N-CSRS 1 d859381dncsrs.htm BLACKROCK EMERGING MARKETS FUND, INC. BLACKROCK EMERGING MARKETS FUND, INC.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT

INVESTMENT COMPANIES

Investment Company Act file number: 811-05723

 

Name of Fund:   BlackRock Emerging Markets Fund, Inc.

 

Fund Address:    100   Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock Emerging Markets Fund, Inc., 50 Hudson Yards, New York, NY 10001

Registrant’s telephone number, including area code: (800) 441-7762

Date of fiscal year end: 04/30/2024

Date of reporting period: 10/31/2023


Item 1 – Report to Stockholders

(a) The Report to Shareholders is attached herewith.


 

LOGO

  OCTOBER 31, 2023

 

  

2023 Semi-Annual Report

(Unaudited)

 

BlackRock Emerging Markets Fund, Inc.

BlackRock Unconstrained Equity Fund

BlackRock Funds VII, Inc.

·   BlackRock Sustainable Emerging Markets Equity Fund

 

 

 

    Not FDIC Insured • May Lose Value • No Bank Guarantee        


The Markets in Review

Dear Shareholder,

The combination of continued economic growth and cooling inflation provided a supportive backdrop for investors during the 12-month reporting period ended October 31, 2023. Significantly tighter monetary policy helped to rein in inflation, as the annual increase in the Consumer Price Index declined to its long-term average of approximately 3% in October 2023. Meanwhile, real economic growth proved more resilient than many investors anticipated. A moderating labor market also helped ease inflationary pressure, although wages continued to grow and unemployment rates touched the lowest levels in decades before rising slightly. This robust labor market powered further growth in consumer spending, backstopping the economy. On October 7, 2023, Hamas launched a horrific attack on Israel. The ensuing war will have a significant humanitarian impact and could lead to heightened economic and market volatility. We see geopolitics as a structural market risk going forward. See our geopolitical risk dashboard at blackrock.com for more details.

Equity returns were solid during the period, as the durability of consumer spending mitigated investors’ concerns about the economy’s trajectory. The U.S. economy continued to show strength, and growth further accelerated in the third quarter of 2023. However, equity returns were uneven, as the performance of a few notable technology companies supported gains among large-capitalization U.S. stocks, while small-capitalization U.S. stocks declined overall. Meanwhile, international developed market equities advanced, and emerging market equities posted solid gains.

The 10-year U.S. Treasury yield rose during the reporting period, driving its price down, as investors reacted to elevated inflation and attempted to anticipate future interest rate changes. The corporate bond market benefited from improving economic sentiment, although high-yield corporate bond prices fared significantly better than investment-grade bonds as demand from yield-seeking investors remained strong.

The U.S. Federal Reserve (the “Fed”), attempting to manage persistent inflation, raised interest rates six times during the 12-month period, but slowed and then paused its tightening later in the period. The Fed also wound down its bond-buying programs and incrementally reduced its balance sheet by not replacing securities that reach maturity.

Supply constraints appear to have become an embedded feature of the new macroeconomic environment, making it difficult for developed economies to increase production without sparking higher inflation. Geopolitical fragmentation and an aging population risk further exacerbating these constraints, keeping the labor market tight and wage growth high. Although the Fed has decelerated the pace of interest rate hikes and recently opted for several pauses, we believe that the new economic regime means that the Fed will need to maintain high rates for an extended period to keep inflation under control. Furthermore, ongoing structural changes may mean that the Fed will be hesitant to cut interest rates in the event of faltering economic activity lest inflation accelerate again.

While we favor an overweight position in developed market equities in the long term, we prefer an underweight stance in the near term. Expectations for corporate earnings remain elevated, which seems inconsistent with macroeconomic constraints. Nevertheless, we are overweight on Japanese stocks in the near term as shareholder-friendly policies generate increased investor interest. We also believe that stocks with an AI tilt should benefit from an investment cycle that is set to support revenues and margins. In credit, there are selective opportunities in the near term despite tightening credit and financial conditions. For fixed income investing with a six- to twelve-month horizon, we see the most attractive investments in short-term U.S. Treasuries, U.S. inflation-linked bonds, euro area government bonds and gilts, U.S. mortgage-backed securities, and hard-currency emerging market bonds.

Overall, our view is that investors need to think globally, position themselves to be prepared for a decarbonizing economy, and be nimble as market conditions change. We encourage you to talk with your financial advisor and visit blackrock.com for further insight about investing in today’s markets.

Sincerely,

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

 

Total Returns as of October 31, 2023
     
       6-Month        12-Month  
   

U.S. large cap equities
(S&P 500® Index)

    1.39%      10.14% 
   

U.S. small cap equities
(Russell 2000® Index)

  (5.29)   (8.56)
   

International equities
(MSCI Europe, Australasia, Far East Index)

  (7.88)   14.40
   

Emerging market equities
(MSCI Emerging Markets Index)

  (4.78)   10.80
   

3-month Treasury bills
(ICE BofA 3-Month U.S. Treasury Bill Index)

  2.63   4.77
   

U.S. Treasury securities
(ICE BofA 10-Year U.S. Treasury Index)

  (9.70)   (3.25)
   

U.S. investment grade bonds
(Bloomberg U.S. Aggregate Bond Index)

  (6.13)   0.36
   

Tax-exempt municipal bonds
(Bloomberg Municipal Bond Index)

  (4.65)   2.64
   

U.S. high yield bonds
(Bloomberg U.S. Corporate High Yield 2% Issuer Capped Index)

  0.02   6.23
Past performance is not an indication of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.
 

 

 

2  

T H I S   P A G E   I S   N O T   P A R T   O F   Y O U R   F U N D   R E P O R T


Table of Contents

 

 

     Page  

 

 

The Markets in Review

     2  

Semi-Annual Report:

  

Fund Summary

     4  

About Fund Performance

     11  

Disclosure of Expenses

     11  

Derivative Financial Instruments

     12  

Financial Statements:

  

Schedules of Investments

     13  

Statements of Assets and Liabilities

     27  

Statements of Operations

     29  

Statements of Changes in Net Assets

     30  

Financial Highlights

     32  

Notes to Financial Statements

     44  

Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements

     57  

Additional Information

     61  

 

 

 

LOGO

 

 

  3


Fund Summary   as of October 31, 2023     BlackRock Emerging Markets Fund, Inc.

 

 

Investment Objective

BlackRock Emerging Markets Fund, Inc.’s (the “Fund”) investment objective is to seek long-term capital appreciation by investing in securities, principally equity securities, of issuers in countries having smaller capital markets.

Portfolio Management Commentary

How did the Fund perform?

For the six-month period ended October 31, 2023, the Fund underperformed its benchmark, the MSCI Emerging Markets Index.

What factors influenced performance?

In terms of countries, selection in China and India detracted most from relative performance during the reporting period. In sector terms, selection in consumer discretionary and utilities were the primary detractors. At the individual stock level, an overweight to Chinese energy company ENN Energy was the largest detractor from relative performance, as the gas distributor sold off due to weaker than expected growth in gas sales. A lack of exposure to Chinese online retailer Pinduoduo also detracted. The stock rallied after a positive shift in consumer sentiment led to a significant earnings beat.

In terms of countries, selection in Taiwan and Poland contributed most to relative performance during the reporting period. In sector terms, selection in communication services and healthcare were the primary contributors. At the individual stock level, an overweight to Taiwanese networking and communications solutions company Accton Technology Corp. (“Accton”) was the top contributor over the period. Accton reported strong results and excitement around its new artificial intelligence (“AI”) accelerator product pushed its stock higher. In addition, Accton was added to the TWSE Taiwan 50 Index. An overweight to Bank Polski also contributed to relative return after Polish election results signaled an improvement in troubled relations with the European Union, leading Polish stocks higher.

Describe recent portfolio activity.

During the period, the Fund initiated a position in Indian IT consulting company Infosys after the company announced a large five-year deal to provide an existing client with AI and automation services. The Fund added to Chinese e-commerce stock Alibaba Group Holding Ltd. after founder Jack Ma returned to China and the announcement of several spin-offs. The Fund trimmed holdings of Baidu Inc. after an analyst downgrade due to potential margin pressures and the recent United States ban on chip sales to China. The Fund exited its position in fast food stock Yum China Holdings Inc. in order to realize profits after strong performance.

The Fund’s cash position averaged approximately 6.0% over the six-month period and was 5.7% at period end. The cash position did not have a material impact on performance.

Describe portfolio positioning at period end.

Relative to the MSCI Emerging Markets Index, the Fund ended the period overweight to Brazil and Indonesia, while being underweight to Taiwan and Saudi Arabia. In sector terms, the Fund was overweight in consumer staples and information technology, and underweight in materials and communication services.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

Performance

 

               

Average Annual Total Returns(a)(b)

 
     

 

 

 
                1 Year           5 Years           10 Years  
     

 

 

     

 

 

     

 

 

 
     6-Month
Total
Returns
           Without
Sales
Charge
     With
Sales
Charge
           Without
Sales
Charge
     With
Sales
Charge
           Without
Sales
Charge
     With
Sales
Charge
 

Institutional

    (5.03 )%        10.54      N/A         3.39      N/A         2.48      N/A  

Investor A

    (5.13       10.26        4.48       3.12        2.02       2.14        1.59

Investor C

    (5.50       9.44        8.44         2.35        2.35         1.50        1.50  

Class K

    (4.97       10.59        N/A         3.44        N/A         2.51        N/A  

MSCI Emerging Markets Index(c)

    (4.78             10.80        N/A               1.59        N/A               1.19        N/A  

 

  (a) 

Assuming maximum sales charges, if any. Average annual total returns with and without sales charges reflect reductions for distribution and service fees. See “About Fund Performance” for a detailed description of share classes, including any related sales charges and fees, and how performance was calculated for certain share classes.

 
  (b) 

Under normal conditions, the Fund invests at least 80% of its net assets plus any borrowings for investment purposes in equity securities of issuers located in countries with developing capital markets.

 
  (c) 

An index that captures large- and mid-cap representation across emerging markets countries. The index covers approximately 85% of the free float-adjusted market capitalization in each country.

 

N/A — Not applicable as the share class and index do not have a sales charge.

Past performance is not an indication of future results.

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

 

 

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Fund Summary   as of October 31, 2023 (continued)    BlackRock Emerging Markets Fund, Inc.

 

Expense Example

 

    Actual           Hypothetical 5% Return           
 

 

 

     

 

 

      
     

Beginning
Account Value
(05/01/23)
 
 
 
    

Ending
Account Value
(10/31/23)
 
 
 
    

Expenses
Paid During
the Period
 
 
(a) 
           

Beginning
Account Value
(05/01/23)
 
 
 
    

Ending
Account Value
(10/31/23)
 
 
 
    

Expenses
Paid During
the Period
 
 
(a) 
      

Annualized
Expense
Ratio
 
 
 

Institutional

    $       1,000.00        $          949.70        $          4.22         $       1,000.00        $       1,020.81        $          4.37          0.86

Investor A

    1,000.00        948.70        5.44         1,000.00        1,019.56        5.64          1.11  

Investor C

    1,000.00        945.00        9.09         1,000.00        1,015.79        9.43          1.86  

Class K

    1,000.00        950.30        3.97               1,000.00        1,021.06        4.12          0.81  

 

  (a) 

For each class of the Fund, expenses are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period shown).

 

See “Disclosure of Expenses” for further information on how expenses were calculated.

Portfolio Information

 

TEN LARGEST HOLDINGS

 

Security(a)

 

   

 

Percent of
Net Assets

 

 
 

 

Taiwan Semiconductor Manufacturing Co. Ltd.

    5.9

Samsung Electronics Co. Ltd.

    5.9  

Alibaba Group Holding Ltd.

    4.3  

Axis Bank Ltd.

    2.1  

HDFC Bank Ltd.

    1.8  

Tencent Holdings Ltd.

    1.7  

Banco Bradesco SA

    1.5  

B3 SA - Brasil Bolsa Balcao

    1.5  

Hapvida Participacoes e Investimentos SA

    1.4  

Wal-Mart de Mexico SAB de CV

    1.4  
GEOGRAPHIC ALLOCATION

 

Country/Geographic Region

 

   

 

Percent of
Net Assets

 

 
 

 

China

    22.0

India

    14.2  

Taiwan

    10.4  

Brazil

    9.5  

South Korea

    9.4  

United States

    8.9  

Mexico

    3.7  

Indonesia

    3.5  

Thailand

    3.0  

Hong Kong

    1.9  

Hungary

    1.5  

Canada

    1.5  

Kazakhstan

    1.2  

South Africa

    1.1  

Philippines

    1.1  

Poland

    1.0  

Other#

    8.0  

Liabilities in Excess of Other Assets

    (1.9
 

 

(a) 

Excludes short-term securities.

# 

Includes holdings within countries/geographic regions that are less than 1.0% of net assets. Please refer to the Schedule of Investments for such countries/geographic regions.

 

 

F U N D   S U M M A R Y

  5


Fund Summary   as of October 31, 2023     BlackRock Unconstrained Equity Fund

 

 

Investment Objective

BlackRock Unconstrained Equity Fund’s (the “Fund”) investment objective is to seek to achieve long term capital growth.

Portfolio Management Commentary

How did the Fund perform?

For the six-month period ended October 31, 2023, the Fund underperformed its benchmark, the MSCI World Index.

What factors influenced performance?

Fund holdings exposed to the life sciences and biologics market were among the largest detractors, suffering from a severe destocking cycle, and included Masimo Corp., Spirax-Sarco Engineering plc, and Lonza Group AG. Exposure to LVMH Moët Hennessy Louis Vuitton also detracted. The company’s results have reflected signs of a slowdown in the U.S. and European consumer bases, and growth is likely to continue to slow in 2024. However, the long-term opportunity in its unique brand portfolio remains compelling.

Software companies held were among the leading contributors during the reporting period, including Cadence Design Systems Inc., Microsoft Corp., and Intuit Inc. These businesses have high switching costs and recurring revenues which make them more fundamentally resilient to macro concerns. Within healthcare, a position in Novo Nordisk A/S proved additive due to its leadership position in the obesity treatment market, which has created an extraordinary multi-year growth opportunity for the company.

Describe recent portfolio activity.

Portfolio changes are driven by stock-specific investment decisions. Typically, trades are made where the structural investment case changes or when competition for capital forces action. Environmental, governance and social factors risks are integrated into the investment research process at the stock level. There were no material changes in the portfolio over the six-month period.

Describe portfolio positioning at period end.

The Fund continues to pursue a long-only, concentrated approach with low anticipated turnover, designed to maximize returns from extraordinary businesses based on fundamental insights. The portfolio reflects the investment adviser’s bottom-up fundamental analysis of individual companies with a goal of having at least half of the Fund invested in businesses with resilient earnings and cash flows.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

Performance

 

              Average Annual Total Returns(a)(b)  
     

 

 

 
              1 Year         5 Years         10 Years  
     

 

 

     

 

 

     

 

 

 
    

6-Month

Total

Returns

        

Without

Sales

Charge

    

With

Sales

    Charge

        

Without

Sales

    Charge

    

With

Sales

Charge

        

Without

Sales

Charge

    

With

Sales

    Charge

 

Institutional

    (4.55 )%        20.45      N/A         11.12      N/A         7.95      N/A  

Investor A

    (4.73       20.07        13.76       10.82        9.63       7.65        7.07

Investor C

    (5.05       19.12        18.12         9.93        9.93         6.98        6.98  

Class R

    (4.75       19.83        N/A         10.45        N/A         7.25        N/A  

MSCI World Index(c)

    (1.59         10.48        N/A           8.27        N/A           7.53        N/A  

 

  (a) 

Assuming maximum sales charges, if any. Average annual total returns with and without sales charges reflect reductions for distribution and service fees. See “About Fund Performance” for a detailed description of share classes, including any related sales charges and fees.

 
  (b) 

Under normal circumstances, the Fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in equity and equity-related securities. The Fund’s total returns prior to March 1, 2022 are the returns of the Fund when it followed a different investment objective and different investment strategies and investment process under the name BlackRock Long-Horizon Equity Fund.

 
  (c) 

A broad global equity index that captures large- and mid-cap representation across certain developed markets countries.

 

N/A — Not applicable as the share class and index do not have a sales charge.

Past performance is not an indication of future results.

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Expense Example

 

        Actual           Hypothetical 5% Return        
 

 

   

 

   
   

Beginning

Account Value

(05/01/23)

   

Ending

Account Value

(10/31/23)

 

 

 

   

Expenses

Paid During

the Period

 

 

(a) 

 

Beginning

Account Value

(05/01/23)

   

Ending

Account Value

(10/31/23)

 

 

 

   

Expenses

Paid During

the Period

 

 

(a) 

   

Annualized

Expense

Ratio

 

 

 

Institutional

  $     1,000.00     $       954.50       $       4.74     $       1,000.00     $       1,020.29       $       4.90       0.96

Investor A

  1,000.00     952.70       5.95     1,000.00     1,019.05       6.15       1.21  

 

 

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Fund Summary   as of October 31, 2023 (continued)    BlackRock Unconstrained Equity Fund

 

Expense Example (continued)

 

        Actual           Hypothetical 5% Return        
 

 

   

 

   
   

Beginning

Account Value

(05/01/23)

   

Ending

Account Value

(10/31/23)

 

 

 

   

Expenses

Paid During

the Period

 

 

(a) 

 

Beginning

Account Value

(05/01/23)

   

Ending

Account Value

(10/31/23)

 

 

 

   

Expenses

Paid During

the Period

 

 

(a) 

   

Annualized

Expense

Ratio

 

 

 

Investor C

  $    1,000.00     $       949.50       $      9.62     $       1,000.00     $       1,015.27       $       9.94              1.96

Class R

  1,000.00     952.50       7.18     1,000.00     1,017.78       7.42       1.46  

 

  (a) 

For each class of the Fund, expenses are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period shown).

 

See “Disclosure of Expenses” for further information on how expenses were calculated.

Portfolio Information

 

TEN LARGEST HOLDINGS

 

 
Security(a)   Percent of   
Net Assets   
 

 

 

Microsoft Corp.

    9.9%  

Novo Nordisk A/S, Class B

    8.0     

LVMH Moet Hennessy Louis Vuitton SE

    7.5     

ASML Holding NV

    7.2     

Cadence Design Systems, Inc.

    7.2     

Visa, Inc., Class A

    4.7     

Costco Wholesale Corp.

    4.7     

Ferrari NV

    4.7     

Mastercard, Inc., Class A

    4.7     

S&P Global, Inc.

    4.6     

 

 

GEOGRAPHIC ALLOCATION

 

 
Country/Geographic Region  

Percent of   

Net Assets   

 

 

 

United States

    71.9%  

Denmark

    8.2     

France

    7.4     

Netherlands

    7.2     

Italy

    4.7     

United Kingdom

    2.5     

Other#

    0.4     

Liabilities in Excess of Other Assets

    (2.3)    

 

 
 

 

(a) 

Excludes short-term securities.

 
# 

Includes holdings within countries/geographic regions that are less than 1.0% of net assets. Please refer to the Schedule of Investments for such countries/geographic regions.

 

 

 

F U N D   S U M M A R Y

  7


Fund Summary   as of October 31, 2023     BlackRock Sustainable Emerging Markets Equity Fund

 

 

Investment Objective

BlackRock Sustainable Emerging Markets Equity Fund’s (the “Fund”) investment objective is to seek to maximize total return.

Portfolio Management Commentary

How did the Fund perform?

For the six-month period ended October 31, 2023, all of the Fund’s share classes underperformed its benchmark, the MSCI Emerging Markets Index.

What factors influenced performance?

In country terms, stock selection within China and India weighed most heavily on the Fund’s performance relative to the benchmark. From a sector perspective, stock picking within consumer discretionary and an underweight to energy hurt relative return.

In terms of individual holdings, Chinese lithium producer Ganfeng Lithium Company Ltd. was the top detractor as supply/demand dynamics in the market continued to be challenging. Shares of Korean electric battery maker Samsung SDI Co. Ltd. also lagged as the broader EV supply chain segment has been under selling pressure due to profit taking and higher concerns around higher interest rates. An underweight in Brazilian energy giant Petroleo Brasileiro SA also hurt relative performance as energy prices have stayed elevated.

In country terms, stock selection was most beneficial within Taiwan and Korea. From a sector perspective, underweights to communication services and industrials were the biggest contributors.

At the individual stock level, leading contributors included Taiwanese server company Accton Technology Corp. (“Accton”). Accton has positioned itself as an early adopter of artificial intelligence (“AI”) relative to its competitors, and its stock rallied on positive sentiment towards the AI theme. Shares of Brazilian healthcare provider Hapvida also outperformed, rebounding on the back of a significant earnings beat as healthcare spending normalized and the company’s margins benefited from an improvement in its medical loss ratio. Finally, the Fund’s position in Hungarian bank OTP Bank Group contributed with outperformance driven by improving net interest margins given the higher interest rate backdrop.

Describe recent portfolio activity.

The Fund reduced exposure to China over the reporting period on a cautious view of the market, exiting such companies as restaurant operator Yum China Holdings Inc., automation tools producer Shenzhen Inovance Technology Company Ltd., and medical device provider Shenzhen Mindray Bio-Medical Electronics Co. Ltd. At the same time, the Fund increased exposure to Alibaba Group Holding Ltd., as the valuation for the Chinese e-commerce giant appeared to have bottomed, presenting a more compelling risk/reward profile. By contrast, the Fund added exposure in India, most notably initiating positions in information technology services companies Infosys Limited and Cognizant Technology Solutions Corp. which were positioned to benefit as smaller and mid-sized companies across industries increasingly integrate remote work into their operating models. Exposure to Brazil was also increased, particularly to domestically oriented companies such as retailer Sendas Distribuidora SA and Banco Bradesco SA.

Describe portfolio positioning at period end.

