open/document-extraction
View Schema
This view of the annotation often reflects the precision of the extraction model or annotator, as well as the complexity of the document.
SEPTEMBER 28, 2026
Prospectus
BlackRock Funds SM | Class K Shares
• BlackRock Advantage Small Cap Core Fund Class K: BDSKX
This Prospectus contains information you should know before investing, including information about risks. Please read it before you invest and keep it for future reference. The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.
Not FDIC Insured • May Lose Value • No Bank Guarantee
NM0926U-5977729-1/40
Page 2
Table of Contents
Fund Overview Key facts and details about the Fund, including investment objective, principal investment strategies, principal risk factors, fee and expense information and historical per formance information Investment Objective ................................................................................ 3 Fees and Expenses of the Fund ................................................................. 3 Principal Investment Strategies of the Fund ................................................ 4 Principal Risks of Investing in the Fund ...................................................... 4 Per formance Information .......................................................................... 6 Investment Manager ................................................................................. 7 Por tfolio Managers ................................................................................... 7 Purchase and Sale of Fund Shares ............................................................ 7 Tax Information......................................................................................... 8 Payments to Broker/Dealers and Other Financial Intermediaries .................. 8
Details About the Fund Information about how the Fund invests, including investment objective, investment process, principal strategies and risk factors How the Fund Invests.............................................................................. 9 Investment Risks.................................................................................... 11
Account Information Information about account services, sales charges and waivers, shareholder transactions, and distribution and other payments Details About the Share Class ................................................................. 21 How to Buy, Sell, Exchange and Transfer Shares ....................................... 22 Fund’s Rights ......................................................................................... 27 Shor t-Term Trading Policy ........................................................................ 27
Management of the Fund Information about BlackRock and the Por tfolio Managers BlackRock .............................................................................................. 29 Por tfolio Manager Information ................................................................. 30 Conflicts of Interest ................................................................................ 30 Valuation of Fund Investments ................................................................. 31 Dividends, Distributions and Taxes........................................................... 33
Financial Highlights Financial Per formance of the Fund ........................................................... 34
General Information Shareholder Documents.......................................................................... 35 Cer tain Fund Policies .............................................................................. 35 Statement of Additional Information ......................................................... 36
Glossary Glossary of Investment Terms ................................................................. 37
For More Information Fund and Service Providers ............................................... Inside Back Cover Additional Information....................................................... Back Cover
NM0926U-5977729-2/40
Page 3
Fund Overview
Key Facts About BlackRock Advantage Small Cap Core Fund
Investment Objective
The investment objective of BlackRock Advantage Small Cap Core Fund (the “Fund”), a series of BlackRock Funds SM (the “Trust”), is to seek capital appreciation over the long term.
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you buy, hold and sell Class K Shares of the Fund. Amounts in the table are rounded to the nearest basis point, which in some cases may be “0.00.” You may pay other fees, such as brokerage commissions and other fees to your financial professional or selected securities dealer, broker, investment adviser, service provider or industry professional (including BlackRock Advisors, LLC (“BlackRock”) and its affiliates) (each a “Financial Intermediary”), which are not reflected in the table and example below.
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) Class K Management Fee 1 0.42% Distribution and/or Service (12b-1) Fees None Other Expenses 0.09% Total Annual Fund Operating Expenses 0.51% Fee Waivers and/or Expense Reimbursements 1,2 (0.06)% Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements 1,2 0.45% 1 As described in the “Management of the Fund” section of the Fund’s prospectus beginning on page 29, BlackRock has contractually agreed to waive the management fee with respect to any portion of the Fund’s assets estimated to be attributable to investments in other equity and fixed income mutual funds and exchange-traded funds managed by BlackRock or its affiliates that have a contractual management fee, through June 30, 2028. In addition, BlackRock has contractually agreed to waive its management fees by the amount of investment advisory fees the Fund pays to BlackRock indirectly through its investment in money market funds managed by BlackRock or its affiliates, through June 30, 2028. The contractual agreements may be terminated upon 90 days’ notice by a majority of the non-interested trustees of the Trust or by a vote of a majority of the outstanding voting securities of the Fund. 2 As described in the “Management of the Fund” section of the Fund’s prospectus beginning on page 29, BlackRock has contractually agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (excluding Dividend Expense, Interest Expense, Acquired Fund Fees and Expenses and certain other Fund expenses) to 0.45% of average daily net assets through June 30, 2028. The contractual agreement may be terminated upon 90 days’ notice by a majority of the non interested trustees of the Trust or by a vote of a majority of the outstanding voting securities of the Fund. Example: This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
1 Year 3 Years 5 Years 10 Years Class K $46 $158 $279 $635
Portfolio Turnover: The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the Example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 92% of the average value of its portfolio.
3
NM0926U-5977729-3/40
Page 4
Principal Investment Strategies of the Fund
Under normal circumstances, the Fund seeks to invest at least 80% of its net assets plus any borrowings for investment purposes in equity securities or other financial instruments that are components of, or have market capitalizations similar to, the securities included in the Russell 2000 Index. With respect to such equity investments, investments in derivatives are counted toward the Fund’s 80% policy to the extent that they provide investment exposure to the securities included within that policy or to one or more market risk factors associated with such securities. The companies included in the Russell 2000 Index have market capitalizations that range from approximately $0.37 million to $12.12 billion as of August 31, 2026. The Fund primarily seeks to buy common stock and may also invest in preferred stock and convertible securities. From time to time the Fund may invest in shares of companies through “new issues” or initial public offerings (“IPOs”).
The Fund may use derivatives, including options, futures, swaps and forward contracts both to seek to increase the return of the Fund and to hedge (or protect) the value of its assets against adverse movements in currency exchange rates, interest rates and movements in the securities markets. In order to manage cash flows into or out of the Fund effectively, the Fund may buy and sell financial futures contracts or options on such contracts. Derivatives are financial instruments whose value is derived from another security, a commodity (such as oil or gas), a currency or an index, including but not limited to the Russell 2000 Index. The use of options, futures, swaps and forward contracts can be effective in protecting or enhancing the value of the Fund’s assets.
The Fund seeks to pursue its investment objective by investing in small cap securities in a disciplined manner, by using proprietary return forecast models that incorporate quantitative analysis. These forecast models are designed to identify aspects of mispricing across stocks which the Fund can seek to capture by over- and under-weighting particular equities while seeking to control incremental risk. The Fund’s manager then constructs and rebalances the portfolio by integrating its investment insights with the model-based optimization process.
Principal Risks of Investing in the Fund
Risk is inherent in all investing. The value of your investment in the Fund, as well as the amount of return you receive on your investment, may fluctuate significantly from day to day and over time. You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other Government agency. The following is a summary description of principal risks of investing in the Fund. The relative significance of each risk factor below may change over time and you should review each risk factor carefully. Equity Securities Risk — Stock markets are volatile. The price of equity securities fluctuates based on changes in a company’s financial condition and overall market and economic conditions. Small Cap Securities Risk — Small cap companies may have limited product lines or markets. They may be less financially secure than larger, more established companies. They may depend on a more limited management group than larger capitalized companies. Investment Style Risk — Under certain market conditions, growth investments have performed better during the later stages of economic expansion and value investments have performed better during periods of economic recovery. Therefore, these investment styles may over time go in and out of favor. At times when the investment style used by the Fund is out of favor, the Fund may underperform other equity funds that use different investment styles. Model Risk — The Fund seeks to pursue its investment objective by using proprietary models that incorporate quantitative analysis. Investments selected using these models may perform differently than as forecasted due to the factors incorporated into the models and the weighting of each factor, changes from historical trends, and issues in the construction and implementation of the models (including, but not limited to, software issues, issues related to the use of artificial intelligence and machine learning (“AI”), and other technological issues). There is no guarantee that BlackRock’s use of these models will result in effective investment decisions for the Fund. The information and data used in the models may be supplied by third parties. Inaccurate or incomplete data may limit the effectiveness of the models. In addition, some of the data that BlackRock uses may be historical data, which may not accurately predict future market movement. There is a risk that the models will not be successful in selecting investments or in determining the weighting of investment positions that will enable the Fund to achieve its investment objective. Risk of Investing in the United States — Certain changes in the U.S. economy, such as when the U.S. economy weakens or when its financial markets decline, may have an adverse effect on the securities to which the Fund has exposure.
4
NM0926U-5977729-4/40
Page 5
Convertible Securities Risk — The market value of a convertible security performs like that of a regular debt security; that is, if market interest rates rise, the value of a convertible security usually falls. In addition, convertible securities are subject to the risk that the issuer will not be able to pay interest, principal or dividends when due, and their market value may change based on changes in the issuer’s credit rating or the market’s perception of the issuer’s creditworthiness. Since it derives a portion of its value from the common stock into which it may be converted, a convertible security is also subject to the same types of market and issuer risks that apply to the underlying common stock, including the potential for increased volatility in the price of the convertible security. Derivatives Risk — The Fund’s use of derivatives may increase its costs, reduce the Fund’s returns and/or increase volatility. Derivatives involve significant risks, including:
Leverage Risk — The Fund’s use of derivatives can magnify the Fund’s gains and losses. Relatively small market movements may result in large changes in the value of a derivatives position and can result in losses that greatly exceed the amount originally invested. Market Risk — Some derivatives are more sensitive to interest rate changes and market price fluctuations than other securities. The Fund could also suffer losses related to its derivatives positions as a result of unanticipated market movements, which losses are potentially unlimited. Finally, BlackRock may not be able to predict correctly the direction of securities prices, interest rates and other economic factors, which could cause the Fund’s derivatives positions to lose value. Counterpar ty Risk — Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will be unable or unwilling to fulfill its contractual obligation, and the related risks of having concentrated exposure to such a counterparty. Illiquidity Risk — The possible lack of a liquid secondary market for derivatives and the resulting inability of the Fund to sell or otherwise close a derivatives position could expose the Fund to losses and could make derivatives more difficult for the Fund to value accurately. Operational Risk — The use of derivatives includes the risk of potential operational issues, including documentation issues, settlement issues, systems failures, inadequate controls and human error.
Legal Risk — The risk of insufficient documentation, insufficient capacity or authority of counterparty, or legality or enforceability of a contract. Volatility and Correlation Risk — Volatility is defined as the characteristic of a security, an index or a market to fluctuate significantly in price within a short time period. A risk of the Fund’s use of derivatives is that the fluctuations in their values may not correlate with the overall securities markets. Valuation Risk — Valuation for derivatives may not be readily available in the market. Valuation may be more difficult in times of market turmoil since many investors and market makers may be reluctant to purchase complex instruments or quote prices for them.
Hedging Risk — Hedges are sometimes subject to imperfect matching between the derivative and the underlying security, and there can be no assurance that the Fund’s hedging transactions will be effective. The use of hedging may result in certain adverse tax consequences. Tax Risk — Certain aspects of the tax treatment of derivative instruments, including swap agreements and commodity-linked derivative instruments, are currently unclear and may be affected by changes in legislation, regulations or other legally binding authority. Such treatment may be less favorable than that given to a direct investment in an underlying asset and may adversely affect the timing, character and amount of income the Fund realizes from its investments. High Portfolio Turnover Risk — The Fund may engage in active and frequent trading of its portfolio securities. High portfolio turnover (more than 100%) may result in increased transaction costs to the Fund, including brokerage commissions, dealer mark-ups and other transaction costs on the sale of the securities and on reinvestment in other securities. The sale of Fund portfolio securities may result in the realization and/or distribution to shareholders of higher capital gains or losses as compared to a fund with less active trading policies. These effects of higher than normal portfolio turnover may adversely affect Fund performance.
Leverage Risk — Some transactions may give rise to a form of economic leverage. These transactions may include, among others, derivatives, and may expose the Fund to greater risk and increase its costs. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet the applicable requirements of the Investment Company Act of 1940, as amended (the “Investment Company Act”), and the rules thereunder. Increases and decreases in the value of the Fund’s portfolio will be magnified when the Fund uses leverage. Market Risk and Selection Risk — Market risk is the risk that one or more markets in which the Fund invests will go down in value, including the possibility that the markets will go down sharply and unpredictably. An investor could 5
NM0926U-5977729-5/40
Page 6
lose money over short periods due to fluctuation in the Fund’s net asset value in response to short-term market movements and over longer periods during market downturns. Securities or other investments held by the Fund may underperform the markets, the relevant indices or benchmarks, or the securities selected by other funds with similar investment objectives and investment strategies, or may otherwise fail to perform as intended. The value of a security or other asset may decline due to changes in general market conditions, economic trends or events that are not specifically related to the issuer of the security or other asset, or factors that affect a particular issuer or issuers, exchange, country, group of countries, region, market, industry, group of industries, sector or asset class. The success of the Fund’s activities could be affected by interest rates, availability of credit, inflation rates, economic uncertainty, changes in laws, tariffs and trade barriers, supply chain disruptions, economic sanctions, currency exchange controls, and local, regional or global events such as war, acts of terrorism, natural and environmental disasters, the spread of infectious illness or other public health issues like pandemics or epidemics, recessions, or other events. The Fund seeks to pursue its investment objective by using proprietary models that incorporate quantitative analysis and is subject to “Model Risk” as described above. Recent policy initiatives undertaken by the U.S. government have the potential to impact international relations, trade agreements and the overall regulatory environment in ways that could create uncertainty and instability in domestic and global markets, and could adversely affect the investment performance of the Fund. In particular, actions taken by the U.S. government in respect of international trade relations could lead to trade wars, increased costs for imported goods, disruptions in supply chains, reduced foreign investment, and instability in regions where the Fund invests. “New Issues” Risk — “New issues” are IPOs of equity securities. Securities issued in IPOs have no trading history, and information about the companies may be available for very limited periods. In addition, the prices of securities sold in IPOs may be highly volatile or may decline shortly after the IPO. Operational and Technology Risks — The Fund is directly and indirectly susceptible to operational and technology risks, including those related to human errors, processing errors, communication errors, systems failures, cybersecurity incidents, and the use of artificial intelligence and machine learning (“AI”), which may result in losses for the Fund and its shareholders or may impair the Fund’s operations. While the Fund’s service providers are required to have appropriate operational, information security and cybersecurity risk management policies and procedures, their methods of risk management may differ from those of the Fund. Operational and technology risks for the issuers in which the Fund invests could also result in material adverse consequences for such issuers and may cause the Fund’s investments in such issuers to lose value. Preferred Securities Risk — Preferred securities may pay fixed or adjustable rates of return. Preferred securities are subject to issuer-specific and market risks applicable generally to equity securities. In addition, a company’s preferred securities generally pay dividends only after the company makes required payments to holders of its bonds and other debt. For this reason, the value of preferred securities will usually react more strongly than bonds and other debt to actual or perceived changes in the company’s financial condition or prospects. Preferred securities of smaller companies may be more vulnerable to adverse developments than preferred securities of larger companies.
Performance Information
The information shows you how the Fund’s performance has varied year by year and provides some indication of the risks of investing in the Fund. The table compares the Fund’s performance to that of the Russell 3000 Index and the Russell 2000 Index. The Russell 2000 Index is relevant to the Fund because it has characteristics similar to the Fund’s investment strategy. The performance information for periods prior to March 28, 2016, the commencement of operations of Class K Shares, shows the performance of the Fund’s Institutional Shares. The performance of the Fund’s Class K Shares would be substantially similar to Institutional Shares because Class K Shares and Institutional Shares are invested in the same portfolio of securities and performance would differ only to the extent that Institutional Shares and Class K Shares have different expenses. The actual returns of Class K Shares would have been higher than those of the Institutional Shares because Class K Shares have lower expenses than the Institutional Shares. To the extent that dividends and distributions have been paid by the Fund, the performance information for the Fund in the chart and table assumes reinvestment of the dividends and distributions. As with all such investments, past performance (before and after taxes) is not an indication of future results. The table includes all applicable fees. If the Fund’s investment manager and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. Updated information on the Fund’s performance, including its current net asset value, can be obtained by visiting www.blackrock.com or can be obtained by phone at (800) 882-0052.
6
NM0926U-5977729-6/40
Page 7
Class K Shares ANNUAL TOTAL RETURNS BlackRock Advantage Small Cap Core Fund As of 12/31
24.00%
10.82%
-8.80%
32.26%
19.60% 14.72%
-19.76%
16.49% 11.96% 13.70%
-30%
-20%
-10%
0%
10%
20%
30%
40%
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 During the ten-year period shown in the bar chart, the highest return for a quarter was 30.99% (quarter ended December 31, 2020) and the lowest return for a quarter was -31.27% (quarter ended March 31, 2020). The year-to date return as of June 30, 2026 was 23.70%.
For the periods ended 12/31/25 Average Annual Total Returns 1 Year 5 Years 10 Years BlackRock Advantage Small Cap Core Fund — Class K Shares Return Before Taxes 13.70% 6.42% 10.47% Return After Taxes on Distributions 12.23% 5.15% 9.37% Return After Taxes on Distributions and Sale of Fund Shares 8.75% 4.66% 8.23% Russell 3000 Index (Reflects no deduction for fees, expenses or taxes) 17.15% 13.15% 14.29% Russell 2000 Index (Reflects no deduction for fees, expenses or taxes) 12.81% 6.09% 9.62%
After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.
Investment Manager
The Fund’s investment manager is BlackRock Advisors, LLC (previously defined as “BlackRock”).
Portfolio Managers
Portfolio Manager
Portfolio Manager of the Fund Since Title Raffaele Savi 2017 Senior Managing Director of BlackRock, Inc. Travis Cooke, CFA 2013 Managing Director of BlackRock, Inc. Richard Mathieson 2017 Managing Director of BlackRock, Inc.
Purchase and Sale of Fund Shares
Class K Shares of the Fund are available only to (i) certain employee benefit plans, such as health savings accounts, and certain employer-sponsored retirement plans (not including SEP IRAs, SIMPLE IRAs and SARSEPs) (collectively, “Employer-Sponsored Retirement Plans”), (ii) collective trust funds, investment companies and other pooled investment vehicles, each of which may purchase shares of the Fund through a Financial Intermediary that has entered into an agreement with the Fund’s distributor to purchase such shares, (iii) “Institutional Investors,” which include, but
7
NM0926U-5977729-7/40
Page 8
are not limited to, endowments, foundations, family offices, banks and bank trusts, local, city, and state governmental institutions, corporations and insurance company separate accounts, each of which may purchase shares of the Fund through a Financial Intermediary that has entered into an agreement with the Fund’s distributor to purchase such shares, (iv) clients of private banks that purchase shares of the Fund through a Financial Intermediary that has entered into an agreement with the Fund’s distributor to sell such shares; (v) fee-based advisory platforms of a Financial Intermediary that (a) has specifically acknowledged in a written agreement with the Fund’s distributor and/or its affiliate(s) that the Financial Intermediary shall offer such shares to fee-based advisory clients through an omnibus account held at the Fund or (b) transacts in the Fund’s shares through another intermediary that has executed such an agreement and (vi) any other investors who met the eligibility criteria for BlackRock Shares or Class K Shares prior to August 15, 2016 and have continually held Class K Shares of the Fund in the same account since August 15, 2016.
You may purchase or redeem shares of the Fund each day the New York Stock Exchange is open. Purchase orders may also be placed by calling (800) 537-4942, by mail (c/o BlackRock, P.O. Box 534429, Pittsburgh, Pennsylvania 152534429), or online at www.blackrock.com. Institutional Investors are subject to a $5 million minimum initial investment requirement. Other investors, including Employer-Sponsored Retirement Plans, have no minimum initial investment requirement. There is no minimum investment amount for additional purchases.
