayre Health Care Facilities Authority RB
(VHA Capital Financing Project)
Series 1985F DN
5.65%** 10/06/00 1,000 1,000,000
Sayre Health Care Facilities Authority RB
(VHA Capital Financing Project)
Series 1985H DN
5.65%** 10/06/00 900 900,000
Sayre Health Care Facilities Authority RB
(VHA Capital Financing Project)
Series 1985M DN
5.65%** 10/06/00 1,000 1,000,000
Schuylkill County IDA Resource
Recovery RB (Gilberton Power
Project) Series 1985 DN
5.45%** 10/06/00 800 800,000
Schuylkill County IDA Resource
Recovery RB (Northeastern Power
Co. Project) Series 1997B DN
5.65%** 10/02/00 1,000 1,000,000
Schuylkill County IDRB (Kaytee
Products, Inc. Project) Series 1995 DN
5.75%** 10/06/00 3,085 3,085,000
See accompanying notes to financial statements.
23
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
PENNSYLVANIA MUNICIPAL MONEY MARKET PORTFOLIO (CONCLUDED)
PAR
AS OF SEPTEMBER 30, 2000 MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
PENNSYLVANIA (CONTINUED)
Schuylkill County IDRB (Northeastern
Power Co. Project) Series 1997A DN
5.55%** 10/02/00 $1,500 $ 1,500,000
Scranton-Lackawana Health and
Welfare Authority RB (Mercy
Health System Project)
Series 1996A DN
5.65%** 10/06/00 6,300 6,300,000
Shaler Township GO Series 2000 TAN
4.37% 12/29/00 2,000 2,001,052
State Public School Building Authority
RB (Parkland School District Project)
Series 1999 DN
5.60%** 10/06/00 7,900 7,900,000
Union County IDRB (Playworld Systems,
Inc. Project) Series 1999 DN
5.65%** 10/06/00 1,000 1,000,000
Venango IDA Resource Recovery RB
(Scrubgrass Project) Series 1990A MB
4.50% 10/24/00 300 300,000
4.30% 10/25/00 4,050 4,050,000
4.50% 10/25/00 2,900 2,900,000
Venango IDA Resource Recovery RB
(Scrubgrass Project) Series 1990B MB
4.50% 10/20/00 19,365 19,365,000
4.50% 10/25/00 11,885 11,885,000
Venango IDA Resource Recovery RB
(Scrubgrass Project) Series 1993 MB
4.50% 10/24/00 9,385 9,385,000
Washington County Authority Lease RB
Series 1985B-1 DN
5.50%** 10/06/00 1,278 1,278,000
Westmoreland County IDRB (Elizabeth
Carbide Die Co. Project)
Series 1998B DN
5.60%** 10/06/00 1,350 1,350,000
York County Hospital Authority RB
(Homewood Retirement Centers of
The United Church of Christ, Inc.
Project) Series 1990 DN
4.39%** 10/06/00 7,200 7,200,000
York County IDA PCRB (PECO Energy
Co. Project) Series 1993A DN
5.55%** 10/02/00 2,400 2,400,000
York County IDRB (Allied Signal, Inc.
Project) Series 1993 DN
5.65%** 10/06/00 1,000 1,000,000
York County IDRB (York Sheet Metal,
Inc. Project) Series 1998 DN
5.60%** 10/06/00 3,240 3,240,000
-----------
537,669,360
-----------
PAR
MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
PUERTO RICO--2.1%
Puerto Rico Electric Power Authority
Trust Receipts Series 1997
SGA-43 DN
4.90%** 10/06/00 $ 800 $ 800,000
Puerto Rico Government Development
Bank Refunding RB Series 1985 DN
4.35%** 10/06/00 6,718 6,718,000
Puerto Rico Industrial, Medical and
Environmental Pollution Control
Facilities Financing Authority RB
(Ana G. Mendez Foundation Project)
Series 1985 DN
2.80%** 10/06/00 100 100,000
Puerto Rico Industrial, Tourist,
Education, Medical, and Environmental
Control Finance Authority RB (Ana G.
Mendez University System Project)
Series 1998 DN
2.60%** 10/06/00 3,500 3,500,000
------------
11,118,000
------------
TOTAL INVESTMENTS IN SECURITIES
(Cost $548,787,360*) 100.5% 548,787,360
LIABILITIES IN EXCESS OF
OTHER ASSETS (0.5%) (2,513,881)
------ ------------
NET ASSETS (Equivalent to $1.00 per
share based on 400,391,951
Institutional shares, 83,486,743
Service shares and 62,425,380
Investor A shares outstanding) 100.0% $546,273,479
====== ============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
INSTITUTIONAL, SERVICE AND
INVESTOR A SHARE
($546,273,479 [DIVIDE] 546,304,074) $1.00
=====
--------------
* Aggregate cost for Federal tax purposes.
** Rates shown are the rates as of September 30, 2000, 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.
24
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
VIRGINIA MUNICIPAL MONEY MARKET PORTFOLIO
PAR
AS OF SEPTEMBER 30, 2000 MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS--100.0%
VIRGINIA--91.6%
Alexandria IDRB (Super. & Curr.
Project) Series 1997 DN
5.40%** 10/06/00 $ 485 $ 485,000
Alexandria IDRB (Young Men's
Christian Association of Metropolitan
Washington Project) Series 1998 DN
4.49%** 10/06/00 1,910 1,910,000
Arlington County Multi-Family Housing
Refunding IDRB (Arna Valley View
Apartments Project) Series 2000 DN
5.55%** 10/06/00 1,000 1,000,000
Brunswick County IDA Exempt Facility
RB (Aegis Waste Solutions, Inc.
Project) Series 1996 DN
5.70%** 10/06/00 1,000 1,000,000
Campbell County IDRB (Hadson Power
12 Altavista Project) Series 1990A DN
5.75%** 10/02/00 300 300,000
Capital Region Airport Commission RB
(Richmond International Airport
Project) Series 1995C DN
5.70%** 10/06/00 1,200 1,200,000
Chesterfield County IDA PCRB
(Virginia Electric & Power Co. Project)
Series 1985 MB
4.25% 10/06/00 500 500,000
Chesterfield County IDRB (Blueprint
Holding, Inc. Project) Series 1997 DN
5.65%** 10/06/00 1,900 1,900,000
Commonwealth of Virginia Transportation
Authority RB Series 1999 DN
5.62%** 10/05/00 2,000 2,000,000
Dinwiddie County IDA Exempt Facility
RB (Chaparral Steel Virginia Project)
Series 1998 DN
5.75%** 10/02/00 1,000 1,000,000
Dinwiddie County IDA Exempt Facility
RB (Chaparral Steel Virginia Project)
Series 1999 DN
5.75%** 10/02/00 6,600 6,600,000
Fairfax County GO Series 1993C MB
4.60% 05/01/01 800 800,738
Fairfax County IDRB (Inova Health
Systems Project) Series 2000 DN
5.50%** 10/06/00 1,600 1,600,000
Greensville County IDRB (Perdue
Farms, Inc. Project) Series 1986 DN
5.70%** 10/06/00 1,600 1,600,000
Halifax County IDA PCRB (Virginia
Electric & Power Co. Project)
Series 1992 MB
4.30% 10/06/00 3,500 3,500,000
Hampton Public Improvement GO
Series 2000 MB
4.75% 02/01/01 1,255 1,257,449
Hanover County IDA Residential Care
Facility RB (Covenent Woods Project)
Series 1999 DN
5.50%** 10/06/00 1,400 1,400,000
King George County IDA Exempt
Facility RB (Birchwood Power
Partners Project) Series 1997 DN
5.70%** 10/02/00 400 400,000
PAR
MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
VIRGINIA (CONTINUED)
Louisa County IDRB (Pooled Financing
Project) Series 1995 DN
5.70%** 10/06/00 $ 400 $ 400,000
Lynchburg IDA Hospital Facilities RB
(VHA Mid-Atlantic States Capital
Asset Finance Program)
Series 1985B DN
5.70%** 10/06/00 600 600,000
Lynchburg IDA Hospital Facilities RB
(VHA Mid-Atlantic States Capital
Asset Finance Program)
Series 1985F DN
5.70%** 10/04/00 1,000 1,000,000
Metropolitan Washington D.C. Airport
Authority GO Series 2000 TECP
4.40% 01/24/01 2,500 2,500,000
Nelson County RB (Taylor Ramsey
Project) Series 1999 DN
5.70%** 10/06/00 1,000 1,000,000
Norfolk Airport Authority TECP
Series 1998 MB
4.35% 01/16/01 1,500 1,500,000
Norfolk IDRB (2F Realty Co. Project)
Series 1998 DN
5.65%** 10/06/00 1,300 1,300,000
Peninsula Port Authority of Virginia
Coal Terminal RB (Dominion Terminal
Associates Project) Series 1987D DN
5.55%** 10/02/00 300 300,000
Peninsula Port Authority of Virginia IDRB
(Allied-Signal, Inc. Project)
Series 1993 DN
5.65%** 10/06/00 1,000 1,000,000
Prince William County IDA PCRB
(Virginia Electric & Power Co. Project)
Series 1986 MB
4.25% 10/06/00 1,400 1,400,000
Prince William County IDRB (Colonial
Investments Facility Project)
Series 1996 DN
4.65%** 10/04/00 2,965 2,965,000
Richmond GO Public Improvement
Bonds Series 1991 MB
6.10% 01/15/01 1,750 1,758,538
Richmond GO Serial Equipment Notes
Series 2000 MB
4.87% 05/15/01 1,545 1,548,983
Richmond IDRB (PM Beef Project)
Series 1997 DN
6.00%** 10/06/00 2,500 2,500,000
Virginia Beach Development Authority
Residential Care Facility RB
(Westminster-Canterbury Project)
Series 1999B DN
5.40%** 10/06/00 1,500 1,500,000
Virginia College Building Authority
Educational Facilities RB (University
of Richmond Project) Series 1996 DN
5.40%** 10/06/00 800 800,000
Virginia Housing Development Authority
Commonwealth Mortgage GO
Series 2000 MB
4.20% 12/07/00 2,000 2,000,000
See accompanying notes to financial statements.