Relative to the MSCI Emerging Market Index benchmark, the Fund ended the period overweight to the information technology and financials sectors, and underweight to the communication services and energy sectors. In country terms, the Fund’s biggest overweights were to Brazil, the United Arab Emirates and Kazakhstan, while the biggest underweights were to Saudi Arabia, China and Taiwan.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

 

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Fund Summary   as of October 31, 2023 (continued)    BlackRock Sustainable Emerging Markets Equity Fund

 

Performance

 

              Average Annual Total Returns(a)(b)  
     

 

 

 
              1 Year         5 Years         10 Years  
     

 

 

     

 

 

     

 

 

 
    

6-Month

Total

Returns

        

Without

Sales

Charge

    

With

Sales

    Charge

        

Without

Sales

    Charge

    

With

Sales

Charge

        

Without

Sales

Charge

    

With

Sales

    Charge

 

Institutional

    (6.62 )%        7.68      N/A         1.71      N/A         1.24      N/A  

Investor A

    (6.66       7.45        1.81       1.46        0.38       1.01        0.46

Class K

    (6.54       7.74        N/A         1.75        N/A         1.27        N/A  

Class R

    (6.81       7.20        N/A         1.10        N/A         0.60        N/A  

MSCI Emerging Markets Index(c)

    (4.78         10.80        N/A           1.59        N/A           1.19        N/A  

 

  (a) 

Assuming maximum sales charges, if any. Average annual total returns with and without sales charges reflect reductions for distribution and service fees. See “About Fund Performance” for a detailed description of share classes, including any related sales charges and fees, and how performance was calculated for certain share classes.

 
  (b) 

Under normal circumstances, the Fund seeks to invest at least 80% of its net assets, plus any borrowings for investment purposes, in the equity securities of issuers located in countries with emerging markets and derivatives that have similar economic characteristics. The Fund’s total returns prior to October 31, 2017 are the returns of the Fund when it followed a different investment objective and different investment strategies under the name BlackRock Pacific Fund, Inc. The Fund’s total returns for the period between October 31, 2017 and November 1, 2021 are the returns of the Fund when it followed a different investment objective and different investment strategies and investment process under the name BlackRock Asian Dragon Fund Inc.

 
  (c) 

An index that captures large- and mid-cap representation across emerging markets countries. The index covers approximately 85% of the free float-adjusted market capitalization in each country.

 

N/A — Not applicable as the share class and index do not have a sales charge.

Past performance is not an indication of future results.

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Expense Example

 

    Actual     Hypothetical 5% Return        
 

 

   

 

 

   
   

Beginning

Account Value

(05/01/23)

    

Ending
Account Value
(10/31/23)
 
 
 
    

Expenses
Paid During
the Period
 
 
(a) 
   

Beginning

Account Value

(05/01/23)

 

 

 

 

Ending

Account Value

(10/31/23)

    

Expenses
Paid During
the Period
 
 
(a) 
   

Annualized
Expense
Ratio
 
 
 

Institutional

  $       1,000.00      $          933.80        $            4.18       $       1,000.00     $       1,020.81      $         4.37       0.86

Investor A

  1,000.00      933.40        5.39       1,000.00     1,019.56      5.64       1.11  

Class K

  1,000.00      934.60        3.94       1,000.00     1,021.06      4.12       0.81  

Class R

  1,000.00      931.90        6.60       1,000.00     1,018.30      6.90       1.36  

 

  (a) 

For each class of the Fund, expenses are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period shown).

 

See “Disclosure of Expenses” for further information on how expenses were calculated.

 

 

F U N D   S U M M A R Y

  9


Fund Summary   as of October 31, 2023 (continued)    BlackRock Sustainable Emerging Markets Equity Fund

 

Portfolio Information

 

TEN LARGEST HOLDINGS

 

Security(a)

 

   

 

Percent of
Net Assets

 

 
 

 

Taiwan Semiconductor Manufacturing Co. Ltd.

    8.0

Samsung Electronics Co. Ltd.

    6.2  

Alibaba Group Holding Ltd.

    4.6  

HDFC Bank Ltd.

    3.9  

Hapvida Participacoes e Investimentos SA

    2.5  

Axis Bank Ltd.

    2.5  

Wal-Mart de Mexico SAB de CV

    2.0  

AIA Group Ltd.

    1.9  

China Mengniu Dairy Co. Ltd.

    1.9  

Grupo Financiero Banorte SAB de CV, Class O

    1.8  
GEOGRAPHIC ALLOCATION

 

Country/Geographic Region

 

   

 

Percent of
Net Assets

 

 
 

 

China

    22.1

India

    14.1  

Taiwan

    12.2  

South Korea

    10.9  

Brazil

    9.6  

United States

    4.7  

South Africa

    4.5  

Mexico

    3.8  

Indonesia

    3.5  

Hong Kong

    3.4  

United Arab Emirates

    3.1  

Thailand

    2.8  

Kazakhstan

    1.7  

United Kingdom

    1.5  

Hungary

    1.5  

Russia

    0.1  

Other Assets Less Liabilities

    0.5  
 

 

(a) 

Excludes short-term securities.

 

 

10  

2 0 2 3   B L A C K R O C K   S E M I - A N N U A L   R E P O R T   T O   S H A R E H O L D E R S


About Fund Performance

 

Institutional and Class K Shares (Class K Shares are available only in BlackRock Emerging Markets Fund, Inc. and BlackRock Sustainable Emerging Markets Equity Fund) are not subject to any sales charge. These shares bear no ongoing distribution or service fees and are available only to certain eligible investors. Class K Shares performance of BlackRock Emerging Markets Fund, Inc. and BlackRock Sustainable Emerging Markets Equity Fund shown prior to the Class K Shares inception date of January 25, 2018 is that of Institutional Shares. The performance of BlackRock Emerging Markets Fund, Inc. and BlackRock Sustainable Emerging Markets Equity Fund Class K Shares would be substantially similar to the performances of the applicable Fund’s Institutional Shares because Class K Shares and Institutional Shares of each Fund invest in the same portfolio of securities and performance would only differ to the extent that Class K Shares and Institutional 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 Institutional Shares.

Investor A Shares are subject to a maximum initial sales charge (front-end load) of 5.25% and a service fee of 0.25% per year (but no distribution fee). Certain redemptions of these shares may be subject to a contingent deferred sales charge (“CDSC”) where no initial sales charge was paid at the time of purchase. These shares are generally available through financial intermediaries. On October 28, 2021, BlackRock Sustainable Emerging Markets Equity Fund’s issued and outstanding Investor C Shares converted into Investor A Shares with the same relative aggregate net asset value (“NAV”).

Investor C Shares (available only in BlackRock Emerging Markets Fund, Inc. and BlackRock Unconstrained Equity Fund) are subject to a 1.00% CDSC if redeemed within one year of purchase. In addition, these shares are subject to a distribution fee of 0.75% per year and a service fee of 0.25% per year. These shares are generally available through financial intermediaries. These shares automatically convert to Investor A Shares after approximately eight years.

Class R Shares (available only in BlackRock Unconstrained Equity Fund and BlackRock Sustainable Emerging Markets Equity Fund) are not subject to any sales charge. These shares are subject to a distribution fee of 0.25% per year and a service fee of 0.25% per year. These shares are available only to certain employer-sponsored retirement plans.

Past performance is not an indication of future results. Financial markets have experienced extreme volatility and trading in many instruments has been disrupted. These circumstances may continue for an extended period of time and may continue to affect adversely the value and liquidity of each Fund’s investments. As a result, current performance may be lower or higher than the performance data quoted. Refer to blackrock.com to obtain performance data current to the most recent month-end. Performance results do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Figures shown in the performance table(s) assume reinvestment of all distributions, if any, at net asset value (“NAV”) on the ex-dividend date or payable date, as applicable. Investment return and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Distributions paid to each class of shares will vary because of the different levels of service, distribution and transfer agency fees applicable to each class, which are deducted from the income available to be paid to shareholders.

BlackRock Advisors, LLC (the “Manager”), each Fund’s investment adviser, has contractually and/or voluntarily agreed to waive and/or reimburse a portion of each Fund’s expenses. Without such waiver(s) and/or reimbursement(s), each Fund’s performance would have been lower. With respect to each Fund’s voluntary waiver(s), if any, the Manager is under no obligation to waive and/or reimburse or to continue waiving and/or reimbursing its fees and such voluntary waiver(s) may be reduced or discontinued at any time. With respect to each Fund’s contractual waiver(s), if any, the Manager is under no obligation to continue waiving and/or reimbursing its fees after the applicable termination date of such agreement. See the Notes to Financial Statements for additional information on waivers and/or reimbursements.

Disclosure of Expenses

Shareholders of each Fund may incur the following charges: (a) transactional expenses, such as sales charges; and (b) operating expenses, including investment advisory fees, service and distribution fees, including 12b-1 fees, acquired fund fees and expenses, and other fund expenses. The expense examples shown (which are based on a hypothetical investment of $1,000 invested at the beginning of the period and held through the end of the period) are intended to assist shareholders both in calculating expenses based on an investment in each Fund and in comparing these expenses with similar costs of investing in other mutual funds.

The expense examples provide information about actual account values and actual expenses. Annualized expense ratios reflect contractual and voluntary fee waivers, if any. In order to estimate the expenses a shareholder paid during the period covered by this report, shareholders can divide their account value by $1,000 and then multiply the result by the number corresponding to their Fund and share class under the heading entitled “Expenses Paid During the Period.”

The expense examples also provide information about hypothetical account values and hypothetical expenses based on a Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses. In order to assist shareholders in comparing the ongoing expenses of investing in these Funds and other funds, compare the 5% hypothetical examples with the 5% hypothetical examples that appear in shareholder reports of other funds.

The expenses shown in the expense examples are intended to highlight shareholders’ ongoing costs only and do not reflect transactional expenses, such as sales charges, if any. Therefore, the hypothetical examples are useful in comparing ongoing expenses only and will not help shareholders determine the relative total expenses of owning different funds. If these transactional expenses were included, shareholder expenses would have been higher.

 

 

A B O U T   F U N D   P E R F O R M A N C E / D I S C L O S U R E   O F   E X P E N S E S

  11


Derivative Financial Instruments

 

The Funds may invest in various derivative financial instruments. These instruments are used to obtain exposure to a security, commodity, index, market, and/or other assets without owning or taking physical custody of securities, commodities and/or other referenced assets or to manage market, equity, credit, interest rate, foreign currency exchange rate, commodity and/or other risks. Derivative financial instruments may give rise to a form of economic leverage and involve risks, including the imperfect correlation between the value of a derivative financial instrument and the underlying asset, possible default of the counterparty to the transaction or illiquidity of the instrument. Pursuant to Rule 18f-4 under the 1940 Act, among other things, the Funds must either use derivative financial instruments with embedded leverage in a limited manner or comply with an outer limit on fund leverage risk based on value-at-risk. The Funds’ successful use of a derivative financial instrument depends on the investment adviser’s ability to predict pertinent market movements accurately, which cannot be assured. The use of these instruments may result in losses greater than if they had not been used, may limit the amount of appreciation a Fund can realize on an investment and/or may result in lower distributions paid to shareholders. The Funds’ investments in these instruments, if any, are discussed in detail in the Notes to Financial Statements.

 

 

12  

2 0 2 3   B L A C K R O C K   S E M I - A N N U A L   R E P O R T   T O   S H A R E H O L D E R S


Schedule of Investments (unaudited)

October 31, 2023

  

BlackRock Emerging Markets Fund, Inc.

(Percentages shown are based on Net Assets)

 

Security   Shares                   Value  

Common Stocks

   

Argentina — 0.3%

   

YPF SA, ADR (a)(b)

    1,553,566     $     15,426,910  
   

 

 

 
Austria — 0.6%            

Erste Group Bank AG

    752,612       26,950,485  
   

 

 

 
Brazil — 9.3%            

Ambev SA

    24,554,090       62,630,158  

Ambev SA, ADR

    7,551,534       19,105,381  

Arezzo Industria e Comercio SA

    858,356       9,940,875  

B3 SA - Brasil Bolsa Balcao

    30,562,097       67,286,017  

Banco Bradesco SA, ADR

    24,701,769       68,917,935  

CCR SA

    9,434,502       22,417,878  

GRUPO DE MODA SOMA SA

    10,312,403       10,820,174  

Hapvida Participacoes e Investimentos SA (a)(c)

    86,172,694       63,068,823  

Lojas Renner SA

    8,205,894       19,954,234  

Pagseguro Digital Ltd., Class A (a)

    3,536,795       24,969,773  

Petroleo Brasileiro SA, ADR

    1,497,728       22,465,920  

Sendas Distribuidora S/A

    15,730,088       34,132,427  
   

 

 

 
      425,709,595  
Canada — 1.5%            

Barrick Gold Corp.

    2,358,014       37,681,064  

Eldorado Gold Corp. (a)

    2,403,393       25,996,679  

Eldorado Gold Corp. (a)(b)

    318,402       3,441,926  
   

 

 

 
      67,119,669  
Chile — 0.2%            

Banco de Chile

    96,274,580       9,888,926  
   

 

 

 
China — 22.0%            

Alibaba Group Holding Ltd. (a)

    18,984,700       195,448,870  

Alibaba Group Holding Ltd., ADR (a)(b)

    710,794       58,668,937  

Baidu, Inc., ADR (a)

    140,579       14,760,795  

Baidu, Inc., Class A (a)

    874,500       11,481,136  

China Construction Bank Corp., Class H

    78,578,000       44,440,409  

China Mengniu Dairy Co. Ltd.

    17,839,000       58,246,774  

China Merchants Bank Co. Ltd., Class H

    8,962,500       33,997,372  

China Oilfield Services Ltd., Class A

    7,952,739       16,917,587  

China Oilfield Services Ltd., Class H

    23,186,000       27,413,264  

China Petroleum & Chemical Corp., Class H

    74,352,000       38,026,417  

Contemporary Amperex Technology Co. Ltd., Class A

    538,047       13,616,768  

ENN Energy Holdings Ltd.

    2,469,200       18,704,540  

Ganfeng Lithium Group Co. Ltd., Class H (c)

    1,448,400       5,202,324  

Haier Smart Home Co. Ltd., Class A

    9,736,021       29,483,338  

Haier Smart Home Co. Ltd., Class H

    10,192,800       29,073,220  

Kweichow Moutai Co. Ltd., Class A

    203,999       46,826,229  

NARI Technology Co. Ltd., Class A

    8,955,934       27,560,143  

NetEase, Inc., ADR

    452,685       48,401,080  

New Oriental Education & Technology Group, Inc. (a)

    636,500       4,150,002  

New Oriental Education & Technology Group, Inc., ADR (a)(b)

    594,052       38,904,465  

Satellite Chemical Co. Ltd., Class A (a)

    9,979,085       22,104,926  

Shenzhou International Group Holdings Ltd.

    2,078,600       20,416,986  

Sunny Optical Technology Group Co. Ltd.

    3,561,400       29,837,149  

Tencent Holdings Ltd.

    2,123,500       78,588,039  

Tencent Music Entertainment Group, ADR (a)

    4,174,017       30,303,363  

WuXi AppTec Co. Ltd., Class A

    3,598,103       42,399,815  

WuXi AppTec Co. Ltd., Class H (b)(c)

    1,924,600       23,127,033  
   

 

 

 
      1,008,100,981  
Security   Shares                   Value  

Colombia — 0.2%

   

Ecopetrol SA, ADR

    855,235     $     10,100,325  
   

 

 

 
Hong Kong — 1.9%            

AIA Group Ltd.

    3,940,400       34,217,657  

China Gas Holdings Ltd.

    19,495,600       17,526,667  

Guangdong Investment Ltd.

    38,008,000       25,935,962  

Link REIT

    2,032,000       9,325,131  
   

 

 

 
      87,005,417  
Hungary — 1.5%            

MOL Hungarian Oil & Gas PLC

    2,401,643       19,109,501  

OTP Bank Nyrt

    746,358       27,779,443  

Wizz Air Holdings PLC (a)(c)

    1,107,855       20,884,135  
   

 

 

 
      67,773,079  
India — 14.2%            

Aditya Birla Capital Ltd. (a)

    11,400,804       23,626,356  

Axis Bank Ltd.

    8,349,755       98,525,494  

Bharat Electronics Ltd.

    14,960,497       23,968,093  

Cipla Ltd.

    1,630,570       23,504,861  

Crompton Greaves Consumer Electricals Ltd.

    4,400,669       14,905,010  

Godrej Consumer Products Ltd. (a)

    3,916,070       46,660,092  

Godrej Properties Ltd. (a)

    656,976       13,109,831  

HDFC Bank Ltd.

    4,739,373       84,097,946  

ICICI Prudential Life Insurance Co. Ltd. (c)

    4,053,537       25,579,210  

Infosys Ltd.

    3,212,286       52,828,502  

Infosys Ltd., ADR

    2,236,553       36,724,200  

InterGlobe Aviation Ltd. (a)(c)

    120,475       3,550,709  

Larsen & Toubro Ltd.

    720,122       25,341,731  

Marico Ltd.

    2,244,513       14,463,267  

Maruti Suzuki India Ltd.

    413,157       51,593,644  

Oil & Natural Gas Corp. Ltd.

    1,668,080       3,729,495  

PB Fintech Ltd. (a)

    1,237,061       10,409,345  

Reliance Industries Ltd.

    2,272,972       62,501,679  

SBI Cards & Payment Services Ltd.

    2,405,268       21,554,460  

UltraTech Cement Ltd.

    140,065       14,175,134  
   

 

 

 
      650,849,059  
Indonesia — 3.5%            

Astra International Tbk PT

    85,799,000       31,211,922  

Bank Central Asia Tbk PT

    83,621,600       46,068,862  

Bank Rakyat Indonesia Persero Tbk PT

    183,928,900       57,511,605  

Telkom Indonesia Persero Tbk PT

    127,337,700       27,914,426  
   

 

 

 
      162,706,815  
Italy — 0.5%            

PRADA SpA (b)

    4,174,400       25,146,812  
   

 

 

 
Kazakhstan — 1.2%            

Kaspi.KZ JSC, GDR, Registered Shares

    601,674       54,391,329  
   

 

 

 
Macau — 0.6%            

Sands China Ltd. (a)

    9,498,400       25,570,164  
   

 

 

 
Malaysia — 0.6%            

Public Bank Bhd

    29,752,900       25,986,231  
   

 

 

 
Mexico — 3.7%            

Fibra Uno Administracion SA de CV

    10,262,845       15,580,125  

Fomento Economico Mexicano SAB de CV

    2,065,406       23,377,156  

Grupo Aeroportuario del Centro Norte SAB de CV

    2,329,107       17,779,965  

Grupo Aeroportuario del Pacifico SAB de CV, ADR

    131,999       15,368,644  

Grupo Aeroportuario del Pacifico SAB de CV, Class B

    713,755       8,326,020  
 

 

 

S C H E D U L E   O F   I N V E S T M E N T S

  13


Schedule of Investments (unaudited) (continued)

October 31, 2023

  

BlackRock Emerging Markets Fund, Inc.

(Percentages shown are based on Net Assets)

 

Security   Shares                   Value  

Mexico (continued)

   

Grupo Financiero Banorte SAB de CV, Class O

    2,982,118     $     24,202,313  

Wal-Mart de Mexico SAB de CV

    17,562,017       62,858,559  
   

 

 

 
      167,492,782  
Netherlands — 0.9%            

Prosus NV (a)

    1,461,382       40,868,411  
   

 

 

 
Panama — 0.7%            

Copa Holdings SA, Class A

    372,537       30,417,646  
   

 

 

 
Philippines — 1.1%            

Ayala Land, Inc.

    23,305,800       11,467,646  

Bank of the Philippine Islands

    5,281,770       9,355,268  

BDO Unibank, Inc.

    4,115,810       9,264,576  

International Container Terminal Services, Inc.

    2,819,250       9,988,671  

Jollibee Foods Corp.

    2,328,640       8,417,558  
   

 

 

 
      48,493,719  
Poland — 1.0%            

Bank Polska Kasa Opieki SA

    640,667       19,468,061  

Powszechny Zaklad Ubezpieczen SA

    2,456,194       27,793,987  
   

 

 

 
      47,262,048  
Qatar — 0.6%            

Qatar National Bank QPSC

    6,416,336       26,203,133  
   

 

 

 
Russia(d) — 0.1%            

Fix Price Group PLC, GDR, Registered Shares (a)

    1,975,076       3,890,900  

Gazprom PJSC (a)

    8,520,027       916  

LUKOIL PJSC

    1,370,026       147  

Magnit PJSC

    686,994       74  

Novatek PJSC

    295,922       32  

Sberbank of Russia PJSC

    6,788,060       729  

TCS Group Holding PLC, GDR, Registered Shares (a)

    182,418       791,694  

TCS Group Holding PLC, Class A, GDR, Registered Shares (a)

    25,066       3  
   

 

 

 
      4,684,495  
Saudi Arabia — 0.6%            

Saudi Basic Industries Corp.

    984,205       20,224,672  

Yanbu National Petrochemical Co.

    853,314       8,624,502  
   

 

 

 
      28,849,174  
Singapore — 0.8%            

Singapore Telecommunications Ltd.

    20,489,100       35,603,371  
   

 

 

 
South Africa — 1.1%            

Absa Group Ltd.

    2,745,994       25,056,188  

Shoprite Holdings Ltd.

    2,106,846       26,998,151  
   

 

 

 
      52,054,339  
South Korea — 8.1%            

Hansol Chemical Co. Ltd.

    165,713       18,492,811  

Orion Corp.

    173,774       15,379,886  

Samsung Electro-Mechanics Co. Ltd.

    165,876       15,337,069  

Samsung Electronics Co. Ltd.

    5,395,479       268,559,309  

Samsung Electronics Co. Ltd., GDR, Registered Shares

    20,019       25,033,272  

Samsung SDI Co. Ltd.

    95,633       30,280,720  
   

 

 

 
      373,083,067  
Taiwan — 10.4%            

Accton Technology Corp.

    3,677,000       56,972,391  

Delta Electronics, Inc.

    5,870,000       52,899,770  

eMemory Technology, Inc.

    32,000       2,004,846  

Hiwin Technologies Corp.

    3,357,000       20,343,885  
Security   Shares                   Value  

Taiwan (continued)

   

Lotes Co. Ltd.

    1,453,000     $     37,103,607  

Taiwan Semiconductor Manufacturing Co. Ltd.