Tax Information
Different income tax rules apply depending on whether you are invested through a qualified tax-exempt plan described in section 401(a) of the Internal Revenue Code of 1986, as amended. If you are invested through such a plan (and Fund shares are not “debt-financed property” to the plan), then the dividends paid by the Fund and the gain realized from a redemption or exchange of Fund shares will generally not be subject to U.S. federal income taxes until you withdraw or receive distributions from the plan. If you are not invested through such a plan, then the Fund’s dividends and gain from a redemption or exchange may be subject to U.S. federal income taxes and may be taxed as ordinary income or capital gains, unless you are a tax-exempt investor.
Payments to Broker/Dealers and Other Financial Intermediaries
If you purchase shares of the Fund through a Financial Intermediary, the Fund and BlackRock Investments, LLC, the Fund’s distributor, or its affiliates may pay the Financial Intermediary for the sale of Fund shares and related services.
These payments may create a conflict of interest by influencing the Financial Intermediary and your individual financial professional to recommend the Fund over another investment.
Class K Shares are only available through a Financial Intermediary if the Financial Intermediary will not receive from Fund assets, or the Fund’s distributor’s or an affiliate’s resources, any commission payments, shareholder servicing fees (including sub-transfer agent and networking fees), or distribution fees (including Rule 12b-1 fees) with respect to assets invested in Class K Shares.
Ask your individual financial professional or visit your Financial Intermediary’s website for more information.
8
NM0926U-5977729-8/40
Page 9
Details About the Fund
Included in this prospectus are sections that tell you about buying and selling shares, management information, shareholder features of BlackRock Advantage Small Cap Core Fund (the “Fund”), a series of BlackRock Funds SM (the “Trust”), and your rights as a shareholder.
How the Fund Invests
Investment Objective The investment objective of the Fund is to seek capital appreciation over the long term.
This investment objective is a non-fundamental policy of the Fund and may not be changed without 30 days’ prior notice to shareholders.
Investment Process The Fund seeks to pursue its investment objective by investing in small cap securities in a disciplined manner, by using proprietary return forecast models that incorporate quantitative analysis. These forecast models are designed to identify aspects of mispricing across stocks which the Fund can seek to capture by over- and under-weighting particular equities while seeking to control incremental risk. The Fund’s manager then constructs and rebalances the portfolio by integrating its investment insights with the model-based optimization process.
The Fund has no stated minimum holding period for investments and may buy or sell securities whenever Fund management sees an appropriate opportunity. The Fund may engage in active and frequent trading of its investments.
The investment process leverages fundamentally informed and data-driven insights, which may use a range of factors to generate investment ideas, including macroeconomic inputs, company fundamentals, machine learning and artificial intelligence methods including large language models, sentiment analysis, factor and thematic insights, and measures of whether a security is over- or under-valued.
Principal Investment Strategies Under normal circumstances, the Fund seeks to invest at least 80% of its net assets plus any borrowings for investment purposes in equity securities or other financial instruments that are components of, or have market capitalizations similar to, the securities included in the Russell 2000 Index. This policy is a non-fundamental policy of the Fund and may not be changed without 60 days’ notice to shareholders. With respect to such equity investments, investments in derivatives are counted toward the Fund’s 80% policy to the extent that they provide investment exposure to the securities included within that policy or to one or more market risk factors associated with such securities. The companies included in the Russell 2000 Index have market capitalizations that range from approximately $0.37 million to $12.12 billion as of August 31, 2026. The Fund primarily seeks to buy common stock and may also invest in preferred stock and convertible securities. From time to time the Fund may invest in shares of companies through “new issues” or initial public offerings (“IPOs”). The Fund is not required to sell a company’s securities solely because that company’s market capitalization rises above the market capitalization range of the Russell 2000 Index. A company’s market capitalization may go up or down due to market fluctuations.
The Fund may use derivatives, including options, futures, swaps and forward contracts both to seek to increase the return of the Fund and to hedge (or protect) the value of its assets against adverse movements in currency exchange rates, interest rates and movements in the securities markets. In order to manage cash flows into or out of the Fund effectively, the Fund may buy and sell financial futures contracts or options on such contracts. Derivatives are financial instruments whose value is derived from another security, a commodity (such as oil or gas), a currency or an index, including but not limited to the Russell 2000 Index. The use of options, futures, swaps and forward contracts can be effective in protecting or enhancing the value of the Fund’s assets.
The Fund is classified as diversified under the Investment Company Act.
Other Strategies Applicable to the Fund In addition to the principal investment strategies discussed above, the Fund may also invest or engage in the following investments/strategies:
9
NM0926U-5977729-9/40
Page 10
Borrowing — The Fund may borrow up to the limits set forth under the Investment Company Act, the rules and regulations thereunder and any applicable exemptive relief.
Foreign Securities — The Fund may invest in equity securities of companies located outside the United States.
Illiquid Investments — The Fund may not acquire any illiquid investment if, immediately after the acquisition, the Fund would have invested more than 15% of its net assets in illiquid investments. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. Indexed and Inverse Securities — The Fund may invest in securities that provide a return based on fluctuations in a stock or other financial index. For example, the Fund may invest in a security that increases in value with the price of a particular securities index. In some cases, the return of the security may be inversely related to the price of the index. This means that the value of the security will rise as the price of the index falls and vice versa. Although these types of securities can make it easier for the Fund to access certain markets or hedge risks of other assets held by the Fund, these securities are subject to the risks related to the underlying index or other assets. Investment Companies — The Fund has the ability to invest in other investment companies, such as exchange traded funds, unit investment trusts, and open-end and closed-end funds, subject to the applicable limits under the Investment Company Act and the rules thereunder. The Fund may invest in affiliated investment companies, including affiliated money market funds and affiliated exchange-traded funds.
Money Market Securities — As part of its normal operations, the Fund may hold high quality money market securities pending investments or when it expects to need cash to pay redeeming shareholders. The Fund also may invest in these securities in order to achieve its investment goal. Money market securities are short term securities consisting primarily of short term U.S. Government securities, U.S. Government agency securities, securities issued by U.S. Government sponsored enterprises and U.S. Government instrumentalities, bank obligations, commercial paper, including asset backed commercial paper, corporate notes and repurchase agreements. Real Estate Investment Trusts — The Fund may invest in real estate investment trusts (“REITs”). REITs are companies that own interests in real estate or in real estate-related loans or other interests, and have revenue primarily consisting of rent derived from owned, income producing real estate properties and capital gains from the sale of such properties. REITs can generally be classified as equity REITs, mortgage REITs and hybrid REITs. Equity REITs invest the majority of their assets directly in real property and derive their income primarily from rents. Equity REITs can also realize capital gains by selling properties that have appreciated in value. Mortgage REITs invest the majority of their assets in real estate mortgages and derive their income primarily from interest payments. Hybrid REITs combine the characteristics of both equity REITs and mortgage REITs. REITs are not taxed on income distributed to shareholders provided they comply with the requirements of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). Repurchase Agreements and Purchase and Sale Contracts — The Fund may enter into certain types of repurchase agreements or purchase and sale contracts. Under a repurchase agreement, the seller agrees to repurchase a security at a mutually agreed-upon time and price. A purchase and sale contract is similar to a repurchase agreement, but purchase and sale contracts also provide that the purchaser receives any interest on the security paid during the period. Restricted Securities — Restricted securities are securities that cannot be offered for public resale unless registered under the applicable securities laws or that have a contractual restriction that prohibits or limits their resale. They may include Rule 144A securities, which are privately placed securities that can be resold to qualified institutional buyers but not to the general public, securities of U.S. and non-U.S. issuers that are offered pursuant to Regulation S under the Securities Act of 1933, as amended, and securities of private companies. Reverse Repurchase Agreements — The Fund may enter into reverse repurchase agreements with the same parties with whom it may enter into repurchase agreements. Under a reverse repurchase agreement, the Fund sells securities to another party and agrees to repurchase them at a particular date and price. The Fund may enter into a reverse repurchase agreement when it is anticipated that the interest income to be earned from the investment of the proceeds of the transaction is greater than the interest expense of the transaction. Securities Lending — The Fund may lend securities with a value up to 33 1⁄ 1⁄3 ⁄3 % of its total assets to financial institutions that provide cash or securities issued or guaranteed by the U.S. Government as collateral. Temporary Defensive Strategies — For temporary defensive purposes, for example, to respond to adverse market, economic, political or other conditions, the Fund may depart from its principal investment strategies and may restrict the markets in which it invests and may invest without limitation in cash, cash equivalents, money market securities, such as U.S. Treasury and agency obligations, other U.S. Government securities, short-term debt obligations of corporate issuers, certificates of deposit, bankers acceptances, commercial paper (short-term,
10
NM0926U-5977729-10/40
Page 11
unsecured, negotiable promissory notes of a domestic or foreign issuer) or other high quality fixed income securities. Temporary defensive positions may affect the Fund’s ability to achieve its investment objective.
Warrants — The Fund may purchase warrants, which are privileges issued by corporations enabling the owners to subscribe to and purchase a specified number of shares of the corporation at a specified price during a specified period of time. Subscription rights normally have a short life span to expiration. When-Issued and Delayed Delivery Securities and Forward Commitments — The purchase or sale of securities on a when-issued basis, on a delayed delivery basis or through a forward commitment involves the purchase or sale of securities by the Fund at an established price with payment and delivery taking place in the future. The Fund enters into these transactions to obtain what is considered an advantageous price to the Fund at the time of entering into the transaction.
ABOUT THE PORTFOLIO MANAGEMENT TEAM OF THE FUND
The Fund is managed by a team of financial professionals. Raffaele Savi, Travis Cooke, CFA, and Richard Mathieson are the portfolio managers and are jointly and primarily responsible for the day-to-day management of the Fund. Please see “Management of the Fund — Portfolio Manager Information” for additional information about the portfolio management team.
Investment Risks
This section contains a discussion of the general risks of investing in the Fund. The “Investment Objective and Policies” section in the Statement of Additional Information (the “SAI”) also includes more information about the Fund, its investments and the related risks. As with any fund, there can be no guarantee that the Fund will meet its investment objective or that the Fund’s performance will be positive for any period of time. An investment in the Fund is not a deposit in any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency. The order of the below risk factors does not indicate the significance of any particular risk factor.
Principal Risks of Investing in the Fund
Convertible Securities Risk — The market value of a convertible security performs like that of a regular debt security; that is, if market interest rates rise, the value of a convertible security usually falls. In addition, convertible securities are subject to the risk that the issuer will not be able to pay interest, principal or dividends when due, and their market value may change based on changes in the issuer’s credit rating or the market’s perception of the issuer’s creditworthiness. Since it derives a portion of its value from the common stock into which it may be converted, a convertible security is also subject to the same types of market and issuer risks that apply to the underlying common stock, including the potential for increased volatility in the price of the convertible security.
Derivatives Risk — The Fund’s use of derivatives may increase its costs, reduce the Fund’s returns and/or increase volatility. Derivatives involve significant risks, including:
Leverage Risk — The Fund’s use of derivatives can magnify the Fund’s gains and losses. Relatively small market movements may result in large changes in the value of a derivatives position and can result in losses that greatly exceed the amount originally invested.
Market Risk — Some derivatives are more sensitive to interest rate changes and market price fluctuations than other securities. The Fund could also suffer losses related to its derivatives positions as a result of unanticipated market movements, which losses are potentially unlimited. Finally, BlackRock Advisors, LLC (“BlackRock”) may not be able to predict correctly the direction of securities prices, interest rates and other economic factors, which could cause the Fund’s derivatives positions to lose value.
Counterpar ty Risk — Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will be unable or unwilling to fulfill its contractual obligation, and the related risks of having concentrated exposure to such a counterparty.
Illiquidity Risk — The possible lack of a liquid secondary market for derivatives and the resulting inability of the Fund to sell or otherwise close a derivatives position could expose the Fund to losses and could make derivatives more difficult for the Fund to value accurately.
11
NM0926U-5977729-11/40
Page 12
Operational Risk — The use of derivatives includes the risk of potential operational issues, including documentation issues, settlement issues, systems failures, inadequate controls and human error.
Legal Risk — The risk of insufficient documentation, insufficient capacity or authority of counterparty, or legality or enforceability of a contract.
Volatility and Correlation Risk — The Fund’s use of derivatives may reduce the Fund’s returns and/or increase volatility. Volatility is defined as the characteristic of a security, an index or a market to fluctuate significantly in price within a short time period. A risk of the Fund’s use of derivatives is that the fluctuations in their values may not correlate with the overall securities markets.
Valuation Risk — Valuation for derivatives may not be readily available in the market. Valuation may be more difficult in times of market turmoil since many investors and market makers may be reluctant to purchase complex instruments or quote prices for them. Derivatives may also expose the Fund to greater risk and increase its costs. Certain transactions in derivatives involve substantial leverage risk and may expose the Fund to potential losses that exceed the amount originally invested by the Fund.
Hedging Risk — When a derivative is used as a hedge against a position that the Fund holds, any loss generated by the derivative generally should be substantially offset by gains on the hedged investment, and vice versa. While hedging can reduce or eliminate losses, it can also reduce or eliminate gains. Hedges are sometimes subject to imperfect matching between the derivative and the underlying security, and there can be no assurance that the Fund’s hedging transactions will be effective. The use of hedging may result in certain adverse tax consequences noted below.
Tax Risk — The federal income tax treatment of a derivative may not be as favorable as a direct investment in an underlying asset and may adversely affect the timing, character and amount of income the Fund realizes from its investments. As a result, a larger portion of the Fund’s distributions may be treated as ordinary income rather than capital gains. In addition, certain derivatives are subject to mark-to-market or straddle provisions of the Internal Revenue Code. If such provisions are applicable, there could be an increase (or decrease) in the amount of taxable dividends paid by the Fund. In addition, the tax treatment of certain derivatives, such as swaps, is unsettled and may be subject to future legislation, regulation or administrative pronouncements issued by the Internal Revenue Service (the “IRS”).
Regulatory Risk — Derivative contracts are subject to regulation under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) in the United States and under comparable regimes in Europe, Asia and other non-U.S. jurisdictions. Under the Dodd-Frank Act, with respect to uncleared swaps, swap dealers are required to exchange variation margin with the Fund and may be required by applicable regulations to collect and/or exchange initial margin with the Fund. Both initial and variation margin may be comprised of cash and/or securities, subject to applicable regulatory haircuts. In certain cases, shares of investment companies may not be posted as collateral under applicable regulations. In addition, regulations adopted by global prudential regulators require certain bank-regulated counterparties and certain of their affiliates to include in certain financial contracts, including many derivatives contracts, terms that delay or restrict the rights of counterparties, such as the Fund, to terminate such contracts, foreclose upon collateral, exercise other default rights or restrict transfers of credit support in the event that the counterparty and/or its affiliates are subject to certain types of resolution or insolvency proceedings. The implementation of these requirements with respect to derivatives, as well as regulations under global regulations regarding clearing, mandatory trading and margining of other derivatives, may increase the costs and risks to the Fund of trading in these instruments and, as a result, may affect returns to investors in the Fund.
Future regulatory developments may impact the Fund’s ability to invest or remain invested in certain derivatives. Legislation or regulation may also change the way in which the Fund itself is regulated. BlackRock cannot predict the effects of any new governmental regulation that may be implemented on the ability of the Fund to use swaps or any other financial derivative product, and there can be no assurance that any new governmental regulation will not adversely affect the Fund’s ability to achieve its investment objective.
Risks Specific to Cer tain Derivatives Used by the Fund Swaps — Swap agreements, including total return swaps that may be referred to as contracts for difference, are two-party contracts entered into for periods ranging from a few days to more than one year. In a standard “swap” transaction, two parties agree to exchange the value(s) or cash flow(s) of one asset for another over a certain period of time. Swap agreements involve the risk that the party with whom the Fund has entered into the swap will default on its obligation to pay the Fund and the risk that the Fund will not be able to meet its obligations to pay the other party to the agreement. Swap agreements may also involve the risk that there is an imperfect
12
NM0926U-5977729-12/40
Page 13
correlation between the return on the Fund’s obligation to its counterparty and the return on the referenced asset. In addition, swap agreements are subject to market and illiquidity risk, leverage risk and hedging risk. Credit Default Swaps — Credit default swaps may have as reference obligations one or more securities that are not currently held by the Fund. The protection “buyer” may be obligated to pay the protection “seller” an up-front payment or a periodic stream of payments over the term of the contract, provided generally that no credit event on a reference obligation has occurred. Credit default swaps involve special risks in addition to those mentioned above because they are difficult to value, are highly susceptible to illiquid investments risk and credit risk, and generally pay a return to the party that has paid the premium only in the event of an actual default by the issuer of the underlying obligation (as opposed to a credit downgrade or other indication of financial difficulty).
Forward Foreign Currency Exchange Contracts — Forward foreign currency exchange transactions are OTC contracts to purchase or sell a specified amount of a specified currency or multinational currency unit at a price and future date set at the time of the contract. Forward foreign currency exchange contracts do not eliminate fluctuations in the value of non-U.S. securities but rather allow the Fund to establish a fixed rate of exchange for a future point in time. This strategy can have the effect of reducing returns and minimizing opportunities for gain. Futures — Futures are standardized, exchange-traded contracts that obligate a purchaser to take delivery, and a seller to make delivery, of a specific amount of an asset at a specified future date at a specified price. The primary risks associated with the use of futures contracts and options are: (a) the imperfect correlations between the change in market value of the instruments held by the Fund and the price of the futures contract or option; (b) the possible lack of a liquid secondary market for a futures contract and the resulting inability to close a futures contract when desired; (c) losses caused by unanticipated market movements, which are potentially unlimited; (d) the investment adviser’s inability to predict correctly the direction of securities prices, interest rates, currency exchange rates and other economic factors; and (e) the possibility that the counterparty will default in the performance of its obligations. Options — An option is an agreement that, for a premium payment or fee, gives the option holder (the purchaser) the right but not the obligation to buy (a “call option”) or sell (a “put option”) the underlying asset (or settle for cash in an amount based on an underlying asset, rate, or index) at a specified price (the “exercise price”) during a period of time or on a specified date. Investments in options are considered speculative. When the Fund purchases an option, it may lose the total premium paid for it if the price of the underlying security or other assets decreased, remained the same or failed to increase to a level at or beyond the exercise price (in the case of a call option) or increased, remained the same or failed to decrease to a level at or below the exercise price (in the case of a put option). If a put or call option purchased by the Fund were permitted to expire without being sold or exercised, its premium would represent a loss to the Fund. To the extent that the Fund writes or sells an option, if the decline or increase in the underlying asset is significantly below or above the exercise price of the written option, the Fund could experience a substantial loss. Commodity-Linked Derivatives — The value of a commodity-linked derivative investment typically is based upon the price movements of a commodity, a commodity futures contract or commodity index, or some other readily measurable economic variable. The value of commodity-linked derivative instruments may be affected by changes in overall market movements, volatility of the underlying benchmark, changes in inflation, interest rates, or factors affecting a particular industry or commodity, such as drought, floods, weather, livestock disease, embargoes, tariffs and international economic, political and regulatory developments. The value of commodity linked derivatives will rise or fall in response to changes in the underlying commodity or related index. Investments in commodity-linked derivatives may be subject to greater volatility than non-derivative based investments. A highly liquid secondary market may not exist for certain commodity-linked derivatives, and there can be no assurance that one will develop.
Commodity-linked derivatives also may be subject to credit and interest rate risks that in general affect the values of fixed-income securities. Therefore, at maturity, the Fund may receive more or less principal than it originally invested. The Fund might receive interest payments that are more or less than the stated coupon interest payments.
In connection with the Fund’s direct and indirect investments in commodity-linked derivatives, the Fund will attempt to manage its counterparty exposure so as to limit its exposure to any one counterparty. However, due to the limited number of entities that may serve as counterparties (and which the Fund believes are creditworthy) at any one time the Fund may enter into swap agreements with a limited number of counterparties and may invest in commodity-linked notes issued by a limited number of issuers that will act as counterparties, which may increase the Fund’s exposure to counterparty credit risk. There can be no assurance that the Fund will be able to limit exposure to any one counterparty at all times.