25
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
VIRGINIA MUNICIPAL MONEY MARKET PORTFOLIO (CONCLUDED)
PAR
AS OF SEPTEMBER 30, 2000 MATURITY (000) VALUE
-------- ----- -------------
MUNICIPAL BONDS (CONTINUED)
VIRGINIA (CONTINUED)
Virginia Resource Authority RB
(Henrico County Project)
Series 1997 DN
5.70%** 10/06/00 $2,000 $ 2,000,000
Virginia Small Business Financing
Authority IDRB (Coastal Development
Group Project) Series 1989 DN
6.20%** 10/06/00 195 195,000
Virginia Small Business Financing
Authority RB (Ennestone, Inc. Project)
Series 1999 DN
5.65%** 10/06/00 920 920,000
York County IDA PCRB (Virginia Electric
& Power Co. Project) Series 1985 MB
4.25% 10/06/00 200 200,000
-----------
55,840,708
-----------
PUERTO RICO--8.4%
Puerto Rico Electric Power Authority
Trust Receipts Series 1997 SGA-43 DN
4.90%** 10/06/00 2,800 2,800,000
Puerto Rico Industrial, Medical and
Environmental Pollution Control
Facilities Financing Authority RB
(Ana G. Mendez Foundation Project)
Series 1985 DN
2.80%** 10/06/00 1,200 1,200,000
Puerto Rico Industrial, Tourist,
Education, Medical, and
Environmental Control Finance
Authority RB (Ana G. Mendez
University System Project)
Series 1998 DN
2.60%** 10/06/00 1,100 1,100,000
-----------
5,100,000
-----------
TOTAL INVESTMENTS IN SECURITIES
(Cost $60,940,708*) 100.0% $60,940,708
====== ===========
--------------
*Aggregate cost for Federal tax purposes.
**Rates shown are the rates as of September 30, 2000, 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.
26
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
VIRGINIA MUNICIPAL MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
SEPTEMBER 30, 2000
<S> <C>
ASSETS
Investments at value .................................................... $ 60,940,708
Cash .................................................................... 18,759
Interest receivable ..................................................... 395,297
Investments sold receivable ............................................. 3,900,464
Prepaid expenses ........................................................ 5,281
------------
TOTAL ASSETS ..................................................... 65,260,509
------------
LIABILITIES
Distributions payable ................................................... 185,025
Advisory fees payable ................................................... 136
Administrative fees payable ............................................. 7,868
Transfer agent fees payable ............................................. 8,575
Other accrued expenses payable .......................................... 19,883
------------
TOTAL LIABILITIES ................................................ 221,487
------------
NET ASSETS (Equivalent to $1.00 per share based on 61,561,465 Institutional
shares, 458,048 Service shares and 3,020,101
Investor A shares outstanding) .......................................... $ 65,039,022
============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE
PER INSTITUTIONAL, SERVICE AND INVESTOR A SHARE
($65,039,022 [DIVIDE] 65,039,614) ....................................... $1.00
=====
</TABLE>
See accompanying notes to financial statements.
27
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
NEW JERSEY NORTH CAROLINA
U.S. TREASURY MUNICIPAL MUNICIPAL MUNICIPAL
MONEY MARKET MONEY MARKET MONEY MARKET MONEY MARKET MONEY MARKET
FOR THE YEAR ENDED SEPTEMBER 30, 2000 PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest ................................ $ 224,240,298 $ 47,938,163 $ 22,096,467 $ 6,218,325 $ 4,485,503
------------- ------------- ------------- ------------- -------------
EXPENSES:
Investment advisory fee ................. 14,322,665 3,708,046 2,483,294 724,743 516,672
Administration fee ...................... 5,329,064 1,418,417 980,922 289,897 206,669
Custodian fee ........................... 409,684 126,903 98,552 30,919 26,444
Transfer agent fee ...................... 1,331,839 271,421 231,515 67,673 39,083
Shareholder servicing fee ............... 2,645,077 813,951 234,097 138,744 2,811
Shareholder processing fee .............. 2,012,306 774,351 360,310 113,983 2,434
Distribution fees ....................... 75,773 -- -- 19,809 29
Legal and audit ......................... 91,033 11,869 15,931 1,095 2,927
Printing ................................ 144,000 14,572 8,474 2,198 5,690
Registration fees and expenses .......... 161,736 45,335 53,548 19,295 20,337
Trustees' fees and officers' salary ..... 54,695 16,210 7,027 2,320 2,720
Other ................................... 20,723 5,887 6,901 5,531 5,310
------------- ------------- ------------- ------------- -------------
26,598,595 7,206,962 4,480,571 1,416,207 831,126
Less fees waived ........................ (6,553,676) (2,212,233) (1,509,018) (500,588) (481,140)
------------- ------------- ------------- ------------- -------------
Total expenses ....................... 20,044,919 4,994,729 2,971,553 915,619 349,986
------------- ------------- ------------- ------------- -------------
Net investment income ................... 204,195,379 42,943,434 19,124,914 5,302,706 4,135,517
------------- ------------- ------------- ------------- -------------
Net realized gain (loss)
on investments ....................... (66,451) (15,464) (19,923) 2,950 (1,663)
------------- ------------- ------------- ------------- -------------
Net increase in net assets resulting from
operations ........................... $ 204,128,928 $ 42,927,970 $ 19,104,991 $ 5,305,656 $ 4,133,854
============= ============= ============= ============= =============
OHIO PENNSYLVANIA VIRGINIA
MUNICIPAL MUNICIPAL MUNICIPAL
MONEY MARKET MONEY MARKET MONEY MARKET
FOR THE YEAR ENDED SEPTEMBER 30, 2000 PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------- -------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest ................................ $ 4,301,878 $ 25,732,064 $ 2,316,699
------------- ------------- -------------
EXPENSES:
Investment advisory fee ................. 485,080 2,934,321 264,112
Administration fee ...................... 194,032 1,143,318 105,645
Custodian fee ........................... 22,799 107,629 17,503
Transfer agent fee ...................... 70,139 257,930 25,507
Shareholder servicing fee ............... 120,355 447,252 5,774
Shareholder processing fee .............. 78,066 317,415 4,583
Distribution fees ....................... 4,229 90,885 1,191
Legal and audit ......................... 627 12,592 3,160
Printing ................................ 588 18,711 858
Registration fees and expenses .......... 12,921 20,373 17,636
Trustees' fees and officers' salary ..... 1,768 8,938 955
Other ................................... 5,368 5,548 1,131
------------- ------------- -------------
995,972 5,364,912 448,055
Less fees waived ........................ (343,320) (1,743,425) (259,598)
------------- ------------- -------------
Total expenses ....................... 652,652 3,621,487 188,457
------------- ------------- -------------
Net investment income ................... 3,649,226 22,110,577 2,128,242
------------- ------------- -------------
Net realized gain (loss)
on investments ....................... 3,211 (17,716) --
------------- ------------- -------------
Net increase in net assets resulting from
operations ........................... $ 3,652,437 $ 22,092,861 $ 2,128,242
============= ============= =============
</TABLE>
See accompanying notes to financial statements.