    16,560,000       270,466,299  

Taiwan Semiconductor Manufacturing Co. Ltd., ADR

    442,107       38,158,255  
   

 

 

 
      477,949,053  
Thailand — 3.0%            

Advanced Info Service PCL, NVDR

    3,934,900       24,100,904  

Bangkok Bank PCL, NVDR

    2,389,100       10,469,275  

Bangkok Dusit Medical Services PCL, NVDR

    49,217,200       36,281,153  

CP ALL PCL, NVDR

    26,478,000       40,693,244  

Thai Beverage PCL

    62,206,600       24,570,369  
   

 

 

 
      136,114,945  
United Arab Emirates — 0.4%            

Abu Dhabi Commercial Bank PJSC

    6,267,714       13,702,626  

Emaar Properties PJSC

    3,272,357       5,961,526  
   

 

 

 
      19,664,152  
United Kingdom — 0.9%            

Anglogold Ashanti PLC

    713,291       13,166,776  

Anglogold Ashanti PLC (b)

    466,461       8,321,664  

Prudential PLC

    1,939,996       20,285,337  
   

 

 

 
      41,773,777  
United States — 1.8%            

Cognizant Technology Solutions Corp., Class A

    619,602       39,945,741  

EPAM Systems, Inc. (a)

    198,120       43,104,968  
   

 

 

 
      83,050,709  
   

 

 

 

Total Common Stocks — 93.3%
(Cost: $4,661,906,130)

 

    4,276,290,618  
   

 

 

 

Preferred Securities

   
Preferred Stocks — 1.5%            
Brazil — 0.2%            

Banco Bradesco SA

    3,229,366       8,960,942  

Banco Nacional SA(d)

    42,567,626       84  
   

 

 

 
      8,961,026  
   

 

 

 
South Korea — 1.3%            

Samsung Electronics Co. Ltd.

    1,502,196       59,974,736  
   

 

 

 

Total Preferred Securities — 1.5%
(Cost: $70,301,831)

 

    68,935,762  
 

 

 

 

Total Long-Term Investments — 94.8%
(Cost: $4,732,207,961)

 

    4,345,226,380  
   

 

 

 

Short-Term Securities

   
Money Market Funds — 7.1%            

BlackRock Liquidity Funds, T-Fund, Institutional Class, 5.24%(e)(f)

    238,620,440       238,620,440  

SL Liquidity Series, LLC, Money Market Series, 5.53%(e)(f)(g)

    85,284,990       85,319,104  
   

 

 

 

Total Short-Term Securities — 7.1%
(Cost: $323,924,468)

 

    323,939,544  
 

 

 

 

Total Investments — 101.9%
(Cost: $5,056,132,429)

 

    4,669,165,924  

Liabilities in Excess of Other Assets — (1.9)%

 

    (87,944,645
 

 

 

 

Net Assets — 100.0%

 

  $ 4,581,221,279  
   

 

 

 
 

 

 

14  

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Schedule of Investments (unaudited) (continued)

October 31, 2023

  

BlackRock Emerging Markets Fund, Inc.

 

(a) 

Non-income producing security.

(b) 

All or a portion of this security is on loan.

(c) 

Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors.

(d) 

Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy.

(e) 

Affiliate of the Fund.

(f) 

Annualized 7-day yield as of period end.

(g) 

All or a portion of this security was purchased with the cash collateral from loaned securities.

 

 

Affiliates

Investments in issuers considered to be affiliate(s) of the Fund during the six months ended October 31, 2023 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

                   
       Affiliated Issuer    Value at
04/30/23
    

Purchases

at Cost

     Proceeds
from Sales
     Net
Realized
Gain (Loss)
     Change in
Unrealized
Appreciation
(Depreciation)
     Value at
10/31/23
    

Shares

Held at
10/31/23

     Income      Capital Gain
Distributions
from
Underlying
Funds
       
 

BlackRock Liquidity Funds, T-Fund, Institutional Class

   $ 202,549,764      $ 36,070,676 (a)     $      $      $      $ 238,620,440        238,620,440      $ 7,454,911      $    
 

SL Liquidity Series, LLC, Money Market Series

     25,671,028        59,648,830 (a)              (8,073      7,319        85,319,104        85,284,990        163,180 (b)           
             

 

 

    

 

 

    

 

 

       

 

 

    

 

 

   
              $ (8,073    $ 7,319      $ 323,939,544         $ 7,618,091      $    
             

 

 

    

 

 

    

 

 

       

 

 

    

 

 

   

 

  (a) 

Represents net amount purchased (sold).

 
  (b) 

All or a portion represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.

 

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

 

         
Description    Number of
Contracts
       Expiration
Date
       Notional
Amount (000)
       Value/
Unrealized
Appreciation
(Depreciation)
 

Long Contracts

                 

MSCI Emerging Markets Index

     490          12/15/23        $ 22,520        $ (673,513
                 

 

 

 

OTC Total Return Swaps

 

 

 

 
    Reference Entity   Payment Frequency   Counterparty(a)   Termination Date     Net Notional    

Accrued

Unrealized

Appreciation

(Depreciation)

   

Net Value of

Reference

Entity

   

Gross  

Notional  

Amount  

Net Asset  

Percentage  

   
 

 

 
 

Equity Securities Long

  Monthly   Goldman Sachs Bank USA(b)     08/17/26 – 08/19/26     $ 48,358,446       $ (1,578,706 )(c)    $ 47,087,523     1.1%       
    Monthly   HSBC Bank PLC(d)     02/10/28       12,626,389         (304,358 )(e)      12,452,430     0.3    
    Monthly   JPMorgan Chase Bank N.A.(f)     02/08/24       30,636,356         (1,489,955 )(g)      29,581,107     0.7    
             

 

 

   

 

 

     
              $ (3,373,019 )      $ 89,121,060      
             

 

 

   

 

 

     

 

  (a) 

The Fund receives the total return on a portfolio of long positions underlying the total return swap. The Fund pays the total return on a portfolio of short positions underlying the total return swap. In addition, the Fund pays or receives a variable rate of interest, based on a specified benchmark. The benchmark and spread are determined based upon the country and/or currency of the individual underlying positions.

 
  (c) 

Amount includes $(307,783) of net dividends and financing fees.

 
  (e) 

Amount includes $(130,399) of net dividends and financing fees.

 
  (g) 

Amount includes $(434,706) of net dividends and financing fees.

 

The following are the specified benchmarks (plus or minus a range) used in determining the variable rate of interest:

 

  (b)   (d)    (f)
Range:   0-82 basis points   0-95 basis points    40 basis points
Benchmarks:   USD - 1D Overnight Fed Funds Effective Rate (FEDL01)   USD - 1D Overnight Bank Funding Rate (OBFR01)    USD - 1D Overnight Bank Funding Rate (OBFR01)

 

 

S C H E D U L E   O F   I N V E S T M E N T S

  15


Schedule of Investments (unaudited) (continued)

October 31, 2023

  

BlackRock Emerging Markets Fund, Inc.

 

The following table represents the individual long positions and related values of the equity securities underlying the total return swap with Goldman Sachs Bank USA as of period end, termination dates 08/17/26 - 08/19/26:

 

Security   Shares     Value    

% of

Basket

Value

 

Reference Entity — Long

 

Common Stocks  
Brazil        

Pagseguro Digital Ltd., Class A

    7,117     $ 50,246       0.1
   

 

 

   

 

 

 
China        

Contemporary Amperex Technology Co. Ltd.

    519,440       13,145,867       27.9  

Ganfeng Lithium Group Co. Ltd., Class A

    1,307,220       7,893,765       16.8  

Zhejiang Sanhua Intelligent Controls Co. Ltd.

    7,127,015       25,997,645       55.2  
   

 

 

   

 

 

 
      47,037,277    
   

 

 

   

Net Value of Reference Entity — Goldman Sachs Bank USA

 

  $ 47,087,523    
   

 

 

   

The following table represents the individual long positions and related values of the equity securities underlying the total return swap with HSBC Bank PLC as of period end, termination date 02/10/28:

 

Security   Shares     Value    

% of

Basket

Value

 

Reference Entity — Long

 

Common Stocks  
Hong Kong        

Prudential PLC

    1,190,893     $ 12,452,430       100.0
   

 

 

   

 

 

 

Net Value of Reference Entity — HSBC Bank PLC

 

  $ 12,452,430    
   

 

 

   

The following table represents the individual long positions and related values of the equity securities underlying the total return swap with JPMorgan Chase Bank N.A. as of period end, termination date 02/08/24:

 

Security   Shares     Value    

% of

Basket

Value

 

Reference Entity — Long

 

Common Stocks  
China        

Prosus NV

    1,057,768     $ 29,581,107       100.0
   

 

 

   

 

 

 

Net Value of Reference Entity — JPMorgan Chase Bank N.A.

 

  $ 29,581,107    
   

 

 

   
 

 

Balances Reported in the Statements of Assets and Liabilities for OTC Swaps

 

 

 
Description    Swap
Premiums
Paid
     Swap
Premiums
Received
     Unrealized
Appreciation
     Unrealized
Depreciation
 

 

 

OTC Swaps

   $      $      $      $ (3,373,019)  

 

 

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:

 

                                                                                                                                                  

 

 
     Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
    

Interest

Rate

    Contracts

     Other
    Contracts
         Total  

 

 

Liabilities — Derivative Financial Instruments

 

Futures contracts

                    

Unrealized depreciation on futures contracts(a)

   $      $      $ 673,513      $      $      $      $ 673,513  

Swaps — OTC

                    

Unrealized depreciation on OTC swaps; Swap premiums received

                   3,373,019                             3,373,019  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $      $      $ 4,046,532      $      $      $      $ 4,046,532  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Net cumulative unrealized appreciation (depreciation) on futures contracts and centrally cleared swaps, if any, are reported in the Schedule of Investments. In the Statements of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss).

 

 

 

16  

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Schedule of Investments (unaudited) (continued)

October 31, 2023

  

BlackRock Emerging Markets Fund, Inc.

 

For the period ended October 31, 2023, the effect of derivative financial instruments in the Statements of Operations was as follows:

 

                                                                                                                                                  

 

 
     Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
    

Interest

Rate

    Contracts

     Other
    Contracts
         Total  

 

 

Net Realized Gain (Loss) from:

 

Futures contracts

   $      $      $ 2,838,517      $      $      $      $ 2,838,517  

Swaps

                   (21,974,650                           (21,974,650
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $      $      $ (19,136,133    $      $      $      $ (19,136,133
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
Net Change in Unrealized Appreciation (Depreciation)
on:
                                                

Futures contracts

   $      $      $ (1,145,346    $      $      $      $ (1,145,346

Swaps

                   (4,148,215                           (4,148,215
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $      $      $ (5,293,561    $      $      $      $ (5,293,561
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

 

 

Futures contracts:

  

Average notional value of contracts — long

   $ 31,160,113  

Total return swaps:

  

Average notional value

   $ 111,485,994  

 

 

For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

Derivative Financial Instruments — Offsetting as of Period End

The Fund’s derivative assets and liabilities (by type) were as follows:

 

 

 
     Assets        Liabilities  

 

 

Derivative Financial Instruments

       

Futures contracts

   $        $ 149,410  

Swaps — OTC(a)

              3,373,019  

Total derivative assets and liabilities in the Statements of Assets and Liabilities

              3,522,429  
  

 

 

      

 

 

 

Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)

              (149,410
  

 

 

      

 

 

 

Total derivative assets and liabilities subject to an MNA

   $        $ 3,373,019  
  

 

 

      

 

 

 

 

  (a) 

Includes unrealized appreciation (depreciation) on OTC swaps and swap premiums (paid/received) in the Statements of Assets and Liabilities.

 

The following table presents the Fund’s derivative liabilities by counterparty net of amounts available for offset under an MNA and net of the related collateral pledged by the Fund:

 

           
Counterparty   

Derivative
Liabilities
Subject to

an MNA by
Counterparty

       Derivatives
Available
for Offset
       Non-Cash
Collateral
Pledged
       Cash  
Collateral  
Pledged(a)
       Net Amount
of Derivative
Liabilities
 

Goldman Sachs Bank USA

   $ 1,578,706        $        $        $ (1,578,706)        $  

HSBC Bank PLC

     304,358                            (304,358)           

JPMorgan Chase Bank N.A.

     1,489,955                            (1,489,955)           
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
   $ 3,373,019        $        $        $ (3,373,019)        $  
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

Excess of collateral received/pledged, if any, from the individual counterparty is not shown for financial reporting purposes.

 

 

 

S C H E D U L E   O F   I N V E S T M E N T S

  17


Schedule of Investments (unaudited) (continued)

October 31, 2023

  

BlackRock Emerging Markets Fund, Inc.

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of financial instruments. For a description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, refer to the Notes to Financial Statements.

The following table summarizes the Fund’s financial instruments categorized in the fair value hierarchy. The breakdown of the Fund’s financial instruments into major categories is disclosed in the Schedule of Investments above.

 

         
      Level 1        Level 2        Level 3        Total  

Assets

                 

Investments

                 

Long-Term Investments

                 

Common Stocks

                 

Argentina

   $ 15,426,910        $        $        $ 15,426,910  

Austria

              26,950,485                   26,950,485  

Brazil

     425,709,595                            425,709,595  

Canada

     67,119,669                            67,119,669  

Chile

              9,888,926                   9,888,926  

China

     191,038,640          817,062,341                   1,008,100,981  

Colombia

     10,100,325                            10,100,325  

Hong Kong

              87,005,417                   87,005,417  

Hungary

     19,109,501          48,663,578                   67,773,079  

India

     40,274,909          610,574,150                   650,849,059  

Indonesia

              162,706,815                   162,706,815  

Italy

              25,146,812                   25,146,812  

Kazakhstan

     54,391,329                            54,391,329  

Macau

              25,570,164                   25,570,164  

Malaysia

              25,986,231                   25,986,231  

Mexico

     167,492,782                            167,492,782  

Netherlands

     40,868,411                            40,868,411  

Panama

     30,417,646                            30,417,646  

Philippines

     9,355,268          39,138,451                   48,493,719  

Poland

              47,262,048                   47,262,048  

Qatar

     26,203,133                            26,203,133  

Russia

                       4,684,495          4,684,495  

Saudi Arabia

              28,849,174                   28,849,174  

Singapore

              35,603,371                   35,603,371  

South Africa

     26,998,151          25,056,188                   52,054,339  

South Korea

              373,083,067                   373,083,067  

Taiwan

     38,158,255          439,790,798                   477,949,053  

Thailand

              136,114,945                   136,114,945  

United Arab Emirates

     13,702,626          5,961,526                   19,664,152  

United Kingdom

     8,321,664          33,452,113                   41,773,777  

United States

     83,050,709                            83,050,709  

Preferred Securities

                 

Preferred Stocks

                 

South Korea

              59,974,736                   59,974,736  

Brazil

     8,960,942                   84          8,961,026  

Short-Term Securities

                 

Money Market Funds

     238,620,440                            238,620,440  
  

 

 

      

 

 

      

 

 

      

 

 

 
   $  1,515,320,905        $  3,063,841,336        $         4,684,579          4,583,846,820  
  

 

 

      

 

 

      

 

 

      

 

 

 

Investments Valued at NAV(a)

                    85,319,104  
                 

 

 

 
                  $  4,669,165,924  
                 

 

 

 

Derivative Financial Instruments(b)

                 

Liabilities

                 

Equity Contracts

   $ (673,513      $ (3,373,019      $        $ (4,046,532
  

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

Certain investments of the Fund were fair valued using NAV as a practical expedient as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

 
  (b) 

Derivative financial instruments are swaps and futures contracts. Swaps and futures contracts are valued at the unrealized appreciation (depreciation) on the instrument.

 

See notes to financial statements.

 

 

18  

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Schedule of Investments (unaudited)

October 31, 2023

  

BlackRock Unconstrained Equity Fund

(Percentages shown are based on Net Assets)

 

    
Security
      
Shares
        
Value
 

 

 

Common Stocks

   
Denmark — 8.0%            

Novo Nordisk A/S, Class B

    330,990     $    31,932,660  
   

 

 

 
France — 7.5%            

LVMH Moet Hennessy Louis Vuitton SE

    41,441       29,668,869  
   

 

 

 
Italy — 4.7%            

Ferrari NV

    62,135       18,808,506  
   

 

 

 
Netherlands — 7.2%            

ASML Holding NV

    47,907       28,797,878  
   

 

 

 
Switzerland — 0.2%            

Lonza Group AG, Registered Shares

    2,497       874,459  
   

 

 

 
United Kingdom — 2.6%            

Spirax-Sarco Engineering PLC

    102,070       10,187,970  
   

 

 

 
United States — 67.8%            

Alphabet, Inc., Class C (a)

    139,648       17,497,894  

ANSYS, Inc. (a)(b)

    53,798       14,969,831  

Cadence Design Systems, Inc. (a)

    119,600       28,686,060  

Costco Wholesale Corp.

    34,079       18,826,603  

Floor & Decor Holdings, Inc., Class A (a)(b)

    126,233       10,401,599  

Intuit, Inc.

    31,203       15,443,925  

Intuitive Surgical, Inc. (a)

    51,476       13,498,037  

Masimo Corp. (a)

    47,206       3,829,823  

Mastercard, Inc., Class A

    49,425       18,601,099  

Microsoft Corp.

    116,377       39,348,227  

NIKE, Inc., Class B

    92,893       9,546,614  

S&P Global, Inc.

    53,218       18,589,579  

Thermo Fisher Scientific, Inc.

    27,674       12,308,565  

VeriSign, Inc. (a)

    71,748       14,325,206  

Verisk Analytics, Inc.

    69,104       15,711,485  

Visa, Inc., Class A

    80,557       18,938,951  
   

 

 

 
      270,523,498  
   

 

 

 

Total Long-Term Investments — 98.0%
(Cost: $363,045,786)

      390,793,840  
   

 

 

 

Short-Term Securities

   
Money Market Funds — 3.9%            

BlackRock Liquidity Funds, T-Fund, Institutional Class, 5.24%(c)(d)

    5,630,996       5,630,996  

SL Liquidity Series, LLC, Money Market Series, 5.53%(c)(d)(e)

    10,029,938       10,033,950  
   

 

 

 
      15,664,946  
   

 

 

 
Security        

Par

(000)

    Value  

 

 
Time Deposits — 0.4%                  
Denmark — 0.1%                  

Brown Brothers Harriman & Co., 2.50%, 11/01/23

    DKK       4,313     $ 611,469  
     

 

 

 
Sweden — 0.1%                  

Brown Brothers Harriman & Co., 2.77%, 11/01/23

    SEK       2,642       236,661  
     

 

 

 
Switzerland — 0.1%                  

BNP Paribas, 0.71%, 11/01/23

    CHF       207       227,954  
     

 

 

 
United States — 0.1%                  

Citibank, New York, 2.85%, 11/01/23

    EUR       460       487,202  
     

 

 

 
        1,563,286  
     

 

 

 

Total Short-Term Securities — 4.3%
(Cost: $17,226,679)

        17,228,232  
     

 

 

 

Total Investments — 102.3%
(Cost: $380,272,465)

        408,022,072  

Liabilities in Excess of Other Assets — (2.3)%

 

      (9,060,878
     

 

 

 

Net Assets — 100.0%

      $  398,961,194  
     

 

 

 

 

(a) 

Non-income producing security.

(b) 

All or a portion of this security is on loan.

(c) 

Affiliate of the Fund.

(d) 

Annualized 7-day yield as of period end.

(e) 

All or a portion of this security was purchased with the cash collateral from loaned securities.

 

 

 

S C H E D U L E   O F   I N V E S T M E N T S

  19


Schedule of Investments (unaudited) (continued)

October 31, 2023

  

BlackRock Unconstrained Equity Fund

 

Affiliates

Investments in issuers considered to be affiliate(s) of the Fund during the six months ended October 31, 2023 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

                   
Affiliated Issuer    Value at
04/30/23
     Purchases
at Cost
     Proceeds
from Sales
     Net
Realized
Gain (Loss)
     Change in
Unrealized
Appreciation
(Depreciation)
     Value at
10/31/23
    

Shares

Held at
10/31/23

     Income      Capital Gain
Distributions
from
Underlying
Funds
 

BlackRock Liquidity Funds, T-Fund, Institutional Class

   $ 575,894      $ 5,055,102 (a)     $      $      $      $ 5,630,996        5,630,996      $ 67,289      $  

SL Liquidity Series, LLC, Money Market Series

     6,646,180        3,386,662 (a)              1,675        (567      10,033,950        10,029,938        5,647 (b)         
           

 

 

    

 

 

    

 

 

       

 

 

    

 

 

 
            $ 1,675      $ (567    $ 15,664,946         $ 72,936      $  
           

 

 

    

 

 

    

 

 

       

 

 

    

 

 

 

 

  (a) 

Represents net amount purchased (sold).

 
  (b) 

All or a portion represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.

 

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

 

         
Description    Number of
Contracts
       Expiration
Date
       Notional
Amount (000)
       Value/
Unrealized
Appreciation
(Depreciation)
 

Long Contracts

                 

S&P 500 E-Mini Index

     33          12/15/23        $ 6,950        $ (61,148
                 

 

 

 

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:

 

               
      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Liabilities — Derivative Financial Instruments

                    

Futures contracts

                    

Unrealized depreciation on futures contracts(a)

   $      $      $ 61,148      $      $      $      $ 61,148  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Net cumulative unrealized appreciation (depreciation) on futures contracts and centrally cleared swaps, if any, are reported in the Schedule of Investments. In the Statements of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss).

 

For the period ended October 31, 2023, the effect of derivative financial instruments in the Statements of Operations was as follows:

 

               
      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Net Realized Gain (Loss) from:

                    

Futures contracts

   $      $      $ (125,534    $      $      $      $ (125,534
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net Change in Unrealized Appreciation (Depreciation) on:

                    

Futures contracts

   $      $      $ (61,148    $      $      $      $ (61,148
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

   

Futures contracts:

  

Average notional value of contracts — long

   $ 3,475,107  

For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

 

 

20  

2 0 2 3   B L A C K R O C K   S E M I - A N N U A L   R E P O R T   T O   S H A R E H O L D E R S


Schedule of Investments (unaudited) (continued)

October 31, 2023

  

BlackRock Unconstrained Equity Fund

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of financial instruments. For a description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, refer to the Notes to Financial Statements.