13
NM0926U-5977729-13/40
Page 14
Commodity-Linked Notes — Commodity-linked notes involve substantial risks, including the risk of loss of a significant portion of their principal value. In addition to commodity risk and general derivatives risk, they may be subject to additional special risks, such as risk of loss of interest and principal, lack of secondary market and risk of greater volatility, that do not affect traditional equity and debt securities. Equity Securities Risk — Common and preferred stocks represent equity ownership in a company. Stock markets are volatile. The price of equity securities will fluctuate and can decline and reduce the value of a portfolio investing in equities. The value of equity securities purchased by the Fund could decline if the financial condition of the companies the Fund invests in declines or if overall market and economic conditions deteriorate. The value of equity securities may also decline due to factors that affect a particular industry or industries, such as labor shortages or an increase in production costs and competitive conditions within an industry. In addition, the value may decline due to general market conditions that are not specifically related to a company or industry, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in inflation, interest or currency rates or generally adverse investor sentiment. High Portfolio Turnover Risk — The Fund may engage in active and frequent trading of its portfolio securities. High portfolio turnover (more than 100%) may result in increased transaction costs to the Fund, including brokerage commissions, dealer mark-ups and other transaction costs on the sale of the securities and on reinvestment in other securities. The sale of Fund portfolio securities may result in the realization and/or distribution to shareholders of higher capital gains or losses as compared to a fund with less active trading policies. These effects of higher than normal portfolio turnover may adversely affect Fund performance. Investment Style Risk — Under certain market conditions, growth investments have performed better during the later stages of economic expansion and value investments have performed better during periods of economic recovery. Therefore, these investment styles may over time go in and out of favor. At times when the investment style used by the Fund is out of favor, the Fund may underperform other equity funds that use different investment styles. Leverage Risk — Some transactions may give rise to a form of economic leverage. These transactions may include, among others, derivatives, and may expose the Fund to greater risk and increase its costs. As an open-end investment company registered with the Securities and Exchange Commission (the “SEC”), the Fund is subject to the federal securities laws, including the Investment Company Act. Under Rule 18f-4 under the Investment Company Act, among other things, the Fund must either use derivatives in a limited manner or comply with an outer limit on fund leverage risk based on value-at-risk. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet the applicable requirements of the Investment Company Act and the rules thereunder. Increases and decreases in the value of the Fund’s portfolio will be magnified when the Fund uses leverage. Market Risk and Selection Risk — Market risk is the risk that one or more markets in which the Fund invests will go down in value, including the possibility that the markets will go down sharply and unpredictably. An investor could lose money over short periods due to fluctuation in the Fund’s net asset value in response to short-term market movements and over longer periods during market downturns. Securities or other investments held by the Fund may underperform the markets, the relevant indices or benchmarks, or the securities selected by other funds with similar investment objectives and investment strategies, or may otherwise fail to perform as intended. The value of a security or other asset may decline due to changes in general market conditions, economic trends or events that are not specifically related to the issuer of the security or other asset, or factors that affect a particular issuer or issuers, exchange, country, group of countries, region, market, industry, group of industries, sector or asset class. The success of the Fund’s activities could be affected by interest rates, availability of credit, inflation rates, economic uncertainty, changes in laws, tariffs and trade barriers, supply chain disruptions, economic sanctions, currency exchange controls, and local, regional or global events such as war, acts of terrorism, natural and environmental disasters, the spread of infectious illness or other public health issues like pandemics or epidemics, recessions, or other events. The Fund seeks to pursue its investment objective by using proprietary models that incorporate quantitative analysis and is subject to “Model Risk” as described below. Recent policy initiatives undertaken by the U.S. government have the potential to impact international relations, trade agreements and the overall regulatory environment in ways that could create uncertainty and instability in domestic and global markets, and could adversely affect the investment performance of the Fund. In particular, actions taken by the U.S. government in respect of international trade relations could lead to trade wars, increased costs for imported goods, disruptions in supply chains, reduced foreign investment, and instability in regions where the Fund invests. Model Risk — The Fund seeks to pursue its investment objective by using proprietary models that incorporate quantitative analysis. Investments selected using these models may perform differently than as forecasted due to the factors incorporated into the models and the weighting of each factor, as well as the level and scope of changes
14
NM0926U-5977729-14/40
Page 15
from historical trends. In addition, issues in the construction and implementation of the models, including software or hardware malfunction, power loss, software bugs, malicious code, viruses, system crashes, issues related to the use of artificial intelligence and machine learning (“AI”), and other technological failures or various other events or circumstances within or beyond the control of BlackRock, may adversely impact the Fund. Please see also “Operational and Technology Risks” below. There is no guarantee that BlackRock’s use of these models will result in effective investment decisions for the Fund. Some of the models used by BlackRock rely on historical data and may not accurately predict future market movements. The Fund bears the risk that the models used by BlackRock will not be successful in forecasting movements in the market or in determining the size, direction, and/or weighting of investment positions that will enable the Fund to achieve its investment objective. In addition, the models may not be reliable in the event of unusual or disruptive events that cause market movements, which may be inconsistent with the historical performance of individual markets. In such instances, the models may produce unexpected results, which can result in losses for the Fund. Furthermore, because predictive models may be constructed based on data supplied by third parties, the success of relying on such models may depend heavily on the accuracy and reliability of such data. “New Issues” Risk — “New issues” are IPOs of equity securities. Investments in companies that have recently gone public have the potential to produce substantial gains for the Fund. However, there is no assurance that the Fund will have access to profitable IPOs and therefore investors should not rely on these past gains as an indication of future performance. The investment performance of the Fund during periods when it is unable to invest significantly or at all in IPOs may be lower than during periods when the Fund is able to do so. In addition, as the Fund increases in size, the impact of IPOs on the Fund’s performance will generally decrease. Securities issued in IPOs are subject to many of the same risks as investing in companies with smaller market capitalizations. Securities issued in IPOs have no trading history, and information about the companies may be available for very limited periods. In addition, the prices of securities sold in IPOs may be highly volatile or may decline shortly after the IPO. When an IPO is brought to the market, availability may be limited and the Fund may not be able to buy any shares at the offering price, or, if it is able to buy shares, it may not be able to buy as many shares at the offering price as it would like. Operational and Technology Risks — The Fund and the entities with which it interacts directly or indirectly are susceptible to operational and technology risks, including those related to human errors, processing errors, communication errors, systems failures, cybersecurity incidents, and the use of artificial intelligence and machine learning (“AI”), which may result in losses for the Fund and its shareholders or impair the Fund’s operations. These entities include, but are not limited to, the Fund’s adviser, administrator, distributor, other service providers (e.g., index and benchmark providers, accountants, custodians, and transfer agents), financial intermediaries, counterparties, market makers, authorized participants, listing exchanges, other financial market operators, and governmental authorities, as applicable. Operational and technology risks for the issuers in which the Fund invests could also result in material adverse consequences for such issuers and may cause the Fund’s investments in such issuers to lose value. The Fund may incur substantial costs in order to mitigate operational and technology risks. Cybersecurity incidents can result from deliberate attacks or unintentional events against an issuer in which the Fund invests, the Fund or any of its service providers. They include, but are not limited to, gaining unauthorized access to systems, misappropriating assets or sensitive information, corrupting or destroying data, and causing operational disruption. Geopolitical tension may increase the scale and sophistication of deliberate attacks, particularly those from nation states or from entities with nation state backing. Cybersecurity incidents may result in any of the following: financial losses; interference with the Fund’s ability to calculate its net asset value (“NAV”); disclosure of confidential information; impediments to trading; submission of erroneous trades by the Fund or erroneous subscription or redemption orders; the inability of the Fund or its service providers to transact business; violations of applicable privacy and other laws; regulatory fines; penalties; reputational damage; reimbursement or other compensation costs; and other legal and compliance expenses. Furthermore, cybersecurity incidents may render records of the Fund, including records relating to its assets and transactions, shareholder ownership of Fund shares, and other data integral to the Fund’s functioning, inaccessible, inaccurate or incomplete. Power outages, natural disasters, equipment malfunctions and processing errors that threaten information and technology systems relied upon by the Fund or its service providers, as well as market events that occur at a pace that overloads these systems, may also disrupt business operations or impact critical data. In addition, the risks of increased use of AI technologies, such as machine learning, include data risk, transparency risk, and operational risk. The AI technologies, which are generally highly reliant on the collection and analysis of large amounts of data, may incorporate biased or inaccurate data, and it is not possible or practicable to incorporate all relevant data into such technologies. The output or results of any such AI technologies may therefore be incomplete, erroneous, distorted or misleading. Further, AI tools may lack transparency as to how data is utilized and how outputs are generated. AI technologies may also allow the unintended introduction of vulnerabilities into infrastructures and applications. The
15
NM0926U-5977729-15/40
Page 16
Fund and its shareholders could be negatively impacted as a result of these risks associated with AI technologies. AI technologies and their current and potential future applications, and the regulatory frameworks within which they operate, continue to quickly evolve, and it is impossible to anticipate the full scope of future AI capabilities or rules and the associated risks to the Fund. While the Fund’s service providers are required to have appropriate operational, information security and cybersecurity risk management policies and procedures, their methods of risk management may differ from those of the Fund in the setting of priorities, the personnel and resources available or the effectiveness of relevant controls. The Fund and its adviser seek to reduce these risks through controls, procedures and oversight, including establishing business continuity plans and risk management systems. However, there are inherent limitations in such plans and systems, including the possibility that certain risks that may affect the Fund have not been identified or may emerge in the future; that such plans and systems may not completely eliminate the occurrence or mitigate the effects of operational or information security disruptions or failures or of cybersecurity incidents; or that prevention and remediation efforts will not be successful or that incidents will go undetected. The Fund cannot control the systems, information security or other cybersecurity of the issuers in which it invests or its service providers, counterparties, and other third parties whose activities affect the Fund.
Lastly, the regulatory climate governing cybersecurity and data protection is developing quickly and may vary considerably across jurisdictions. Regulators continue to develop new rules and standards related to cybersecurity and data protection. Compliance with evolving regulations can be demanding and costly, requiring substantial resources to monitor and implement required changes. Preferred Securities Risk — Preferred securities may pay fixed or adjustable rates of return. Preferred securities are subject to issuer-specific and market risks applicable generally to equity securities. In addition, a company’s preferred securities generally pay dividends only after the company makes required payments to holders of its bonds and other debt. For this reason, the value of preferred securities will usually react more strongly than bonds and other debt to actual or perceived changes in the company’s financial condition or prospects. Preferred securities of smaller companies may be more vulnerable to adverse developments than preferred securities of larger companies. Risk of Investing in the United States — A decrease in imports or exports, changes in trade regulations, tariffs, inflation and/or an economic recession in the United States may have a material adverse effect on the U.S. economy and the securities listed on U.S. exchanges. Proposed and adopted policy and legislative changes in the United States are changing many aspects of financial, commercial, public health, environmental, and other regulation and may have a significant effect on U.S. markets generally, as well as on the value of certain securities. Governmental agencies project that the United States will continue to maintain elevated public debt levels for the foreseeable future. Although elevated debt levels do not necessarily indicate or cause economic problems, elevated public debt service costs may constrain future economic growth. The United States has developed increasingly strained relations with a number of foreign countries. If relations with certain countries deteriorate, it could adversely affect U.S. issuers as well as non-U.S. issuers that rely on the United States for trade. The United States has also experienced increased internal political discord. If these trends were to continue, it may have an adverse impact on the U.S. economy and the issuers in which the Fund invests. Small Cap Securities Risk — Small cap companies may have limited product lines or markets. They may be less financially secure than larger, more established companies. They may depend on a small number of key personnel. If a product fails or there are other adverse developments, or if management changes, the Fund’s investment in a small cap company may lose substantial value. In addition, it is more difficult to get information on smaller companies, which tend to be less well known, have shorter operating histories, do not have significant ownership by large investors and are followed by relatively few securities analysts. The securities of small cap companies generally trade in lower volumes and are subject to greater and more unpredictable price changes than larger cap securities or the market as a whole. In addition, small cap securities may be particularly sensitive to changes in interest rates, borrowing costs and earnings. Investing in small cap securities requires a longer term view.
Other Risks of Investing in the Fund The Fund may also be subject to certain other non-principal risks associated with its investments and investment strategies, including: Borrowing Risk — Borrowing may exaggerate changes in the net asset value of Fund shares and in the return on the Fund’s portfolio. Borrowing will cost the Fund interest expense and other fees. The costs of borrowing may reduce the Fund’s return. Borrowing may cause the Fund to liquidate positions when it may not be advantageous to do so to satisfy its obligations.
16
NM0926U-5977729-16/40
Page 17
Expense Risk — Fund expenses are subject to a variety of factors, including fluctuations in the Fund’s net assets. Accordingly, actual expenses may be greater or less than those indicated. For example, to the extent that the Fund’s net assets decrease due to market declines or redemptions, the Fund’s expenses will increase as a percentage of Fund net assets. During periods of high market volatility, these increases in the Fund’s expense ratio could be significant. Foreign Securities Risk — Because the Fund may invest in companies located in countries other than the United States, the Fund may be exposed to risks associated with foreign investments. The value of holdings traded outside the United States (and any hedging transactions in foreign currencies) will be affected by changes in currency exchange rates. The costs of non-U.S. securities transactions tend to be higher than those of U.S. transactions. Foreign holdings may be adversely affected by foreign government action. International trade barriers or economic sanctions against certain non-U.S. countries may adversely affect these holdings. The economies of certain countries may compare unfavorably with the U.S. economy. Foreign securities markets may be smaller than the U.S. markets, which may make trading more difficult. The Fund’s claims to recover foreign withholding taxes may not be successful, which may adversely affect the Fund’s net asset value. Illiquid Investments Risk — The Fund may not acquire any illiquid investment if, immediately after the acquisition, the Fund would have invested more than 15% of its net assets in illiquid investments. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. Liquid investments may become illiquid after purchase by the Fund, particularly during periods of market turmoil. There can be no assurance that a security or instrument that is deemed to be liquid when purchased will continue to be liquid for as long as it is held by the Fund, and any security or instrument held by the Fund may be deemed an illiquid investment pursuant to the Fund’s liquidity risk management program. The Fund’s illiquid investments may reduce the returns of the Fund because it may be difficult to sell the illiquid investments at an advantageous time or price. In addition, if the Fund is limited in its ability to dispose of illiquid investments during periods when shareholders are redeeming or selling their shares or the Fund’s net assets otherwise shrink, the Fund will need to dispose of liquid securities to meet redemption requests and illiquid securities will become a larger portion of the Fund’s holdings. An investment may be illiquid due to, among other things, the lack of an active trading market. To the extent that the Fund’s principal investment strategies involve derivatives or securities with substantial market and/or credit risk, the Fund will tend to have greater exposure to the risks associated with illiquid investments. Illiquid investments may be harder to value, especially in changing markets, and if the Fund is forced to sell these investments to meet redemption requests or for other cash needs, the Fund may suffer a loss. In addition, when there is illiquidity in the market for certain securities, the Fund, due to limitations on illiquid investments, may be subject to purchase and sale restrictions. Indexed and Inverse Securities Risk — Indexed and inverse securities provide a potential return based on a particular index of value or interest rates. The Fund’s return on these securities will be subject to risk with respect to the value of the particular index. These securities are subject to leverage risk and correlation risk. Certain indexed and inverse securities have greater sensitivity to changes in interest rates or index levels than other securities, and the Fund’s investment in such instruments may decline significantly in value if interest rates or index levels move in a way Fund management does not anticipate. Investment in Other Investment Companies Risk — As with other investments, investments in other investment companies, including exchange-traded funds (“ETFs”), are subject to market and selection risk. In addition, if the Fund acquires shares of investment companies, including ones affiliated with the Fund, shareholders bear both their proportionate share of expenses in the Fund (including management and advisory fees) and, indirectly, the expenses of the investment companies (to the extent not offset by BlackRock through waivers). To the extent the Fund is held by an affiliated fund, the ability of the Fund itself to hold other investment companies may be limited. Large Shareholder and Large-Scale Redemption Risk — Certain shareholders, including a third-party investor, the Fund’s adviser or an affiliate of the Fund’s adviser, or another entity, may from time to time own or manage a substantial amount of Fund shares, including funds or accounts over which the Fund’s adviser has discretion, or may invest in the Fund and hold its investment for a limited period of time. There can be no assurance that any large shareholder or large group of shareholders would not redeem their investment or that the size of the Fund would be maintained. Redemptions of a large number of Fund shares by these shareholders may adversely affect the Fund’s liquidity and net assets. These redemptions may force the Fund to sell portfolio securities to meet
17
NM0926U-5977729-17/40
Page 18
redemption requests when it might not otherwise do so, which may negatively impact the Fund’s net asset value and increase the Fund’s brokerage costs and/or accelerate the realization of taxable income and cause the Fund to make taxable distributions to its shareholders earlier than the Fund otherwise would have. In addition, under certain circumstances, non-redeeming shareholders may be treated as receiving a disproportionately large taxable distribution during or with respect to such tax year. The effects of taxable income and/or gains resulting from such transactions would particularly impact non-redeeming shareholders who do not hold their Fund shares in an IRA, 401(k) plan or other tax-advantaged plan. To the extent that such transactions result in short-term capital gains, such gains will generally be taxed at the ordinary income tax rate for shareholders who hold Fund shares in a taxable account. The Fund also may be required to sell its more liquid Fund investments to meet a large redemption, in which case the Fund’s remaining assets may be less liquid, more volatile, and more difficult to price. In addition, large redemptions can result in the Fund’s current expenses being allocated over a smaller asset base, which generally results in an increase in the Fund’s expense ratio. Because large redemptions can adversely affect a portfolio manager’s ability to implement a fund’s investment strategy, the Fund also reserves the right to redeem in-kind, subject to certain conditions. In addition, large purchases of Fund shares may adversely affect the Fund’s performance to the extent that the Fund is delayed in investing new cash and is required to maintain a larger cash position than it ordinarily would, diluting its investment returns. Money Market Securities Risk — If market conditions improve while the Fund has invested some or all of its assets in high quality money market securities, this strategy could result in reducing the potential gain from the market upswing, thus reducing the Fund’s opportunity to achieve its investment objective. Ownership Limitations Risk — If certain aggregate and/or fund-level ownership thresholds are reached through transactions undertaken by BlackRock, its affiliates or the Fund, or as a result of third-party transactions or actions by an issuer or regulator, the ability of BlackRock and its affiliates on behalf of clients (including the Fund) to purchase or dispose of investments, exercise rights or undertake business transactions may be restricted by law, regulation or rule or otherwise impaired. The capacity of the Fund to invest in certain securities or other assets may be affected by the relevant threshold limits, and such limitations may have adverse effects on the liquidity and performance of the Fund’s portfolio holdings. For example, ownership limits may apply to securities whose issuers operate in certain regulated industries or in certain international markets. Such limits also may apply where the investing entity (such as the Fund) is subject to corporate or regulatory ownership restrictions or invests in certain futures or other derivative transactions. In certain circumstances, aggregate and/or fund-level amounts invested or voted by BlackRock and its affiliates for client funds and accounts managed by BlackRock (including the Fund) may not exceed the relevant limits without the grant of a license or other regulatory or corporate approval, order, consent, relief or non-disapproval. However, there is no guarantee that permission will be granted, or that, once granted, it will not be modified or revoked at a later date with minimal or no notice. In other cases, exceeding such thresholds may cause BlackRock and its affiliates, the Fund or other client accounts to suffer disadvantages or business restrictions. Ownership limitations are highly complex. It is possible that, despite BlackRock’s intent to either comply with or be granted permission to exceed ownership limitations, it may inadvertently breach a limit or violate the corporate or regulatory approval, order, consent, relief or non-disapproval that was obtained. Real Estate-Related Securities Risk — The main risk of real estate-related securities is that the value of the underlying real estate may go down. Many factors may affect real estate values. These factors include both the general and local economies, vacancy rates, changes in rent schedules, tenant bankruptcies, the ability to re-lease space under expiring leases on attractive terms, the amount of new construction in a particular area, the laws and regulations (including zoning, environmental and tax laws) affecting real estate and the costs of owning, maintaining and improving real estate. The availability of mortgage financing and changes in interest rates may also affect real estate values. If the Fund’s real estate-related investments are concentrated in one geographic area or in one property type, the Fund will be particularly subject to the risks associated with that area or property type. Many issuers of real estate-related securities are highly leveraged, which increases the risk to holders of such securities. The value of the securities the Fund buys will not necessarily track the value of the underlying investments of the issuers of such securities. In addition, certain issuers of real estate-related securities may have developed or commenced development on properties and may develop additional properties in the future. Real estate development involves significant risks in addition to those involved in the ownership and operation of established properties. Real estate securities may have limited diversification and are, therefore, subject to risks inherent in operating and financing a limited number of projects. Real estate securities are also subject to heavy cash flow dependency and defaults by borrowers or tenants. REIT Investment Risk — In addition to the risks facing real estate-related securities, such as a decline in property values due to increasing vacancies, a decline in rents resulting from unanticipated economic, legal or technological developments or a decline in the price of securities of real estate companies due to a failure of borrowers to pay
18
NM0926U-5977729-18/40
Page 19
their loans or poor management, investments in REITs involve unique risks. REITs may have limited financial resources, may trade less frequently and in limited volume, may engage in dilutive offerings of securities and may be more volatile than other securities. REIT issuers may also fail to maintain their exemptions from investment company registration or fail to qualify for the “dividends paid deduction” under the Internal Revenue Code, which allows REITs to reduce their corporate taxable income for dividends paid to their shareholders. Ordinary REIT dividends received by the Fund and distributed to the Fund’s shareholders will generally be taxable as ordinary income and will not constitute “qualified dividend income.” However, a non-corporate taxpayer who is a direct REIT shareholder may claim a 20% “qualified business income” deduction for ordinary REIT dividends, and a regulated investment company may report dividends as eligible for this deduction to the extent the regulated investment company’s income is derived from ordinary REIT dividends (reduced by allocable regulated investment company expenses). A shareholder may treat the dividends as such provided the regulated investment company and the shareholder satisfy applicable holding period requirements. Reliance on Advisor Risk — The Fund is dependent upon services and resources provided by BlackRock, and therefore BlackRock’s parent, BlackRock, Inc. BlackRock is not required to devote its full time to the business of the Fund and there is no guarantee or requirement that any investment professional or other employee of BlackRock will allocate a substantial portion of his or her time to the Fund. The loss of, or changes in, BlackRock’s personnel could have a negative effect on the performance or the continued operation of the Fund. Repurchase Agreements and Purchase and Sale Contracts Risk — If the other party to a repurchase agreement or purchase and sale contract defaults on its obligation under the agreement, the Fund may suffer delays and incur costs or lose money in exercising its rights under the agreement. If the seller fails to repurchase the security in either situation and the market value of the security declines, the Fund may lose money.