28-29
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
U.S. TREASURY
MONEY MARKET PORTFOLIO MONEY MARKET PORTFOLIO
--------------------------------- -----------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
9/30/00 9/30/99 9/30/00 9/30/99
-------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income ................. $ 204,195,379 $ 155,016,091 $ 42,943,434 $ 42,598,746
Net realized gain (loss) on investments (66,451) (68,603) (15,464) 29,066
-------------- -------------- ------------- -------------
Net increase in net assets resulting
from operations ....................... 204,128,928 154,947,488 42,927,970 42,627,812
-------------- -------------- ------------- -------------
Distributions to shareholders from:
Net investment income:
Institutional Class ................... (130,621,528) (98,261,892) (16,721,443) (15,659,093)
Service Class ......................... (40,292,175) (35,699,099) (24,276,446) (24,215,597)
Hilliard Lyons Class .................. (8,252,754) -- -- --
Investor A Class ...................... (24,545,069) (20,886,959) (1,945,543) (2,723,328)
Investor B Class ...................... (293,079) (122,431) (2) --
Investor C Class ...................... (190,774) (45,710) -- (728)
-------------- -------------- ------------- -------------
Total distribution from net
investment income ................... (204,195,379) (155,016,091) (42,943,434) (42,598,746)
-------------- -------------- ------------- -------------
Capital share transactions ................ 111,229,884 285,875,157 (132,808,404) (71,420,053)
-------------- -------------- ------------- -------------
Total increase (decrease) in
net assets .......................... 111,163,433 285,806,554 (132,823,868) (71,390,987)
Net assets:
Beginning of period ................... 3,320,533,618 3,034,727,064 894,224,553 965,615,540
-------------- -------------- ------------- -------------
End of period ......................... $3,431,697,051 $3,320,533,618 $ 761,400,685 $ 894,224,553
============== ============== ============= =============
<CAPTION>
MUNICIPAL NEW JERSEY MUNICIPAL
MONEY MARKET PORTFOLIO MONEY MARKET PORTFOLIO
----------------------------- -----------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
9/30/00 9/30/99 9/30/00 9/30/99
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income ................. $ 19,124,914 $ 12,328,300 $ 5,302,706 $ 3,899,587
Net realized gain (loss) on investments (19,923) 4,275 2,950 870
------------- ------------- ------------- -------------
Net increase in net assets resulting
from operations ....................... 19,104,991 12,332,575 5,305,656 3,900,457
------------- ------------- ------------- -------------
Distributions to shareholders from:
Net investment income:
Institutional Class ................... (11,223,728) (7,889,717) (2,939,671) (2,210,426)
Service Class ......................... (4,704,341) (4,264,538) (1,655,371) (806,717)
Hilliard Lyons Class .................. (3,018,030) -- -- --
Investor A Class ...................... (178,815) (173,039) (707,664) (882,443)
Investor B Class ...................... -- -- -- (1)
Investor C Class ...................... -- (1,006) -- --
------------- ------------- ------------- -------------
Total distribution from net
investment income ................... (19,124,914) (12,328,300) (5,302,706) (3,899,587)
------------- ------------- ------------- -------------
Capital share transactions ................ 145,854,480 (2,177,494) 4,617,289 (8,860,468)
------------- ------------- ------------- -------------
Total increase (decrease) in
net assets .......................... 145,834,557 (2,173,219) 4,620,239 (8,859,598)
Net assets:
Beginning of period ................... 394,247,425 396,420,644 139,057,966 147,917,564
------------- ------------- ------------- -------------
End of period ......................... $ 540,081,982 $ 394,247,425 $ 143,678,205 $ 139,057,966
============= ============= ============= =============
<CAPTION>
NORTH CAROLINA MUNICIPAL OHIO MUNICIPAL
MONEY MARKET PORTFOLIO MONEY MARKET PORTFOLIO
----------------------------- -----------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
9/30/00 9/30/99 9/30/00 9/30/99
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income ................. $ 4,135,517 $ 6,694,961 $ 3,649,226 $ 3,135,027
Net realized gain (loss) on investments (1,663) (579) 3,211 (6,193)
------------- ------------- ------------- -------------
Net increase in net assets resulting
from operations ....................... 4,133,854 6,694,382 3,652,437 3,128,834
------------- ------------- ------------- -------------
Distributions to shareholders from:
Net investment income:
Institutional Class ................... (4,083,891) (6,365,924) (2,005,105) (1,583,637)
Service Class ......................... (39,849) (319,883) (321,434) (857,398)
Hilliard Lyons Class .................. -- -- -- --
Investor A Class ...................... (11,676) (9,154) (1,322,687) (693,992)
Investor B Class ...................... (101) -- -- --
Investor C Class ...................... -- -- -- --
------------- ------------- ------------- -------------
Total distribution from net
investment income ................... (4,135,517) (6,694,961) (3,649,226) (3,135,027)
------------- ------------- ------------- -------------
Capital share transactions ................ (76,897,336) (21,467,926) (2,063,779) (17,138,785)
------------- ------------- ------------- -------------
Total increase (decrease) in
net assets .......................... (76,898,999) (21,468,505) (2,060,568) (17,144,978)
Net assets:
Beginning of period ................... 180,066,701 201,535,206 105,449,893 122,594,871
------------- ------------- ------------- -------------
End of period ......................... $ 103,167,702 $ 180,066,701 $ 103,389,325 $ 105,449,893
============= ============= ============= =============
<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
9/30/00 9/30/99 9/30/00 9/30/99
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income ................. $ 22,110,577 $ 16,687,480 $ 2,128,242 $ 1,817,624
Net realized gain (loss) on investments (17,716) 558 -- --
------------- ------------- ------------- -------------
Net increase in net assets resulting
from operations ....................... 22,092,861 16,688,038 2,128,242 1,817,624
------------- ------------- ------------- -------------
Distributions to shareholders from:
Net investment income:
Institutional Class ................... (15,559,365) (11,581,237) (2,031,928) (1,715,802)
Service Class ......................... (2,655,048) (2,012,057) (59,111) (80,532)
Hilliard Lyons Class .................. -- -- -- --
Investor A Class ...................... (3,896,164) (3,094,186) (37,203) (21,290)
Investor B Class ...................... -- -- -- --
Investor C Class ...................... -- -- -- --
------------- ------------- ------------- -------------
Total distribution from net
investment income ................... (22,110,577) (16,687,480) (2,128,242) (1,817,624)
------------- ------------- ------------- -------------
Capital share transactions ................ (41,625,054) 53,072,152 9,690,532 (26,511,446)
------------- ------------- ------------- -------------
Total increase (decrease) in
net assets .......................... (41,642,770) 53,072,710 9,690,532 (26,511,446)
Net assets:
Beginning of period ................... 587,916,249 534,843,539 55,348,490 81,859,936
------------- ------------- ------------- -------------
End of period ......................... $ 546,273,479 $ 587,916,249 $ 65,039,022 $ 55,348,490
============= ============= ============= =============
</TABLE>
See accompanying notes to financial statements.
30-31
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
NET DISTRIBUTIONS NET NET
ASSET DISTRIBUTIONS FROM NET ASSET ASSETS
VALUE NET FROM NET REALIZED VALUE END OF
BEGINNING INVESTMENT INVESTMENT CAPITAL END OF TOTAL PERIOD
OF PERIOD INCOME INCOME GAINS PERIOD RETURN (000)
--------------------------------------------------------------------------------------------------------------------------------
----------------------
MONEY MARKET PORTFOLIO
----------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INSTITUTIONAL CLASS