The following table summarizes the Fund’s financial instruments categorized in the fair value hierarchy. The breakdown of the Fund’s financial instruments into major categories is disclosed in the Schedule of Investments above.

 

         
      Level 1        Level 2        Level 3        Total  

Assets

                 

Investments

                 

Long-Term Investments

                 

Common Stocks

                 

Denmark

   $        $ 31,932,660        $        $ 31,932,660  

France

              29,668,869                   29,668,869  

Italy

              18,808,506                   18,808,506  

Netherlands

              28,797,878                   28,797,878  

Switzerland

              874,459                   874,459  

United Kingdom

              10,187,970                   10,187,970  

United States

     270,523,498                            270,523,498  

Short-Term Securities

                 

Money Market Funds

     5,630,996                            5,630,996  

Time Deposits

              1,563,286                   1,563,286  
  

 

 

      

 

 

      

 

 

      

 

 

 
   $  276,154,494        $  121,833,628        $               —          397,988,122  
  

 

 

      

 

 

      

 

 

      

 

 

 

Investments Valued at NAV(a)

                    10,033,950  
                 

 

 

 
                  $  408,022,072  
                 

 

 

 

Derivative Financial Instruments(b)

                 

Liabilities

                 

Equity Contracts

   $ (61,148)        $        $        $ (61,148
  

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

Certain investments of the Fund were fair valued using NAV as a practical expedient as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

 
  (b) 

Derivative financial instruments are futures contracts. Futures contracts are valued at the unrealized appreciation (depreciation) on the instrument.

 

See notes to financial statements.

 

 

S C H E D U L E   O F   I N V E S T M E N T S

  21


Schedule of Investments (unaudited)

October 31, 2023

  

BlackRock Sustainable Emerging Markets Equity Fund

(Percentages shown are based on Net Assets)

 

Security   Shares      Value  

 

 

Common Stocks

    
Brazil — 7.9%             

Arezzo Industria e Comercio SA

    76,256      $ 883,143  

B3 SA - Brasil Bolsa Balcao

    582,321        1,282,048  

Banco Bradesco SA, ADR

    42,114        117,498  

Hapvida Participacoes e Investimentos SA (a)(b)

    2,539,820        1,858,866  

Pagseguro Digital Ltd., Class A (a)

    110,617        780,956  

Sendas Distribuidora S/A

    458,143        994,116  
    

 

 

 
          5,916,627  
China — 22.1%             

Alibaba Group Holding Ltd. (a)

    334,792        3,446,708  

Alibaba Group Holding Ltd., ADR (a)

    12,548        1,035,712  

Asymchem Laboratories Tianjin Co. Ltd., Class A

    59,000        1,213,500  

Baidu, Inc., ADR (a)

    2,637        276,885  

China Mengniu Dairy Co. Ltd.

    437,000        1,426,865  

China Merchants Bank Co. Ltd., Class A

    150,800        632,339  

China Merchants Bank Co. Ltd., Class H

    277,000        1,050,742  

Contemporary Amperex Technology Co. Ltd., Class A

    39,300        994,595  

Ganfeng Lithium Group Co. Ltd., Class H (b)

    199,400        716,200  

Haier Smart Home Co. Ltd., Class A

    165,500        501,179  

Haier Smart Home Co. Ltd., Class H

    202,000        576,170  

Industrial & Commercial Bank of China Ltd., Class H

    1,805,000        865,036  

Kanzhun Ltd., ADR (a)

    43,384        642,083  

KE Holdings, Inc., ADR

    81,134        1,193,481  

LONGi Green Energy Technology Co. Ltd., Class A

    198,810        654,034  

Tencent Holdings Ltd.

    10,600        392,293  

Tencent Holdings Ltd., ADR

    2,421        89,601  

Zhejiang Sanhua Intelligent Controls Co. Ltd., Class A

    244,800        892,972  
    

 

 

 
       16,600,395  
Hong Kong — 3.4%             

AIA Group Ltd.

    167,200        1,451,932  

Hang Lung Properties Ltd.

    860,000        1,130,433  
    

 

 

 
       2,582,365  
Hungary — 1.5%             

OTP Bank Nyrt

    29,581        1,101,005  
    

 

 

 
India — 14.1%             

Aditya Birla Capital Ltd. (a)

    492,568        1,020,769  

Alkem Laboratories Ltd.

    18,216        814,652  

Axis Bank Ltd.

    157,038        1,853,018  

Crompton Greaves Consumer Electricals Ltd.

    248,101        840,315  

HDFC Bank Ltd.

    165,108        2,929,764  

Hindustan Unilever Ltd.

    28,554        852,148  

Infosys Ltd.

    77,107        1,268,083  

Marico Ltd.

    158,931        1,024,125  
    

 

 

 
       10,602,874  
Indonesia — 3.5%             

Bank Central Asia Tbk PT

    2,303,200        1,268,880  

Bank Rakyat Indonesia Persero Tbk PT

    4,286,300        1,340,257  
    

 

 

 
       2,609,137  
Kazakhstan — 1.7%             

Kaspi.KZ JSC, GDR, Registered Shares

    14,272        1,290,189  
    

 

 

 
Mexico — 3.8%             

Grupo Financiero Banorte SAB de CV, Class O

    168,898        1,370,745  

Wal-Mart de Mexico SAB de CV

    406,607        1,455,341  
    

 

 

 
       2,826,086  
Russia — 0.1%             

TCS Group Holding PLC, GDR, Registered Shares (a)(c)

    13,836        60,048  
    

 

 

 
Security   Shares      Value  

 

 
South Africa — 4.5%             

Gold Fields Ltd.

    56,096      $ 740,015  

Gold Fields Ltd., ADR

    51,368        668,811  

Naspers Ltd., N Shares

    7,768        1,212,592  

Shoprite Holdings Ltd.

    58,044        743,804  
    

 

 

 
          3,365,222  
South Korea — 10.3%             

Samsung Biologics Co. Ltd. (a)(b)

    1,820        956,786  

Samsung Electronics Co. Ltd.

    93,936        4,675,653  

Samsung Electronics Co. Ltd., GDR, Registered Shares

    993        1,241,722  

Samsung SDI Co. Ltd.

    2,576        815,651  
    

 

 

 
       7,689,812  
Taiwan — 12.2%             

Accton Technology Corp.

    80,000        1,239,541  

Delta Electronics, Inc.

    123,000        1,108,462  

Taiwan Semiconductor Manufacturing Co. Ltd.

    365,000        5,961,365  

Taiwan Semiconductor Manufacturing Co. Ltd., ADR

    9,291        801,906  
    

 

 

 
       9,111,274  
Thailand — 2.7%             

Advanced Info Service PCL, NVDR

    166,400        1,019,185  

CP ALL PCL, NVDR

    682,300        1,048,606  
    

 

 

 
       2,067,791  
United Arab Emirates — 3.1%             

Abu Dhabi Commercial Bank PJSC

    456,075        997,082  

Aldar Properties PJSC

    927,994        1,313,795  
    

 

 

 
       2,310,877  
United Kingdom — 1.5%             

Prudential PLC

    106,621        1,114,870  
    

 

 

 
United States — 3.2%             

Cognizant Technology Solutions Corp., Class A

    20,838        1,343,426  

EPAM Systems, Inc. (a)

    4,979        1,083,281  
    

 

 

 
       2,426,707  
    

 

 

 

Total Common Stocks — 95.6%
(Cost: $72,002,482)

       71,675,279  
    

 

 

 

Preferred Securities

    
Preferred Stocks — 2.4%             
Brazil — 1.7%             

Banco Bradesco SA

    458,083        1,271,103  
    

 

 

 
South Korea — 0.7%             

Samsung Electronics Co. Ltd.

    13,064        521,576  
    

 

 

 

Total Preferred Securities — 2.4%
(Cost: $1,777,384)

       1,792,679  
    

 

 

 

Total Long-Term Investments — 98.0%
(Cost: $73,779,866)

       73,467,958  
    

 

 

 
 

 

 

22  

2 0 2 3   B L A C K R O C K   S E M I - A N N U A L   R E P O R T   T O   S H A R E H O L D E R S


Schedule of Investments (unaudited) (continued)

October 31, 2023

  

BlackRock Sustainable Emerging Markets Equity Fund

    (Percentages shown are based on Net Assets)

 

Security   Shares      Value  

 

 

Short-Term Securities

    
Money Market Funds — 1.5%             

BlackRock Liquidity Funds, T-Fund, Institutional Class, 5.24%(d)(e)

    1,097,295      $ 1,097,295  
    

 

 

 

Total Short-Term Securities — 1.5%
(Cost: $1,097,295)

       1,097,295  
    

 

 

 

Total Investments — 99.5%
(Cost: $74,877,161)

       74,565,253  

Other Assets Less Liabilities — 0.5%

       362,657  
    

 

 

 

Net Assets — 100.0%

     $ 74,927,910  
    

 

 

 

 

(a) 

Non-income producing security.

(b) 

Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors.

(c) 

Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy.

(d) 

Affiliate of the Fund.

(e) 

Annualized 7-day yield as of period end.

 

 

Affiliates

Investments in issuers considered to be affiliate(s) of the Fund during the six months ended October 31, 2023 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

                   
Affiliated Issuer    Value at
04/30/23
     Purchases
at Cost
     Proceeds
from Sales
     Net
Realized
Gain (Loss)
     Change in
Unrealized
Appreciation
(Depreciation)
     Value at
10/31/23
     Shares
Held at
10/31/23
     Income     

Capital Gain

Distributions

from

Underlying

Funds

 

BlackRock Liquidity Funds, T-Fund, Institutional Class

   $ 1,651,403      $      $ (554,108)(a)      $      $      $ 1,097,295        1,097,295      $ 28,927      $  

SL Liquidity Series, LLC, Money Market Series(b)

            303 (a)              (303                           212 (c)         
           

 

 

    

 

 

    

 

 

       

 

 

    

 

 

 
            $ (303    $      $ 1,097,295         $ 29,139      $  
           

 

 

    

 

 

    

 

 

       

 

 

    

 

 

 

 

  (a) 

Represents net amount purchased (sold).

 
  (b) 

As of period end, the entity is no longer held.

 
  (c) 

All or a portion represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.

 

Derivative Financial Instruments Outstanding as of Period End

OTC Total Return Swaps

 

               
Reference Entity   Payment
Frequency
  Counterparty(a)   

Termination

Date

     Net Notional      Accrued
Unrealized
Appreciation
(Depreciation)
     Net Value of
Reference
Entity
     Gross
Notional
Amount
Net Asset
Percentage
 

Equity Securities Long

  Monthly  

JPMorgan Chase Bank N.A.(b)

     02/08/24      $ 236,374      $ (37,030 )(c)     $ 202,770        0.3
         

 

 

    

 

 

    

 

 

    

 

  (a) 

The Fund receives the total return on a portfolio of long positions underlying the total return swap. The Fund pays the total return on a portfolio of short positions underlying the total return swap. In addition, the Fund pays or receives a variable rate of interest, based on a specified benchmark. The benchmark and spread are determined based upon the country and/or currency of the individual underlying positions.

 
  (c) 

Amount includes $(3,426) of net dividends and financing fees.

 

 

The following are the specified benchmarks (plus or minus a range) used in determining the variable rate of interest:
  (b)
Range:   40 basis points
Benchmarks:   USD - 1D Overnight Bank Funding Rate (OBFR01)

 

 

S C H E D U L E   O F   I N V E S T M E N T S

  23


Schedule of Investments (unaudited) (continued)

October 31, 2023

  

BlackRock Sustainable Emerging Markets Equity Fund

 

The following table represents the individual long positions and related values of the equity securities underlying the total return swap with JPMorgan Chase Bank N.A. as of period end, termination date 02/08/24:

 

Security   Shares     Value    

% of

Basket

Value

 

Reference Entity — Long

     
Common Stocks                  
Brazil                  

Pagseguro Digital Ltd., Class A

    28,721     $ 202,770       100.0
   

 

 

   

 

 

 

Net Value of Reference Entity — JPMorgan Chase Bank N.A

 

  $ 202,770    
   

 

 

   
 

 

Balances Reported in the Statements of Assets and Liabilities for OTC Swaps

 

 

 
Description   

Swap

Premiums

Paid

    

Swap

Premiums

Received

    

Unrealized

Appreciation

    

Unrealized 

Depreciation 

 

 

 

OTC Swaps

   $      $      $      $ (37,030)  

 

 

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:

 

 

 
    

Commodity

Contracts

    

Credit

Contracts

    

Equity

Contracts

    

Foreign

Currency

Exchange

Contracts

    

Interest

Rate

Contracts

    

Other

Contracts

     Total    

 

 

Liabilities — Derivative Financial Instruments

                    

Swaps — OTC

                    

Unrealized depreciation on OTC swaps; Swap premiums received

   $      $      $ 37,030      $      $      $      $ 37,030  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

For the period ended October 31, 2023, the effect of derivative financial instruments in the Statements of Operations was as follows:

 

 

 
     Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

 

 

Net Realized Gain (Loss) from:

                    

Futures contracts

   $      $      $ (7,193    $      $      $      $ (7,193)  

Swaps

                   (83,069                           (83,069)  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $      $      $ (90,262    $      $      $      $ (90,262)  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net Change in Unrealized Appreciation (Depreciation) on:

                    

Futures contracts

   $      $      $ (1,464    $      $      $      $ (1,464)  

Swaps

                   (37,030                           (37,030)  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $      $      $ (38,494    $      $      $      $ (38,494)  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

 

 

Futures contracts:

  

Average notional value of contracts — long

   $ 221,445  

Total return swaps:

  

Average notional value

   $ 118,187  

 

 

For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

 

 

24  

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Schedule of Investments (unaudited) (continued)

October 31, 2023

  

BlackRock Sustainable Emerging Markets Equity Fund

 

Derivative Financial Instruments — Offsetting as of Period End

The Fund’s derivative assets and liabilities (by type) were as follows:

 

 

 
     Assets        Liabilities   

 

 

Derivative Financial Instruments

       

Swaps — OTC(a)

   $        $ 37,030  
  

 

 

      

 

 

 

Total derivative assets and liabilities in the Statements of Assets and Liabilities

              37,030  
  

 

 

      

 

 

 

Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)

               
  

 

 

      

 

 

 

Total derivative assets and liabilities subject to an MNA

   $        $ 37,030  
  

 

 

      

 

 

 

 

  (a) 

Includes unrealized appreciation (depreciation) on OTC swaps and swap premiums (paid/received) in the Statements of Assets and Liabilities.

 

The following table presents the Fund’s derivative liabilities by counterparty net of amounts available for offset under an MNA and net of the related collateral pledged by the Fund:

 

           

Counterparty

    



Derivative
Liabilities
Subject to

an MNA by
Counterparty

 
 
 

 
 

      

Derivatives
Available

for Offset

 
 

 

      

Non-Cash
Collateral
Pledged
 
 
 
      

Cash
Collateral
Pledged
 
 
 
      

Net Amount

of Derivative

Liabilities

 

 

(a)  

JPMorgan Chase Bank N.A.

   $ 37,030        $        $        $        $ 37,030  
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

Net amount represents the net amount payable due to counterparty in the event of default.

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of financial instruments. For a description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, refer to the Notes to Financial Statements.

The following table summarizes the Fund’s financial instruments categorized in the fair value hierarchy. The breakdown of the Fund’s financial instruments into major categories is disclosed in the Schedule of Investments above.

 

 

 
     Level 1        Level 2        Level 3        Total  

 

 

Assets

                 

Investments

                 

Long-Term Investments

                 

Common Stocks

                 

Brazil

   $ 5,916,627        $        $        $ 5,916,627  

China

     3,237,762          13,362,633                   16,600,395  

Hong Kong

              2,582,365                   2,582,365  

Hungary

              1,101,005                   1,101,005  

India

              10,602,874                   10,602,874  

Indonesia

              2,609,137                   2,609,137  

Kazakhstan

     1,290,189                            1,290,189  

Mexico

     2,826,086                            2,826,086  

Russia

                       60,048          60,048  

South Africa

     2,625,207          740,015                   3,365,222  

South Korea

              7,689,812                   7,689,812  

Taiwan

     801,906          8,309,368                   9,111,274  

Thailand

              2,067,791                   2,067,791  

United Arab Emirates

     2,310,877                            2,310,877  

United Kingdom

              1,114,870                   1,114,870  

United States

     2,426,707                            2,426,707  

Preferred Securities

                 

Preferred Stocks

                 

South Korea

              521,576                   521,576  

Brazil

     1,271,103                            1,271,103  

Short-Term Securities

                 

Money Market Funds

     1,097,295                            1,097,295  
  

 

 

      

 

 

      

 

 

      

 

 

 
   $  23,803,759        $  50,701,446        $         60,048        $  74,565,253  
  

 

 

      

 

 

      

 

 

      

 

 

 

 

 

S C H E D U L E   O F   I N V E S T M E N T S

  25


Schedule of Investments (unaudited) (continued)

October 31, 2023

  

BlackRock Sustainable Emerging Markets Equity Fund

 

Fair Value Hierarchy as of Period End (continued)

 

 

     Level 1        Level 2        Level 3        Total  

 

 

Derivative Financial Instruments(a)

                 

Liabilities

                 

Equity Contracts

   $               —        $       (37,030      $               —        $       (37,030
  

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

Derivative financial instruments are swaps contracts. Swaps contracts are valued at the unrealized appreciation (depreciation) on the instrument.

 

See notes to financial statements.

 

 

26  

2 0 2 3   B L A C K R O C K   S E M I - A N N U A L   R E P O R T   T O   S H A R E H O L D E R S


Statements of Assets and Liabilities (unaudited)

October 31, 2023

 

       

BlackRock

Emerging Markets

Fund, Inc.

         

BlackRock

Unconstrained

Equity Fund

         

BlackRock

Sustainable

Emerging Markets

Equity Fund

 

 

 

ASSETS

           

Investments, at value — unaffiliated(a)(b)

       $ 4,345,226,380              $ 392,357,126              $ 73,467,958  

Investments, at value — affiliated(c)

      323,939,544         15,664,946         1,097,295  

Cash

                      47,102  

Cash pledged:

           

Collateral — OTC derivatives

      7,441,000                  

Futures contracts

      723,000         329,000          

Foreign currency, at value(d)

      20,052,276         1,208,201         672,469  

Receivables:

           

Investments sold

      20,243,949         719,535          

Securities lending income — affiliated

      14,208         843          

Swaps

      133,665                  

Capital shares sold

      8,810,300         1,102,734         6,896  

Dividends — unaffiliated

      6,177,351         181,971         92,435  

Dividends — affiliated

      1,161,164         13,789         2,169  

Variation margin on futures contracts

              41,968          

Prepaid expenses

      94,598         56,625         27,817  
   

 

 

     

 

 

     

 

 

 

Total assets

      4,734,017,435         411,676,738         75,414,141  
   

 

 

     

 

 

     

 

 

 

LIABILITIES

           

Bank overdraft

      5,916,070         1,251,755          

Collateral on securities loaned

      85,334,270         10,028,760          

Payables:

           

Investments purchased

      20,632,611         507          

Swaps

      9,958,545                 58,983  

Accounting services fees

      79,953         11,936         10,685  

Capital shares redeemed

      18,243,660         857,576         76,298  

Custodian fees

      1,372,775         17,441         50,778  

Deferred foreign capital gain tax

      4,485,539                  

Investment advisory fees

      2,851,794         273,836         19,556  

Directors’ and Officer’s fees

      7,541         2,242         2,439  

Other accrued expenses

      25,070         41,436         27,713  

Professional fees

      82,196         141,404         172,687  

Service and distribution fees

      67,514         39,578         8,534  

Transfer agent fees

      216,189         49,073         21,528  

Variation margin on futures contracts

      149,410                  

Unrealized depreciation on OTC swaps

      3,373,019                 37,030  
   

 

 

     

 

 

     

 

 

 

Total liabilities

      152,796,156         12,715,544         486,231  
   

 

 

     

 

 

     

 

 

 

Commitments and contingent liabilities

           

NET ASSETS

    $ 4,581,221,279       $ 398,961,194       $ 74,927,910  
   

 

 

     

 

 

     

 

 

 

NET ASSETS CONSIST OF

           

Paid-in capital

    $ 6,061,712,817       $ 394,743,072       $ 91,183,564  

Accumulated earnings (loss)

      (1,480,491,538       4,218,122         (16,255,654
   

 

 

     

 

 

     

 

 

 

NET ASSETS

    $ 4,581,221,279       $ 398,961,194       $ 74,927,910  
   

 

 

     

 

 

     

 

 

 

(a) Investments, at cost — unaffiliated

    $ 4,732,207,961       $ 364,609,072       $ 73,779,866  

(b) Securities loaned, at value

    $ 82,668,782       $ 10,015,974       $  

(c)  Investments, at cost — affiliated

    $ 323,924,468       $ 15,663,393       $ 1,097,295  

(d) Foreign currency, at cost

    $ 20,966,759       $ 1,211,873       $ 769,582  

 

 

F I N A N C I A L   S T A T E M E N T S

  27


Statements of Assets and Liabilities (unaudited) (continued)

October 31, 2023

 

    

BlackRock

Emerging Markets

Fund, Inc.