Restricted Securities Risk — Limitations on the resale, including any required lock-up or holding periods, of restricted securities may have an adverse effect on their marketability and their liquidity, and may prevent the Fund from disposing of them promptly at advantageous prices, if at all. Restricted securities may not be listed on an exchange and may have no active trading market. In order to sell certain restricted securities, the Fund may have to bear the expense of registering the securities for resale and the risk of substantial delays in effecting the registration. Other transaction costs may be higher for restricted securities than unrestricted securities. Restricted securities may be difficult to value because market quotations may not be readily available, there may be limited other information regarding the investment’s market or fair value, and the securities’ values may have significant volatility. Also, the Fund may get only limited information about the issuer of a given restricted security, and therefore may be less able to determine the security’s market or fair value or assess the investment risks as fully as for other issuers for which more information is available. Certain restricted securities may involve a high degree of business and financial risk and may result in substantial losses to the Fund. Certain restricted securities may represent limited investment opportunities and each shareholder’s proportionate investment exposure to such limited investment opportunities may be reduced proportionately as the Fund’s net assets grow from new or additional investments made in the Fund by other shareholders. Reverse Repurchase Agreements Risk — Reverse repurchase agreements involve the sale of securities held by the Fund with an agreement to repurchase the securities at an agreed-upon price, date and interest payment. Reverse repurchase agreements involve the risk that the other party may fail to return the securities in a timely manner or at all. The Fund could lose money if it is unable to recover the securities and the value of the collateral held by the Fund, including the value of the investments made with cash collateral, is less than the value of the securities. These events could also trigger adverse tax consequences for the Fund. In addition, reverse repurchase agreements involve the risk that the interest income earned in the investment of the proceeds will be less than the interest expense. Securities Lending Risk — The Fund may engage in securities lending. Securities lending involves the risk that the Fund may lose money because the borrower of the loaned securities fails to return the securities in a timely manner or at all. The Fund could also lose money in the event of a decline in the value of collateral provided for loaned securities or a decline in the value of any investments made with cash collateral. These events could also trigger adverse tax consequences for the Fund. Valuation Risk — The price the Fund could receive upon the sale of any particular portfolio investment may differ from the Fund’s valuation of the investment, particularly for securities that trade in thin or volatile markets or that are valued using a fair valuation methodology or a price provided by an independent pricing service. As a result, the price received upon the sale of an investment may be less than the value ascribed by the Fund, and the Fund could realize a greater than expected loss or lesser than expected gain upon the sale of the investment. Pricing services that value fixed-income securities generally utilize a range of market-based and security-specific inputs and assumptions, as well as considerations about general market conditions, to establish a price. Pricing services generally value fixed-income securities assuming orderly transactions of an institutional round lot size, but the Fund
19
NM0926U-5977729-19/40
Page 20
may hold or transact in such securities in smaller, odd lot sizes. Odd lots of securities in certain asset classes may trade at lower prices than institutional round lots, and the value ultimately realized when the securities are sold could differ from the prices used by the Fund. The Fund’s ability to value its investments may also be impacted by technological issues and/or errors by pricing services or other third-party service providers. Warrants Risk — If the price of the underlying stock does not rise above the exercise price before the warrant expires, the warrant generally expires without any value and the Fund will lose any amount it paid for the warrant. Thus, investments in warrants may involve substantially more risk than investments in common stock. Warrants may trade in the same markets as their underlying stock; however, the price of the warrant does not necessarily move with the price of the underlying stock.
When-Issued and Delayed Delivery Securities and Forward Commitments Risk — When-issued and delayed delivery securities and forward commitments involve the risk that the security the Fund buys will lose value prior to its delivery. There also is the risk that the security will not be issued or that the other party to the transaction will not meet its obligation. If this occurs, the Fund may lose both the investment opportunity for the assets it set aside to pay for the security and any gain in the security’s price.
20
NM0926U-5977729-20/40
Page 21
Account Information
Details About the Share Class
The Fund currently offers multiple share classes (Class K Shares in this prospectus), each with its own sales charge and expense structure, allowing you to invest in the way that best suits your needs. Each share class represents an ownership interest in the same investment portfolio of the Fund. When you choose your class of shares, you should consider the size of your investment and how long you plan to hold your shares. Only certain investors are eligible to buy Class K Shares. Either your financial professional or your selected securities dealer, broker, investment adviser, service provider or industry professional (including BlackRock and its affiliates) (each, a “Financial Intermediary”) can help you determine whether you are eligible to buy Class K Shares.
The Fund’s shares are distributed by BlackRock Investments, LLC (the “Distributor”), an affiliate of BlackRock.
The table below summarizes key features of Class K Shares of the Fund.
Class K Shares at a Glance
Availability Available only to (i) certain employee benefit plans, such as health savings accounts, and certain employer-sponsored retirement plans (not including SEP IRAs, SIMPLE IRAs and SARSEPs) (collectively, “Employer-Sponsored Retirement Plans”), (ii) collective trust funds, investment companies and other pooled investment vehicles, each of which may purchase shares of the Fund through a Financial Intermediary that has entered into an agreement with the Distributor to purchase such shares, (iii) “Institutional Investors,” which include, but are not limited to, endowments, foundations, family offices, banks and bank trusts, local, city, and state governmental institutions, corporations and insurance company separate accounts, each of which may purchase shares of the Fund through a Financial Intermediary that has entered into an agreement with the Distributor to purchase such shares, (iv) clients of private banks that purchase shares of the Fund through a Financial Intermediary that has entered into an agreement with the Distributor to sell such shares, (v) fee-based advisory platforms of a Financial Intermediary that (a) has specifically acknowledged in a written agreement with the Distributor and/or its affiliate(s) that the Financial Intermediary shall offer such shares to fee-based advisory clients through an omnibus account held at the Fund or (b) transacts in the Fund’s shares through another intermediary that has executed such an agreement and (vi) any other investors who met the eligibility criteria for BlackRock Shares or Class K Shares prior to August 15, 2016 and have continually held Class K Shares of the Fund in the same account since August 15, 2016.
Minimum Investment $5 million minimum initial investment for Institutional Investors. There is no minimum initial investment requirement for any Employer-Sponsored Retirement Plans or any other eligible investors other than Institutional Investors. There is no minimum investment amount for additional purchases. Initial Sales Charge? No. Entire purchase price is invested in shares of the Fund. Deferred Sales Charge? No. Distribution and Service (12b-1) Fees? No. Redemption Fees? No.
The Fund reserves the right to modify or waive the above-stated policies at any time.
When Class K Shares are purchased through a customer’s account in an Employer-Sponsored Retirement Plan through procedures established by the Employer-Sponsored Retirement Plan, confirmation of share purchases and redemptions will be sent to the Employer-Sponsored Retirement Plan. A customer’s ownership of shares will be recorded by the Employer-Sponsored Retirement Plan and reflected in the account statements provided by the Employer-Sponsored Retirement Plan to its participants.
21
NM0926U-5977729-21/40
Page 22
If you purchased your shares through an Employer-Sponsored Retirement Plan and you transfer your investment from an Employer-Sponsored Retirement Plan to a type of account, such as an individual retirement account, that is not an eligible Class K Share investor in the Fund, you must liquidate your investment in Class K Shares of the Fund and purchase a share class of the Fund or another fund advised by BlackRock or its affiliates that is available for purchase by that type of account.
For investors not purchasing shares through an Employer-Sponsored Retirement Plan, please see below for information on how to buy, sell, exchange and transfer shares.
Right of Accumulation Investors have a “right of accumulation” under which any of the following may be combined with the amount of the current purchase in determining whether an investor qualifies for a breakpoint and a reduced front-end sales charge:
i. The current value of an investor’s existing Investor A and A1, Investor C, Investor P, Institutional, Class K and Premier Shares in most mutual funds sponsored and advised by BlackRock or its affiliates (“BlackRock Funds”),
ii. The current value of an investor’s existing shares of certain unlisted closed-end management investment companies sponsored and advised by BlackRock or its affiliates and
iii. The investment in the BlackRock CollegeAdvantage 529 Program by the investor or by or on behalf of the investor’s spouse and children.
Financial Intermediaries may value current holdings of their customers differently for purposes of determining whether an investor qualifies for a breakpoint and a reduced front-end sales charge, although customers of the same Financial Intermediary will be treated similarly. In order to use this right, the investor must alert BlackRock to the existence of any previously purchased shares.
How to Buy, Sell, Exchange and Transfer Shares
The chart on the following pages summarizes how to buy, sell, exchange and transfer shares through your Financial Intermediary. If you are not purchasing shares through an Employer-Sponsored Retirement Plan, you may also buy, sell, exchange and transfer shares through BlackRock, if your account is held directly with BlackRock. To learn more about buying, selling, exchanging or transferring shares through BlackRock, call (800) 537-4942. Because the selection of a mutual fund involves many considerations, your Financial Intermediary may help you with this decision.
With certain limited exceptions, the Fund is generally available only to investors residing in the United States and may not be distributed by a foreign Financial Intermediary. Under this policy, in order to accept new accounts or additional investments (including by way of exchange from another BlackRock Fund) into existing accounts, the Fund generally requires that (i) a shareholder that is a natural person be a U.S. citizen or resident alien, in each case residing within the United States or a U.S. territory (including APO/FPO/DPO addresses), and have a valid U.S. taxpayer identification number, and (ii) a Financial Intermediary or a shareholder that is an entity be domiciled in the United States and have a valid U.S. taxpayer identification number or be domiciled in a U.S. territory and have a valid U.S. taxpayer identification number or IRS Form W-8. Any existing account that is updated to reflect a non-U.S. address will also be restricted from making additional investments.
The Fund may reject any purchase order, modify or waive the minimum initial or subsequent investment requirements for any shareholders and suspend and resume the sale of any share class of the Fund at any time for any reason. In addition, the Fund may waive certain requirements regarding the purchase, sale, exchange or transfer of shares described below.
Under certain circumstances, if no activity occurs in an account within a time period specified by state law, a shareholder’s shares in the Fund may be transferred to that state.
How to Buy Shares
Your Choices Important Information for You to Know Initial Purchase Determine the amount of your investment
There is no minimum initial investment for any Employer-Sponsored Retirement Plans or any other investors other than Institutional Investors. For Institutional Investors, there is a $5 million minimum initial investment for all accounts.
22
NM0926U-5977729-22/40
Page 23
Your Choices Important Information for You to Know Initial Purchase (continued)
Have your Financial Intermediary submit your purchase order
The price of your shares is based on the next calculation of the Fund’s net asset value after your order is placed. Any purchase orders placed prior to the close of business on the New York Stock Exchange (the “NYSE”) (generally 4:00 p.m. Eastern time) will be priced at the net asset value determined that day. Certain Financial Intermediaries, however, may require submission of orders prior to that time. Purchase orders placed after that time will be priced at the net asset value determined on the next business day. A broker-dealer or financial institution maintaining the account in which you hold shares may charge a separate account, service or transaction fee on the purchase or sale of Fund shares that would be in addition to the fees and expenses shown in the Fund’s “Fees and Expenses” table. The Fund may reject any order to buy shares and may suspend the sale of shares at any time. Certain Financial Intermediaries may charge a processing fee to confirm a purchase. Or contact BlackRock (for accounts held directly with BlackRock)
For investors not purchasing shares through an Employer-Sponsored Retirement Plan, to purchase shares directly from BlackRock, call (800) 537-4942 and request a new account application. Add to Your Investment
Purchase additional shares There is no minimum investment amount for additional purchases.
Have your Financial Intermediary submit your purchase order for additional shares
To purchase additional shares, you may contact your Financial Intermediary or Employer-Sponsored Retirement Plan.
Or contact BlackRock (for accounts held directly with BlackRock)
For investors not purchasing shares through an Employer-Sponsored Retirement Plan: Purchase by Telephone : Call the Fund at (800) 537-4942 and speak with one of our representatives. The Fund has the right to reject any telephone request for any reason. Purchase by Internet : You may purchase your shares and view activity in your account by logging onto the BlackRock website at www.blackrock.com. Purchases made on the Internet using the Automated Clearing House (“ACH”) will have a trade date that is the day after the purchase is made. Certain institutional clients’ purchase orders placed by wire prior to the close of business on the NYSE will be priced at the net asset value determined that day. Contact your Financial Intermediary or BlackRock for further information. Limits on amounts that may be purchased via Internet may vary. For additional information call BlackRock at (800) 537-4942. Please read the On-Line Services Disclosure Statement and User Agreement, the Terms and Conditions page and the Consent to Electronic Delivery Agreement (if you consent to electronic delivery), before attempting to transact online. The Fund employs reasonable procedures to confirm that transactions entered over the Internet are genuine. By entering into the User Agreement with the Fund in order to open an account through the website, the shareholder waives any right to reclaim any losses from the Fund or any of its affiliates incurred through fraudulent activity. Acquire additional shares by reinvesting dividends and capital gains
All dividends and capital gains distributions are automatically reinvested in shares of the Fund at net asset value. To make any changes to your dividend and/or capital gains distributions options, please call BlackRock at (800) 537-4942 (for investors who are not purchasing shares through an Employer-Sponsored Retirement Plan) or contact your Financial Intermediary.
23
NM0926U-5977729-23/40
Page 24
Your Choices Important Information for You to Know How to Pay for Shares
Making payment for purchases If you are purchasing shares through an Employer-Sponsored Retirement Plan, payment for an order must be made in Federal funds or other immediately available funds by the time specified by your Financial Intermediary, but in no event later than 4:00 p.m. (Eastern time) on the first business day following the receipt of the order. If payment is not received by this time, the order will be canceled and you and your Financial Intermediary will be responsible for any loss to the Fund. If you are not purchasing shares through an Employer-Sponsored Retirement Plan, payment for shares must normally be made in Federal funds or other immediately available funds by the time specified by your Financial Intermediary but in no event later than 4:00 p.m. (Eastern time) on the first business day following the receipt of the order. Payment may also, at the discretion of the Fund, be made in the form of securities that are permissible investments for the respective fund. If payment is not received by this time, the order will be canceled and you and your Financial Intermediary will be responsible for any loss to the Fund.