9/30/00 $1.00 $0.0582 $(0.0582) $0.00 $1.00 5.98% $2,231,404
9/30/99 1.00 0.0478 (0.0478) 0.00 1.00 4.89 2,076,083
9/30/98 1.00 0.0532 (0.0532) 0.00 1.00 5.46 1,858,165
9/30/97 1.00 0.0529 (0.0529) 0.00 1.00 5.42 878,566
9/30/96 1.00 0.0533 (0.0533) 0.00 1.00 5.46 587,730
--------------------------------------------------------------------------------------------------------------------------------
SERVICE CLASS
9/30/00 $1.00 $0.0552 $(0.0552) $0.00 $1.00 5.66% $ 629,769
9/30/99 1.00 0.0448 (0.0448) 0.00 1.00 4.58 748,191
9/30/98 1.00 0.0502 (0.0502) 0.00 1.00 5.14 808,962
9/30/97 1.00 0.0499 (0.0499) 0.00 1.00 5.11 1,610,315
9/30/96 1.00 0.0503 (0.0503) 0.00 1.00 5.15 1,575,064
--------------------------------------------------------------------------------------------------------------------------------
HILLIARD LYONS CLASS
10/18/99(1) through 9/30/00 $1.00 $0.0518 $(0.0518) $0.00 $1.00 5.30% $ 154,279
--------------------------------------------------------------------------------------------------------------------------------
INVESTOR A CLASS
9/30/00 $1.00 $0.0539 $(0.0539) $0.00 $1.00 5.53% $ 405,740
9/30/99 1.00 0.0441 (0.0441) 0.00 1.00 4.50 486,578
9/30/98 1.00 0.0495 (0.0495) 0.00 1.00 5.06 365,458
9/30/97 1.00 0.0491 (0.0491) 0.00 1.00 5.02 256,039
9/30/96 1.00 0.0485 (0.0485) 0.00 1.00 4.96 162,099
--------------------------------------------------------------------------------------------------------------------------------
INVESTOR B CLASS
9/30/00 $1.00 $0.0475 $(0.0475) $0.00 $1.00 4.85% $ 6,371
9/30/99 1.00 0.0371 (0.0371) 0.00 1.00 3.77 5,414
9/30/98 1.00 0.0426 (0.0426) 0.00 1.00 4.34 1,805
9/30/97 1.00 0.0424 (0.0424) 0.00 1.00 4.32 238
9/30/96 1.00 0.0426 (0.0426) 0.00 1.00 4.34 138
--------------------------------------------------------------------------------------------------------------------------------
INVESTOR C CLASS
9/30/00 $1.00 $0.0475 $(0.0475) $0.00 $1.00 4.85% $ 4,134
9/30/99 1.00 0.0371 (0.0371) 0.00 1.00 3.77 4,268
9/30/98 1.00 0.0426 (0.0426) 0.00 1.00 4.34 337
10/17/96(1) through 9/30/97 1.00 0.0390 (0.0390) 0.00 1.00 3.97 2
--------------------------------------------------------------------------------------------------------------------------------
------------------------------------
U.S. TREASURY MONEY MARKET PORTFOLIO
------------------------------------
INSTITUTIONAL CLASS
9/30/00 $1.00 $0.0543 $(0.0543) $0.00 $1.00 5.56% $ 317,272
9/30/99 1.00 0.0453 (0.0453) 0.00 1.00 4.63 324,879
9/30/98 1.00 0.0519 (0.0519) 0.00 1.00 5.32 297,161
9/30/97 1.00 0.0515 (0.0515) 0.00 1.00 5.27 162,052
9/30/96 1.00 0.0519 (0.0519) 0.00 1.00 5.32 167,193
--------------------------------------------------------------------------------------------------------------------------------
SERVICE CLASS
9/30/00 $1.00 $0.0513 $(0.0513) $0.00 $1.00 5.25% $ 412,321
9/30/99 1.00 0.0423 (0.0423) 0.00 1.00 4.31 524,122
9/30/98 1.00 0.0489 (0.0489) 0.00 1.00 5.00 596,644
9/30/97 1.00 0.0485 (0.0485) 0.00 1.00 4.93 836,151
9/30/96 1.00 0.0489 (0.0489) 0.00 1.00 5.00 955,454
--------------------------------------------------------------------------------------------------------------------------------
INVESTOR A CLASS
9/30/00 $1.00 $0.0497 $(0.0497) $0.00 $1.00 5.09% $ 31,808
9/30/99 1.00 0.0412 (0.0412) 0.00 1.00 4.20 45,224
9/30/98 1.00 0.0476 (0.0476) 0.00 1.00 4.87 71,811
9/30/97 1.00 0.0468 (0.0468) 0.00 1.00 4.75 43,425
9/30/96 1.00 0.0467 (0.0467) 0.00 1.00 4.77 10,630
--------------------------------------------------------------------------------------------------------------------------------
INVESTOR B CLASS
1/10/00(1) through 2/7/00 $1.00 $0.0037 $(0.0037) $0.00 $1.00 0.37% $ --(7)
--------------------------------------------------------------------------------------------------------------------------------
INVESTOR C CLASS
12/8/98(1) through 5/25/99 $1.00 $0.0138 $(0.0138) $0.00 $1.00 1.39% $ --(3)
<CAPTION>
RATIO OF EXPENSES INVESTMENT INCOME
RATIO OF TO AVERAGE RATIO OF NET TO AVERAGE
EXPENSES TO NET ASSETS INVESTMENT INCOME NET ASSETS
AVERAGE NET (EXCLUDING TO AVERAGE NET (EXCLUDING
ASSETS WAIVERS) ASSETS WAIVERS)
---------------------------------------------------------------------------------------------------------
----------------------
MONEY MARKET PORTFOLIO
----------------------
<S> <C> <C> <C> <C>
INSTITUTIONAL CLASS
9/30/00 0.42% 0.60% 5.83% 5.65%
9/30/99 0.42 0.61 4.78 4.59
9/30/98 0.39 0.63 5.32 5.08
9/30/97 0.32 0.65 5.30 4.97
9/30/96 0.29 0.65 5.34 4.98
---------------------------------------------------------------------------------------------------------
SERVICE CLASS
9/30/00 0.72% 0.90% 5.49% 5.31%
9/30/99 0.72 0.91 4.48 4.29
9/30/98 0.69 0.93 5.03 4.79
9/30/97 0.61 0.94 4.99 4.66
9/30/96 0.59 0.95 5.00 4.64
---------------------------------------------------------------------------------------------------------
HILLIARD LYONS CLASS
10/18/99(1) through 9/30/00 0.91%(2) 1.09%(2) 5.43%(2) 5.25%(2)
---------------------------------------------------------------------------------------------------------
INVESTOR A CLASS
9/30/00 0.85% 1.03% 5.37% 5.19%
9/30/99 0.80 0.99 4.40 4.21
9/30/98 0.77 1.01 4.94 4.70
9/30/97 0.70 1.03 4.92 4.59
9/30/96 0.74 1.10 4.81 4.45
---------------------------------------------------------------------------------------------------------
INVESTOR B CLASS
9/30/00 1.49% 1.67% 4.84% 4.66%
9/30/99 1.49 1.68 3.71 3.52
9/30/98 1.48 1.72 4.22 3.98
9/30/97 1.39 1.72 4.26 3.93
9/30/96 1.36 1.73 4.18 3.82
---------------------------------------------------------------------------------------------------------
INVESTOR C CLASS
9/30/00 1.49% 1.67% 4.77% 4.59%
9/30/99 1.49 1.68 3.71 3.52
9/30/98 1.49 1.73 4.22 3.98
10/17/96(1) through 9/30/97 1.50(2) 1.83(2) 4.01(2) 3.68(2)
---------------------------------------------------------------------------------------------------------
------------------------------------
U.S. TREASURY MONEY MARKET PORTFOLIO
------------------------------------
INSTITUTIONAL CLASS
9/30/00 0.41% 0.68% 5.43% 5.16%
9/30/99 0.41 0.68 4.53 4.26
9/30/98 0.38 0.69 5.19 4.88
9/30/97 0.31 0.69 5.15 4.77
9/30/96 0.29 0.69 5.18 4.78
---------------------------------------------------------------------------------------------------------
SERVICE CLASS
9/30/00 0.71% 0.98% 5.10% 4.83%
9/30/99 0.71 0.98 4.23 3.96
9/30/98 0.68 0.99 4.90 4.59
9/30/97 0.61 0.99 4.85 4.47
9/30/96 0.59 0.99 4.84 4.45
---------------------------------------------------------------------------------------------------------
INVESTOR A CLASS
9/30/00 0.86% 1.13% 4.91% 4.64%
9/30/99 0.82 1.09 4.12 3.85
9/30/98 0.81 1.12 5.57 5.26
9/30/97 0.78 1.16 4.70 4.32
9/30/96 0.79 1.19 4.60 4.20
---------------------------------------------------------------------------------------------------------
INVESTOR B CLASS
1/10/00(1) through 2/7/00 1.48%(2) 1.75%(2) 4.70%(2) 4.43%(2)
---------------------------------------------------------------------------------------------------------
INVESTOR C CLASS
12/8/98(1) through 5/25/99 1.48%(2) 1.75%(2) 3.46%(2) 3.19%(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 TOTAL
OF PERIOD INCOME INCOME GAINS PERIOD RETURN
----------------------------------------------------------------------------------------------------------------------
--------------------------------
MUNICIPAL MONEY MARKET PORTFOLIO
--------------------------------
<S> <C> <C> <C> <C> <C> <C>
INSTITUTIONAL CLASS
9/30/00 $1.00 $0.0356 $(0.0356) $0.00 $1.00 3.62%
9/30/99 1.00 0.0281 (0.0281) 0.00 1.00 2.85
9/30/98 1.00 0.0327 (0.0327) 0.00 1.00 3.32
9/30/97 1.00 0.0337 (0.0337) 0.00 1.00 3.42
9/30/96 1.00 0.0339 (0.0339) 0.00 1.00 3.41
----------------------------------------------------------------------------------------------------------------------
SERVICE CLASS
9/30/00 $1.00 $0.0326 $(0.0326) $0.00 $1.00 3.31%
9/30/99 1.00 0.0252 (0.0252) 0.00 1.00 2.54
9/30/98 1.00 0.0297 (0.0297) 0.00 1.00 3.01
9/30/97 1.00 0.0307 (0.0307) 0.00 1.00 3.11
9/30/96 1.00 0.0309 (0.0309) 0.00 1.00 3.10
----------------------------------------------------------------------------------------------------------------------
HILLIARD LYONS CLASS
10/26/99(1) through 9/30/00 $1.00 $0.0316 $(0.0316) $0.00 $1.00 3.21%
----------------------------------------------------------------------------------------------------------------------