   

BlackRock

Unconstrained

Equity Fund

    

BlackRock

Sustainable

Emerging Markets

Equity Fund

 

NET ASSET VALUE

      
Institutional                   

Net assets

  $  3,422,802,326     $  217,421,496      $  35,350,499  
 

 

 

   

 

 

    

 

 

 

Shares outstanding

    156,931,987       19,542,712        3,017,812  
 

 

 

   

 

 

    

 

 

 

Net asset value

  $ 21.81     $ 11.13      $ 11.71  
 

 

 

   

 

 

    

 

 

 

Shares authorized

    1.1 billion       Unlimited        100 million  
 

 

 

   

 

 

    

 

 

 

Par value

  $ 0.10     $ 0.10      $ 0.10  
 

 

 

   

 

 

    

 

 

 
Investor A                   

Net assets

  $ 274,597,023     $ 179,191,426      $ 38,249,751  
 

 

 

   

 

 

    

 

 

 

Shares outstanding

    13,107,883       16,182,754        3,323,654  
 

 

 

   

 

 

    

 

 

 

Net asset value

  $ 20.95     $ 11.07      $ 11.51  
 

 

 

   

 

 

    

 

 

 

Shares authorized

    100 million       Unlimited        200 million  
 

 

 

   

 

 

    

 

 

 

Par value

  $ 0.10     $ 0.10      $ 0.10  
 

 

 

   

 

 

    

 

 

 
Investor C                   

Net assets

  $ 8,126,529     $ 2,041,049        N/A  
 

 

 

   

 

 

    

 

 

 

Shares outstanding

    469,128       184,001        N/A  
 

 

 

   

 

 

    

 

 

 

Net asset value

  $ 17.32     $ 11.09        N/A  
 

 

 

   

 

 

    

 

 

 

Shares authorized

    100 million       Unlimited        N/A  
 

 

 

   

 

 

    

 

 

 

Par value

  $ 0.10     $ 0.10        N/A  
 

 

 

   

 

 

    

 

 

 
Class K                   

Net assets

  $ 875,695,401       N/A      $ 1,002,174  
 

 

 

   

 

 

    

 

 

 

Shares outstanding

    40,130,643       N/A        85,664  
 

 

 

   

 

 

    

 

 

 

Net asset value

  $ 21.82       N/A      $ 11.70  
 

 

 

   

 

 

    

 

 

 

Shares authorized

    1 billion       N/A        2 billion  
 

 

 

   

 

 

    

 

 

 

Par value

  $ 0.10       N/A      $ 0.10  
 

 

 

   

 

 

    

 

 

 
Class R                   

Net assets

    N/A     $ 307,223      $ 325,486  
 

 

 

   

 

 

    

 

 

 

Shares outstanding

    N/A       27,338        39,946  
 

 

 

   

 

 

    

 

 

 

Net asset value

    N/A     $ 11.24      $ 8.15  
 

 

 

   

 

 

    

 

 

 

Shares authorized

    N/A       Unlimited        200 million  
 

 

 

   

 

 

    

 

 

 

Par value

    N/A     $ 0.10      $ 0.10  
 

 

 

   

 

 

    

 

 

 

See notes to financial statements.

 

 

28  

2 0 2 3   B L A C K R O C K   S E M I - A N N U A L   R E P O R T   T O   S H A R E H O L D E R S


Statements of Operations (unaudited)

Six Months Ended October 31, 2023

 

           

BlackRock

Emerging Markets

Fund, Inc.

          

BlackRock

Unconstrained

Equity Fund

          

BlackRock

Sustainable

Emerging Markets

Equity Fund

 

INVESTMENT INCOME

           

Dividends — unaffiliated

    $ 81,475,823                $ 860,122                $ 1,132,014  

Dividends — affiliated

      7,454,911         67,289         28,927  

Securities lending income — affiliated — net

      163,180         5,647         212  

Other income — unaffiliated

              4,794          

Foreign taxes withheld

      (8,500,577       (35,819       (129,237

Foreign withholding tax claims

                     231,972          
   

 

 

     

 

 

     

 

 

 

Total investment income

      80,593,337         1,134,005         1,031,916  
   

 

 

     

 

 

     

 

 

 

EXPENSES

           

Investment advisory

      18,699,565         1,462,750         254,284  

Transfer agent — class specific

      3,421,811         148,976         66,298  

Custodian

      1,096,637         14,940         45,518  

Service and distribution — class specific

      426,390         253,330         55,562  

Accounting services

      238,217         33,226         22,353  

Registration

      187,751         42,552         35,506  

Professional

      78,100         106,852         102,653  

Printing and postage

      25,526         5,133         21,267  

Directors and Officer

      22,913         4,184         3,487  

Miscellaneous

      29,780         11,144         11,711  
   

 

 

     

 

 

     

 

 

 

Total expenses

      24,226,690         2,083,087         618,639  

Less:

           

Fees waived and/or reimbursed by the Manager

      (408,721       (971       (153,467

Transfer agent fees waived and/or reimbursed by the Manager — class specific

      (2,409,250       (68,035       (45,396
   

 

 

     

 

 

     

 

 

 

Total expenses after fees waived and/or reimbursed

      21,408,719         2,014,081         419,776  
   

 

 

     

 

 

     

 

 

 

Net investment income (loss)

      59,184,618         (880,076       612,140  
   

 

 

     

 

 

     

 

 

 

REALIZED AND UNREALIZED GAIN (LOSS)

           

Net realized gain (loss) from:

           

Investments — unaffiliated(a)

      (119,912,197       (8,362,524       674,070  

Investments — affiliated

      (8,073       1,675         (303

Foreign currency transactions

      (1,412,718       (28,578       (6,857

Futures contracts

      2,838,517         (125,534       (7,193

Swaps

      (21,974,650               (83,069
   

 

 

     

 

 

     

 

 

 
      (140,469,121       (8,514,961       576,648  
   

 

 

     

 

 

     

 

 

 

Net change in unrealized appreciation (depreciation) on:

           

Investments — unaffiliated(b)

      (148,392,219       (14,154,861       (6,318,509

Investments — affiliated

      7,319         (567        

Foreign currency translations

      (860,634       3,087         (97,966

Futures contracts

      (1,145,346       (61,148       (1,464

Swaps

      (4,148,215               (37,030
   

 

 

     

 

 

     

 

 

 
      (154,539,095       (14,213,489       (6,454,969
   

 

 

     

 

 

     

 

 

 

Net realized and unrealized loss

      (295,008,216       (22,728,450       (5,878,321
   

 

 

     

 

 

     

 

 

 

NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS

    $ (235,823,598     $ (23,608,526     $ (5,266,181
   

 

 

     

 

 

     

 

 

 

(a) Net of foreign capital gain tax and capital gain tax refund, if applicable of

    $ (2,596,642     $       $  

(b) Net of reduction in/(increase in) deferred foreign capital gain tax of

    $ (2,788,786     $       $ 38,634  

See notes to financial statements.

 

 

F I N A N C I A L   S T A T E M E N T S

  29


Statements of Changes in Net Assets

 

 

        BlackRock Emerging Markets Fund, Inc.          BlackRock Unconstrained Equity Fund  
       

Six Months Ended

10/31/23

(unaudited)

   

Year Ended

04/30/23

        

Six Months Ended

10/31/23

(unaudited)

   

Year Ended

04/30/23

 

 

 

INCREASE (DECREASE) IN NET ASSETS

            

OPERATIONS

            

Net investment income (loss)

    $ 59,184,618     $75,860,362      $ (880,076   $ (709,636

Net realized loss

 

  

    (140,469,121   (475,854,396)               (8,514,961     (10,834,577

Net change in unrealized appreciation (depreciation)

      (154,539,095   169,103,003        (14,213,489     39,420,051  
   

 

 

   

 

    

 

 

   

 

 

 

Net increase (decrease) in net assets resulting from operations

      (235,823,598   (230,891,031)        (23,608,526     27,875,838  
   

 

 

   

 

    

 

 

   

 

 

 

DISTRIBUTIONS TO SHAREHOLDERS(a)

            

Institutional

      (22,725,202   (58,609,418)              (6,796,902

Investor A

      (1,646,896   (6,008,508)              (29,616,260

Investor C

      (38,874   (162,744)              (211,141

Class K

      (5,737,805   (14,242,365)               

Class R

                       (33,496
   

 

 

   

 

    

 

 

   

 

 

 

Decrease in net assets resulting from distributions to shareholders

      (30,148,777   (79,023,035)              (36,657,799
   

 

 

   

 

    

 

 

   

 

 

 

CAPITAL SHARE TRANSACTIONS

            

Net increase (decrease) in net assets derived from capital share transactions

      (20,572,315   847,499,599        163,287,361       7,746,875  
   

 

 

   

 

    

 

 

   

 

 

 

NET ASSETS

            

Total increase (decrease) in net assets

      (286,544,690   537,585,533        139,678,835       (1,035,086

Beginning of period

      4,867,765,969     4,330,180,436        259,282,359       260,317,445  
   

 

 

   

 

    

 

 

   

 

 

 

End of period

    $ 4,581,221,279     $4,867,765,969      $ 398,961,194     $ 259,282,359  
   

 

 

   

 

    

 

 

   

 

 

 

 

(a) 

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

See notes to financial statements.

 

 

30  

2 0 2 3   B L A C K R O C K   S E M I - A N N U A L   R E P O R T   T O   S H A R E H O L D E R S


Statements of Changes in Net Assets (continued)

 

 

                   BlackRock Sustainable Emerging Markets Equity Fund  
                      

Six Months Ended

10/31/23

(unaudited)

            Year Ended
04/30/23
 

INCREASE (DECREASE) IN NET ASSETS

             

OPERATIONS

             

Net investment income

         $ 612,140                 $ 772,485  

Net realized gain (loss)

           576,648          (7,753,364

Net change in unrealized appreciation (depreciation)

           (6,454,969        4,237,432  
        

 

 

      

 

 

 

Net decrease in net assets resulting from operations

           (5,266,181        (2,743,447
        

 

 

      

 

 

 

DISTRIBUTIONS TO SHAREHOLDERS(a)

             

Institutional

           (320,484        (453,923

Investor A

           (321,817        (377,594

Class K

           (9,346        (15,636

Class R

           (3,737        (4,438
        

 

 

      

 

 

 

Decrease in net assets resulting from distributions to shareholders

           (655,384        (851,591
        

 

 

      

 

 

 

CAPITAL SHARE TRANSACTIONS

             

Net decrease in net assets derived from capital share transactions

           (4,779,348        (13,484,488
        

 

 

      

 

 

 

NET ASSETS

             

Total decrease in net assets

           (10,700,913        (17,079,526

Beginning of period

           85,628,823          102,708,349  
        

 

 

      

 

 

 

End of period

         $ 74,927,910        $ 85,628,823  
        

 

 

      

 

 

 

 

(a) 

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

See notes to financial statements.

 

 

F I N A N C I A L   S T A T E M E N T S

  31


Financial Highlights

(For a share outstanding throughout each period)

 

        BlackRock Emerging Markets Fund, Inc.  
        Institutional  
       

Six Months Ended

10/31/23

(unaudited)

   

Year Ended

04/30/23

   

Year Ended

04/30/22

   

Year Ended

04/30/21

   

Period from

11/01/19

to 04/30/20

   

Year Ended

10/31/19

   

Year Ended

10/31/18

 
 
                 

Net asset value, beginning of period

                 $ 23.10     $ 24.41     $ 34.51     $ 22.21     $ 24.51     $ 20.73     $ 22.74  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income(a)

      0.28       0.43       0.31       0.15       0.04       0.40       0.24  

Net realized and unrealized gain (loss)

      (1.43     (1.24     (8.70     12.46       (1.94     3.58       (2.14
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) from investment operations

      (1.15     (0.81     (8.39     12.61       (1.90     3.98       (1.90
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributions(b)

               

From net investment income

      (0.14     (0.50     (0.28     (0.31     (0.40     (0.20     (0.11

From net realized gain

                  (1.43                        
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions

      (0.14     (0.50     (1.71     (0.31     (0.40     (0.20     (0.11
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net asset value, end of period

    $ 21.81     $ 23.10     $ 24.41     $ 34.51     $ 22.21     $ 24.51     $ 20.73  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Return(c)

               

Based on net asset value

      (5.03 )%(d)       (3.26 )%      (25.52 )%      57.05     (7.95 )%(d)      19.39     (8.39 )% 
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ratios to Average Net Assets(e)

               

Total expenses

      0.99 %(f)       1.00     0.96     1.02     1.04 %(f)       1.14     1.31
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed

      0.86 %(f)       0.86     0.86     0.86     0.86 %(f)       0.97     1.11
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income

      2.41 %(f)       1.88     1.03     0.49     0.34 %(f)       1.73     1.05
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Supplemental Data

               

Net assets, end of period (000)

    $ 3,422,802     $ 3,675,123     $ 3,261,325     $ 2,771,663     $ 660,315     $ 308,719     $ 98,990  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio turnover rate

      45 %(g)       96 %(g)       132 %(g)       109 %(g)       63 %(g)       119 %(g)       121
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(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) 

Not annualized.

(e) 

Excludes fees and expenses incurred indirectly as a result of investments in underlying funds.

(f) 

Annualized.

(g) 

Excludes underlying investments in total return swaps.

See notes to financial statements.

 

 

32  

2 0 2 3   B L A C K R O C K   S E M I - A N N U A L   R E P O R T   T O   S H A R E H O L D E R S


Financial Highlights (continued)

(For a share outstanding throughout each period)

 

        BlackRock Emerging Markets Fund, Inc. (continued)  
        Investor A  
       

Six Months Ended

10/31/23

(unaudited)

   

Year Ended

04/30/23

   

Year Ended

04/30/22

   

Year Ended

04/30/21

   

Period from

11/01/19

to 04/30/20

   

Year Ended

10/31/19

   

Year Ended

10/31/18

 
 
                 

Net asset value, beginning of period

             $ 22.20     $ 23.47     $ 33.26     $ 21.42     $ 23.62     $ 19.96     $ 21.88  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income(a)

      0.24       0.38       0.24       0.11       0.02       0.29       0.16  

Net realized and unrealized gain (loss)

      (1.37     (1.22     (8.40     11.98       (1.89     3.50       (2.04
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) from investment operations

      (1.13     (0.84     (8.16     12.09       (1.87     3.79       (1.88
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributions(b)

               

From net investment income

      (0.12     (0.43     (0.20     (0.25     (0.33     (0.13     (0.04

From net realized gain

                  (1.43                        
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions

      (0.12     (0.43     (1.63     (0.25     (0.33     (0.13     (0.04
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net asset value, end of period

    $ 20.95     $ 22.20     $ 23.47     $ 33.26     $ 21.42     $ 23.62     $ 19.96  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Return(c)

               

Based on net asset value

      (5.13 )%(d)      (3.49 )%      (25.74 )%      56.67     (8.09 )%(d)      19.11     (8.62 )% 
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ratios to Average Net Assets(e)

               

Total expenses

      1.34 %(f)       1.33     1.25     1.28     1.36 %(f)       1.45     1.60
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed

      1.11 %(f)       1.11     1.11     1.11     1.11 %(f)       1.22     1.40
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income

      2.16 %(f)       1.74     0.82     0.38     0.21 %(f)       1.31     0.72
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Supplemental Data

               

Net assets, end of period (000)

    $ 274,597     $ 305,065     $ 351,246     $ 463,032     $ 196,836     $ 204,061     $ 164,683  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio turnover rate

      45 %(g)       96 %(g)       132 %(g)       109 %(g)       63 %(g)       119 %(g)       121
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(a) 

Based on average shares outstanding.

(b) 

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

(c) 

Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

(d) 

Not annualized.

(e) 

Excludes fees and expenses incurred indirectly as a result of investments in underlying funds.

(f) 

Annualized.

(g) 

Excludes underlying investments in total return swaps.

See notes to financial statements.

 

 

F I N A N C I A L   H I G H L I G H T S

  33


Financial Highlights (continued)

(For a share outstanding throughout each period)

 

        BlackRock Emerging Markets Fund, Inc. (continued)  
        Investor C  
       

Six Months Ended

10/31/23

(unaudited)

   

Year Ended

04/30/23

   

Year Ended

04/30/22

   

Year Ended

04/30/21

   

Period from

11/01/19

to 04/30/20

   

Year Ended

10/31/19

   

Year Ended

10/31/18

 
 
                 

Net asset value, beginning of period

               $ 18.40     $ 19.52     $ 28.01     $ 18.03     $ 19.83     $ 16.77     $ 18.50  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income (loss)(a)

      0.13       0.19       0.02       0.04       (0.05     0.09       (0.02

Net realized and unrealized gain (loss)

      (1.13     (1.02     (7.01     9.96       (1.60     2.97       (1.71
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) from investment operations

      (1.00     (0.83     (6.99     10.00       (1.65     3.06       (1.73
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributions(b)

               

From net investment income

      (0.08     (0.29     (0.07     (0.02     (0.15            

From net realized gain

                  (1.43                        
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions

      (0.08     (0.29     (1.50     (0.02     (0.15            
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net asset value, end of period

    $  17.32     $  18.40     $ 19.52     $ 28.01     $ 18.03     $ 19.83     $ 16.77  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Return(c)

               

Based on net asset value

      (5.50 )%(d)      (4.22 )%      (26.29 )%      55.48     (8.42 )%(d)      18.25     (9.35 )% 
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ratios to Average Net Assets(e)

               

Total expenses

      2.08 %(f)      2.10     2.02     2.13     2.22 %(f)      2.31     2.41
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed

      1.86 %(f)      1.86     1.86     1.86     1.86 %(f)      1.98     2.18
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income (loss)

      1.43 %(f)      1.03     0.07     0.16     (0.51 )%(f)      0.50     (0.10 )% 
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Supplemental Data

               

Net assets, end of period (000)

    $ 8,127     $ 9,739     $  13,144     $  18,769     $  24,639     $  31,362     $  34,756  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio turnover rate

      45 %(g)       96 %(g)       132 %(g)       109 %(g)       63 %(g)       119 %(g)       121
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(a) 

Based on average shares outstanding.

(b) 

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

(c) 

Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

(d) 

Not annualized.

(e) 

Excludes fees and expenses incurred indirectly as a result of investments in underlying funds.

(f) 

Annualized.

(g) 

Excludes underlying investments in total return swaps.

See notes to financial statements.

 

 

34  

2 0 2 3   B L A C K R O C K   S E M I - A N N U A L   R E P O R T   T O   S H A R E H O L D E R S


Financial Highlights (continued)

(For a share outstanding throughout each period)

 

        BlackRock Emerging Markets Fund, Inc. (continued)  
        Class K  
       

Six Months Ended

10/31/23

(unaudited)

   

Year Ended

04/30/23

   

Year Ended

04/30/22

   

Year Ended

04/30/21

   

Period from

11/01/19

to 04/30/20

   

Year Ended

10/31/19

   

Period from

01/25/18(a)
to 10/31/18

 
 
                 

Net asset value, beginning of period

                 $ 23.10     $ 24.42     $ 34.53     $ 22.22     $ 24.52     $ 20.74     $ 25.97  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income(b)

      0.29       0.42       0.34       0.19       0.06       0.48       0.32  

Net realized and unrealized gain (loss)

      (1.42     (1.23     (8.73     12.44       (1.95     3.52       (5.55
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) from investment operations

      (1.13     (0.81     (8.39     12.63       (1.89     4.00       (5.23
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributions(c)

               

From net investment income

      (0.15     (0.51     (0.29     (0.32     (0.41     (0.22      

From net realized gain

                  (1.43                        
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions

      (0.15     (0.51     (1.72     (0.32     (0.41     (0.22      
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net asset value, end of period

    $ 21.82     $ 23.10     $ 24.42     $ 34.53     $ 22.22     $ 24.52     $ 20.74  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Return(d)

               

Based on net asset value

      (4.97 )%(e)      (3.24 )%      (25.50 )%      57.13     (7.91 )%(e)      19.48     (20.14 )%(e) 
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ratios to Average Net Assets(f)

               

Total expenses

      0.83 %(g)      0.86     0.85     0.85     0.92 %(g)      0.98     1.16 %(g) 
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed

      0.81 %(g)      0.81     0.81     0.81     0.81 %(g)      0.92     0.95 %(g) 
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income

      2.47 %(g)      1.85     1.12     0.63     0.46 %(g)      2.08     1.82 %(g) 
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Supplemental Data

               

Net assets, end of period (000)

    $ 875,695     $ 877,839     $ 704,465     $ 458,860     $ 166,590     $ 109,569     $ 1,500  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio turnover rate

      45 %(h)      96 %(h)      132 %(h)      109 %(h)      63 %(h)      119 %(h)      121
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(a) 

Commencement of operations.

(b) 

Based on average shares outstanding.

(c) 

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

(d) 

Where applicable, assumes the reinvestment of distributions.

(e) 

Not annualized.

(f) 

Excludes fees and expenses incurred indirectly as a result of investments in underlying funds.

(g) 

Annualized.

(h) 

Excludes underlying investments in total return swaps.

See notes to financial statements.

 

 

F I N A N C I A L   H I G H L I G H T S

  35


Financial Highlights (continued)

(For a share outstanding throughout each period)

 

        BlackRock Unconstrained Equity Fund  
        Institutional  
       

Six Months Ended

10/31/23

(unaudited)

   

Year Ended

04/30/23

   

Year Ended

04/30/22

   

Year Ended

04/30/21

   

Period from

11/01/19

to 04/30/20

   

Year Ended

10/31/19

   

Year Ended

10/31/18

 
 
                 

Net asset value, beginning of period

                 $ 11.66     $ 12.12     $ 16.41     $ 12.18     $ 14.58     $ 13.08     $ 13.09  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income (loss)(a)

      (0.02     (0.01     (0.03     0.02       0.04       0.10       0.10  

Net realized and unrealized gain (loss)

      (0.51     1.32       (0.95     5.77       (0.80     2.38       0.42  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) from investment operations

      (0.53     1.31       (0.98     5.79       (0.76     2.48       0.52  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributions(b)

               

From net investment income

                  (0.08     (0.04     (0.12     (0.10     (0.08

From net realized gain

            (1.77     (3.23     (1.52     (1.52     (0.88     (0.45
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions

            (1.77     (3.31     (1.56     (1.64     (0.98     (0.53
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net asset value, end of period

    $ 11.13     $ 11.66     $ 12.12     $ 16.41     $ 12.18     $ 14.58     $ 13.08  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Return(c)

               

Based on net asset value

      (4.55 )%(d)      14.49     (8.74 )%      50.41 %(e)      (6.45 )%(d)      20.73     4.04
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ratios to Average Net Assets(f)

               

Total expenses

      1.01 %(g)      1.12     1.02 %(h)      1.05 %(i)      1.04 %(g)(j)      1.01     1.01
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed

      0.96 %(g)      0.95     0.95 %(h)      1.00 %(i)      0.99 %(g)(j)      0.96     0.96
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed and excluding professional fees for foreign withholding taxes

      0.95 %(g)      0.95     0.95 %(h)      1.00 %(i)      0.99 %(g)(j)      0.96     0.96
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income (loss)

      (0.34 )%(g)      (0.07 )%      (0.20 )%      0.15     0.67 %(g)      0.76     0.75
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Supplemental Data

               

Net assets, end of period (000)

    $  217,421     $  66,293     $  49,303     $  52,716     $  38,428     $  45,641     $  44,879  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio turnover rate

      8     27     100     83     27     42     24
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(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) 

Not annualized.