How to Sell Shares
Your Choices Important Information for You to Know Full or Partial Redemption of Shares
Have your Financial Intermediary submit your sales order
If you purchased shares through an Employer-Sponsored Retirement Plan, you can make redemption requests through your Financial Intermediary in accordance with the procedures applicable to your accounts. These procedures may vary according to the type of account and the Financial Intermediary involved, and customers should consult their Financial Intermediary in this regard. Financial Intermediaries are responsible for transmitting redemption orders and crediting their customers’ accounts with redemption proceeds on a timely basis. Information relating to such redemption services and charges to process a redemption of shares, if any, should be obtained by customers from their Financial Intermediaries. If you did not purchase your shares through an Employer-Sponsored Retirement Plan, you can make redemption requests through your Financial Intermediary. The price of Class K Shares is based on the next calculation of the Fund’s net asset value after your order is placed. For your redemption request to be priced at the net asset value on the day of your request, you must submit your request to your Financial Intermediary prior to that day’s close of business on the NYSE (generally 4:00 p.m. Eastern time). Certain Financial Intermediaries, however, may require submission of orders prior to that time. Any redemption request placed after that time will be priced at the net asset value at the close of business on the next business day. Regardless of the method the Fund uses to make payment of your redemption proceeds (check or wire), your redemption proceeds typically will be sent one business day after your request is submitted, but in any event, within seven days. Certain Financial Intermediaries may charge a fee to process a redemption of shares. The Fund may reject an order to sell shares under certain circumstances. Selling shares held directly with BlackRock
Methods of Redeeming if You Did Not Purchase Your Shares Through an Employer-Sponsored Retirement Plan Redeem by Telephone : You may sell shares held at BlackRock by telephone request. Call (800) 537-4942 for details. The Fund, its administrators and the Distributor will employ reasonable procedures to confirm that instructions communicated by telephone are genuine. The Fund and its service providers will not be liable for any loss, liability, cost or expense for acting upon telephone instructions
24
NM0926U-5977729-24/40
Page 25
Your Choices Important Information for You to Know Full or Partial Redemption of Shares (continued)
Selling shares held directly with BlackRock (continued)
that are reasonably believed to be genuine in accordance with such procedures. The Fund may refuse a telephone redemption request if it believes it is advisable to do so. During periods of substantial economic or market change, telephone redemptions may be difficult to complete. Please find alternative redemption methods below. Redeem by Internet: You may redeem in your account by logging onto the BlackRock website at www.blackrock.com. Proceeds from Internet redemptions will be sent via wire to the bank account of record. Redeem in Writing: Redemption requests may be sent in proper form to BlackRock, P.O. Box 534429, Pittsburgh, Pennsylvania 15253-4429 or for overnight delivery, Attention: 534429, 1350 Penn Avenue, Suite 102, Pittsburgh, Pennsylvania 15222. Under certain circumstances, a medallion signature guarantee will be required. Payment of Redemption Proceeds Redemption proceeds may be paid by check or, if the Fund has verified banking information on file, by wire transfer. Payment by Check: BlackRock will normally mail redemption proceeds within one business day following receipt of a properly completed request, but in any event within seven days. Shares can be redeemed by telephone and the proceeds sent by check to the shareholder at the address on record. Shareholders will pay $15 for redemption proceeds sent by check via overnight mail. You are responsible for any additional charges imposed by your bank for this service. The Fund reserves the right to reinvest any dividend or distribution amounts (e.g., income dividends or capital gains) which you have elected to receive by check should your check be returned as undeliverable or remain uncashed for more than 6 months. No interest will accrue on amounts represented by uncashed checks. Your check will be reinvested in your account at the net asset value next calculated, on the day of the investment. When reinvested, those amounts are subject to the risk of loss like any fund investment. If you elect to receive distributions in cash and a check remains undeliverable or uncashed for more than 6 months, your cash election may also be changed automatically to reinvest and your future dividend and capital gains distributions will be reinvested in the Fund at the net asset value as of the date of payment of the distribution. Payment by Wire Transfer: Payment for redeemed shares for which a redemption order is received before 4:00 p.m. (Eastern time) on a business day is normally made in Federal funds wired to the redeeming shareholder on the next business day, provided that the Fund’s custodian is also open for business. Payment for redemption orders received after 4:00 p.m. (Eastern time) or on a day when the Fund’s custodian is closed is normally wired in Federal funds on the next business day following redemption on which the Fund’s custodian is open for business. The Fund reserves the right to wire redemption proceeds within seven days after receiving a redemption order if, in the judgment of the Fund, an earlier payment could adversely affect the Fund. Shares can be redeemed by Federal wire transfer to a single previously designated bank account. No charge for wiring redemption payments with respect to Class K Shares is imposed by the Fund. You are responsible for any additional charges imposed by your bank for wire transfers. The Fund is not responsible for the efficiency of the Federal wire system or the shareholder’s firm or bank. To change the name of the single, designated bank account to receive wire redemption proceeds, it is necessary to send a written request to the Fund at the address on the back cover of this prospectus. ***
25
NM0926U-5977729-25/40
Page 26
Your Choices Important Information for You to Know Full or Partial Redemption of Shares (continued)
Selling shares held directly with BlackRock (continued)
If you make a redemption request before the Fund has collected payment for the purchase of shares, the Fund may delay mailing your proceeds. This delay will usually not exceed ten days. Redemption Proceeds Under normal circumstances, the Fund expects to meet redemption requests by using cash or cash equivalents in its portfolio or by selling portfolio assets to generate cash. During periods of stressed market conditions, when a significant portion of the Fund’s portfolio may be comprised of less-liquid investments, the Fund may be more likely to limit cash redemptions and may determine to pay redemption proceeds by (i) borrowing under a line of credit it has entered into with a group of lenders and/or (ii) transferring portfolio securities in kind to you. The SAI includes more information about the Fund’s line of credit. If the Fund pays redemption proceeds by transferring portfolio securities in-kind to you, you may pay transaction costs to dispose of the securities, and you may receive less for them than the price at which they were valued for purposes of redemption.
How to Exchange Shares or Transfer Your Account
Your Choices Important Information for You to Know Exchange Privilege Selling shares of one BlackRock Fund to purchase shares of another BlackRock Fund (“exchanging”)
Class K Shares of the Fund are generally exchangeable for shares of the same class of another BlackRock Fund, to the extent such shares are offered by your Financial Intermediary. Investors who currently own Class K Shares of the Fund may make exchanges into Class K Shares of other BlackRock Funds except for investors holding shares through certain client accounts at Financial Intermediaries that are omnibus with the Fund and do not meet applicable minimums. There is no required minimum amount with respect to exchanges of Class K Shares. You may only exchange into Class K Shares of a BlackRock Fund that is open to new investors or in which you have a current account, if the BlackRock Fund is closed to new investors. To exercise the exchange privilege, you may contact your Financial Intermediary. Alternatively, if your account is held directly with BlackRock, you may: (i) call (800) 537-4942 and speak with one of our representatives, (ii) make the exchange via the Internet by accessing your account online at www.blackrock.com or (iii) send a written request to the Fund at the address on the back cover of this prospectus. Please note, if you indicated on your new account application that you did not want the Telephone Exchange Privilege, you will not be able to place exchanges via the telephone until you update this option either in writing or by calling (800) 537-4942. The Fund has the right to reject any telephone request for any reason. Although there is currently no limit on the number of exchanges that you can make, the exchange privilege may be modified or terminated at any time in the future. The Fund may suspend or terminate your exchange privilege at any time for any reason, including if the Fund believes, in its sole discretion, that you are engaging in market timing activities. See “Short-Term Trading Policy” below. For U.S. federal income tax purposes a share exchange is a taxable event and a capital gain or loss may be realized. Please consult your tax adviser or other Financial Intermediary before making an exchange request. Transfer Shares to Another Financial Intermediary
Transfer to a participating Financial Intermediary
You may transfer your Class K Shares of the Fund only to another Financial Intermediary that has entered into an agreement with the Distributor. Certain shareholder services may not be available for the transferred shares. All future trading of these assets must be coordinated by the receiving firm. Please contact your Financial Intermediary to accomplish the transfer of your Class K Shares. Transfer to a non-participating Financial Intermediary
You must either: • Transfer your Class K Shares to an account with the Fund; or
26
NM0926U-5977729-26/40
Page 27
Your Choices Important Information for You to Know Transfer Shares to Another Financial Intermediary (continued)
Transfer to a non-participating Financial Intermediary (continued)
• Sell your Class K Shares. Please contact your Financial Intermediary to accomplish the transfer of your Class K Shares.
Additional Purchase and Redemption Information Applicable to the Fund if You Are Not Purchasing Shares Through an Employer-Sponsored Retirement Plan
If you are not purchasing shares through an Employer-Sponsored Retirement Plan, the Fund may authorize one or more banks, savings and loan associations and other financial institutions (each a “Service Organization”) to accept purchase and redemption orders on its behalf. Such Service Organizations may be authorized to designate other intermediaries to accept purchase and redemption orders on the Fund’s behalf. If you purchase or redeem shares through a Service Organization or its designee, that entity may have its own deadlines for the receipt of the purchase or redemption order that may be earlier than those stated in the prospectus. The Fund will be deemed to have received a purchase or redemption order when a Service Organization or, if applicable, that Service Organization’s authorized designee, accepts the order. These orders will be priced at the Fund’s net asset value per share next calculated after they are so accepted.
Fund’s Rights
The Fund may: Suspend the right of redemption if trading is halted or restricted on the NYSE or under other emergency conditions described in the Investment Company Act; Postpone the date of payment upon redemption if trading is halted or restricted on the NYSE or under other emergency conditions described in the Investment Company Act or if a redemption request is made before the Fund has collected payment for the purchase of shares; Redeem shares for property other than cash as may be permitted under the Investment Company Act; and Redeem shares involuntarily in certain cases, such as when the value of a shareholder account falls below a specified level.
Note on Low Balance Accounts. Because of the high cost of maintaining smaller shareholder accounts, BlackRock has set a minimum balance of $500 in each Fund position you hold within your account (“Fund Minimum”), and may redeem the shares in your account if the net asset value of those shares in your account falls below $500 for any reason, including market fluctuation.
You will be notified that the value of your account is less than the Fund Minimum before the Fund makes any involuntary redemption. This notification will provide you with a 90 calendar day period to make an additional investment in order to bring the value of your account to at least $500 before the Fund makes an involuntary redemption. This involuntary redemption will not charge any deferred sales charge, and may not apply to accounts of certain employer-sponsored retirement plans (not including IRAs), qualified state tuition plan (529 Plan) accounts, and select fee-based programs at your Financial Intermediary.
Short-Term Trading Policy
The Board has determined that the interests of long-term shareholders and the Fund’s ability to manage its investments may be adversely affected when shares are repeatedly bought, sold or exchanged in response to short term market fluctuations — also known as “market timing.” The Fund is not designed for market timing organizations or other entities using programmed or frequent purchases and sales or exchanges. The exchange privilege is not intended as a vehicle for short-term trading. Excessive purchase and sale or exchange activity may interfere with portfolio management, increase expenses and taxes and may have an adverse effect on the performance of the Fund and its returns to shareholders. For example, large flows of cash into and out of the Fund may require the management team to allocate a significant amount of assets to cash or other short-term investments or sell securities, rather than maintaining such assets in securities selected to achieve the Fund’s investment objective. Frequent trading may cause the Fund to sell securities at less favorable prices, and transaction costs, such as brokerage commissions, can reduce the Fund’s performance.
A fund’s investment in non-U.S. securities is subject to the risk that an investor may seek to take advantage of a delay between the change in value of the fund’s portfolio securities and the determination of the fund’s net asset value as a
27
NM0926U-5977729-27/40
Page 28
result of different closing times of U.S. and non-U.S. markets by buying or selling fund shares at a price that does not reflect their true value. A similar risk exists for funds that invest in securities of small capitalization companies, securities of issuers located in emerging markets or high yield securities (junk bonds) that are thinly traded and therefore may have actual values that differ from their market prices. This short-term arbitrage activity can reduce the return received by long-term shareholders. The Fund will seek to eliminate these opportunities by using fair value pricing, as described in “Management of the Fund — Valuation of Fund Investments” below.
The Fund discourages market timing and seeks to prevent frequent purchases and sales or exchanges of Fund shares that it determines may be detrimental to the Fund or long-term shareholders. The Board has approved the policies discussed below to seek to deter market timing activity. The Board has not adopted any specific numerical restrictions on purchases, sales and exchanges of Fund shares because certain legitimate strategies will not result in harm to the Fund or its shareholders.
If as a result of its own investigation, information provided by a Financial Intermediary or other third-party, or otherwise, the Fund believes, in its sole discretion, that your short-term trading is excessive or that you are engaging in market timing activity, it reserves the right to reject any specific purchase or exchange order. If the Fund rejects your purchase or exchange order, you will not be able to execute that transaction, and the Fund will not be responsible for any losses you therefore may suffer. For transactions placed directly with the Fund, the Fund may consider the trading history of accounts under common ownership or control for the purpose of enforcing these policies. Transactions placed through the same Financial Intermediary on an omnibus basis may be deemed part of a group for the purpose of this policy and may be rejected in whole or in part by the Fund. Certain accounts, such as omnibus accounts and accounts at Financial Intermediaries, however, include multiple investors and such accounts typically provide the Fund with net purchase or redemption and exchange requests on any given day where purchases, redemptions and exchanges of shares are netted against one another and the identity of individual purchasers, redeemers and exchangers whose orders are aggregated may not be known by the Fund. While the Fund monitors for market timing activity, the Fund may be unable to identify such activities because the netting effect in omnibus accounts often makes it more difficult to locate and eliminate market timers from the Fund. The Distributor has entered into agreements with respect to Financial Intermediaries that maintain omnibus accounts with the Transfer Agent pursuant to which such Financial Intermediaries undertake to cooperate with the Distributor in monitoring purchase, exchange and redemption orders by their customers in order to detect and prevent short-term or excessive trading in the Fund’s shares through such accounts. Identification of market timers may also be limited by operational systems and technical limitations. In the event that a Financial Intermediary is determined by the Fund to be engaged in market timing or other improper trading activity, the Fund’s Distributor may terminate such Financial Intermediary’s agreement with the Distributor, suspend such Financial Intermediary’s trading privileges or take other appropriate actions.
There is no assurance that the methods described above will prevent market timing or other trading that may be deemed abusive.
The Fund may from time to time use other methods that it believes are appropriate to deter market timing or other trading activity that may be detrimental to the Fund or long-term shareholders.
28
NM0926U-5977729-28/40
Page 29
Management of the Fund
BlackRock
BlackRock, the Fund’s investment adviser, manages the Fund’s investments and its business operations subject to the oversight of the Board. While BlackRock is ultimately responsible for the management of the Fund, it is able to draw upon the trading, research and expertise of its asset management affiliates for portfolio decisions and management with respect to certain portfolio securities. BlackRock is an indirect, majority-owned subsidiary of BlackRock, Inc.
BlackRock, a registered investment adviser, was organized in 1994 to perform advisory services for investment companies. BlackRock and its affiliates had approximately $15.3 trillion in investment company and other portfolio assets under management as of June 30, 2026.
BlackRock serves as manager to the Fund pursuant to a management agreement (the “Management Agreement”). Pursuant to the Management Agreement, BlackRock is entitled to fees computed daily and payable monthly. The maximum annual management fees that can be paid to BlackRock (as a percentage of average daily net assets) are calculated as follows:
Average Daily Net Assets Management Fee Rate First $1 billion 0.45% $1 billion – $3 billion 0.42% $3 billion – $5 billion 0.41% $5 billion – $10 billion 0.39% Greater than $10 billion 0.38%
BlackRock has contractually agreed to waive the management fee with respect to any portion of the Fund’s assets estimated to be attributable to investments in other equity and fixed-income mutual funds and ETFs managed by BlackRock or its affiliates that have a contractual management fee, through June 30, 2028. In addition, BlackRock has contractually agreed to waive its management fees by the amount of investment advisory fees the Fund pays to BlackRock indirectly through its investment in money market funds managed by BlackRock or its affiliates (the “affiliated money market fund waiver”), through June 30, 2028. The contractual agreements may be terminated upon 90 days’ notice by a majority of the non-interested trustees of the Trust or by a vote of a majority of the outstanding voting securities of the Fund.
BlackRock has agreed to cap net expenses (excluding: (i) interest, taxes, dividends tied to short sales, brokerage commissions, and other expenditures which are capitalized in accordance with generally accepted accounting principles; (ii) the Fund’s pro rata share of the fees and expenses incurred indirectly by the Fund as a result of investing in other investment companies; (iii) other expenses attributable to, and incurred as a result of, the Fund’s investments; and (iv) extraordinary expenses (including litigation expenses) not incurred in the ordinary course of the Fund’s business, if any) of Class K Shares of the Fund at the level shown below and in the Fund’s fees and expenses table in the “Fund Overview” section of this prospectus. Items (i), (ii), (iii) and (iv) in the preceding sentence are referred to in this prospectus as “Dividend Expense, Interest Expense, Acquired Fund Fees and Expenses and certain other Fund expenses.” To achieve this expense cap, BlackRock has agreed to waive and/or reimburse fees or expenses if the Fund’s operating expenses exceed a certain limit.
With respect to the Fund, BlackRock has contractually agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses as a percentage of average daily net assets to the amounts noted in the table below.
29
NM0926U-5977729-29/40
Page 30
Contractual Cap(s) 1 on Total Annual Fund Operating Expenses 2 (excluding Dividend Expense, Interest Expense, Acquired Fund Fees and Expenses and certain other Fund expenses) Class K Shares 0.45% 1 The contractual cap is in effect through June 30, 2028. The contractual agreement may be terminated with respect to the Fund upon 90 days’ notice by a majority of the non-interested trustees of the Trust or by a vote of a majority of the outstanding voting securities of the Fund. 2 As a percentage of average daily net assets.
The amount of the contractual waivers and/or reimbursements of fees and expenses made pursuant to the contractual caps on net expenses will be reduced by the amount of the affiliated money market fund waiver.
A discussion of the basis for the Board’s approval of the Management Agreement with BlackRock is available in the Fund’s reports filed on Form N-CSR for the fiscal year ended May 31, 2026.
For the fiscal year ended May 31, 2026, BlackRock received a management fee, net of management fee waivers, at the annual rate of 0.42% of the Fund’s average daily net assets.
From time to time, a manager, analyst, or other employee of BlackRock or its affiliates may express views regarding a particular asset class, company, security, industry, or market sector. The views expressed by any such person are the views of only that individual as of the time expressed and do not necessarily represent the views of BlackRock or any other person within the BlackRock organization. Any such views are subject to change at any time based upon market or other conditions and BlackRock disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for the Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of the Fund.
Portfolio Manager Information
Information regarding the portfolio managers of the Fund is set forth below. Further information regarding the portfolio managers, including other accounts managed, compensation, ownership of Fund shares, and possible conflicts of interest, is available in the Fund’s SAI.
Portfolio Manager Primary Role Since Title and Recent Biography Raffaele Savi Jointly and primarily responsible for the day-to-day management of the Fund’s portfolio, including setting the Fund’s overall investment strategy and overseeing the management of the Fund.
2017 Senior Managing Director of BlackRock, Inc. since 2023; Managing Director of BlackRock, Inc. from 2009 to 2022.
Travis Cooke, CFA Jointly and primarily responsible for the day-to-day management of the Fund’s portfolio, including setting the Fund’s overall investment strategy and overseeing the management of the Fund.
2013 Managing Director of BlackRock, Inc. since 2012.
Richard Mathieson Jointly and primarily responsible for the day-to-day management of the Fund’s portfolio, including setting the Fund’s overall investment strategy and overseeing the management of the Fund.
2017 Managing Director of BlackRock, Inc. since 2011.
Conflicts of Interest
The investment activities of BlackRock and its affiliates (including BlackRock, Inc. and its subsidiaries (collectively, the “Affiliates”)), and their respective directors, officers or employees, in managing their own accounts and other accounts, may present conflicts of interest that could disadvantage the Fund and its shareholders.
30
NM0926U-5977729-30/40
Page 31
BlackRock and its Affiliates are involved worldwide with a broad spectrum of financial services and asset management activities and in the ordinary course of business may engage in activities in which their interests or the interests of other clients may conflict with those of the Fund. BlackRock and its Affiliates act, or may act, as an investor, research provider, investment manager, commodity pool operator, commodity trading advisor, financier, underwriter, adviser, trader, lender, index provider, agent and/or principal. BlackRock and its Affiliates may have other direct and indirect interests in securities, currencies, commodities, derivatives and other assets in which the Fund may directly or indirectly invest.
BlackRock and its Affiliates may engage in proprietary trading and advise accounts and other funds that have investment objectives similar to those of the Fund and/or that engage in and compete for transactions in the same or similar types of securities, currencies and other assets as are held by the Fund. This may include transactions in securities issued by other open-end and closed-end investment companies, including investment companies that are affiliated with the Fund and BlackRock, to the extent permitted under the Investment Company Act. The trading activities of BlackRock and its Affiliates are carried out without reference to positions held directly or indirectly by the Fund. These activities may result in BlackRock or an Affiliate having positions in assets that are senior or junior to, or that have interests different from or adverse to, the assets held by the Fund.
The Fund may invest in securities issued by, or engage in other transactions with, entities with which an Affiliate has significant debt or equity investments or other interests. The Fund may also invest in issuances (such as debt offerings or structured notes) for which an Affiliate is compensated for providing advisory, cash management or other services. The Fund also may invest in securities of, or engage in other transactions with, entities for which an Affiliate provides or may provide research coverage or other analysis.
An Affiliate may have business relationships with, and receive compensation from, distributors, consultants or others who recommend the Fund or who engage in transactions with or for the Fund.
Neither BlackRock nor any Affiliate is under any obligation to share any investment opportunity, idea or strategy with the Fund. As a result, an Affiliate may compete with the Fund for appropriate investment opportunities. The results of the Fund’s investment activities, therefore, may differ from those of an Affiliate and of other accounts managed by an Affiliate. It is possible that the Fund could sustain losses during periods in which one or more Affiliates and other accounts achieve profits on their trading for proprietary or other accounts. The opposite result is also possible.