INVESTOR A CLASS
9/30/00 $1.00 $0.0309 $(0.0309) $0.00 $1.00 3.13%
9/30/99 1.00 0.0235 (0.0235) 0.00 1.00 2.37
9/30/98 1.00 0.0280 (0.0280) 0.00 1.00 2.83
9/30/97 1.00 0.0290 (0.0290) 0.00 1.00 2.93
9/30/96 1.00 0.0288 (0.0288) 0.00 1.00 2.88
----------------------------------------------------------------------------------------------------------------------
INVESTOR C CLASS
10/1/98 through 12/18/98 $1.00 $0.0040 $(0.0040) $0.00 $1.00 0.40%
9/30/98(6) 1.00 0.0133 (0.0133) 0.00 1.00 1.34
9/12/97(1) through 9/30/97 1.00 0.0013 (0.0013) 0.00 1.00 0.13
----------------------------------------------------------------------------------------------------------------------
-------------------------------------------
NEW JERSEY MUNICIPAL MONEY MARKET PORTFOLIO
-------------------------------------------
INSTITUTIONAL CLASS
9/30/00 $1.00 $0.0347 $(0.0347) $0.00 $1.00 3.52%
9/30/99 1.00 0.0279 (0.0279) 0.00 1.00 2.83
9/30/98 1.00 0.0319 (0.0319) 0.00 1.00 3.24
9/30/97 1.00 0.0323 (0.0323) 0.00 1.00 3.28
2/1/96 through 9/30/96 1.00 0.0207 (0.0207) 0.00 1.00 2.09
1/16/96(1) through 1/31/96 1.00 0.0000 (0.0000) 0.00 1.00 3.07
----------------------------------------------------------------------------------------------------------------------
SERVICE CLASS
9/30/00 $1.00 $0.0317 $(0.0317) $0.00 $1.00 3.21%
9/30/99 1.00 0.0249 (0.0249) 0.00 1.00 2.52
9/30/98 1.00 0.0289 (0.0289) 0.00 1.00 2.93
9/30/97 1.00 0.0293 (0.0293) 0.00 1.00 2.96
2/1/96 through 9/30/96 1.00 0.0187 (0.0187) 0.00 1.00 1.89
3/1/95 through 1/31/96 1.00 0.0300 (0.0300) 0.00 1.00 3.23
----------------------------------------------------------------------------------------------------------------------
INVESTOR A CLASS
9/30/00 $1.00 $0.0292 $(0.0292) $0.00 $1.00 2.96%
9/30/99 1.00 0.0227 (0.0227) 0.00 1.00 2.30
9/30/98 1.00 0.0265 (0.0265) 0.00 1.00 2.68
9/30/97 1.00 0.0268 (0.0268) 0.00 1.00 2.71
2/1/96 through 9/30/96 1.00 0.0175 (0.0175) 0.00 1.00 1.76
1/16/96(1) through 1/31/96 1.00 0.0000 (0.0000) 0.00 1.00 2.66
----------------------------------------------------------------------------------------------------------------------
INVESTOR B CLASS
10/1/99 through 2/8/00 $1.00 $0.0077 $(0.0077) $0.00 $1.00 0.77%
9/30/99 1.00 0.0094 (0.0094) 0.00 1.00 0.94
5/13/98(5) through 9/30/98 1.00 0.0079 (0.0079) 0.00 1.00 0.79
3/20/97(1) through 7/17/97 1.00 0.0077 (0.0077) 0.00 1.00 0.77
----------------------------------------------------------------------------------------------------------------------
<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
PERIOD AVERAGE NET (EXCLUDING TO AVERAGE NET (EXCLUDING
(000) ASSETS WAIVERS) ASSETS WAIVERS)
---------------------------------------------------------------------------------------------------------------------
--------------------------------
MUNICIPAL MONEY MARKET PORTFOLIO
--------------------------------
<S> <C> <C> <C> <C> <C>
INSTITUTIONAL CLASS
9/30/00 $ 314,307 0.42% 0.70% 3.63% 3.35%
9/30/99 238,281 0.42 0.70 2.80 2.52
9/30/98 246,733 0.39 0.71 3.25 2.93
9/30/97 58,747 0.31 0.72 3.36 2.95
9/30/96 43,936 0.29 0.73 3.37 2.93
----------------------------------------------------------------------------------------------------------------------
SERVICE CLASS
9/30/00 $ 112,807 0.72% 1.00% 3.23% 2.95%
9/30/99 151,261 0.72 1.00 2.50 2.22
9/30/98 140,155 0.69 1.01 2.96 2.64
9/30/97 327,910 0.61 1.02 3.06 2.65
9/30/96 261,617 0.59 1.03 3.08 2.64
----------------------------------------------------------------------------------------------------------------------
HILLIARD LYONS CLASS
10/26/99(1) through 9/30/00 $ 105,57(2) 0.66%(2) 0.94%(2) 3.42%(2) 3.14%(2)
----------------------------------------------------------------------------------------------------------------------
INVESTOR A CLASS
9/30/00 $ 7,396 0.89% 1.17% 3.09% 2.81%
9/30/99 4,705 0.89 1.17 2.33 2.05
9/30/98 9,227 0.86 1.18 2.80 2.48
9/30/97 8,468 0.79 1.20 2.92 2.51
9/30/96 1,851 0.77 1.21 2.80 2.36
----------------------------------------------------------------------------------------------------------------------
INVESTOR C CLASS
10/1/98 through 12/18/98 --() 1.49%(2) 1.77%(2) 1.73%(2) 1.45%(2)
9/30/98(6) 306 1.47 1.79 2.08 1.76
9/12/97(1) through 9/30/97 12 1.32(2) 1.73(2) 2.63(2) 2.22(2)
-------------------------------------------
NEW JERSEY MUNICIPAL MONEY MARKET PORTFOLIO
-------------------------------------------
INSTITUTIONAL CLASS
9/30/00 $ 82,080 0.39% 0.70% 3.45% 3.14%
9/30/99 79,568 0.39 0.71 2.79 2.47
9/30/98 68,771 0.38 0.75 3.17 2.80
9/30/97 7,432 0.32 0.76 3.27 2.83
2/1/96 through 9/30/96 614 0.29(2) 0.78(2) 3.07(2) 2.58(2)
1/16/96(1) through 1/31/96 4,195 0.29(2) 0.78(2) 3.07(2) 2.58(2)
----------------------------------------------------------------------------------------------------------------------
SERVICE CLASS
9/30/00 $ 55,177 0.69% 1.00% 3.23% 2.92%
9/30/99 37,120 0.69 1.01 2.49 2.17
9/30/98 35,152 0.67 1.04 2.89 2.52
9/30/97 101,294 0.61 1.05 2.93 2.49
2/1/96 through 9/30/96 68,139 0.59(2) 1.08(2) 2.82(2) 2.33(2)
3/1/95 through 1/31/96 56,958 0.70(2) 0.74(2) 3.17(2) 3.13(2)
----------------------------------------------------------------------------------------------------------------------
INVESTOR A CLASS
9/30/00 $ 6,421 0.93% 1.24% 2.86% 2.55%
9/30/99 22,370 0.91 1.23 2.27 1.95
9/30/98 43,995 0.91 1.28 2.64 2.27
9/30/97 21,691 0.86 1.30 2.68 2.24
2/1/96 through 9/30/96 17,314 0.78(2) 1.27(2) 2.63(2) 2.15(2)
1/16/96(1) through 1/31/96 21,66(2) 0.71(2) 1.20(2) 2.66(2) 2.17(2)
----------------------------------------------------------------------------------------------------------------------
INVESTOR B CLASS
10/1/99 through 2/8/00 $ --(7) 1.46%(2) 1.77%(2) 2.33%(2) 2.02%(2)
9/30/99 -- 1.46 1.78 1.72 1.40
5/13/98(5) through 9/30/98 -- 1.44(2) 1.81(2) 2.12(2) 1.75(2)
3/20/97(1) through 7/17/97 --(4) 1.37(2) 1.81(2) 2.35(2) 1.91(2)
----------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
34-35
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET DISTRIBUTIONS NET NET
ASSET DISTRIBUTIONS FROM NET ASSET ASSETS
VALUE NET FROM NET REALIZED VALUE END OF
BEGINNING INVESTMENT INVESTMENT CAPITAL END OF TOTAL PERIOD
OF PERIOD INCOME INCOME GAINS PERIOD RETURN (000)
---------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------
NORTH CAROLINA MUNICIPAL MONEY MARKET PORTFOLIO
-----------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INSTITUTIONAL CLASS
9/30/00 $1.00 $0.0362 $(0.0362) $0.00 $1.00 3.68% $ 102,155
9/30/99 1.00 0.0288 (0.0288) 0.00 1.00 2.92 178,059
9/30/98 1.00 0.0335 (0.0335) 0.00 1.00 3.40 181,984
9/30/97 1.00 0.0334 (0.0334) 0.00 1.00 3.39 147,658
9/30/96 1.00 0.0338 (0.0338) 0.00 1.00 3.43 112,097
---------------------------------------------------------------------------------------------------------------------------------
SERVICE CLASS
9/30/00 $1.00 $0.0332 $(0.0332) $0.00 $1.00 3.37% $ 649
9/30/99 1.00 0.0258 (0.0258) 0.00 1.00 2.61 1,639
9/30/98 1.00 0.0305 (0.0305) 0.00 1.00 3.09 19,306
9/30/97 1.00 0.0304 (0.0304) 0.00 1.00 3.08 23,704
9/30/96 1.00 0.0308 (0.0308) 0.00 1.00 3.12 7,463
---------------------------------------------------------------------------------------------------------------------------------
INVESTOR A CLASS
9/30/00 $1.00 $0.0315 $(0.0315) $0.00 $1.00 3.20% $ 358
9/30/99 1.00 0.0241 (0.0241) 0.00 1.00 2.44 369
9/30/98 1.00 0.0288 (0.0288) 0.00 1.00 2.92 245
9/30/97 1.00 0.0287 (0.0287) 0.00 1.00 2.91 304
9/30/96 1.00 0.0286 (0.0286) 0.00 1.00 2.90 111
---------------------------------------------------------------------------------------------------------------------------------
INVESTOR B CLASS
1/12/00(1) through 9/30/00 $1.00 $0.0185 $(0.0185) $0.00 $1.00 1.86% $ 6
---------------------------------------------------------------------------------------------------------------------------------
-------------------------------------
OHIO MUNICIPAL MONEY MARKET PORTFOLIO
-------------------------------------
INSTITUTIONAL CLASS
9/30/00 $1.00 $0.0361 $(0.0361) $0.00 $1.00 3.67% $ 52,095
9/30/99 1.00 0.0294 (0.0294) 0.00 1.00 2.98 49,237
9/30/98 1.00 0.0334 (0.0334) 0.00 1.00 3.39 48,614
9/30/97 1.00 0.0340 (0.0340) 0.00 1.00 3.45 23,739
9/30/96 1.00 0.0346 (0.0346) 0.00 1.00 3.52 32,944