(e) 

Includes payment from an affiliate, which had no impact on the Fund’s total return.

(f) 

Excludes fees and expenses incurred indirectly as a result of investments in underlying funds.

(g) 

Annualized.

(h) 

Includes non-recurring expenses of proxy costs. Without these costs, total expenses, total expenses after fees waived and/or reimbursed and total expenses after fees waived and/or reimbursed and excluding professional fees for foreign withholding taxes would have been 0.99%, 0.92% and 0.92%, respectively.

(i) 

Includes non-recurring expenses of proxy costs. Without these costs, total expenses, total expenses after fees waived and/or reimbursed and total expenses after fees waived and/or reimbursed and excluding professional fees for foreign withholding taxes would have been 1.01%, 0.96% and 0.96%, respectively.

(j) 

Audit, printing and tax cost expenses were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses, total expenses after fees waived and/or reimbursed and total expenses after fees waived and/or reimbursed and excluding professional fees for foreign withholding taxes would have been 1.07%, 1.02% and 1.02%, respectively.

See notes to financial statements.

 

 

36  

2 0 2 3   B L A C K R O C K   S E M I - A N N U A L   R E P O R T   T O   S H A R E H O L D E R S


Financial Highlights (continued)

(For a share outstanding throughout each period)

 

        BlackRock Unconstrained Equity Fund (continued)  
        Investor A  
       

Six Months Ended

10/31/23

(unaudited)

   

Year Ended

04/30/23

   

Year Ended

04/30/22

   

Year Ended

04/30/21

   

Period from

11/01/19

to 04/30/20

   

Year Ended

10/31/19

   

Year Ended

10/31/18

 
 
                 

Net asset value, beginning of period

                 $ 11.62     $ 12.11     $ 16.41     $ 12.17     $ 14.55     $ 13.05     $ 13.06  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income (loss)(a)

      (0.03     (0.04     (0.06     (0.01     0.03       0.07       0.07  

Net realized and unrealized gain (loss)

      (0.52     1.32       (0.97     5.77       (0.82     2.38       0.42  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) from investment operations

      (0.55     1.28       (1.03     5.76       (0.79     2.45       0.49  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributions(b)

               

From net investment income

                  (0.07     (0.03     (0.07     (0.07     (0.05

From net realized gain

            (1.77     (3.20     (1.49     (1.52     (0.88     (0.45
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions

            (1.77     (3.27     (1.52     (1.59     (0.95     (0.50
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net asset value, end of period

    $ 11.07     $ 11.62     $ 12.11     $ 16.41     $ 12.17     $ 14.55     $ 13.05  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Return(c)

               

Based on net asset value

      (4.73 )%(d)      14.21     (9.04 )%      50.17 %(e)      (6.61 )%(d)      20.42     3.78
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ratios to Average Net Assets(f)

               

Total expenses

      1.25 %(g)      1.34     1.26 %(h)      1.30 %(i)      1.30 %(g)(j)      1.27     1.27
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed

      1.21 %(g)      1.20     1.21 %(h)      1.25 %(i)      1.25 %(g)(j)      1.22     1.22
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed and excluding professional fees for foreign withholding taxes

      1.20 %(g)      1.20     1.21 %(h)      1.25 %(i)      1.25 %(g)(j)      1.22     1.22
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income (loss)

      (0.59 )%(g)      (0.36 )%      (0.44 )%      (0.10 )%      0.43 %(g)      0.50     0.49
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Supplemental Data

               

Net assets, end of period (000)

    $ 179,191     $ 191,316     $ 209,352     $ 252,119     $ 182,892     $ 211,071     $ 194,416  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio turnover rate

      8     27     100     83     27     42     24
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(a) 

Based on average shares outstanding.

(b) 

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

(c) 

Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions. (d) Not annualized.

(e) 

Includes payment from an affiliate, which had no impact on the Fund’s total return.

(f) 

Excludes fees and expenses incurred indirectly as a result of investments in underlying funds.

(g) 

Annualized.

(h) 

Includes non-recurring expenses of proxy costs. Without these costs, total expenses, total expenses after fees waived and/or reimbursed and total expenses after fees waived and/or reimbursed and excluding professional fees for foreign withholding taxes would have been 1.23%, 1.18% and 1.18%, respectively.

(i) 

Includes non-recurring expenses of proxy costs. Without these costs, total expenses, total expenses after fees waived and/or reimbursed and total expenses after fees waived and/or reimbursed and excluding professional fees for foreign withholding taxes would have been 1.26%, 1.21% and 1.21%, respectively.

(j) 

Audit, printing and tax cost expenses were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses, total expenses after fees waived and/or reimbursed and total expenses after fees waived and/or reimbursed and excluding professional fees for foreign withholding taxes would have been 1.33%, 1.28% and 1.28%, respectively.

See notes to financial statements.

 

 

F I N A N C I A L   H I G H L I G H T S

  37


Financial Highlights (continued)

(For a share outstanding throughout each period)

 

        BlackRock Unconstrained Equity Fund (continued)  
        Investor C  
       

Six Months Ended

10/31/23

(unaudited)

   

Year Ended

04/30/23

   

Year Ended

04/30/22

   

Year Ended

04/30/21

   

Period from

11/01/19

to 04/30/20

   

Year Ended

10/31/19

   

Year Ended

10/31/18

 
 
                 

Net asset value, beginning of period

                 $ 11.68     $ 12.25     $ 16.54     $ 12.22     $ 14.50     $ 12.87     $ 12.94  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment loss(a)

      (0.08     (0.12     (0.19     (0.18     (0.03     (0.05     (0.04

Net realized and unrealized gain (loss)

      (0.51     1.32       (0.97     5.83       (0.82     2.40       0.42  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) from investment operations

      (0.59     1.20       (1.16     5.65       (0.85     2.35       0.38  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributions(b)

               

From net investment income

                  (0.02                        

From net realized gain

            (1.77     (3.11     (1.33     (1.43     (0.72     (0.45
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions

            (1.77     (3.13     (1.33     (1.43     (0.72     (0.45
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net asset value, end of period

    $ 11.09     $ 11.68     $ 12.25     $ 16.54     $ 12.22     $ 14.50     $ 12.87  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Return(c)

               

Based on net asset value

      (5.05 )%(d)      13.27     (9.75 )%      48.76 %(e)      (6.97 )%(d)      19.54     2.96
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ratios to Average Net Assets(f)

               

Total expenses

      2.08 %(g)      2.25     2.14 %(h)      2.18 %(i)      2.13 %(g)(j)      2.07     2.03
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed

      1.96 %(g)      1.95     2.07 %(h)      2.13 %(i)      2.08 %(g)(j)      2.02     1.98
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed and excluding professional fees for foreign withholding taxes

      1.95 %(g)      1.95     2.07 %(h)      2.13 %(i)      2.08 %(g)(j)      2.08     1.98
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment loss

      (1.35 )%(g)      (1.12 )%      (1.30 )%      (1.28 )%      (0.42 )%(g)      (0.35 )%      (0.27 )% 
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Supplemental Data

               

Net assets, end of period (000)

    $ 2,041     $ 1,407     $ 1,432     $ 2,022     $ 6,501     $ 8,502     $ 18,464  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio turnover rate

      8     27     100     83     27     42     24
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(a) 

Based on average shares outstanding.

(b) 

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

(c) 

Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

(d) 

Not annualized.

(e) 

Includes payment from an affiliate, which had no impact on the Fund’s total return.

(f) 

Excludes fees and expenses incurred indirectly as a result of investments in underlying funds.

(g) 

Annualized.

(h) 

Includes non-recurring expenses of proxy costs. Without these costs, total expenses, total expenses after fees waived and/or reimbursed and total expenses after fees waived and/or reimbursed and excluding professional fees for foreign withholding taxes would have been 2.11%, 2.04% and 2.04%, respectively.

(i) 

Includes non-recurring expenses of proxy costs. Without these costs, total expenses, total expenses after fees waived and/or reimbursed and total expenses after fees waived and/or reimbursed and excluding professional fees for foreign withholding taxes would have been 2.15%, 2.10% and 2.10%, respectively.

(j) 

Audit, printing and tax cost expenses were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses, total expenses after fees waived and/or reimbursed and total expenses after fees waived and/or reimbursed and excluding professional fees for foreign withholding taxes would have been 2.16%, 2.11% and 2.11%, respectively.

See notes to financial statements.

 

 

38  

2 0 2 3   B L A C K R O C K   S E M I - A N N U A L   R E P O R T   T O   S H A R E H O L D E R S


Financial Highlights (continued)

(For a share outstanding throughout each period)

 

        BlackRock Unconstrained Equity Fund (continued)  
        Class R  
       

Six Months Ended

10/31/23

(unaudited)

   

Year Ended

04/30/23

   

Year Ended

04/30/22

   

Year Ended

04/30/21

   

Period from

11/01/19

to 04/30/20

   

Year Ended

10/31/19

   

Year Ended

10/31/18

 
 
                 

Net asset value, beginning of period

                 $ 11.80     $ 12.30     $ 16.59     $ 12.28     $ 14.60     $ 13.06     $ 13.08  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income (loss)(a)

      (0.05     (0.06     (0.13     (0.08     0.00 (b)      0.01       0.01  

Net realized and unrealized gain (loss)

      (0.51     1.33       (0.99     5.85       (0.82     2.40       0.42  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) from investment operations

      (0.56     1.27       (1.12     5.77       (0.82     2.41       0.43  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributions(c)

               

From net investment income

                  (0.03                        

From net realized gain

            (1.77     (3.14     (1.46     (1.50     (0.87     (0.45
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions

            (1.77     (3.17     (1.46     (1.50     (0.87     (0.45
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net asset value, end of period

    $ 11.24     $ 11.80     $ 12.30     $ 16.59     $ 12.28     $ 14.60     $ 13.06  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Return(d)

               

Based on net asset value

      (4.75 )%(e)      13.86     (9.42 )%      49.61 %(f)      (6.74 )%(e)      19.94     3.32
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ratios to Average Net Assets(g)

               

Total expenses

      1.78 %(h)      1.68     1.83 %(i)      1.65 %(j)      1.71 %(h)(k)      1.67     1.65
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed

      1.46 %(h)      1.45     1.66 %(i)      1.59 %(j)      1.64 %(h)(k)      1.62     1.60
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed and excluding professional fees for foreign withholding taxes

      1.45 %(h)      1.45     1.66 %(i)      1.59 %(j)      1.64 %(h)(k)      1.62     1.60
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income (loss)

      (0.84 )%(h)      (0.60 )%      (0.85 )%      (0.55 )%      0.03 %(h)      0.09     0.07
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Supplemental Data

               

Net assets, end of period (000)

    $ 307     $ 267     $ 230     $ 377     $ 683     $ 806     $ 1,100  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio turnover rate

      8     27     100     83     27     42     24
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(a) 

Based on average shares outstanding.

(b) 

Amount is less than $0.00005 per share.

(c) 

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

(d) 

Where applicable, assumes the reinvestment of distributions.

(e) 

Not annualized.

(f) 

Includes payment from an affiliate, which had no impact on the Fund’s total return.

(g) 

Excludes fees and expenses incurred indirectly as a result of investments in underlying funds.

(h) 

Annualized.

(i) 

Includes non-recurring expenses of proxy costs. Without these costs, total expenses, total expenses after fees waived and/or reimbursed and total expenses after fees waived and/or reimbursed and excluding professional fees for foreign withholding taxes would have been 1.79%, 1.62% and 1.62%, respectively.

(j) 

Includes non-recurring expenses of proxy costs. Without these costs, total expenses, total expenses after fees waived and/or reimbursed and total expenses after fees waived and/or reimbursed and excluding professional fees for foreign withholding taxes would have been 1.62%, 1.56% and 1.56%, respectively.

(k) 

Audit, printing and tax cost expenses were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses, total expenses after fees waived and/or reimbursed and total expenses after fees waived and/or reimbursed and excluding professional fees for foreign withholding taxes would have been 1.74%, 1.67% and 1.67%, respectively.

See notes to financial statements.

 

 

F I N A N C I A L   H I G H L I G H T S

  39


Financial Highlights (continued)

(For a share outstanding throughout each period)

 

        BlackRock Sustainable Emerging Markets Equity Fund  
        Institutional  
       

Six Months Ended

10/31/23

(unaudited)

   

Year Ended

04/30/23

   

Year Ended

04/30/22

   

Year Ended

04/30/21

   

Period from

01/01/20

to 04/30/20

   

Year Ended

12/31/19

   

Year Ended

12/31/18

 
 
                 

Net asset value, beginning of period

                 $ 12.64     $ 13.01     $ 20.51     $ 14.31     $ 16.41     $ 13.58     $ 17.15  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income (loss)(a)

      0.10       0.12       0.18       0.15       (0.03     0.15       0.15  

Net realized and unrealized gain (loss)

      (0.93     (0.36     (4.73     6.16       (2.07     2.83       (3.00
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) from investment operations

      (0.83     (0.24     (4.55     6.31       (2.10     2.98       (2.85
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributions(b)

               

From net investment income

      (0.10     (0.13     (0.15     (0.11           (0.15     (0.12

From net realized gain

                  (2.80                       (0.60
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions

      (0.10     (0.13     (2.95     (0.11           (0.15     (0.72
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net asset value, end of period

    $ 11.71     $ 12.64     $ 13.01     $ 20.51     $ 14.31     $ 16.41     $ 13.58  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Return(c)

               

Based on net asset value

      (6.62 )%(d)      (1.78 )%      (25.22 )%      44.25     (12.80 )%(d)      21.97     (16.73 )% 
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ratios to Average Net Assets(e)

               

Total expenses

      1.33 %(f)      1.46     1.03     0.99     1.14 %(f)(g)      0.99     1.06
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed

      0.86 %(f)      0.86     0.93     0.99     1.14 %(f)(g)      0.99     1.05
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income (loss)

      1.57 %(f)      0.99     1.03     0.81     (0.56 )%(f)      1.02     0.94
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Supplemental Data

               

Net assets, end of period (000)

    $ 35,350     $ 39,380     $ 49,410     $ 87,154     $ 58,412     $ 71,202     $ 68,280  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio turnover rate

      29 %(h)      58     139 %(h)      81 %(h)      13     55     44
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(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) 

Not annualized.

(e) 

Excludes fees and expenses incurred indirectly as a result of investments in underlying funds.

(f) 

Annualized.

(g) 

Audit, printing and tax costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses and total expenses after fees waived and/or reimbursed would have been 1.31%.

(h) 

Excludes underlying investments in total return swaps.

See notes to financial statements.

 

 

40  

2 0 2 3   B L A C K R O C K   S E M I - A N N U A L   R E P O R T   T O   S H A R E H O L D E R S


Financial Highlights (continued)

(For a share outstanding throughout each period)

 

        BlackRock Sustainable Emerging Markets Equity Fund (continued)  
        Investor A  
       

Six Months Ended

10/31/23

(unaudited)

   

Year Ended

04/30/23

   

Year Ended

04/30/22

   

Year Ended

04/30/21

   

Period from

01/01/20

to 04/30/20

   

Year Ended

12/31/19

   

Year Ended

12/31/18

 
 
                 

Net asset value, beginning of period

                 $ 12.42     $ 12.79     $ 20.21     $ 14.12     $ 16.20     $ 13.41     $ 16.94  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income (loss)(a)

      0.08       0.09       0.13       0.10       (0.04     0.11       0.11  

Net realized and unrealized gain (loss)

      (0.90     (0.36     (4.65     6.08       (2.04     2.78       (2.96
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) from investment operations

      (0.82     (0.27     (4.52     6.18       (2.08     2.89       (2.85
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributions(b)

               

From net investment income

      (0.09     (0.10     (0.10     (0.09           (0.10     (0.08

From net realized gain

                  (2.80                       (0.60
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions

      (0.09     (0.10     (2.90     (0.09           (0.10     (0.68
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net asset value, end of period

    $ 11.51     $ 12.42     $ 12.79     $ 20.21     $ 14.12     $ 16.20     $ 13.41  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Return(c)

               

Based on net asset value

      (6.66 )%(d)      (2.08 )%      (25.40 )%      43.86     (12.84 )%(d)      21.63     (16.95 )% 
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ratios to Average Net Assets(e)

               

Total expenses

      1.58 %(f)      1.71     1.28     1.23     1.40 %(f)(g)      1.25     1.31
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed

      1.11 %(f)      1.11     1.18     1.23     1.40 %(f)(g)      1.25     1.30
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income (loss)

      1.33 %(f)      0.73     0.75     0.56     (0.83 )%(f)      0.75     0.72
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Supplemental Data

               

Net assets, end of period (000)

    $ 38,250     $ 44,551     $ 51,393     $ 77,884     $ 59,493     $ 73,416     $ 70,891  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio turnover rate

      29 %(h)      58     139 %(h)      81 %(h)      13     55     44
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(a) 

Based on average shares outstanding.

(b) 

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

(c) 

Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

(d) 

Not annualized.

(e) 

Excludes fees and expenses incurred indirectly as a result of investments in underlying funds.

(f) 

Annualized.

(g) 

Audit, printing and tax costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses and total expenses after fees waived and/or reimbursed would have been 1.57%.

(h) 

Excludes underlying investments in total return swaps.

See notes to financial statements.

 

 

F I N A N C I A L   H I G H L I G H T S

  41


Financial Highlights (continued)

(For a share outstanding throughout each period)

 

        BlackRock Sustainable Emerging Markets Equity Fund (continued)  
        Class K  
       

Six Months Ended

10/31/23

(unaudited)

   

Year Ended

04/30/23

   

Year Ended

04/30/22

   

Year Ended

04/30/21

   

Period from

01/01/20

to 04/30/20

   

Year Ended

12/31/19

   

Period from

01/25/18(a)
to 12/31/18

 
 
                 

Net asset value, beginning of period

                 $ 12.62     $ 13.00     $ 20.49     $ 14.30     $ 16.40     $ 13.57     $ 18.69  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income (loss)(b)

      0.11       0.13       0.18       0.14       (0.02     0.16       0.22  

Net realized and unrealized gain (loss)

      (0.92     (0.37     (4.71     6.16       (2.08     2.82       (4.60
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) from investment operations

      (0.81     (0.24     (4.53     6.30       (2.10     2.98       (4.38
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributions(c)

               

From net investment income

      (0.11     (0.14     (0.16     (0.11           (0.15     (0.14

From net realized gain

                  (2.80                       (0.60
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions

      (0.11     (0.14     (2.96     (0.11           (0.15     (0.74
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net asset value, end of period

    $ 11.70     $ 12.62     $ 13.00     $ 20.49     $ 14.30     $ 16.40     $ 13.57  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Return(d)

               

Based on net asset value

      (6.54 )%(e)      (1.79 )%      (25.14 )%      44.18     (12.80 )%(e)      22.05     (23.55 )%(e) 
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ratios to Average Net Assets(f)

               

Total expenses

      1.18 %(g)      1.40     1.01     1.01     1.10 %(g)(h)      0.96     1.00 %(g)(i) 
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed

      0.81 %(g)      0.81     0.87     1.01     1.10 %(g)(h)      0.96     1.00 %(g) 
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income (loss)

      1.67 %(g)      1.03     1.03     0.80     (0.42 )%(g)      1.03     1.52 %(g) 
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Supplemental Data

               

Net assets, end of period (000)

    $ 1,002     $ 1,285     $ 1,275     $ 1,488     $ 809     $ 699     $ 446  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio turnover rate

      29 %(j)      58     139 %(j)      81 %(j)      13     55     44
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(a) 

Commencement of operations.

(b) 

Based on average shares outstanding.

(c) 

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

(d) 

Where applicable, assumes the reinvestment of distributions.

(e) 

Not annualized.

(f) 

Excludes fees and expenses incurred indirectly as a result of investments in underlying funds.

(g) 

Annualized.

(h) 

Audit, printing and tax costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses and total expenses after fees waived and/or reimbursed would have been 1.27% and 1.27%, respectively.

(i) 

Offering costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses would have been 1.00%.

(j) 

Excludes underlying investments in total return swaps.

See notes to financial statements.

 

 

42  

2 0 2 3   B L A C K R O C K   S E M I - A N N U A L   R E P O R T   T O   S H A R E H O L D E R S


Financial Highlights (continued)

(For a share outstanding throughout each period)

 

        BlackRock Sustainable Emerging Markets Equity Fund (continued)  
        Class R  
       

Six Months Ended

10/31/23

(unaudited)

   

Year Ended

04/30/23

   

Year Ended

04/30/22

   

Year Ended

04/30/21

   

Period from

01/01/20

to 04/30/20

   

Year Ended

12/31/19

   

Year Ended

12/31/18

 
 
                 

Net asset value, beginning of period

                 $ 8.83     $ 9.12     $ 15.31     $ 10.73     $ 12.33     $ 10.20     $ 13.07  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income (loss)(a)

      0.05       0.04       0.05       0.04       (0.05     0.03       0.04  

Net realized and unrealized gain (loss)

      (0.64     (0.25     (3.37     4.60       (1.55     2.12       (2.28
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) from investment operations

      (0.59     (0.21     (3.32     4.64       (1.60     2.15       (2.24
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributions(b)

               

From net investment income

      (0.09     (0.08     (0.07     (0.06           (0.02     (0.03

From net realized gain

                  (2.80                       (0.60
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions

      (0.09     (0.08     (2.87     (0.06           (0.02     (0.63
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net asset value, end of period

    $ 8.15     $ 8.83     $ 9.12     $ 15.31     $ 10.73     $ 12.33     $ 10.20  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Return(c)

               

Based on net asset value

      (6.81 )%(d)      (2.23 )%      (25.72 )%      43.35     (12.98 )%(d)      21.14     (17.30 )% 
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ratios to Average Net Assets(e)

               

Total expenses

      2.06 %(f)      2.27     1.75     1.59     1.77 %(f)(g)      1.73     1.73
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed

      1.36 %(f)      1.36     1.56     1.59     1.77 %(f)(g)      1.73     1.72
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income (loss)

      1.09 %(f)      0.50     0.38     0.31     (1.21 )%(f)      0.27     0.30
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Supplemental Data

               

Net assets, end of period (000)

    $ 325     $ 413     $ 631     $ 982     $ 844     $ 1,115     $ 2,062  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio turnover rate

      29 %(h)      58     139 %(h)      81 %(h)      13     55     44
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(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) 

Not annualized.