In addition, the Fund may enter into transactions in which BlackRock or an Affiliate or their directors, officers, employees or clients have an adverse interest. The Fund may be adversely impacted by the effects of transactions undertaken by BlackRock or an Affiliate or their directors, officers, employees or clients.
From time to time, BlackRock or its advisory clients (including other funds and accounts) may, subject to compliance with applicable law, purchase and hold shares of the Fund. The price, availability, liquidity, and (in some cases) expense ratio of the Fund may be impacted by purchases and sales of the Fund by BlackRock or its advisory clients.
The Fund’s activities may be limited because of regulatory restrictions applicable to BlackRock or an Affiliate or their policies designed to comply with such restrictions.
Under a securities lending program approved by the Board, the Fund has retained BlackRock Investment Management, LLC, an Affiliate of BlackRock, to serve as its securities lending agent to the extent that it participates in the securities lending program. For these services, the securities lending agent will receive a fee from the participating Fund based on the returns earned on the Fund’s lending activities, including the investment of the cash received as collateral for the loaned securities. In addition, one or more Affiliates may be among the entities to which the Fund may lend its portfolio securities under the securities lending program.
BlackRock and its Affiliates may benefit from a fund using a BlackRock index by creating increasing acceptance in the marketplace for such indexes. BlackRock and its Affiliates are not obligated to license an index to a fund, and no fund is under an obligation to use a BlackRock index. The terms of a fund’s index licensing agreement with BlackRock or its Affiliates may not be as favorable as the terms offered to other licensees.
The activities of BlackRock and its Affiliates and their respective directors, officers or employees, may give rise to other conflicts of interest that could disadvantage the Fund and its shareholders. BlackRock has adopted policies and procedures designed to address these potential conflicts of interest. Please see the SAI for further information.
Valuation of Fund Investments
When you buy shares, you pay the net asset value. This is the offering price. Shares are also redeemed at their net asset value, minus any applicable redemption fee. The net asset value used in determining your share price is the next one calculated after your purchase or redemption order is received. The net asset value of each class of shares 31
NM0926U-5977729-31/40
Page 32
normally is determined once daily Monday through Friday, generally as of the close of regular trading hours of the New York Stock Exchange (“NYSE”) (normally 4:00 p.m., Eastern time), on each day that the NYSE is open for trading, based on prices at the time of closing, provided that any Fund assets or liabilities denominated in currencies other than the U.S. dollar are translated into U.S. dollars at the prevailing market rates on the date of valuation as quoted by one or more data service providers. The net asset value of shares is calculated by dividing the value of the net assets of each class of shares (i.e., the value of its total assets less total liabilities) by the total number of outstanding shares of the class, generally rounded to the nearest cent.
The value of the securities and other assets and liabilities held by the Fund is determined pursuant to BlackRock’s valuation policies and procedures. BlackRock has been designated by the Board as the valuation designee for the Fund pursuant to Rule 2a-5 under the Investment Company Act.
Equity securities and other equity instruments (except ETF options, equity index options or those that are customized) for which market quotations are readily available are valued at market value, which is generally determined using the last reported official closing price or, if a reported closing price is not available, the last traded price on the exchange or market on which the security or instrument is primarily traded at the time of valuation. Shares of underlying open end funds that are not traded on an exchange (including money market funds) are valued at net asset value. Shares of underlying exchange-traded closed-end funds or other ETFs are valued at their most recent closing price.
The Fund values fixed-income portfolio securities and certain derivative instruments using prices provided by dealers or prices (including evaluated prices) supplied by the Fund’s approved independent third-party pricing services, each in accordance with BlackRock’s valuation policies and procedures. Pricing services may use valuation models that utilize certain inputs and assumptions to derive values. Pricing services generally value fixed-income securities assuming orderly transactions of an institutional round lot size, but the Fund may hold or transact in such securities in smaller odd lot sizes. Odd lots of securities in certain asset classes may trade at lower prices than institutional round lots, and the value ultimately realized when the securities are sold could differ from the prices used by the Fund. The amortized cost method of valuation may be used with respect to debt obligations with 60 days or less remaining to maturity unless BlackRock determines in good faith that such method does not represent fair value.
Generally, trading in non-U.S. securities is substantially completed each day at various times prior to the close of regular trading hours of the NYSE. The values of such securities used in computing the net asset value of the Fund’s shares are determined as of such times. U.S. government securities, money market instruments and fixed income securities are generally priced as of close of regular trading hours on the NYSE.
When market quotations are not readily available or are believed by BlackRock to be unreliable, BlackRock will fair value the Fund’s investments in accordance with its policies and procedures. BlackRock may conclude that a market quotation is not readily available or is unreliable if a security or other asset or liability does not have a price source due to its lack of trading or other reasons, if a market quotation differs significantly from recent price quotations or otherwise no longer appears to reflect fair value, where the security or other asset or liability is thinly traded, when there is a significant event subsequent to the most recent market quotation, or if the trading market on which a security is listed is suspended or closed and no appropriate alternative trading market is available. A “significant event” is deemed to occur if BlackRock determines, in its reasonable business judgment prior to or at the time of pricing the Fund’s assets or liabilities, that the event is likely to cause a material change to the last exchange closing price or closing market price of one or more assets held by, or liabilities of, the Fund.
For certain foreign assets, a third-party vendor supplies evaluated, systematic fair value pricing based upon the movement of a proprietary multi-factor model after the relevant foreign markets have closed. This systematic fair value pricing methodology is designed to correlate the prices of foreign assets in one or more non-U.S. markets following the close of the local markets to the prices that might have prevailed as of the Fund’s pricing time.
Fair value represents a good faith approximation of the value of an asset or liability. The fair value of an asset or liability held by the Fund is the amount the Fund might reasonably expect to receive from the current sale of that asset or the cost to extinguish that liability in an arm’s-length transaction. Valuing the Fund’s investments using fair value pricing will result in prices that may differ from current market valuations and that may not be the prices at which those investments could have been sold during the period in which the particular fair values were used.
The Fund may accept orders from certain authorized Financial Intermediaries or their designees. The Fund will be deemed to receive an order when accepted by the Financial Intermediary or designee, and the order will receive the net asset value next computed by the Fund after such acceptance. If the payment for a purchase order is not made by a designated later time, the order will be canceled and the Financial Intermediary could be held liable for any losses.
32
NM0926U-5977729-32/40
Page 33
Dividends, Distributions and Taxes
BUYING A DIVIDEND
Unless your investment is in a tax-deferred account, you may want to avoid buying shares shortly before the Fund pays a dividend. The reason? If you buy shares when the Fund has declared but not yet distributed ordinary income or capital gains, you will pay the full price for the shares and then receive a portion of the price back in the form of a taxable dividend. Before investing you may want to consult your tax adviser.
The Fund will distribute net investment income, if any, and net realized capital gains, if any, at least annually. The Fund may also pay a special distribution at the end of the calendar year to comply with federal tax requirements. Dividends may be reinvested automatically in shares of the Fund at net asset value or may be taken in cash. If you would like to receive dividends in cash, contact your Financial Intermediary or the Fund.
Your tax consequences from an investment in the Fund will depend on whether you have invested through a qualified tax-exempt plan described in section 401(a) of the Internal Revenue Code (a “Qualified Plan”).
Investments Through a Qualified Plan
Special tax rules apply to investments made through Qualified Plans. If you are invested through a Qualified Plan (and Fund shares are not “debt-financed property” to the plan), then you will not be subject to U.S. federal income tax on the dividends paid by the Fund or the gain realized from a redemption or exchange of Fund shares until you withdraw or receive distributions from the plan. Distributions you receive from the Qualified Plan may be subject to U.S. federal withholding tax depending on the kind of payment you receive.
Investments Not Made Through Qualified Plans
If you are not invested through a Qualified Plan, you will generally pay tax on dividends from the Fund whether you receive them in cash or additional shares. If you redeem Fund shares or exchange them for shares of another fund, you generally will be treated as having sold your shares and any gain on the transaction may be subject to tax. Fund distributions derived from qualified dividend income, which consists of dividends received from U.S. corporations and qualifying foreign corporations, and long-term capital gains, are eligible for taxation at a maximum rate of 15% or 20% for individuals, depending on whether their income exceeds certain threshold amounts, which are adjusted annually for inflation.
A 3.8% Medicare tax is imposed on the net investment income (which includes, but is not limited to, interest, dividends and net gain from investments) of U.S. individuals with income exceeding $200,000, or $250,000 if married filing jointly, and of trusts and estates.
Your dividends and redemption proceeds will be subject to backup withholding tax if you have not provided a taxpayer identification number or social security number or the number you have provided is incorrect.
Special Considerations for Non-U.S. Persons
If you are not invested through a Qualified Plan and you are neither a tax resident nor a citizen of the United States or if you are a foreign entity (other than a pass-through entity to the extent owned by U.S. persons), the Fund’s ordinary income dividends will generally be subject to a 30% U.S. withholding tax, unless a lower treaty rate applies. However, certain distributions paid to a foreign shareholder and reported by the Fund as capital gain dividends, interest-related dividends or short-term capital gain dividends may be eligible for an exemption from U.S. withholding tax.
Separately, a 30% withholding tax is currently imposed on U.S.-source dividends, interest and other income items paid to (i) certain foreign financial institutions and investment funds, and (ii) certain other foreign entities. To avoid withholding, foreign financial institutions and investment funds will generally either need to (a) collect and report to the IRS detailed information identifying their U.S. accounts and U.S. account holders, comply with due diligence procedures for identifying U.S. accounts and withhold tax on certain payments made to noncomplying foreign entities and account holders or (b) if an intergovernmental agreement is entered into and implementing legislation is adopted, comply with the agreement and legislation. Other foreign entities will generally either need to provide detailed information identifying each substantial U.S. owner or certify there are no such owners.
This section summarizes some of the consequences under current federal tax law of an investment in the Fund. It is not a substitute for individualized tax advice. Consult your tax adviser about the potential tax consequences of an investment in the Fund under all applicable tax laws.
33
NM0926U-5977729-33/40
Page 34
The financial highlights table is intended to help investors understand the Fund’s financial performance for the periods shown. Certain information reflects financial results for a single share of the Fund. The total returns in the table represent the rate of return that an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of all dividends and distributions. The information has been audited by Deloitte & Touche LLP, whose report, along with the Fund’s audited financial statements, is included in the Fund’s Annual Financial Statements and Additional Information for the fiscal year ended May 31, 2026, as filed with the SEC on Form N-CSR, which are available upon request and at www.blackrock.com. BlackRock Advantage Small Cap Core Fund Class K
(For a share outstanding throughout each period) Year Ended 05/31/26 Year Ended 05/31/25 Year Ended 05/31/24 Year Ended 05/31/23 Year Ended 05/31/22 Net asset value, beginning of year $ 17.28 $ 17.37 $ 14.07 $ 15.36 $ 20.73 Net investment income (a) 0.15 0.15 0.14 0.14 0.13 Net realized and unrealized gain (loss) 7.45 (0.09) 3.33 (1.02) (3.27) Net increase (decrease) from investment operations 7.60 0.06 3.47 (0.88) (3.14) Distributions (b) From net investment income (0.15) (0.15) (0.17) (0.12) (0.15) From net realized gain (0.81) — — (0.29) (2.08) Total distributions (0.96) (0.15) (0.17) (0.41) (2.23) Net asset value, end of year $ 23.92 $ 17.28 $ 17.37 $ 14.07 $ 15.36 Total Return (c) Based on net asset value 44.87% 0.25% 24.80% (5.70)% (16.84)% Ratios to Average Net Assets (d) Total expenses 0.51% 0.51% 0.51% 0.51% 0.51% Total expenses after fees waived and/or reimbursed 0.45% 0.45% 0.45% 0.45% 0.45% Net investment income 0.73% 0.84% 0.89% 0.97% 0.73% Supplemental Data Net assets, end of year (000) $1,229,683 $1,124,484 $1,099,659 $964,449 $967,682 Portfolio turnover rate 92% 88% 75% 93% 81%
(a) Based on average shares outstanding. (b) Distributions for annual periods determined in accordance with U.S. federal income tax regulations. (c) Where applicable, assumes the reinvestment of distributions. (d) Excludes fees and expenses incurred indirectly as a result of investments in underlying funds.
Financial Highlights
34
NM0926U-5977729-34/40
Page 35
General Information
Shareholder Documents
Electronic Access to Annual and Semi-Annual Reports, Annual and Semi-Annual Financial Statements and Additional Information and Prospectuses Electronic copies of most financial reports and prospectuses are available on BlackRock’s website. Shareholders can sign up for e-mail notifications of annual and semi-annual reports, Annual and Semi-Annual Financial Statements and Additional Information and prospectuses by enrolling in the Fund’s electronic delivery program. To enroll:
Shareholders Who Hold Accounts with Investment Advisers, Banks or Brokerages: Please contact your Financial Intermediary. Please note that not all investment advisers, banks or brokerages may offer this service.
Shareholders Who Hold Accounts Directly With BlackRock: Access the BlackRock website at http://www.blackrock.com/edelivery; and Log into your account.
Delivery of Shareholder Documents The Fund delivers only one copy of shareholder documents, including prospectuses, shareholder reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is known as “householding” and is intended to eliminate duplicate mailings and reduce expenses. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact the Fund at (800) 537-4942.
Certain Fund Policies
Anti-Money Laundering Requirements The Fund is subject to the USA PATRIOT Act (the “Patriot Act”). The Patriot Act is intended to prevent the use of the U.S. financial system in furtherance of money laundering, terrorism or other illicit activities. Pursuant to requirements under the Patriot Act, the Fund is required to obtain sufficient information from shareholders to enable it to form a reasonable belief that it knows the true identity of its shareholders. This information will be used to verify the identity of investors or, in some cases, the status of Financial Intermediaries. Such information may be verified using third party sources. This information will be used only for compliance with the Patriot Act or other applicable laws, regulations and rules in connection with money laundering, terrorism or economic sanctions.
The Fund reserves the right to reject purchase orders from persons who have not submitted information sufficient to allow the Fund to verify their identity. The Fund also reserves the right to redeem any amounts in the Fund from persons whose identity it is unable to verify on a timely basis. It is the Fund’s policy to cooperate fully with appropriate regulators in any investigations conducted with respect to potential money laundering, terrorism or other illicit activities.
BlackRock Privacy Principles BlackRock is committed to maintaining the privacy of its current and former fund investors and individual clients (collectively, “Clients”) and to safeguarding their non-public personal information. The following information is provided to help you understand what personal information BlackRock collects, how we protect that information and why in certain cases we share such information with select parties.
If you are located in a jurisdiction where specific laws, rules or regulations require BlackRock to provide you with additional or different privacy-related rights beyond what is set forth below, then BlackRock will comply with those specific laws, rules or regulations.
BlackRock obtains or verifies personal non-public information from and about you from different sources, including the following: (i) information we receive from you or, if applicable, your Financial Intermediary, on applications, forms or other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our website.
35
NM0926U-5977729-35/40
Page 36
BlackRock does not sell or disclose to non-affiliated third parties any non-public personal information about its Clients, except as permitted by law, or as is necessary to respond to regulatory requests or to service Client accounts. These non-affiliated third parties are required to protect the confidentiality and security of this information and to use it only for its intended purpose.
We may share information with our affiliates to service your account or to provide you with information about other BlackRock products or services that may be of interest to you. In addition, BlackRock restricts access to non-public personal information about its Clients to those BlackRock employees with a legitimate business need for the information. BlackRock maintains physical, electronic and procedural safeguards that are designed to protect the non public personal information of its Clients, including procedures relating to the proper storage and disposal of such information.
Statement of Additional Information
If you would like further information about the Fund, including how it invests, please see the SAI.
For a discussion of the Fund’s policies and procedures regarding the selective disclosure of its portfolio holdings, please see the SAI. The Fund makes its top ten holdings available on a monthly basis at www.blackrock.com generally within 5 business days after the end of the month to which the information applies.
36
NM0926U-5977729-36/40
Page 37
Glossary
This glossary contains an explanation of some of the common terms used in this prospectus. For additional information about the Fund, please see the SAI.
Acquired Fund Fees and Expenses — the Fund’s pro rata share of the fees and expenses incurred indirectly by the Fund as a result of investing in other investment companies.
Annual Fund Operating Expenses — expenses that cover the costs of operating the Fund.
Distribution Fees — fees used to support the Fund’s marketing and distribution efforts, such as compensating Financial Intermediaries, advertising and promotion.
Management Fee — a fee paid to BlackRock for managing the Fund.
Other Expenses — include accounting, administration, transfer agency, custody, professional fees and registration fees.
Russell 2000 Index — an index that measures the performance of the small-cap segment of the U.S. equity universe. The Russell 2000 Index is a subset of the Russell 3000 Index which is designed to represent approximately 98% of the investable U.S. equity market. It includes approximately 2,000 of the smallest securities based on a combination of their market cap and current index membership.
Russell 3000 Index — an index that measures the performance of the largest 3,000 U.S. companies designed to represent approximately 98% of the investable U.S. equity market. The Russell 3000 Index is constructed to provide a comprehensive, unbiased and stable barometer of the broad market.
Service Fees — fees used to compensate Financial Intermediaries for certain shareholder servicing activities.
37
NM0926U-5977729-37/40
Page 38
[This page intentionally left blank]
NM0926U-5977729-38/40
Page 39
For More Information
Fund and Service Providers
FUND
BlackRock Funds SM BlackRock Advantage Small Cap Core Fund 100 Bellevue Parkway Wilmington, Delaware 19809 Written Correspondence: P.O. Box 534429 Pittsburgh, Pennsylvania 15253-4429 Overnight Mail: Attention: 534429 1350 Penn Avenue, Suite 102 Pittsburgh, Pennsylvania 15222 (800) 537-4942
MANAGER AND ADMINISTRATOR BlackRock Advisors, LLC 100 Bellevue Parkway Wilmington, Delaware 19809
TRANSFER AGENT BNY Mellon Investment Servicing (US) Inc. 118 Flanders Road Westborough, Massachusetts 01581
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Deloitte & Touche LLP 115 Federal Street Boston, Massachusetts 02110
ACCOUNTING SERVICES PROVIDER The Bank of New York Mellon 240 Greenwich Street New York, New York 10286
DISTRIBUTOR BlackRock Investments, LLC 50 Hudson Yards New York, New York 10001
CUSTODIAN The Bank of New York Mellon 240 Greenwich Street New York, New York 10286
COUNSEL Ropes & Gray LLP 1211 Avenue of the Americas New York, New York 10036
NM0926U-5977729-39/40
Page 40
Additional Information
For more information: This prospectus contains important information you should know before investing, including information about risks. Please read it before you invest and keep it for future reference. More information about the Fund is available at no charge upon request. This information includes:
Annual/Semi-Annual Reports and Form N-CSR The Fund’s annual and semi-annual reports and Form N CSR contain additional information about each of the Fund’s investments. The annual report describes the Fund’s performance, lists portfolio holdings, and discusses recent market conditions, economic trends and Fund investment strategies that significantly affected the Fund’s performance for the last fiscal year. In Form N-CSR, you will find the Fund’s financial statements.
Statement of Additional Information A Statement of Additional Information (“SAI”), dated September 28, 2026, has been filed with the Securities and Exchange Commission (the “SEC”). The SAI, which includes additional information about the Fund, may be obtained free of charge, along with the Fund’s annual and semi-annual reports and other information such as Fund financial statements, by calling (800) 537-4942. The SAI, as amended and/or supplemented from time to time, is incorporated by reference into this prospectus.