---------------------------------------------------------------------------------------------------------------------------------
SERVICE CLASS
9/30/00 $1.00 $0.0331 $(0.0331) $0.00 $1.00 3.36% $ 10,284
9/30/99 1.00 0.0264 (0.0264) 0.00 1.00 2.67 11,284
9/30/98 1.00 0.0304 (0.0304) 0.00 1.00 3.08 58,077
9/30/97 1.00 0.0310 (0.0310) 0.00 1.00 3.15 58,160
9/30/96 1.00 0.0316 (0.0316) 0.00 1.00 3.21 45,525
---------------------------------------------------------------------------------------------------------------------------------
INVESTOR A CLASS
9/30/00 $1.00 $0.0313 $(0.0313) $0.00 $1.00 3.18% $ 41,010
9/30/99 1.00 0.0246 (0.0246) 0.00 1.00 2.49 44,929
9/30/98 1.00 0.0286 (0.0286) 0.00 1.00 2.90 15,904
9/30/97 1.00 0.0292 (0.0292) 0.00 1.00 2.96 15,876
9/30/96 1.00 0.0293 (0.0293) 0.00 1.00 2.98 5,672
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------
PENNSYLVANIA MUNICIPAL MONEY MARKET PORTFOLIO
---------------------------------------------
INSTITUTIONAL CLASS
9/30/00 $1.00 $0.0354 $(0.0354) $0.00 $1.00 3.60% $ 400,378
9/30/99 1.00 0.0280 (0.0280) 0.00 1.00 2.84 376,402
9/30/98 1.00 0.0322 (0.0322) 0.00 1.00 3.27 350,249
9/30/97 1.00 0.0332 (0.0332) 0.00 1.00 3.37 229,164
9/30/96 1.00 0.0334 (0.0334) 0.00 1.00 3.40 198,822
---------------------------------------------------------------------------------------------------------------------------------
SERVICE CLASS
9/30/00 $1.00 $0.0324 $(0.0324) $0.00 $1.00 3.29% $ 83,474
9/30/99 1.00 0.0250 (0.0250) 0.00 1.00 2.53 76,173
9/30/98 1.00 0.0292 (0.0292) 0.00 1.00 2.97 73,735
9/30/97 1.00 0.0302 (0.0302) 0.00 1.00 3.06 234,472
9/30/96 1.00 0.0304 (0.0304) 0.00 1.00 3.04 224,197
---------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
RATIO OF NET
RATIO OF EXPENSES INVESTMENT INCOME
RATIO OF TO AVERAGE RATIO OF NET TO AVERAGE
EXPENSES TO NET ASSETS INVESTMENT INCOME NET ASSETS
AVERAGE NET (EXCLUDING TO AVERAGE NET (EXCLUDING
ASSETS WAIVERS) ASSETS WAIVERS)
-------------------------------------------------------------------------------------------------------
-----------------------------------------------
NORTH CAROLINA MUNICIPAL MONEY MARKET PORTFOLIO
-----------------------------------------------
<S> <C> <C> <C> <C>
INSTITUTIONAL CLASS
9/30/00 0.30% 0.72% 3.62% 3.20%
9/30/99 0.30 0.70 2.87 2.47
9/30/98 0.29 0.74 3.35 2.90
9/30/97 0.28 0.73 3.34 2.89
9/30/96 0.25 0.74 3.33 2.84
-------------------------------------------------------------------------------------------------------
SERVICE CLASS
9/30/00 0.60% 1.02% 3.20% 2.78%
9/30/99 0.60 1.00 2.57 2.17
9/30/98 0.60 1.05 3.04 2.59
9/30/97 0.60 1.05 3.04 2.59
9/30/96 0.55 1.04 3.06 2.56
-------------------------------------------------------------------------------------------------------
INVESTOR A CLASS
9/30/00 0.77% 1.19% 3.15% 2.73%
9/30/99 0.77 1.17 2.40 2.00
9/30/98 0.76 1.21 2.88 2.43
9/30/97 0.76 1.21 2.88 2.43
9/30/96 0.76 1.25 2.83 2.34
-------------------------------------------------------------------------------------------------------
INVESTOR B CLASS
1/12/00(1) through 9/30/00 1.37%(2) 1.79%(2) 2.61%(2) 2.19%(2)
-------------------------------------------------------------------------------------------------------
-------------------------------------
OHIO MUNICIPAL MONEY MARKET PORTFOLIO
-------------------------------------
INSTITUTIONAL CLASS
9/30/00 0.39% 0.71% 3.60% 3.28%
9/30/99 0.39 0.71 2.95 2.63
9/30/98 0.36 0.72 3.36 3.00
9/30/97 0.30 0.73 3.37 2.94
9/30/96 0.29 0.75 3.47 3.01
-------------------------------------------------------------------------------------------------------
SERVICE CLASS
9/30/00 0.69% 1.01% 3.29% 2.97%
9/30/99 0.69 1.01 2.65 2.33
9/30/98 0.67 1.03 3.04 2.68
9/30/97 0.61 1.03 3.10 2.68
9/30/96 0.59 1.05 3.17 2.71
-------------------------------------------------------------------------------------------------------
INVESTOR A CLASS
9/30/00 0.87% 1.19% 3.13% 2.81%
9/30/99 0.87 1.19 2.47 2.15
9/30/98 0.85 1.21 2.86 2.50
9/30/97 0.79 1.21 2.92 2.50
9/30/96 0.79 1.25 2.88 2.42
-------------------------------------------------------------------------------------------------------
---------------------------------------------
PENNSYLVANIA MUNICIPAL MONEY MARKET PORTFOLIO
---------------------------------------------
INSTITUTIONAL CLASS
9/30/00 0.42% 0.68% 3.53% 3.27%
9/30/99 0.42 0.70 2.80 2.52
9/30/98 0.39 0.71 3.19 2.87
9/30/97 0.30 0.70 3.31 2.91
9/30/96 0.29 0.71 3.34 2.92
-------------------------------------------------------------------------------------------------------
SERVICE CLASS
9/30/00 0.72% 0.98% 3.25% 2.99%
9/30/99 0.72 1.00 2.50 2.22
9/30/98 0.69 1.01 2.92 2.60
9/30/97 0.61 1.01 3.01 2.61
9/30/96 0.59 1.01 3.02 2.59
-------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
36-37
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
NET DISTRIBUTIONS NET NET
ASSET DISTRIBUTIONS FROM NET ASSET ASSETS
VALUE NET FROM NET REALIZED VALUE END OF
BEGINNING INVESTMENT INVESTMENT CAPITAL END OF TOTAL PERIOD
OF PERIOD INCOME INCOME GAINS PERIOD RETURN (000)
--------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------
PENNSYLVANIA MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)
---------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTOR A CLASS
9/30/00 $1.00 $0.0304 $(0.0304) $0.00 $1.00 3.08% $ 62,421
9/30/99 1.00 0.0235 (0.0235) 0.00 1.00 2.37 135,341
9/30/98 1.00 0.0276 (0.0276) 0.00 1.00 2.80 110,860
9/30/97 1.00 0.0285 (0.0285) 0.00 1.00 2.89 98,218
9/30/96 1.00 0.0281 (0.0281) 0.00 1.00 2.90 63,424
-----------------------------------------
VIRGINIA MUNICIPAL MONEY MARKET PORTFOLIO
-----------------------------------------
INSTITUTIONAL CLASS
9/30/00 $1.00 $0.0367 $(0.0367) $0.00 $1.00 3.73% $ 61,561
9/30/99 1.00 0.0294 (0.0294) 0.00 1.00 2.98 51,301
9/30/98 1.00 0.0338 (0.0338) 0.00 1.00 3.43 77,812
9/30/97 1.00 0.0347 (0.0347) 0.00 1.00 3.53 62,834
9/30/96 1.00 0.0348 (0.0348) 0.00 1.00 3.54 38,553
--------------------------------------------------------------------------------------------------------------------------------
SERVICE CLASS
9/30/00 $1.00 $0.0337 $(0.0337) $0.00 $1.00 3.42% $ 458
9/30/99 1.00 0.0264 (0.0264) 0.00 1.00 2.68 2,786
9/30/98 1.00 0.0308 (0.0308) 0.00 1.00 3.13 3,405
9/30/97 1.00 0.0317 (0.0317) 0.00 1.00 3.22 5,244
9/30/96 1.00 0.0318 (0.0318) 0.00 1.00 3.25 14,968
--------------------------------------------------------------------------------------------------------------------------------
INVESTOR A CLASS
9/30/008 $1.00 $0.0288 $(0.0288) $0.00 $1.00 2.92% $ 3,020
9/30/99 1.00 0.0237 (0.0237) 0.00 1.00 2.40 1,261
9/30/98 1.00 0.0280 (0.0280) 0.00 1.00 2.84 643
5/27/97(1) through 9/30/97 1.00 0.0102 (0.0102) 0.00 1.00 1.03 1,096
<CAPTION>
RATIO OF NET
RATIO OF EXPENSES INVESTMENT INCOME
RATIO OF TO AVERAGE RATIO OF NET TO AVERAGE
EXPENSES TO NET ASSETS INVESTMENT INCOME NET ASSETS
AVERAGE NET (EXCLUDING TO AVERAGE NET (EXCLUDING
ASSETS WAIVERS) ASSETS WAIVERS)
----------------------------------------------------------------------------------------------------
---------------------------------------------------------
PENNSYLVANIA MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)
---------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTOR A CLASS
9/30/00 0.92% 1.18% 3.00% 2.74%
9/30/99 0.88 1.16 2.34 2.06
9/30/98 0.85 1.17 2.75 2.43
9/30/97 0.77 1.17 2.85 2.45
9/30/96 0.81 1.23 2.81 2.39
-----------------------------------------
VIRGINIA MUNICIPAL MONEY MARKET PORTFOLIO
-----------------------------------------
INSTITUTIONAL CLASS
9/30/00 0.30% 0.74% 3.65% 3.21%
9/30/99 0.30 0.75 2.95 2.50
9/30/98 0.30 0.77 3.37 2.90
9/30/97 0.22 0.81 3.49 2.90
9/30/96 0.14 0.82 3.47 2.79
----------------------------------------------------------------------------------------------------
SERVICE CLASS
9/30/00 0.60% 1.04% 3.17% 2.73%
9/30/99 0.60 1.05 2.65 2.20
9/30/98 0.60 1.07 3.08 2.61
9/30/97 0.48 1.07 3.12 2.53
9/30/96 0.45 1.12 3.05 2.38
----------------------------------------------------------------------------------------------------
INVESTOR A CLASS
9/30/008 0.87% 1.31% 3.11% 2.67%
9/30/99 0.87 1.32 2.38 1.93
9/30/98 0.87 1.34 2.85 2.38
5/27/97(1) through 9/30/97 0.86(2) 1.45(2) 2.95(2) 2.36(2)
<FN>
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 cumulative periods that the class
was opened.