(e) 

Excludes fees and expenses incurred indirectly as a result of investments in underlying funds.

(f) 

Annualized.

(g) 

Audit, printing and tax costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses and total expenses after fees waived and/or reimbursed would have been 1.94%.

(h) 

Excludes underlying investments in total return swaps.

See notes to financial statements.

 

 

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Notes to Financial Statements (unaudited)

 

1.

ORGANIZATION

BlackRock Emerging Markets Fund, Inc., BlackRock Funds VII, Inc. (each, a “Corporation” or collectively, the “Corporations”) and BlackRock Unconstrained Equity Fund are each registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as open-end management investment companies. The Corporations are each organized as a Maryland corporation and BlackRock Unconstrained Equity Fund is organized as a Delaware statutory trust. BlackRock Sustainable Emerging Markets Equity Fund is a series of BlackRock Funds VII, Inc. The following are referred to herein collectively as the “Funds” or individually as a “Fund”:

 

       
Registrant Name   Fund Name    Herein Referred To As    Diversification
Classification

BlackRock Emerging Markets Fund, Inc.

  BlackRock Emerging Markets Fund, Inc.    Emerging Markets    Diversified

BlackRock Unconstrained Equity Fund

  BlackRock Unconstrained Equity Fund    Unconstrained Equity    Non-diversified

BlackRock Funds VII, Inc.

  BlackRock Sustainable Emerging Markets Equity Fund    Sustainable Emerging Markets Equity    Diversified

 

Each Fund offers multiple classes of shares. All classes of shares have identical voting, dividend, liquidation and other rights and are subject to the same terms and conditions, except that certain classes bear expenses related to the shareholder servicing and distribution of such shares. Institutional and Class K Shares are sold only to certain eligible investors. Investor A, Investor C and Class R Shares bear certain expenses related to shareholder servicing of such shares, and Investor C and Class R Shares also bear certain expenses related to the distribution of such shares. Investor A and Investor C Shares are generally available through financial intermediaries. Class R Shares are sold only to certain employer-sponsored retirement plans. Each class has exclusive voting rights with respect to matters relating to its shareholder servicing and distribution expenditures (except that Investor C shareholders may vote on material changes to the Investor A Shares distribution and service plan).

 

 

 
Share Class   Initial Sales Charge      CDSC     Conversion Privilege  

 

 

Institutional, Class K and Class R Shares

    No        No       None  

Investor A Shares

    Yes        No (a)      None  

Investor C Shares

    No        Yes (b)      To Investor A Shares after approximately 8 years  

 

 

 

  (a) 

Investor A Shares may be subject to a contingent deferred sales charge (“CDSC”) for certain redemptions where no initial sales charge was paid at the time of purchase.

 
  (b) 

A CDSC of 1.00% is assessed on certain redemptions of Investor C Shares made within one year after purchase.

 

The Board of Directors of Emerging Markets and Sustainable Emerging Markets Equity and the Board of Trustees of Unconstrained Equity are collectively referred to throughout this report as the “Board of Directors” or the “Board,” and the directors/trustees thereof are collectively referred to throughout this report as “Directors”.

The Funds, together with certain other registered investment companies advised by BlackRock Advisors, LLC (the “Manager”) or its affiliates, are included in a complex of funds referred to as the BlackRock Multi-Asset Complex.

 

2.

SIGNIFICANT ACCOUNTING POLICIES

The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. Below is a summary of significant accounting policies:

Investment Transactions and Income Recognition: For financial reporting purposes, investment transactions are recorded on the dates the transactions are executed. Realized gains and losses on investment transactions are determined using the specific identification method. Dividend income and capital gain distributions, if any, are recorded on the ex-dividend dates. Non-cash dividends, if any, are recorded on the ex-dividend dates at fair value. Dividends from foreign securities where the ex-dividend dates may have passed are subsequently recorded when the Funds are informed of the ex-dividend dates. Under the applicable foreign tax laws, a withholding tax at various rates may be imposed on capital gains, dividends and interest. Upon notification from issuers, a portion of the dividend income received from a real estate investment trust may be redesignated as a reduction of cost of the related investment and/or realized gain. Interest income, including amortization and accretion of premiums and discounts on debt securities, is recognized daily on an accrual basis. Income, expenses and realized and unrealized gains and losses are allocated daily to each class based on its relative net assets.

Foreign Currency Translation: Each Fund’s books and records are maintained in U.S. dollars. Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates determined as of the close of trading on the New York Stock Exchange (“NYSE”). Purchases and sales of investments are recorded at the rates of exchange prevailing on the respective dates of such transactions. Generally, when the U.S. dollar rises in value against a foreign currency, the investments denominated in that currency will lose value; the opposite effect occurs if the U.S. dollar falls in relative value.

Each Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of investments for financial reporting purposes. Accordingly, the effects of changes in exchange rates on investments are not segregated in the Statements of Operations from the effects of changes in market prices of those investments, but are included as a component of net realized and unrealized gain (loss) from investments. Each Fund reports realized currency gains (losses) on foreign currency related transactions as components of net realized gain (loss) for financial reporting purposes, whereas such components are generally treated as ordinary income for U.S. federal income tax purposes.

ForeignTaxes: The Funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, capital gains on investments, or certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which each Fund invests. These foreign taxes, if any, are paid by each Fund and are reflected in its Statements of Operations as follows: foreign taxes withheld at source are presented as a

 

 

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Notes to Financial Statements (unaudited) (continued)

 

reduction of income, foreign taxes on securities lending income are presented as a reduction of securities lending income, foreign taxes on stock dividends are presented as “Foreign taxes withheld”, and foreign taxes on capital gains from sales of investments and foreign taxes on foreign currency transactions are included in their respective net realized gain (loss) categories. Foreign taxes payable or deferred as of October 31, 2023, if any, are disclosed in the Statements of Assets and Liabilities.

The Funds file withholding tax reclaims in certain jurisdictions to recover a portion of amounts previously withheld. The Funds may record a reclaim receivable based on collectability, which includes factors such as the jurisdiction’s applicable laws, payment history and market convention. The Statements of Operations include tax reclaims recorded as well as professional and other fees, if any, associated with recovery of foreign withholding taxes.

Bank Overdraft: Certain Funds had outstanding cash disbursements exceeding deposited cash amounts at the custodian during the reporting period and as of the report date. The Funds are obligated to repay the custodian for any overdraft, including any related costs or expenses, where applicable. For financial reporting purposes, overdraft fees, if any, are included in interest expense in the Statements of Operations.

Collateralization: If required by an exchange or counterparty agreement, the Funds may be required to deliver/deposit cash and/or securities to/with an exchange, or broker-dealer or custodian as collateral for certain investments.

Distributions: Distributions paid by the Funds are recorded on the ex-dividend dates. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP.

Indemnifications: In the normal course of business, a Fund enters into contracts that contain a variety of representations that provide general indemnification. A Fund’s maximum exposure under these arrangements is unknown because it involves future potential claims against a Fund, which cannot be predicted with any certainty.

Other: Expenses directly related to a Fund or its classes are charged to that Fund or the applicable class. Expenses directly related to the Funds and other shared expenses prorated to the Funds are allocated daily to each class based on their relative net assets or other appropriate methods. Other operating expenses shared by several funds, including other funds managed by the Manager, are prorated among those funds on the basis of relative net assets or other appropriate methods.

The Funds have an arrangement with their custodian whereby credits are earned on uninvested cash balances, which could be used to reduce custody fees and/or overdraft charges. The Funds may incur charges on overdrafts, subject to certain conditions.

 

3.

INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS

Investment Valuation Policies: Each Fund’s investments are valued at fair value (also referred to as “market value” within the financial statements) each day that the Fund is open for business and, for financial reporting purposes, as of the report date. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Board has approved the designation of each Fund’s Manager as the valuation designee for each Fund. Each Fund determines the fair values of its financial instruments using various independent dealers or pricing services under the Manager’s policies. If a security’s market price is not readily available or does not otherwise accurately represent the fair value of the security, the security will be valued in accordance with the Manager’s policies and procedures as reflecting fair value. The Manager has formed a committee (the “Valuation Committee”) to develop pricing policies and procedures and to oversee the pricing function for all financial instruments, with assistance from other BlackRock pricing committees.

Fair Value Inputs and Methodologies: The following methods and inputs are used to establish the fair value of each Fund’s assets and liabilities:

 

   

Equity investments traded on a recognized securities exchange are valued at that day’s official closing price, as applicable, on the exchange where the stock is primarily traded. Equity investments traded on a recognized exchange for which there were no sales on that day may be valued at the last available bid (long positions) or ask (short positions) price.

 

   

Investments in open-end U.S. mutual funds (including money market funds) are valued at that day’s published net asset value (“NAV”).

 

   

The Funds value their investment in SL Liquidity Series, LLC, Money Market Series (the “Money Market Series”) at fair value, which is ordinarily based upon their pro rata ownership in the underlying fund’s net assets.

 

   

Futures contracts are valued based on that day’s last reported settlement or trade price on the exchange where the contract is traded.

 

   

Swap agreements are valued utilizing quotes received daily by independent pricing services or through brokers, which are derived using daily swap curves and models that incorporate a number of market data factors, such as discounted cash flows, trades and values of the underlying reference instruments.

Generally, trading in foreign instruments is substantially completed each day at various times prior to the close of trading on the NYSE. Each business day, the Funds use current market factors supplied by independent pricing services to value certain foreign instruments (“Systematic Fair Value Price”). The Systematic Fair Value Price is designed to value such foreign securities at fair value as of the close of trading on the NYSE, which follows the close of the local markets.

If events (e.g., market volatility, company announcement or a natural disaster) occur that are expected to materially affect the value of such investment, or in the event that application of these methods of valuation results in a price for an investment that is deemed not to be representative of the market value of such investment, or if a price is not available, the investment will be valued by the Valuation Committee in accordance with the Manager’s policies and procedures as reflecting fair value (“Fair Valued Investments”). The fair valuation approaches that may be used by the Valuation Committee include market approach, income approach and cost approach. Valuation techniques such as discounted cash flow, use of market comparables and matrix pricing are types of valuation approaches and are typically used in determining fair value. When determining the price for Fair Valued Investments, the Valuation Committee seeks to determine the price that each Fund might reasonably expect to receive or pay from

 

 

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Notes to Financial Statements (unaudited) (continued)

 

the current sale or purchase of that asset or liability in an arm’s-length transaction. Fair value determinations shall be based upon all available factors that the Valuation Committee deems relevant and consistent with the principles of fair value measurement.

For investments in equity or debt issued by privately held companies or funds (“Private Company” or collectively, the “Private Companies”) and other Fair Valued Investments, the fair valuation approaches that are used by the Valuation Committee and third-party pricing services utilized by the Valuation Committee include one or a combination of, but not limited to, the following inputs.

 

 

    Standard Inputs Generally Considered By The Valuation Committee And Third-Party Pricing Services

 

Market approach

  (i)   recent market transactions, including subsequent rounds of financing, in the underlying investment or comparable issuers;
  (ii)   recapitalizations and other transactions across the capital structure; and
  (iii)   market multiples of comparable issuers.

 

Income approach

  (i)   future cash flows discounted to present and adjusted as appropriate for liquidity, credit, and/or market risks;
  (ii)   quoted prices for similar investments or assets in active markets; and
  (iii)   other risk factors, such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, recovery rates, liquidation amounts and/or default rates.

 

Cost approach

  (i)   audited or unaudited financial statements, investor communications and financial or operational metrics issued by the Private Company;
  (ii)   changes in the valuation of relevant indices or publicly traded companies comparable to the Private Company;
  (iii)   relevant news and other public sources; and
  (iv)   known secondary market transactions in the Private Company’s interests and merger or acquisition activity in companies comparable to the Private Company.

 

Investments in series of preferred stock issued by Private Companies are typically valued utilizing market approach in determining the enterprise value of the company. Such investments often contain rights and preferences that differ from other series of preferred and common stock of the same issuer. Enterprise valuation techniques such as an option pricing model (“OPM”), a probability weighted expected return model (“PWERM”), current value method or a hybrid of those techniques are used as deemed appropriate under the circumstances. The use of these valuation techniques involve a determination of the exit scenarios of the investment in order to appropriately allocate the enterprise value of the company among the various parts of its capital structure.

The Private Companies are not subject to the public company disclosure, timing, and reporting standards applicable to other investments held by a Fund. Typically, the most recently available information by a Private Company is as of a date that is earlier than the date a Fund is calculating its NAV. This factor may result in a difference between the value of the investment and the price a Fund could receive upon the sale of the investment.

Fair Value Hierarchy: Various inputs are used in determining the fair value of financial instruments. These inputs to valuation techniques are categorized into a fair value hierarchy consisting of three broad levels for financial reporting purposes as follows:

 

   

Level 1 – Unadjusted price quotations in active markets/exchanges for identical assets or liabilities that each Fund has the ability to access;

 

   

Level 2 – Other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market–corroborated inputs); and

 

   

Level 3 – Unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Valuation Committee’s assumptions used in determining the fair value of financial instruments).

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Investments classified within Level 3 have significant unobservable inputs used by the Valuation Committee in determining the price for Fair Valued Investments. Level 3 investments include equity or debt issued by Private Companies that may not have a secondary market and/or may have a limited number of investors. The categorization of a value determined for financial instruments is based on the pricing transparency of the financial instruments and is not necessarily an indication of the risks associated with investing in those securities.

As of October 31, 2023, certain investments of Emerging Markets and Unconstrained Equity were fair valued using NAV as a practical expedient as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

 

4.

SECURITIES AND OTHER INVESTMENTS

Preferred Stocks: Preferred stock has a preference over common stock in liquidation (and generally in receiving dividends as well), but is subordinated to the liabilities of the issuer in all respects. As a general rule, the market value of preferred stock with a fixed dividend rate and no conversion element varies inversely with interest rates and perceived credit risk, while the market price of convertible preferred stock generally also reflects some element of conversion value. Because preferred stock is junior to debt securities and other obligations of the issuer, deterioration in the credit quality of the issuer will cause greater changes in the value of a preferred stock than in a more senior debt security with similar stated yield characteristics. Unlike interest payments on debt securities, preferred stock dividends are payable only if declared by the issuer’s board of directors. Preferred stock also may be subject to optional or mandatory redemption provisions.

 

 

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Notes to Financial Statements (unaudited) (continued)

 

Securities Lending: Certain Funds may lend their securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Funds collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received by each Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current market value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Fund and any additional required collateral is delivered to the Fund, or excess collateral returned by the Fund, on the next business day. During the term of the loan, the Funds are entitled to all distributions made on or in respect of the loaned securities, but do not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.

As of period end, any securities on loan were collateralized by cash and/or U.S. Government obligations. Cash collateral invested by the securities lending agent, BlackRock Investment Management, LLC (“BIM”), if any, is disclosed in the Schedules of Investments. Any non-cash collateral received cannot be sold, re-invested or pledged by the Fund, except in the event of borrower default. The securities on loan, if any, are disclosed in the Funds’ Schedules of Investments. The market value of any securities on loan and the value of related collateral, if any, are shown separately in the Statements of Assets and Liabilities as a component of investments at value – unaffiliated and collateral on securities loaned, respectively.

Securities lending transactions are entered into by the Funds under Master Securities Lending Agreements (each, an “MSLA”), which provide the right, in the event of default (including bankruptcy or insolvency), for the non-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, the Funds, as lender, would offset the market value of the collateral received against the market value of the securities loaned. When the value of the collateral is greater than that of the market value of the securities loaned, the lender is left with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, absent an event of default, the borrower can resell or re-pledge the loaned securities, and the Funds can reinvest cash collateral received in connection with loaned securities. Upon an event of default, the parties’ obligations to return the securities or collateral to the other party are extinguished, and the parties can resell or re-pledge the loaned securities or the collateral received in connection with the loaned securities in order to satisfy the defaulting party’s net payment obligation for all transactions under the MSLA. The defaulting party remains liable for any deficiency.

As of period end, the following table is a summary of the Funds’ securities on loan by counterparty which are subject to offset under an MSLA:

 

 

 

Fund Name/Counterparty

   

Securities

Loaned at Value

 

 

   

Cash Collateral

Received

 

(a)  

   

Non-Cash Collateral

Received, at Fair Value

 

(a) 

   

Net

Amount

 

 

 

 

Emerging Markets

       

BofA Securities, Inc.

  $ 529,020     $ (529,020   $     $  

Citigroup Global Markets, Inc.

    414,834       (414,834            

Credit Suisse Securities (USA) LLC

    116,441       (116,441            

Goldman Sachs & Co. LLC

    16,057,507       (16,057,507            

J.P. Morgan Securities LLC

    1,081       (1,081            

Morgan Stanley

    37,772,773       (37,772,773            

National Financial Services LLC

    323,718       (323,718            

SG Americas Securities LLC

    27,453,408       (27,453,408            
 

 

 

   

 

 

   

 

 

   

 

 

 
  $ 82,668,782     $ (82,668,782   $     $  
 

 

 

   

 

 

   

 

 

   

 

 

 

Unconstrained Equity

       

Goldman Sachs & Co. LLC

  $ 10,015,974     $ (10,015,974   $     $  
 

 

 

   

 

 

   

 

 

   

 

 

 

 

  (a) 

Collateral received, if any, in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by each Fund is disclosed in the Fund’s Statements of Assets and Liabilities.

 

The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Funds benefit from a borrower default indemnity provided by BIM. BIM’s indemnity allows for full replacement of the securities loaned to the extent the collateral received does not cover the value on the securities loaned in the event of borrower default. Each Fund could incur a loss if the value of an investment purchased with cash collateral falls below the market value of loaned securities or if the value of an investment purchased with cash collateral falls below the value of the original cash collateral received. Such losses are borne entirely by the Funds.

 

5.

DERIVATIVE FINANCIAL INSTRUMENTS

The Funds engage in various portfolio investment strategies using derivative contracts both to increase the returns of the Funds and/or to manage their exposure to certain risks such as credit risk, equity risk, interest rate risk, foreign currency exchange rate risk, commodity price risk or other risks (e.g., inflation risk). Derivative financial instruments categorized by risk exposure are included in the Schedules of Investments. These contracts may be transacted on an exchange or over-the-counter (“OTC”).

Futures Contracts: Futures contracts are purchased or sold to gain exposure to, or manage exposure to, changes in interest rates (interest rate risk) and changes in the value of equity securities (equity risk) or foreign currencies (foreign currency exchange rate risk).

Futures contracts are exchange-traded agreements between the Funds and a counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and on a specified date. Depending on the terms of a contract, it is settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash amount on the settlement date. Upon entering into a futures contract, the Funds are required to deposit initial margin with the broker in the form of cash or securities in

 

 

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Notes to Financial Statements (unaudited) (continued)

 

an amount that varies depending on a contract’s size and risk profile. The initial margin deposit must then be maintained at an established level over the life of the contract. Amounts pledged, which are considered restricted, are included in cash pledged for futures contracts in the Statements of Assets and Liabilities.

Securities deposited as initial margin are designated in the Schedules of Investments and cash deposited, if any, are shown as cash pledged for futures contracts in the Statements of Assets and Liabilities. Pursuant to the contract, the Funds agree to receive from or pay to the broker an amount of cash equal to the daily fluctuation in market value of the contract (“variation margin”). Variation margin is recorded as unrealized appreciation (depreciation) and, if any, shown as variation margin receivable (or payable) on futures contracts in the Statements of Assets and Liabilities. When the contract is closed, a realized gain or loss is recorded in the Statements of Operations equal to the difference between the notional amount of the contract at the time it was opened and the notional amount at the time it was closed. The use of futures contracts involves the risk of an imperfect correlation in the movements in the price of futures contracts and interest rates, foreign currency exchange rates or underlying assets.

Swaps: Swap contracts are entered into to manage exposure to issuers, markets and securities. Such contracts are agreements between the Funds and a counterparty to make periodic net payments on a specified notional amount or a net payment upon termination. Swap agreements are privately negotiated in the OTC market and may be entered into as a bilateral contract (“OTC swaps”) or centrally cleared (“centrally cleared swaps”).

For OTC swaps, any upfront premiums paid and any upfront fees received are shown as swap premiums paid and swap premiums received, respectively, in the Statements of Assets and Liabilities and amortized over the term of the contract. The daily fluctuation in market value is recorded as unrealized appreciation (depreciation) on OTC Swaps in the Statements of Assets and Liabilities. Payments received or paid are recorded in the Statements of Operations as realized gains or losses, respectively. When an OTC swap is terminated, a realized gain or loss is recorded in the Statements of Operations equal to the difference between the proceeds from (or cost of) the closing transaction and the Funds’ basis in the contract, if any. Generally, the basis of the contract is the premium received or paid.