BlackRock Investor Services Representatives are available to discuss account balance information, mutual fund prospectuses, literature, programs and services available. Hours: 8:00 a.m. to 6:00 p.m. (Eastern time), on any business day. Call: (800) 537-4942.
Purchases and Redemptions Call your Financial Intermediary or BlackRock Investor Services at (800) 537-4942.
World Wide Web General Fund information and specific Fund performance, including the SAI, annual/semi-annual reports and other information such as Fund financial statements, can be accessed free of charge at www.blackrock.com/ prospectus. Mutual fund prospectuses and literature can also be requested via this website.
Written Correspondence BlackRock Funds SM P. P.O. Box 534429, Pittsburgh, Pennsylvania 15253-4429
Overnight Mail BlackRock Funds SM Attention: 534429 1350 Penn Avenue, Suite 102 Pittsburgh, Pennsylvania 15222
Internal Wholesalers/Broker Dealer Support Available on any business day to support investment professionals. Call: (800) 882-0052.
Portfolio Characteristics and Holdings A description of the Fund’s policies and procedures related to disclosure of portfolio characteristics and holdings is available in the SAI.
For information about portfolio holdings and characteristics, BlackRock fund shareholders and prospective investors may call (800) 882-0052.
Securities and Exchange Commission You may also view and copy public information about the Fund, including the SAI, by visiting the EDGAR database on the SEC’s website (http://www.sec.gov). Copies of this information can be obtained, for a duplicating fee, by electronic request at the following e-mail address: publicinfo@sec.gov.
You should rely only on the information contained in this prospectus. No one is authorized to provide you with information that is different from information contained in this prospectus.
The SEC has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
INVESTMENT COMPANY ACT FILE # 811-05742
PRO-ADVSCC-K-0926
NM0926U-5977729-40/40
Truncated: This annotation is too large to fit.
View the raw JSON.
{
"annotation_id": "5d4cd27c-74e5-4da4-81b4-37b68e961624",
"date_created": "2026-10-02T11:56:53.490000Z",
"date_modified": "2026-10-02T11:56:53.490000Z",
"file_hash": "71641a7bc307b3f0e328f45ea29ffb9b89f0a1cb6b8c8f416f7b5f1bbac00b66",
"private": false,
"record": {
"attributes": {
"chunk_type": "page_range",
"end_page": 40,
"start_page": 1
},
"blocks": [
{
"block_type": "box",
"box": {
"height": 11,
"width": 184,
"x": 754,
"y": 47
},
"id": "4728f2b5-4f0c-4e65-a489-ad5e13b76626",
"page_number": 1,
"text": "SEPTEMBER 28, 2026"
},
{
"block_type": "box",
"box": {
"height": 32,
"width": 259,
"x": 106,
"y": 175
},
"id": "66af58ec-5156-431a-b093-be2c15f6504b",
"page_number": 1,
"text": "Prospectus"
},
{
"block_type": "box",
"box": {
"height": 9,
"width": 140,
"x": 63,
"y": 297
},
"id": "c8f2aa87-d3ad-449e-ad8b-302c213cc848",
"page_number": 1,
"text": "BlackRock Funds"
},
{
"block_type": "box",
"box": {
"height": 5,
"width": 13,
"x": 204,
"y": 297
},
"id": "92fd4d8d-639f-4b26-a201-428a2ee85f84",
"page_number": 1,
"text": "SM"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 3,
"x": 227,
"y": 296
},
"id": "a6f57977-b251-4e04-9545-2ac048c714b0",
"page_number": 1,
"text": "|"
},
{
"block_type": "box",
"box": {
"height": 9,
"width": 119,
"x": 240,
"y": 297
},
"id": "90b196e0-a484-45f5-9e11-732dd0182092",
"page_number": 1,
"text": "Class K Shares"
},
{
"block_type": "box",
"box": {
"height": 4,
"width": 6,
"x": 63,
"y": 325
},
"id": "59cf467f-36d8-4372-a6ee-27a55f675f49",
"page_number": 1,
"text": "\u2022"
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 352,
"x": 84,
"y": 321
},
"id": "e26ca743-12f5-4103-8171-cc7d20056581",
"page_number": 1,
"text": "BlackRock Advantage Small Cap Core Fund"
},
{
"block_type": "box",
"box": {
"height": 7,
"width": 96,
"x": 83,
"y": 339
},
"id": "ddba7b0f-0ebe-4644-96fa-4b8d64e42c68",
"page_number": 1,
"text": "Class K: BDSKX"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 741,
"x": 63,
"y": 834
},
"id": "f76bfb29-446e-498c-8925-8d0676a675ae",
"page_number": 1,
"text": "This Prospectus contains information you should know before investing, including information about risks."
},
{
"block_type": "box",
"box": {
"height": 10,
"width": 438,
"x": 63,
"y": 850
},
"id": "e8e2fd40-cdb7-4583-b699-acdb066a3d42",
"page_number": 1,
"text": "Please read it before you invest and keep it for future reference."
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 749,
"x": 63,
"y": 870
},
"id": "ff4fbe43-26b4-47f5-aa77-6d317fedef1e",
"page_number": 1,
"text": "The Securities and Exchange Commission has not approved or disapproved these securities or passed upon"
},
{
"block_type": "box",
"box": {
"height": 10,
"width": 615,
"x": 63,
"y": 886
},
"id": "1d095d08-16de-4125-8f11-4170e98171ff",
"page_number": 1,
"text": "the adequacy of this Prospectus. Any representation to the contrary is a criminal offense."
},
{
"block_type": "box",
"box": {
"height": 8,
"width": 112,
"x": 101,
"y": 916
},
"id": "de72ec60-5dc8-432c-b398-7e7f024fe3dc",
"page_number": 1,
"text": "Not FDIC Insured"
},
{
"block_type": "box",
"box": {
"height": 3,
"width": 5,
"x": 218,
"y": 919
},
"id": "c81c9f60-0d4c-45bc-9ea4-0fdd33f07f85",
"page_number": 1,
"text": "\u2022"
},
{
"block_type": "box",
"box": {
"height": 10,
"width": 101,
"x": 228,
"y": 916
},
"id": "2ae6846d-c7f6-4c0a-b39e-e328c6ef5eeb",
"page_number": 1,
"text": "May Lose Value"
},
{
"block_type": "box",
"box": {
"height": 3,
"width": 4,
"x": 334,
"y": 919
},
"id": "dfe7f151-77fb-42ef-b660-82155ed7c4ca",
"page_number": 1,
"text": "\u2022"
},
{
"block_type": "box",
"box": {
"height": 8,
"width": 127,
"x": 344,
"y": 916
},
"id": "91c99896-6325-4ab4-8b84-553ade0b08b9",
"page_number": 1,
"text": "No Bank Guarantee"
},
{
"block_type": "box",
"box": {
"height": 7,
"width": 138,
"x": 757,
"y": 969
},
"id": "03eaf978-8b69-46e5-b720-72470cd1c4dd",
"page_number": 1,
"text": "NM0926U-5977729-1/40"
},
{
"block_type": "box",
"box": {
"height": 18,
"width": 255,
"x": 371,
"y": 82
},
"id": "25820593-29d4-4828-889e-ef7964cad7c9",
"page_number": 2,
"text": "Table of Contents"
},
{
"block_type": "box",
"box": {
"height": 13,
"width": 155,
"x": 190,
"y": 136
},
"id": "44489fb1-6a81-4101-a586-830e7197aa1d",
"page_number": 2,
"text": "Fund Overview"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 503,
"x": 361,
"y": 140
},
"id": "a1bd194f-45d2-4111-943d-0fba8587b8ad",
"page_number": 2,
"text": "Key facts and details about the Fund, including investment objective,"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 517,
"x": 360,
"y": 155
},
"id": "a69b0161-1adb-41c9-bdc0-2dc1e49d9487",
"page_number": 2,
"text": "principal investment strategies, principal risk factors, fee and expense"
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 374,
"x": 361,
"y": 169
},
"id": "f2fc8d1b-2517-4e5b-9439-b0b6e6b99723",
"page_number": 2,
"text": "information and historical per formance information"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 577,
"x": 361,
"y": 185
},
"id": "558db234-e267-4b90-9193-df0ee39238dd",
"page_number": 2,
"text": "Investment Objective ................................................................................ 3"
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 577,
"x": 361,
"y": 200
},
"id": "0cb8333b-2ab1-4922-9b98-b2ef83fb1c7a",
"page_number": 2,
"text": "Fees and Expenses of the Fund ................................................................. 3"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 577,
"x": 360,
"y": 216
},
"id": "29da2d7e-9a20-4f5c-8887-189d7481d130",
"page_number": 2,
"text": "Principal Investment Strategies of the Fund ................................................ 4"
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 577,
"x": 360,
"y": 231
},
"id": "ef80fb98-9968-4ec7-9906-e9cbe8c51a31",
"page_number": 2,
"text": "Principal Risks of Investing in the Fund ...................................................... 4"
},
{
"block_type": "box",
"box": {
"height": 9,
"width": 578,
"x": 360,
"y": 247
},
"id": "ee9a7286-4042-47d1-b654-eda49fb62aeb",
"page_number": 2,
"text": "Per formance Information .......................................................................... 6"
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 577,
"x": 361,
"y": 262
},
"id": "38f597e1-6ec4-4bdb-8c90-3ad8ebf4294a",
"page_number": 2,
"text": "Investment Manager ................................................................................. 7"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 578,
"x": 360,
"y": 278
},
"id": "45da630b-9ced-4853-bd30-f57ec0b17300",
"page_number": 2,
"text": "Por tfolio Managers ................................................................................... 7"
},
{
"block_type": "box",
"box": {
"height": 9,
"width": 578,
"x": 360,
"y": 293
},
"id": "053a4c4e-9517-4f32-a1d1-e47148ffb95c",
"page_number": 2,
"text": "Purchase and Sale of Fund Shares ............................................................ 7"
},
{
"block_type": "box",
"box": {
"height": 9,
"width": 577,
"x": 361,
"y": 309
},
"id": "783fd5c9-d72d-4142-a51e-a65f4e930743",
"page_number": 2,
"text": "Tax Information......................................................................................... 8"
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 578,
"x": 360,
"y": 324
},
"id": "7b678ca0-0ec5-4a54-8488-b437c04bc1a5",
"page_number": 2,
"text": "Payments to Broker/Dealers and Other Financial Intermediaries .................. 8"
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 242,
"x": 102,
"y": 348
},
"id": "47d9d6b3-989e-4779-866c-310a4b506cc6",
"page_number": 2,
"text": "Details About the Fund"
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 524,
"x": 361,
"y": 351
},
"id": "d138f40a-db75-4638-a2ba-654c00c85f83",
"page_number": 2,
"text": "Information about how the Fund invests, including investment objective,"
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 412,
"x": 361,
"y": 366
},
"id": "493c5681-cdeb-477b-b561-8b1cd8b99d9c",
"page_number": 2,
"text": "investment process, principal strategies and risk factors"
},
{
"block_type": "box",
"box": {
"height": 9,
"width": 577,
"x": 361,
"y": 382
},
"id": "ecc71285-2415-447b-8b46-12cc8b7599ff",
"page_number": 2,
"text": "How the Fund Invests.............................................................................. 9"
},
{
"block_type": "box",
"box": {
"height": 9,
"width": 576,
"x": 361,
"y": 397
},
"id": "15b089c0-0655-40b6-af2d-9d7152101bea",
"page_number": 2,
"text": "Investment Risks.................................................................................... 11"
},
{
"block_type": "box",
"box": {
"height": 13,
"width": 215,
"x": 128,
"y": 420
},
"id": "4212832b-463c-482e-a399-1ed9414098ca",
"page_number": 2,
"text": "Account Information"
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 468,
"x": 361,
"y": 424
},
"id": "62a3bd38-d642-4513-a8e9-2613249c39c2",
"page_number": 2,
"text": "Information about account services, sales charges and waivers,"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 459,
"x": 360,
"y": 439
},
"id": "772b69fa-af63-4b8e-9055-681b9a56877a",
"page_number": 2,
"text": "shareholder transactions, and distribution and other payments"
},
{
"block_type": "box",
"box": {
"height": 10,
"width": 576,
"x": 361,
"y": 454
},
"id": "87785f07-e989-4ad8-b0b7-aec6b06222b7",
"page_number": 2,
"text": "Details About the Share Class ................................................................. 21"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 577,
"x": 361,
"y": 470
},
"id": "96294ead-28d1-487d-9099-755a2cb847a8",
"page_number": 2,
"text": "How to Buy, Sell, Exchange and Transfer Shares ....................................... 22"
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 577,
"x": 361,
"y": 485
},
"id": "ff5b46cc-ce10-4c9d-af8e-b25edffbeb9c",
"page_number": 2,
"text": "Fund\u2019s Rights ......................................................................................... 27"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 577,
"x": 361,
"y": 501
},
"id": "1f25b89a-97c5-4e00-b7f9-d8bbcf4d44a7",
"page_number": 2,
"text": "Shor t-Term Trading Policy ........................................................................ 27"
},
{
"block_type": "box",
"box": {
"height": 16,
"width": 264,
"x": 80,
"y": 524
},
"id": "e9303955-77c0-40ee-8323-e703e92a8d33",
"page_number": 2,
"text": "Management of the Fund"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 415,
"x": 361,
"y": 528
},
"id": "95390ecd-59cf-46a0-ac06-e7437dd6836a",
"page_number": 2,
"text": "Information about BlackRock and the Por tfolio Managers"
},
{
"block_type": "box",
"box": {
"height": 9,
"width": 577,
"x": 361,
"y": 543
},
"id": "63e7c8e7-616a-4553-b505-38c975d91a43",
"page_number": 2,
"text": "BlackRock .............................................................................................. 29"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 578,
"x": 360,
"y": 559
},
"id": "c730a194-7948-4305-aee3-3aeadb89fd81",
"page_number": 2,
"text": "Por tfolio Manager Information ................................................................. 30"
},
{
"block_type": "box",
"box": {
"height": 9,
"width": 577,
"x": 361,
"y": 574
},
"id": "968e8a82-1bca-4d06-bea9-480d1fe9a71a",
"page_number": 2,
"text": "Conflicts of Interest ................................................................................ 30"
},
{
"block_type": "box",
"box": {
"height": 9,
"width": 575,
"x": 362,
"y": 590
},
"id": "3146caa9-ab74-41a3-b038-ea2dafbefa45",
"page_number": 2,
"text": "Valuation of Fund Investments ................................................................. 31"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 577,
"x": 361,
"y": 605
},
"id": "b498b1a7-ef58-40f4-a79b-1a687fcbb533",
"page_number": 2,
"text": "Dividends, Distributions and Taxes........................................................... 33"
},
{
"block_type": "box",
"box": {
"height": 16,
"width": 207,
"x": 136,
"y": 629
},
"id": "e19438e5-40ab-421a-b0be-93e2543731c8",
"page_number": 2,
"text": "Financial Highlights"
},
{
"block_type": "box",
"box": {
"height": 9,
"width": 576,
"x": 361,
"y": 632
},
"id": "81664c58-eb7c-404f-ad38-13ee8ddfa3b7",
"page_number": 2,
"text": "Financial Per formance of the Fund ........................................................... 34"
},
{
"block_type": "box",
"box": {
"height": 13,
"width": 207,
"x": 136,
"y": 665
},
"id": "1f0df757-c6ed-48f3-96e8-a22a9f9d6b0f",
"page_number": 2,
"text": "General Information"
},
{
"block_type": "box",
"box": {
"height": 10,
"width": 577,
"x": 361,
"y": 668
},
"id": "74486e38-e509-4189-9b34-825f2258cea2",
"page_number": 2,
"text": "Shareholder Documents.......................................................................... 35"
},
{
"block_type": "box",
"box": {
"height": 9,
"width": 577,
"x": 361,
"y": 684
},
"id": "a1e35922-4cdc-4e3c-8a69-9606f72cc658",
"page_number": 2,
"text": "Cer tain Fund Policies .............................................................................. 35"
},
{
"block_type": "box",
"box": {
"height": 9,
"width": 577,
"x": 361,
"y": 699
},
"id": "c66d95b7-81d6-4f51-b317-1e18eb84ec10",
"page_number": 2,
"text": "Statement of Additional Information ......................................................... 36"
},
{
"block_type": "box",
"box": {
"height": 16,
"width": 92,
"x": 253,
"y": 723
},
"id": "2f1ec55e-4bb3-4913-a349-9300ebeec869",
"page_number": 2,
"text": "Glossary"
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 577,
"x": 361,
"y": 726
},
"id": "5d8db913-c1cc-4b41-b2e2-fe33311b90a6",
"page_number": 2,
"text": "Glossary of Investment Terms ................................................................. 37"
},
{
"block_type": "box",
"box": {
"height": 13,
"width": 221,
"x": 122,
"y": 759
},
"id": "5b5470ea-d298-470e-b260-d8da3462f813",
"page_number": 2,
"text": "For More Information"
},
{
"block_type": "box",
"box": {
"height": 9,
"width": 578,
"x": 361,
"y": 763
},
"id": "11555477-e4be-4f4f-9035-abd0849b0cfc",
"page_number": 2,
"text": "Fund and Service Providers ............................................... Inside Back Cover"
},
{
"block_type": "box",
"box": {
"height": 9,
"width": 580,
"x": 359,
"y": 778
},
"id": "d3c4180f-dd3a-4491-9166-765a49b6c6de",
"page_number": 2,
"text": "Additional Information....................................................... Back Cover"
},
{
"block_type": "box",
"box": {
"height": 7,
"width": 138,
"x": 757,
"y": 969
},
"id": "3d4995ca-5313-41a5-b279-2d498bed4101",
"page_number": 2,
"text": "NM0926U-5977729-2/40"
},
{
"block_type": "box",
"box": {
"height": 27,
"width": 315,
"x": 64,
"y": 82
},
"id": "b3759ce7-cc55-49ba-a49c-ef277fd96597",
"page_number": 3,
"text": "Fund Overview"
},
{
"block_type": "box",
"box": {
"height": 14,
"width": 547,
"x": 62,
"y": 156
},
"id": "7cd053c1-2709-4fe6-a8cc-4d5dfb03fb5f",
"page_number": 3,
"text": "Key Facts About BlackRock Advantage Small Cap Core Fund"
},
{
"block_type": "box",
"box": {
"height": 14,
"width": 191,
"x": 62,
"y": 187
},
"id": "979a461a-f615-421d-8a8c-9a6fc0ba651a",
"page_number": 3,
"text": "Investment Objective"
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 835,
"x": 60,
"y": 213
},
"id": "ebd89a73-8028-447f-b056-bbc507192eba",
"page_number": 3,
"text": "The investment objective of BlackRock Advantage Small Cap Core Fund (the \u201cFund\u201d), a series of BlackRock Funds"
},
{
"block_type": "box",
"box": {
"height": 4,
"width": 11,
"x": 896,
"y": 214
},
"id": "2ed3c86b-dabe-410e-bc15-4fb3b5b2f92c",
"page_number": 3,
"text": "SM"
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 465,
"x": 61,
"y": 228
},
"id": "a4729c2b-f306-4112-b86c-8f9e76a13e67",
"page_number": 3,
"text": "(the \u201cTrust\u201d), is to seek capital appreciation over the long term."
},
{
"block_type": "box",
"box": {
"height": 13,
"width": 283,
"x": 61,
"y": 267
},
"id": "80ce66bd-dc3d-4d94-948e-65cc78ee4d5e",
"page_number": 3,
"text": "Fees and Expenses of the Fund"
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 839,
"x": 60,
"y": 293
},
"id": "b00273b7-9645-4643-af86-002913e6a053",
"page_number": 3,
"text": "This table describes the fees and expenses that you may pay if you buy, hold and sell Class K Shares of the Fund."