7 There were no Investor B shares outstanding as of September 30, 2000.
8 This class has closed and reopened during the fiscal year. The financial
highlights are reflective of the cumulative periods that the class was
opened.
</FN>
</TABLE>
See accompanying notes to financial statements.
38
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
BlackRock Funds[SERVICE MARK] ("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 39 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 seven 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 Hilliard Lyons Investor A
---------------------------------------------------------------------------------------------------------------------------
Contractual Actual Contractual Actual Contractual Actual Contractual Actual
Fees Fees(4) Fees(1) Fees(4) Fees(2) Fees(4) Fees(2) Fees(4)
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Money Market None None 0.30% 0.30% 0.50% 0.40% 0.50% 0.40%
---------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Money Market None None 0.30% 0.30% N/A N/A 0.50% 0.40%
---------------------------------------------------------------------------------------------------------------------------
Municipal Money Market None None 0.30% 0.30% 0.50% 0.15% 0.50% 0.40%
---------------------------------------------------------------------------------------------------------------------------
New Jersey Municipal Money Market None None 0.30% 0.30% N/A N/A 0.50% 0.48%
---------------------------------------------------------------------------------------------------------------------------
North Carolina Municipal Money Market None None 0.30% 0.30% N/A N/A 0.50% 0.40%
---------------------------------------------------------------------------------------------------------------------------
Ohio Municipal Money Market None None 0.30% 0.30% N/A N/A 0.50% 0.41%
---------------------------------------------------------------------------------------------------------------------------
Pennsylvania Municipal Money Marke None None 0.30% 0.30% N/A N/A 0.50% 0.47%
---------------------------------------------------------------------------------------------------------------------------
Virginia Municipal Money Market None None 0.30% 0.30% N/A N/A 0.50% 0.50%
---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
--------------------------------------------------------------------------------------
Portfolio Share Classes
--------------------------------------------------------------------------------------
Investor B Investor C
--------------------------------------------------------------------------------------
Contractual Actual Contractual Actual
Fees(3) Fees(4) Fees(3) Fees(4)
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Money Market 1.15% 1.00% 1.15% 1.00%
--------------------------------------------------------------------------------------
U.S. Treasury Money Market 1.15% 1.00% 1.15% N/A
--------------------------------------------------------------------------------------
Municipal Money Market 1.15% N/A 1.15% N/A
--------------------------------------------------------------------------------------
New Jersey Municipal Money Market 1.15% 1.00% 1.15% N/A
--------------------------------------------------------------------------------------
North Carolina Municipal Money Market 1.15% 1.00% 1.15% N/A
--------------------------------------------------------------------------------------
Ohio Municipal Money Market 1.15% N/A 1.15% N/A
--------------------------------------------------------------------------------------
Pennsylvania Municipal Money Marke 1.15% N/A 1.15% N/A
--------------------------------------------------------------------------------------
Virginia Municipal Money Market 1.15% N/A 1.15% N/A
--------------------------------------------------------------------------------------
<FN>
(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, 2000.
</FN>
</TABLE>
In addition, Institutional and Service shares bear a Transfer Agent fee at an
annual rate not to exceed .03% and Hilliard Lyons, 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 accounting principles generally accepted
in the United States of America 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.
40
<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 The PNC Financial Services Group, Inc.
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, 2000, 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 ..................... $14,322,665 $6,553,676 $7,768,989
U.S. Treasury Money Market Portfolio ....... 3,708,046 2,212,233 1,495,813
Municipal Money Market Portfolio ........... 2,483,294 1,509,018 974,276
New Jersey Municipal Money Market Portfolio 724,743 500,588 224,155
North Carolina Municipal Money Market Portfolio 516,672 479,993 36,679
Ohio Municipal Money Market Portfolio ...... 485,080 343,320 141,760
Pennsylvania Municipal Money Market Portfolio 2,934,321 1,743,425 1,190,896
Virginia Municipal Money Market Portfolio .. 264,112 257,930 6,182
</TABLE>
PFPC Inc. ("PFPC"), an indirect wholly-owned subsidiary of The PNC
Financial Services Group, Inc., and BlackRock 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, 2000, 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 ..................... $5,329,064 $ -- $5,329,064
U.S. Treasury Money Market Portfolio ....... 1,418,417 -- 1,418,417
Municipal Money Market Portfolio ........... 980,922 -- 980,922
New Jersey Municipal Money Market Portfolio 289,897 -- 289,897
North Carolina Municipal Money Market Portfolio 206,669 1,147 205,522
Ohio Municipal Money Market Portfolio ...... 194,032 -- 194,032
Pennsylvania Municipal Money Market Portfolio 1,143,318 -- 1,143,318
Virginia Municipal Money Market Portfolio .. 105,645 1,668 103,977
</TABLE>
41
<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 and
BlackRock 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% $10,852,763
U.S. Treasury Money Market ...................... .295% 3,972,670
Municipal Money Market .......................... .295% 2,357,895
New Jersey Municipal Money Market ............... .265% 813,484
North Carolina Municipal Money Market ........... .195% 1,150,630
Ohio Municipal Money Market ..................... .265% 584,123
Pennsylvania Municipal Money Market ............. .295% 2,885,548
Virginia Municipal Money Market ................. .205% 430,165
PFPC Trust Co. serves as custodian for each of the Fund's Portfolios. PFPC
serves as transfer agent and dividend disbursing agent.
Under the Fund's Amended and Restated Distribution and Service Plan (the
"Plan"), Investor Shares of the Portfolios bear the expense of payments
("distribution fees") made to BlackRock Distributors, Inc. 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 organizations (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.