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 864,
"x": 60,
"y": 308
},
"id": "23365482-8c90-4f72-8f45-44ad94195c5e",
"page_number": 3,
"text": "Amounts in the table are rounded to the nearest basis point, which in some cases may be \u201c0.00.\u201d You may pay other"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 827,
"x": 60,
"y": 323
},
"id": "4b415d0f-fd8a-4c23-a826-2efaa71585ec",
"page_number": 3,
"text": "fees, such as brokerage commissions and other fees to your financial professional or selected securities dealer,"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 865,
"x": 61,
"y": 338
},
"id": "565f0074-1cfd-453c-8926-0b5d50ec4fcd",
"page_number": 3,
"text": "broker, investment adviser, service provider or industry professional (including BlackRock Advisors, LLC (\u201cBlackRock\u201d)"
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 787,
"x": 61,
"y": 352
},
"id": "5f07bc39-c2b1-4040-856c-60985f7b7c87",
"page_number": 3,
"text": "and its affiliates) (each a \u201cFinancial Intermediary\u201d), which are not reflected in the table and example below."
},
{
"block_type": "box",
"box": {
"height": 10,
"width": 222,
"x": 69,
"y": 389
},
"id": "a2089434-76e2-4a39-b74f-29475149c6a5",
"page_number": 3,
"text": "Annual Fund Operating Expenses"
},
{
"block_type": "box",
"box": {
"height": 10,
"width": 261,
"x": 69,
"y": 401
},
"id": "cbb39e23-5369-4f42-ab00-666b4ad605d0",
"page_number": 3,
"text": "(expenses that you pay each year as a"
},
{
"block_type": "box",
"box": {
"height": 10,
"width": 294,
"x": 70,
"y": 412
},
"id": "35451cbb-8442-42f6-8058-cb098091d289",
"page_number": 3,
"text": "percentage of the value of your investment)"
},
{
"block_type": "box",
"box": {
"height": 8,
"width": 51,
"x": 873,
"y": 412
},
"id": "59be92b7-1ded-4f18-a5cd-1c6ebfba7bf2",
"page_number": 3,
"text": "Class K"
},
{
"block_type": "box",
"box": {
"height": 10,
"width": 112,
"x": 70,
"y": 430
},
"id": "ed0d134b-6984-4e90-9202-b62e45033934",
"page_number": 3,
"text": "Management Fee"
},
{
"block_type": "box",
"box": {
"height": 4,
"width": 4,
"x": 183,
"y": 430
},
"id": "9ff6fcac-3bd8-414d-84af-29fea9ed76e3",
"page_number": 3,
"text": "1"
},
{
"block_type": "box",
"box": {
"height": 8,
"width": 41,
"x": 885,
"y": 430
},
"id": "724c9696-5751-4e45-9c60-ed87dd05c904",
"page_number": 3,
"text": "0.42%"
},
{
"block_type": "box",
"box": {
"height": 10,
"width": 266,
"x": 70,
"y": 448
},
"id": "c4341eea-396d-4900-a8e6-1cb915b5207e",
"page_number": 3,
"text": "Distribution and/or Service (12b-1) Fees"
},
{
"block_type": "box",
"box": {
"height": 8,
"width": 32,
"x": 883,
"y": 448
},
"id": "676bb48b-8665-4cdc-9d20-117a2e99a165",
"page_number": 3,
"text": "None"
},
{
"block_type": "box",
"box": {
"height": 10,
"width": 103,
"x": 69,
"y": 466
},
"id": "48b29336-e829-4a82-a0c9-cd1adf75ebfa",
"page_number": 3,
"text": "Other Expenses"
},
{
"block_type": "box",
"box": {
"height": 8,
"width": 41,
"x": 885,
"y": 466
},
"id": "b81cc9e7-989e-47ee-a5ec-4db9f3a6531b",
"page_number": 3,
"text": "0.09%"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 252,
"x": 69,
"y": 484
},
"id": "2ed930ae-29cd-4ee5-a085-0987e1b4b93b",
"page_number": 3,
"text": "Total Annual Fund Operating Expenses"
},
{
"block_type": "box",
"box": {
"height": 9,
"width": 41,
"x": 885,
"y": 484
},
"id": "66fc3040-9b50-418d-a4d2-92829b6e3d28",
"page_number": 3,
"text": "0.51%"
},
{
"block_type": "box",
"box": {
"height": 9,
"width": 304,
"x": 70,
"y": 503
},
"id": "1805f24c-872b-4225-b08c-c6dd8df74d5e",
"page_number": 3,
"text": "Fee Waivers and/or Expense Reimbursements"
},
{
"block_type": "box",
"box": {
"height": 5,
"width": 11,
"x": 375,
"y": 502
},
"id": "90e63c7c-aa00-4db0-8020-fc33b503b60b",
"page_number": 3,
"text": "1,2"
},
{
"block_type": "box",
"box": {
"height": 10,
"width": 50,
"x": 881,
"y": 502
},
"id": "e843fdc8-457b-4b91-90aa-030c443b013c",
"page_number": 3,
"text": "(0.06)%"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 598,
"x": 69,
"y": 520
},
"id": "664a3ff8-c046-4d5e-b8d5-3769dec121fe",
"page_number": 3,
"text": "Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements"
},
{
"block_type": "box",
"box": {
"height": 5,
"width": 10,
"x": 668,
"y": 520
},
"id": "bc5d453b-5361-4e15-bf1c-e7d46e111e0f",
"page_number": 3,
"text": "1,2"
},
{
"block_type": "box",
"box": {
"height": 9,
"width": 41,
"x": 885,
"y": 520
},
"id": "1dd995fb-6bda-48fb-af73-4698c1b6eed8",
"page_number": 3,
"text": "0.45%"
},
{
"block_type": "box",
"box": {
"height": 4,
"width": 3,
"x": 61,
"y": 540
},
"id": "bcdd12c1-6dae-4e9a-826d-a4ac835fba18",
"page_number": 3,
"text": "1"
},
{
"block_type": "box",
"box": {
"height": 9,
"width": 837,
"x": 81,
"y": 540
},
"id": "48461e3b-9ffa-4387-88a1-3ca5e87a662f",
"page_number": 3,
"text": "As described in the \u201cManagement of the Fund\u201d section of the Fund\u2019s prospectus beginning on page 29, BlackRock has contractually agreed to"
},
{
"block_type": "box",
"box": {
"height": 9,
"width": 854,
"x": 80,
"y": 550
},
"id": "a829a93d-4801-4d58-a26d-7100c5b8a017",
"page_number": 3,
"text": "waive the management fee with respect to any portion of the Fund\u2019s assets estimated to be attributable to investments in other equity and fixed"
},
{
"block_type": "box",
"box": {
"height": 9,
"width": 810,
"x": 81,
"y": 561
},
"id": "1209a78e-6630-495a-9e6e-186bd8dce879",
"page_number": 3,
"text": "income mutual funds and exchange-traded funds managed by BlackRock or its affiliates that have a contractual management fee, through"
},
{
"block_type": "box",
"box": {
"height": 9,
"width": 832,
"x": 81,
"y": 571
},
"id": "94367f2d-cd5d-427f-9925-6b07ad4a648c",
"page_number": 3,
"text": "June 30, 2028. In addition, BlackRock has contractually agreed to waive its management fees by the amount of investment advisory fees the"
},
{
"block_type": "box",
"box": {
"height": 9,
"width": 847,
"x": 81,
"y": 581
},
"id": "d40ae07e-ef90-482f-97ca-5bdba905eb72",
"page_number": 3,
"text": "Fund pays to BlackRock indirectly through its investment in money market funds managed by BlackRock or its affiliates, through June 30, 2028."
},
{
"block_type": "box",
"box": {
"height": 10,
"width": 834,
"x": 81,
"y": 591
},
"id": "3f19503a-adbd-4b9e-9bcb-7caf110788b4",
"page_number": 3,
"text": "The contractual agreements may be terminated upon 90 days\u2019 notice by a majority of the non-interested trustees of the Trust or by a vote of a"
},
{
"block_type": "box",
"box": {
"height": 9,
"width": 330,
"x": 81,
"y": 602
},
"id": "d789ebb2-22fd-431f-947c-772fea049d53",
"page_number": 3,
"text": "majority of the outstanding voting securities of the Fund."
},
{
"block_type": "box",
"box": {
"height": 3,
"width": 3,
"x": 61,
"y": 615
},
"id": "7ffcf031-4ada-46fc-81e8-9e0a6dcf201c",
"page_number": 3,
"text": "2"
},
{
"block_type": "box",
"box": {
"height": 9,
"width": 837,
"x": 81,
"y": 615
},
"id": "ccfe2fea-32ed-402a-8479-1e7e254f7da9",
"page_number": 3,
"text": "As described in the \u201cManagement of the Fund\u201d section of the Fund\u2019s prospectus beginning on page 29, BlackRock has contractually agreed to"
},
{
"block_type": "box",
"box": {
"height": 9,
"width": 771,
"x": 80,
"y": 625
},
"id": "d22f371b-6a9b-41f1-8379-bfba09517efc",
"page_number": 3,
"text": "waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waivers and/or Expense"
},
{
"block_type": "box",
"box": {
"height": 10,
"width": 844,
"x": 81,
"y": 635
},
"id": "8981715b-07d6-4b8e-ba2a-c01a297dd936",
"page_number": 3,
"text": "Reimbursements (excluding Dividend Expense, Interest Expense, Acquired Fund Fees and Expenses and certain other Fund expenses) to 0.45%"
},
{
"block_type": "box",
"box": {
"height": 9,
"width": 851,
"x": 81,
"y": 646
},
"id": "d17a4828-9cfb-482c-8aeb-cd929cb4b498",
"page_number": 3,
"text": "of average daily net assets through June 30, 2028. The contractual agreement may be terminated upon 90 days\u2019 notice by a majority of the non"
},
{
"block_type": "box",
"box": {
"height": 9,
"width": 617,
"x": 81,
"y": 656
},
"id": "a7e7ee72-d288-4d78-a3cc-90d197f6e0ba",
"page_number": 3,
"text": "interested trustees of the Trust or by a vote of a majority of the outstanding voting securities of the Fund."
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 74,
"x": 61,
"y": 674
},
"id": "b48328a9-48d2-4a70-9836-c5d337814f3f",
"page_number": 3,
"text": "Example:"
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 830,
"x": 60,
"y": 690
},
"id": "c5466d09-ca89-4f5c-8b06-9ac40d9c75a2",
"page_number": 3,
"text": "This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other"
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 832,
"x": 61,
"y": 704
},
"id": "0e334f0b-acfd-41d0-a1cb-86f218e645ad",
"page_number": 3,
"text": "mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 832,
"x": 61,
"y": 720
},
"id": "ef9f3add-32da-410e-b2b0-36e01ed7c066",
"page_number": 3,
"text": "redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5%"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 859,
"x": 61,
"y": 735
},
"id": "50228f34-a7c2-4371-a5cb-99fb2fac53c1",
"page_number": 3,
"text": "return each year and that the Fund\u2019s operating expenses remain the same. Although your actual costs may be higher"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 436,
"x": 61,
"y": 750
},
"id": "a9f1baae-79c3-4399-9d2b-817b36e72fd1",
"page_number": 3,
"text": "or lower, based on these assumptions your costs would be:"
},
{
"block_type": "box",
"box": {
"height": 8,
"width": 292,
"x": 631,
"y": 778
},
"id": "b4ec7119-6196-4cc3-8787-335e51236d1d",
"page_number": 3,
"text": "1 Year 3 Years 5 Years 10 Years"
},
{
"block_type": "box",
"box": {
"height": 8,
"width": 51,
"x": 69,
"y": 796
},
"id": "643eaabd-20fb-4562-9966-59f20e3e1b82",
"page_number": 3,
"text": "Class K"
},
{
"block_type": "box",
"box": {
"height": 9,
"width": 272,
"x": 639,
"y": 796
},
"id": "86f16754-c18f-407e-9ca8-f435162f731d",
"page_number": 3,
"text": "$46 $158 $279 $635"
},
{
"block_type": "box",
"box": {
"height": 10,
"width": 151,
"x": 61,
"y": 821
},
"id": "8f392b48-e253-4618-b55e-e62aa32cdf36",
"page_number": 3,
"text": "Portfolio Turnover:"
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 800,
"x": 60,
"y": 837
},
"id": "0383c3bd-86b3-4e0e-91c3-6625caae720d",
"page_number": 3,
"text": "The Fund pays transaction costs, such as commissions, when it buys and sells securities (or \u201cturns over\u201d its"
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 850,
"x": 62,
"y": 852
},
"id": "bf4f1644-4d70-4d43-a10c-98f4291725dc",
"page_number": 3,
"text": "portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 870,
"x": 61,
"y": 867
},
"id": "63222db2-8633-4c81-9306-52f87a348ca8",
"page_number": 3,
"text": "shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 839,
"x": 62,
"y": 882
},
"id": "3d594b4d-470d-4aa6-84bc-c6fe2a05db65",
"page_number": 3,
"text": "Example, affect the Fund\u2019s performance. During the most recent fiscal year, the Fund\u2019s portfolio turnover rate was"
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 298,
"x": 61,
"y": 896
},
"id": "999780f5-43e6-4f26-b4bf-dc3e8dbe0c72",
"page_number": 3,
"text": "92% of the average value of its portfolio."
},
{
"block_type": "box",
"box": {
"height": 9,
"width": 9,
"x": 927,
"y": 935
},
"id": "af6b173c-89bd-432e-befe-eb73bab234d3",
"page_number": 3,
"text": "3"
},
{
"block_type": "box",
"box": {
"height": 7,
"width": 138,
"x": 757,
"y": 969
},
"id": "89db0cf9-8f6b-4286-bc94-8998f652d46a",
"page_number": 3,
"text": "NM0926U-5977729-3/40"
},
{
"block_type": "box",
"box": {
"height": 14,
"width": 394,
"x": 61,
"y": 46
},
"id": "35a33bea-28a9-4d9d-92b1-08b98afde23a",
"page_number": 4,
"text": "Principal Investment Strategies of the Fund"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 800,
"x": 62,
"y": 73
},
"id": "4c51b554-b59e-49f8-958c-355a4e973388",
"page_number": 4,
"text": "Under normal circumstances, the Fund seeks to invest at least 80% of its net assets plus any borrowings for"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 816,
"x": 62,
"y": 88
},
"id": "3c6f43b7-4ef0-4068-a264-1b1d03622b6d",
"page_number": 4,
"text": "investment purposes in equity securities or other financial instruments that are components of, or have market"
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 859,
"x": 61,
"y": 102
},
"id": "f0e15785-8fe8-4b76-94e6-90fe59753362",
"page_number": 4,
"text": "capitalizations similar to, the securities included in the Russell 2000 Index. With respect to such equity investments,"
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 815,
"x": 62,
"y": 117
},
"id": "b96a462f-4a2b-4d5f-b7a6-3112f097890c",
"page_number": 4,
"text": "investments in derivatives are counted toward the Fund\u2019s 80% policy to the extent that they provide investment"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 821,
"x": 61,
"y": 132
},
"id": "f368b02c-d708-4416-b72d-20d8c5f8dbf7",
"page_number": 4,
"text": "exposure to the securities included within that policy or to one or more market risk factors associated with such"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 777,
"x": 61,
"y": 147
},
"id": "182ec3c5-bc7b-4cbe-8c2e-394192dc6f9c",
"page_number": 4,
"text": "securities. The companies included in the Russell 2000 Index have market capitalizations that range from"
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 860,
"x": 61,
"y": 161
},
"id": "587ecb67-38d5-4ef6-b896-0d49accf7c86",
"page_number": 4,
"text": "approximately $0.37 million to $12.12 billion as of August 31, 2026. The Fund primarily seeks to buy common stock"
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 863,
"x": 61,
"y": 176
},
"id": "93c3c24e-66a5-4729-95c7-e4f05aba8307",
"page_number": 4,
"text": "and may also invest in preferred stock and convertible securities. From time to time the Fund may invest in shares of"
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 493,
"x": 61,
"y": 191
},
"id": "7f04ca56-2181-4059-9608-859236cbafc9",
"page_number": 4,
"text": "companies through \u201cnew issues\u201d or initial public offerings (\u201cIPOs\u201d)."
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 850,
"x": 60,
"y": 214
},
"id": "02293df9-56d1-4e79-872c-cad7cb4ff9d4",
"page_number": 4,
"text": "The Fund may use derivatives, including options, futures, swaps and forward contracts both to seek to increase the"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 859,
"x": 61,
"y": 229
},
"id": "c5335e2a-4804-4213-a638-2afb6d67a9f8",
"page_number": 4,
"text": "return of the Fund and to hedge (or protect) the value of its assets against adverse movements in currency exchange"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 857,
"x": 61,
"y": 244
},
"id": "03b8eff9-f5c3-40e4-9feb-60acd5f96041",
"page_number": 4,
"text": "rates, interest rates and movements in the securities markets. In order to manage cash flows into or out of the Fund"
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 872,
"x": 61,
"y": 258
},
"id": "7caac3d8-5cf0-42a5-9b4d-4d8c6e635d89",
"page_number": 4,
"text": "effectively, the Fund may buy and sell financial futures contracts or options on such contracts. Derivatives are financial"
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 844,
"x": 62,
"y": 273
},
"id": "585b38ec-4592-455f-bf27-061ca143a843",
"page_number": 4,
"text": "instruments whose value is derived from another security, a commodity (such as oil or gas), a currency or an index,"
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 857,
"x": 62,
"y": 288
},
"id": "b2695f8d-037b-4121-843c-c09b773a9399",
"page_number": 4,
"text": "including but not limited to the Russell 2000 Index. The use of options, futures, swaps and forward contracts can be"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 491,
"x": 61,
"y": 303
},
"id": "c3b56b3f-03aa-4298-9193-f7a587e3de06",
"page_number": 4,
"text": "effective in protecting or enhancing the value of the Fund\u2019s assets."
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 834,
"x": 60,
"y": 326
},
"id": "32a8aef7-9c70-4e4e-97a6-71f7fc43cbdc",
"page_number": 4,
"text": "The Fund seeks to pursue its investment objective by investing in small cap securities in a disciplined manner, by"
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 871,
"x": 61,
"y": 340
},
"id": "e1ebce53-29ab-4cc1-b16a-3270b5d693f2",
"page_number": 4,
"text": "using proprietary return forecast models that incorporate quantitative analysis. These forecast models are designed to"
},
{
"block_type": "box",
"box": {
"height": 12,
"width": 874,
"x": 62,
"y": 355
},
"id": "de40fffd-77b9-4dc6-a308-a7cd5f2b6ec8",
"page_number": 4,
"text": "identify aspects of mispricing across stocks which the Fund can seek to capture by over- and under-weighting particular"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 874,
"x": 61,
"y": 370
},
"id": "bd5ecd1d-d64d-4ca6-a2f2-625276ff1b6a",
"page_number": 4,
"text": "equities while seeking to control incremental risk. The Fund\u2019s manager then constructs and rebalances the portfolio by"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 570,
"x": 62,
"y": 385
},
"id": "337ffe2a-e053-4d51-b760-6740a48bdc05",
"page_number": 4,
"text": "integrating its investment insights with the model-based optimization process."
},
{
"block_type": "box",
"box": {
"height": 13,
"width": 354,
"x": 61,
"y": 424
},
"id": "841edd27-aabd-45ed-bfdd-e5372fb02bf1",
"page_number": 4,
"text": "Principal Risks of Investing in the Fund"
},
{
"block_type": "box",
"box": {
"height": 11,
"width": 860,
"x": 62,
"y": 450
},
"id": "c648885b-400a-4924-ae19-82e6bc7b4772",
"page_number": 4,
"text": "Risk is inherent in all investing. The value of your investment in the Fund, as well as the amount of return you...