42
<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
9/30/00 9/30/99
--------------- ---------------
Shares sold:
Institutional Class ............... $ 2,296,289,567 $ 2,723,434,142
Service Class ..................... 1,933,270,482 2,720,807,611
Hilliard Lyons Class .............. 310,611,414 --
Investor A Class .................. 2,035,200,977 2,512,122,406
Investor B Class .................. 23,042,050 12,639,333
Investor C Class .................. 45,001,450 22,030,422
Shares issued in reinvestment of dividends:
Institutional Class ............... 176,008 466,421
Service Class ..................... 6,399,150 6,670,890
Hilliard Lyons Class .............. 7,490,048 --
Investor A Class .................. 23,731,921 18,658,333
Investor B Class .................. 206,446 93,558
Investor C Class .................. 118,882 31,755
Shares redeemed:
Institutional Class ............... (2,141,109,855) (2,505,940,526)
Service Class ..................... (2,058,079,957) (2,788,232,297)
Hilliard Lyons Class .............. (163,818,693) --
Investor A Class .................. (2,139,754,807) (2,409,651,253)
Investor B Class .................. (22,290,912) (9,124,279)
Investor C Class .................. (45,254,287) (18,131,359)
--------------- ---------------
Net increase ........................... $ 111,229,884 $ 285,875,157
=============== ===============
U.S. TREASURY MONEY
MARKET PORTFOLIO
----------------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
9/30/00 9/30/99
--------------- ---------------
Shares sold:
Institutional Class ............... $ 841,808,252 $ 910,330,259
Service Class ..................... 1,712,508,240 2,196,002,421
Investor A Class .................. 139,928,033 204,846,376
Investor B Class .................. 1,012 --
Investor C Class .................. -- 54,331
Shares issued in reinvestment of dividends:
Institutional Class ............... 5,531 9,442
Service Class ..................... 813,277 2,493,676
Investor A Class .................. 1,960,482 2,629,147
Investor B Class .................. 2 --
Investor C Class .................. -- 722
Shares redeemed:
Institutional Class ............... (849,414,384) (882,632,578)
Service Class ..................... (1,825,113,299) (2,271,034,326)
Investor A Class .................. (155, 304,536) (234,064,470)
Investor B Class .................. (1,014) --
Investor C Class .................. -- (55,053)
---------------- ---------------
Net decrease ........................... $ (132,808,404) $ (71,420,053)
================ ===============
43
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MUNICIPAL MONEY
MARKET PORTFOLIO
--------------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
9/30/00 9/30/99
------------- --------------
Shares sold:
Institutional Class ............... $ 828,666,804 $ 626,515,555
Service Class ..................... 517,496,953 758,806,431
Hilliard Lyons Class .............. 213,461,925 --
Investor A Class .................. 15,408,590 22,899,335
Investor C Class .................. -- 115
Shares issued in reinvestment of dividends:
Institutional Class ............... 381 --
Service Class ..................... 588,530 1,063,097
Hilliard Lyons Class .............. 2,681,240 --
Investor A Class .................. 167,143 167,158
Investor C Class .................. -- 1,397
Shares redeemed:
Institutional Class ............... (752,629,741) (634,971,125)
Service Class ..................... (556,535,149) (748,764,662)
Hilliard Lyons Class .............. (110,567,550) --
Investor A Class .................. (12,884,646) (27,587,702)
Investor C Class .................. -- (307,093)
------------- --------------
Net increase (decrease) ................ $ 145,854,480 $ (2,177,494)
============= =============
NEW JERSEY MUNICIPAL
MONEY MARKET PORTFOLIO
-------------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
9/30/00 9/30/99
------------ -------------
Shares sold:
Institutional Class ............... $164,362,596 $ 159,417,665
Service Class ..................... 67,427,580 40,346,284
Investor A Class .................. 123,914,485 126,463,562
Investor B Class .................. -- --
Shares issued in reinvestment of dividends:
Institutional Class ............... 129,584 50,493
Service Class ..................... 96,752 83,193
Investor A Class .................. 717,488 823,079
Investor B Class .................. -- 1
Shares redeemed:
Institutional Class ............... (161,982,341) (148,671,242)
Service Class ..................... (49,468,111) (38,461,030)
Investor A Class .................. (140,580,692) (148,912,473)
Investor B Class .................. (52) --
------------ -------------
Net increase (decrease) ................ $ 4,617,289 $ (8,860,468)
============ =============
44
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
NORTH CAROLINA MUNICIPAL
MONEY MARKET PORTFOLIO
--------------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
9/30/00 9/30/99
------------- -------------
Shares sold:
Institutional Class ............... $ 261,497,339 $ 535,254,134
Service Class ..................... 20,336,577 56,837,213
Investor A Class .................. 50,920 190,110
Investor B Class .................. 5,455 --
Shares issued in reinvestment of dividends:
Institutional Class ............... 9,652 4,403
Service Class ..................... 31,378 36,151
Investor A Class .................. 11,527 9,128
Investor B Class .................. 73 --
Shares redeemed:
Institutional Class ............... (337,408,508) (539,183,661)
Service Class ..................... (21,358,303) (74,540,755)
Investor A Class .................. (73,446) (74,649)
Investor B Class .................. -- --
------------- -------------
Net decrease ........................... $ (76,897,336) $ (21,467,926)
============= =============
OHIO MUNICIPAL
MONEY MARKET PORTFOLIO
--------------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
9/30/00 9/30/99
------------- -------------
Shares sold:
Institutional Class ............... $ 186,087,327 $ 182,873,102
Service Class ..................... 50,131,098 110,327,709
Investor A Class .................. 69,205,472 109,339,237
Shares issued in reinvestment of dividends:
Institutional Class ............... 5,227 2,440
Service Class ..................... 23,905 561,579
Investor A Class .................. 1,312,217 663,445
Shares redeemed:
Institutional Class ............... (183,236,554) (182,249,894)
Service Class ..................... (51,155,476) (157,679,961)
Investor A Class .................. (74,436,995) (80,976,442)
------------- -------------
Net decrease ........................... $ (2,063,779) $ (17,138,785)
============= =============
45
<PAGE>
BLACKROCK FUNDS
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
PENNSYLVANIA MUNICIPAL
MONEY MARKET PORTFOLIO
--------------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
9/30/00 9/30/99
------------- ---------------
Shares sold:
Institutional Class ............... $ 900,671,407 $ 1,037,502,953
Service Class ..................... 205,202,286 190,803,785
Investor A Class .................. 405,904,749 486,622,487
Shares issued in reinvestment of dividends:
Institutional Class ............... 193,590 67,375
Service Class ..................... 922,564 605,537
Investor A Class .................. 3,935,575 3,058,878
Shares redeemed:
Institutional Class ............... (876,877,121) (1,011,416,929)
Service Class ..................... (198,822,299) (188,971,099)
Investor A Class .................. (482,755,805) (465,200,835)
------------- ---------------
Net increase (decrease) ................ $ (41,625,054) $ 53,072,152
============= ===============
VIRGINIA MUNICIPAL
MONEY MARKET PORTFOLIO
--------------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
9/30/00 9/30/99
------------- -------------
Shares sold:
Institutional Class ............... $ 120,608,798 $ 121,465,660
Service Class ..................... 6,903,032 8,816,929
Investor A Class .................. 4,545,805 2,752,842
Shares issued in reinvestment of dividends:
Institutional Class ............... 1,079 246,705
Service Class ..................... 63,045 78,555
Investor A Class .................. 28,995 20,870
Shares redeemed:
Institutional Class ............... (110,350,460) (148,222,976)
Service Class ..................... (9,293,957) (9,514,476)
Investor A Class .................. (2,815,805) (2,155,555)
------------- -------------
Net increase (decrease) ................ $ 9,690,532 $ (26,511,446)
============= =============
On September 30, 2000, one shareholder held approximately 27% of the
outstanding shares of the U. S. Treasury Money Market Portfolio, one shareholder
held approximately 12% of the outstanding shares of the New Jersey Municipal
Money Market Portfolio, three shareholders held approximately 89% of the
outstanding shares of the North Carolina Municipal Money Market Portfolio, one
shareholder held approximately 11% of the Ohio Municipal Money Market Portfolio
and two shareholders held approximately 79% 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.
46
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BLACKROCK FUNDS
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(D) AT SEPTEMBER 30, 2000, 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 ........................ $3,431,767,866 $761,369,558 $540,155,551 $143,682,580
Accumulated net realized gain (loss) on
investment transactions ............. (70,815) 31,127 (73,569) (4,375)
-------------- ------------ ------------ ------------
$3,431,697,051 $761,400,685 $540,081,982 $143,678,205
============== ============ ============ ============
<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 ........................ $103,168,607 $103,425,035 $546,300,977 $65,039,594
Accumulated net realized loss on
investment transactions ............. (905) (35,710) (27,498) (572)
------------ ------------ ------------ -----------
$103,167,702 $103,389,325 $546,273,479 $65,039,022
============ ============ ============ ===========
</TABLE>
(E) CAPITAL LOSS CARRYOVER
At September 30, 2000, 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
44,610 2008
U. S. Treasury Money Market Portfolio: 4,849 2008
Municipal Money Market Portfolio: 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
1,485 2008
North Carolina Municipal Money Market Portfolio: 121 2003
784 2008
Ohio Municipal Money Market Portfolio: 2,285 2002
5,840 2005
4,223 2006
16,541 2007
6,193 2008
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, 2000, deferred post-October losses for the Money Market
Portfolio were $67,429, for the U. S. Treasury Money Market Portfolio were
$10,615, for the Municipal Money Market Portfolio were $19,923, for the Ohio
Municipal Money Market Portfolio were $628, and for the Pennsylvania Municipal
Money Market Portfolio were $17,716.
47
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BLACKROCK FUNDS
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REPORT OF INDEPENDENT ACCOUNTANTS
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF BLACKROCK FUNDS:
In our opinion, the accompanying statements of net assets of the Money Market,
Municipal Money Market, New Jersey Municipal Money Market, North Carolina
Municipal Money Market, Ohio Municipal Money Market and Pennsylvania Municipal
Money Market Portfolios and the statements of assets and liabilities, including
the schedules of investments, of the U.S. Treasury Money Market and Virginia
Municipal Money Market Portfolios (constituting the money market portfolios of
BlackRock Funds, hereafter referred to as the "Fund") 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 Fund at September 30, 2000, the results of each of their
operations for the year then ended, the changes in each of their net assets for
each of the two years in the period then ended and the financial highlights for
each of the periods indicated, in conformity with accounting principles
generally accepted in the United States of America. 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 auditing standards
generally accepted in the United States of America, 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 at
September 30, 2000 by correspondence with the custodian and brokers, provide a
reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
November 17, 2000
48
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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
Distributor
BlackRock Distributors, Inc.
King of Prussia, Pennsylvania 19406
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 39 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.(R)
Stock Portfolios
----------------
Large Cap Value Equity European Equity
Large Cap Growth Equity International Equity
Mid-Cap Value Equity International Small Cap Equity
Mid-Cap Growth Equity Asia Pacific Equity
Small Cap Value Equity International Emerging Markets
Small Cap Growth Equity Select Equity
Micro-Cap Equity Index Equity
Global Science & Technology
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 IRAaccounts or
rollover IRAs.
GENERAL INFORMATION ABOUT THE BLACKROCK FUNDS
If you would like additional reports or have questions regarding any of
the 39 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 OF BLACK ROCK FUNDS LOGO OMITTED]
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 9/30/00 MM