In a centrally cleared swap, immediately following execution of the swap contract, the swap contract is novated to a central counterparty (the “CCP”) and the CCP becomes the Funds’ counterparty on the swap. Each Fund is required to interface with the CCP through the broker. Upon entering into a centrally cleared swap, each Fund is required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on the size and risk profile of the particular swap. Securities deposited as initial margin are designated in the Schedules of Investments and cash deposited is shown as cash pledged for centrally cleared swaps in the Statements of Assets and Liabilities. Amounts pledged, which are considered restricted cash, are included in cash pledged for centrally cleared swaps in the Statements of Assets and Liabilities. Pursuant to the contract, each Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in market value of the contract (“variation margin”). Variation margin is recorded as unrealized appreciation (depreciation) and shown as variation margin receivable (or payable) on centrally cleared swaps in the Statements of Assets and Liabilities. Payments received from (paid to) the counterparty are amortized over the term of the contract and recorded as realized gains (losses) in the Statements of Operations, including those at termination.

 

   

Total return swaps — Total return swaps are entered into to obtain exposure to a security or market without owning such security or investing directly in such market or to exchange the risk/return of one security or market (e.g., fixed-income) with another security or market (e.g., equity or commodity prices) (equity risk, commodity price risk and/or interest rate risk).

Total return swaps are agreements in which there is an exchange of cash flows whereby one party commits to make payments based on the total return (distributions plus capital gains/losses) of an underlying instrument, or basket of underlying instruments, in exchange for fixed or floating rate interest payments. If the total return of the instrument(s) or index underlying the transaction exceeds or falls short of the offsetting fixed or floating interest rate obligation, the Funds receive payment from or make a payment to the counterparty.

Certain total return swaps are designed to function as a portfolio of direct investments in long and short equity positions. This means that the Fund has the ability to trade in and out of these long and short positions within the swap and will receive the economic benefits and risks equivalent to direct investment in these positions, subject to certain adjustments due to events related to the counterparty. Benefits and risks include capital appreciation (depreciation), corporate actions and dividends received and paid, all of which are reflected in the swap’s market value. The market value also includes interest charges and credits (“financing fees”) related to the notional values of the long and short positions and cash balances within the swap. These interest charges and credits are based on a specified benchmark rate plus or minus a specified spread determined based upon the country and/or currency of the positions in the portfolio.

Positions within the swap and financing fees are reset periodically. During a reset, any unrealized appreciation (depreciation) on positions and accrued financing fees become available for cash settlement between the Funds and the counterparty. The amounts that are available for cash settlement are recorded as realized gains or losses in the Statements of Operations. Cash settlement in and out of the swap may occur at a reset date or any other date, at the discretion of the Funds and the counterparty, over the life of the agreement. Certain swaps have no stated expiration and can be terminated by either party at any time.

Swap transactions involve, to varying degrees, elements of interest rate, credit and market risks in excess of the amounts recognized in the Statements of Assets and Liabilities. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreements may default on its obligation to perform or disagree as to the meaning of the contractual terms in the agreements, and that there may be unfavorable changes in interest rates and/or market values associated with these transactions.

Master Netting Arrangements: In order to define its contractual rights and to secure rights that will help it mitigate its counterparty risk, a Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs certain OTC derivatives and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, the Fund may, under certain circumstances, offset with the counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of default including the bankruptcy or insolvency of the counterparty. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against the right of offset in bankruptcy, insolvency or other events.

 

 

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Notes to Financial Statements (unaudited) (continued)

 

Collateral Requirements: For derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by netting the mark-to-market amount for each transaction under such agreement and comparing that amount to the value of any collateral currently pledged by the Funds and the counterparty.

Cash collateral that has been pledged to cover obligations of the Funds and cash collateral received from the counterparty, if any, is reported separately in the Statements of Assets and Liabilities as cash pledged as collateral and cash received as collateral, respectively. Non-cash collateral pledged by the Funds, if any, is noted in the Schedules of Investments. Generally, the amount of collateral due from or to a counterparty is subject to a certain minimum transfer amount threshold before a transfer is required, which is determined at the close of business of the Funds. Any additional required collateral is delivered to/pledged by the Funds on the next business day. Typically, the counterparty is not permitted to sell, re-pledge or use cash and non-cash collateral it receives. A Fund generally agrees not to use non-cash collateral that it receives but may, absent default or certain other circumstances defined in the underlying ISDA Master Agreement, be permitted to use cash collateral received. In such cases, interest may be paid pursuant to the collateral arrangement with the counterparty. To the extent amounts due to the Funds from the counterparties are not fully collateralized, each Fund bears the risk of loss from counterparty non-performance. Likewise, to the extent the Funds have delivered collateral to a counterparty and stand ready to perform under the terms of their agreement with such counterparty, each Fund bears the risk of loss from a counterparty in the amount of the value of the collateral in the event the counterparty fails to return such collateral. Based on the terms of agreements, collateral may not be required for all derivative contracts.

For financial reporting purposes, the Funds do not offset derivative assets and derivative liabilities that are subject to netting arrangements, if any, in the Statements of Assets and Liabilities.

 

6.

INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Advisory: Each Fund entered into an Investment Advisory Agreement with the Manager, the Funds’ investment adviser and an indirect, wholly-owned subsidiary of BlackRock, Inc. (“BlackRock”), to provide investment advisory and administrative services. The Manager is responsible for the management of each Fund’s portfolio and provides the personnel, facilities, equipment and certain other services necessary to the operations of each Fund.

For such services, each Fund pays the Manager a monthly fee at an annual rate equal to the following percentages of the average daily value of each Fund’s net assets:

 

   
    Investment Advisory Fees  
 

 

 

 
Average Daily Net Assets   Emerging Markets     Unconstrained Equity     Sustainable Emerging Markets Equity  

First $1 billion

    0.81     0.80     0.60

$1 billion — $3 billion

    0.76       0.75       0.56  

$3 billion — $5 billion

    0.73       0.72       0.54  

$5 billion — $10 billion

    0.70       0.70       0.52  

Greater than $10 billion

    0.69       0.68       0.51  

With respect to Emerging Markets and Sustainable Emerging Markets Equity, the Manager entered into separate sub-advisory agreements with BlackRock Asset Management North Asia Limited (“BAMNA”) and with respect to Emerging Markets, Unconstrained Equity and Sustainable Emerging Markets Equity, the Manager entered into sub-advisory agreements with BlackRock International Limited (“BIL”), each an affiliate of the Manager. The Manager pays BAMNA and BIL for services they provide for that portion of each Fund for which BAMNA and BIL, as applicable, acts as sub-adviser, a monthly fee that is equal to a percentage of the investment advisory fees paid by each Fund to the Manager.

Service and Distribution Fees: The Funds entered into a Distribution Agreement and Distribution and Service Plans with BlackRock Investments, LLC (“BRIL”), an affiliate of the Manager. Pursuant to the Distribution and Service Plan and in accordance with Rule 12b-1 under the 1940 Act, each Fund pays BRIL ongoing service and distribution fees. The fees are accrued daily and paid monthly at annual rates based upon the average daily net assets of the relevant share class of each Fund as follows:

 

       
    Emerging Markets     Unconstrained Equity     Sustainable Emerging Markets Equity  
 

 

 

   

 

 

   

 

 

 
Share Class   Service Fees     Distribution Fees     Service Fees     Distribution Fees     Service Fees     Distribution Fees  

Investor A

    0.25     N/A       0.25     N/A       0.25     N/A  

Investor C

    0.25       0.75     0.25       0.75     N/A       N/A  

Class R

    N/A       N/A       0.25       0.25       0.25       0.25

BRIL and broker-dealers, pursuant to sub-agreements with BRIL, provide shareholder servicing and distribution services to the Funds. The ongoing service and/or distribution fee compensates/reimburses BRIL and each broker-dealer for providing shareholder servicing and/or distribution related services to shareholders.

For the six months ended October 31, 2023, the following table shows the class specific service and distribution fees borne directly by each share class of each Fund:

 

 

 
Fund Name    Investor A     Investor C     Class R     Total  

 

 

Emerging Markets

   $ 379,455     $ 46,935     $     $ 426,390  

Unconstrained Equity

     242,522       10,051       757       253,330  

Sustainable Emerging Markets Equity

     54,580             982       55,562  

 

 

Transfer Agent: Pursuant to written agreements, certain financial intermediaries, some of which may be affiliates, provide the Funds with sub-accounting, recordkeeping, sub-transfer agency and other administrative services with respect to servicing of underlying investor accounts. For these services, these entities receive an asset-based fee or an annual fee per shareholder account, which will vary depending on share class and/or net assets. For the six months ended October 31, 2023, the Funds did not pay any amounts to affiliates in return for these services.

 

 

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Notes to Financial Statements (unaudited) (continued)

 

The Manager maintains a call center that is responsible for providing certain shareholder services to the Funds. Shareholder services include responding to inquiries and processing purchases and sales based upon instructions from shareholders. For the six months ended October 31, 2023, each Fund reimbursed the Manager the following amounts for costs incurred in running the call center, which are included in transfer agent — class specific in the Statements of Operations:

 

 

 
Fund Name    Institutional        Investor A        Investor C        Class K        Class R        Total  

 

 

Emerging Markets

   $ 4,095        $ 5,846        $ 893        $ 1,013        $        $ 11,847  

Unconstrained Equity

     212          2,183                            6          2,401  

Sustainable Emerging Markets Equity

     3,065          1,755                   12          15          4,847  

 

 

For the six months ended October 31, 2023, the following table shows the class specific transfer agent fees borne directly by each share class of each Fund:

 

 

 
Fund Name    Institutional        Investor A        Investor C        Class K        Class R        Total  

 

 

Emerging Markets

   $ 2,994,930        $ 393,452        $ 12,099        $ 21,330        $        $ 3,421,811  

Unconstrained Equity

     72,436          74,358          1,639                   543          148,976  

Sustainable Emerging Markets Equity

     30,479          34,980                   73          766          66,298  

 

 

Other Fees: For the six months ended October 31, 2023, affiliates earned underwriting discounts, direct commissions and dealer concessions on sales of each Fund’s Investor A Shares as follows:

 

 

 
Fund Name   Investor A  

 

 

Emerging Markets

  $ 1,673  

Unconstrained Equity

    2,364  

Sustainable Emerging Markets Equity

    54  

 

 

For the six months ended October 31, 2023, affiliates received CDSCs as follows:

 

 

 
Fund Name    Investor A        Investor C  

 

 

Emerging Markets

   $ 756        $ 290  

Unconstrained Equity

     107          197  

 

 

Expense Limitations, Waivers and Reimbursements: With respect to each Fund, the Manager contractually agreed to waive its investment advisory fees by the amount of investment advisory fees each Fund pays to the Manager indirectly through its investment in affiliated money market funds (the “affiliated money market fund waiver”) through June 30, 2025. These contractual agreements may be terminated upon 90 days’ notice by a majority of the directors who are not “interested persons” of a Fund, as defined in the 1940 Act (“Independent Directors”), or by a vote of a majority of the outstanding voting securities of a Fund. With respect to each Fund, the amount of waivers and/or reimbursements of fees and expenses made pursuant to the expense limitation described below will be reduced by the amount of the affiliated money market fund waiver. These amounts are included in fees waived and/or reimbursed by the Manager in the Statements of Operations. For the six months ended October 31, 2023, the amounts waived were as follows:

 

 

 
Fund Name    Fees Waived and/or Reimbursed
by the Manager
 

 

 

Emerging Markets

   $ 109,123  

Unconstrained Equity

     956  

Sustainable Emerging Markets Equity

     422  

 

 

With respect to each Fund, the Manager has contractually agreed to waive its investment advisory fee with respect to any portion of each Fund’s assets invested in affiliated equity and fixed-income mutual funds and affiliated exchange-traded funds that have a contractual management fee through June 30, 2025. These contractual agreements may be terminated upon 90 days’ notice by a majority of the Independent Directors or by a vote of a majority of the outstanding voting securities of a Fund. For the six months ended October 31, 2023, there were no fees waived and/or reimbursed by the Manager pursuant to these arrangements.

With respect to each Fund, the Manager contractually agreed to waive and/or reimburse fees or expenses in order to limit expenses, excluding interest expense, dividend expense, tax expense, acquired fund fees and expenses, and certain other fund expenses, which constitute extraordinary expenses not incurred in the ordinary course of each Fund’s business (“expense limitation”). The expense limitations as a percentage of average daily net assets are as follows:

 

 

 
Fund Name    Institutional      Investor A      Investor C      Class K      Class R    

 

 

Emerging Markets

     0.86      1.11      1.86      0.81      —%  

Unconstrained Equity

     0.95        1.20        1.95               1.45    

Sustainable Emerging Markets Equity

     0.86        1.11               0.81        1.36    

 

 

The Manager has agreed not to reduce or discontinue the contractual expense limitations through June 30, 2025, unless approved by the Board, including a majority of the

 

 

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Notes to Financial Statements (unaudited) (continued)

 

Independent Directors, or by a vote of a majority of the outstanding voting securities of a Fund. For the six months ended October 31, 2023, the Manager waived and/or reimbursed amounts as follows, which is included in fees waived and/or reimbursed by the Manager in the Statements of Operations.

 

 

 
Fund Name   

Fees Waived and/or Reimbursed

by the Manager

 

 

 

Emerging Markets

   $ 299,598  

Unconstrained Equity

     15  

Sustainable Emerging Markets Equity

     153,045  

 

 

In addition, these amounts waived and/or reimbursed by the Manager are included in transfer agent fees waived and/or reimbursed by the Manager—class specific in the Statements of Operations. For the six months ended October 31, 2023, class specific expense waivers and/or reimbursements were as follows:

 

 

    

Transfer Agent Fees Waived and/or

Reimbursed by the Manager - Class Specific

 

 

 
Fund Name    Institutional        Investor A        Investor C        Class K        Class R        Total  

 

 

Emerging Markets

   $ 2,062,038        $ 317,156        $ 9,739        $ 20,317        $        $ 2,409,250  

Unconstrained Equity

     33,761          32,602          1,195                   477          68,035  

Sustainable Emerging Markets Equity

     20,591          24,065                   72          668          45,396  

 

 

Securities Lending: The U.S. Securities and Exchange Commission (“SEC”) has issued an exemptive order which permits BIM, an affiliate of the Manager, to serve as securities lending agent for the Funds, subject to applicable conditions. As securities lending agent, BIM bears all operational costs directly related to securities lending. The Funds are responsible for expenses in connection with the investment of cash collateral received for securities on loan (the “collateral investment expenses”). The cash collateral is invested in a private investment company, Money Market Series, managed by the Manager or its affiliates. However, BIM has agreed to cap the collateral investment expenses of the Money Market Series to an annual rate of 0.04%. The investment adviser to the Money Market Series will not charge any advisory fees with respect to shares purchased by the Funds. The Money Market Series may impose a discretionary liquidity fee of up to 2% of the value withdrawn, if such fee is determined to be in the best interests of the Money Market Series. The Money Market Series seeks current income consistent with maintaining liquidity and preserving capital. Although the Money Market Series is not registered under the 1940 Act, its investments may follow the parameters of investments by a money market fund that is subject to Rule 2a-7 under the 1940 Act.

Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment expenses. Each Fund retains a portion of securities lending income and remits a remaining portion to BIM as compensation for its services as securities lending agent.

Pursuant to the current securities lending agreement, each Fund retains 82% of securities lending income (which excludes collateral investment expenses), and this amount retained can never be less than 70% of the total of securities lending income plus the collateral investment expenses.

In addition, commencing the business day following the date that the aggregate securities lending income earned across the BlackRock Multi-Asset Complex in a calendar year exceeds a specified threshold, each Fund, pursuant to the securities lending agreement, will retain for the remainder of that calendar year securities lending income in an amount equal to 85% of securities lending income (which excludes collateral investment expenses), and this amount retained can never be less than 70% of the total of securities lending income plus the collateral investment expenses.

The share of securities lending income earned by each Fund is shown as securities lending income — affiliated — net in the Statements of Operations. For the six months ended October 31, 2023, each Fund paid BIM the following amounts for securities lending agent services:

 

 

 
Fund Name    Amounts  

 

 

Emerging Markets

   $ 34,036  

Unconstrained Equity

     1,106  

Sustainable Emerging Markets Equity

     40  

 

 

Interfund Lending: In accordance with an exemptive order (the “Order”) from the SEC, each Fund may participate in a joint lending and borrowing facility for temporary purposes (the “Interfund Lending Program”), subject to compliance with the terms and conditions of the Order, and to the extent permitted by each Fund’s investment policies and restrictions. Sustainable Emerging Markets Equity and Unconstrained Equity are currently permitted to borrow and lend under the Interfund Lending Program. Emerging Markets is currently permitted to borrow under the Interfund Lending Program.

A lending BlackRock fund may lend in aggregate up to 15% of its net assets but may not lend more than 5% of its net assets to any one borrowing fund through the Interfund Lending Program. A borrowing BlackRock fund may not borrow through the Interfund Lending Program or from any other source more than 33 1/3% of its total assets (or any lower threshold provided for by the fund’s investment restrictions). If a borrowing BlackRock fund’s total outstanding borrowings exceed 10% of its total assets, each of its outstanding interfund loans will be subject to collateralization of at least 102% of the outstanding principal value of the loan. All interfund loans are for temporary or emergency purposes and the interest rate to be charged will be the average of the highest current overnight repurchase agreement rate available to a lending fund and the bank loan rate, as calculated according to a formula established by the Board.

During the period ended October 31, 2023, the Funds did not participate in the Interfund Lending Program.

Directors and Officers: Certain directors and/or officers of the Funds are directors and/or officers of BlackRock or its affiliates. The Funds reimburse the Manager for a portion of the compensation paid to the Funds’ Chief Compliance Officer, which is included in Directors and Officer in the Statements of Operations.

 

 

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Notes to Financial Statements (unaudited) (continued)

 

Other Transactions: The Funds may purchase securities from, or sell securities to, an affiliated fund provided the affiliation is due solely to having a common investment adviser, common officers, or common directors. For the six months ended October 31, 2023, the purchase and sale transactions and any net realized gains (losses) with affiliated funds in compliance with Rule 17a-7 under the 1940 Act were as follows:

 

 

 
Fund Name    Purchases      Sales     

Net Realized

Gain (Loss)

 

 

 

Emerging Markets

   $      $ 634,103      $ 103,539  

 

 

 

7.

PURCHASES AND SALES

For the six months ended October 31, 2023, purchases and sales of investments, excluding short-term securities, were as follows:

 

 

 
Fund Name    Purchases        Sales  

 

 

Emerging Markets

   $ 2,045,806,391        $ 2,084,208,648  

Unconstrained Equity

     183,537,931          29,130,093  

Sustainable Emerging Markets Equity

     23,492,476          27,815,917  

 

 

 

8.

INCOME TAX INFORMATION

It is each Fund’s policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies, and to distribute substantially all of its taxable income to its shareholders. Therefore, no U.S. federal income tax provision is required.

Each Fund files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on each Fund’s U.S. federal tax returns generally remains open for a period of three years after they are filed. The statutes of limitations on each Fund’s state and local tax returns may remain open for an additional year depending upon the jurisdiction.

Management has analyzed tax laws and regulations and their application to the Funds as of October 31, 2023, inclusive of the open tax return years, and does not believe that there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.

As of April 30, 2023, the Funds had non-expiring capital loss carryforwards available to offset future realized capital gains and qualified late-year losses as follows:

 

 

 
Fund Name     

Non-Expiring

Capital Loss

Carryforwards

 

 

(a) 

    

Qualified

Late-Year

Ordinary Losses

 

 

(b) 

 

 

Emerging Markets

   $ (900,478,460    $  

Unconstrained Equity

     (12,445,280      (442,038

Sustainable Emerging Markets Equity

     (14,550,278       

 

 

 

  (a) 

Amounts available to offset future realized capital gains.

 
  (b) 

The Fund has elected to defer these qualified late-year losses and recognize such losses in the next taxable year.

 

As of October 31, 2023, gross unrealized appreciation and depreciation based on cost of investments (including short positions and derivatives, if any) for U.S. federal income tax purposes were as follows:

 

 

 
Fund Name    Tax Cost       

Gross Unrealized

Appreciation

      

Gross Unrealized

Depreciation

      

Net Unrealized

Appreciation
(Depreciation)

 

 

 

Emerging Markets

   $ 5,158,390,663        $ 283,272,779        $ (776,544,050      $ (493,271,271

Unconstrained Equity

     381,573,391          50,772,444          (24,384,911        26,387,533  

Sustainable Emerging Markets Equity

     77,351,538          10,757,232          (13,580,547        (2,823,315

 

 

 

9.

BANK BORROWINGS

Each Fund, along with certain other funds managed by the Manager and its affiliates (“Participating Funds”), is party to a 364-day, $2.50 billion credit agreement with a group of lenders. Under this agreement, the Funds may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Funds, can borrow up to an aggregate commitment amount of $1.75 billion at any time outstanding, subject to asset coverage and other limitations as specified in the agreement. The credit agreement has the following terms: a fee of 0.10% per annum on unused commitment amounts and interest at a rate equal to the higher of (a) Overnight Bank Funding Rate (“OBFR”) (but, in any event, not less than 0.00%) on the date the loan is made plus 0.80% per annum, (b) the Fed Funds rate (but, in any event, not less than 0.00%) in effect from time to time plus 0.80% per annum on amounts borrowed or (c) the sum of (x) Daily Simple Secured Overnight Financing Rate (“SOFR”) (but, in any event, not less than 0.00%) on the date the loan is made plus 0.10% and (y) 0.80% per annum. The agreement expires in April 2024 unless extended or renewed. These fees were allocated among such funds based upon portions of the aggregate commitment available to them and relative net assets of Participating Funds. During the six months ended October 31, 2023, the Funds did not borrow under the credit agreement.

 

 

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Notes to Financial Statements (unaudited) (continued)

 

10.

PRINCIPAL RISKS

In the normal course of business, the Funds invest in securities or other instruments and may enter into certain transactions, and such activities subject each Fund to various risks, including among others, fluctuations in the market (market risk) or failure of an issuer to meet all of its obligations. The value of securities or other instruments may also be affected by various factors, including, without limitation: (i) the general economy; (ii) the overall market as well as local, regional or global political and/or social instability; (iii) regulation, taxation or international tax treaties between various countries; or (iv) currency, interest rate and price fluctuations. Local, regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues, recessions, or other events could have a significant impact on the Funds and their investments. Each Fund’s prospectus provides details of the risks to which each Fund is subject.

The Funds may be exposed to additional risks when reinvesting cash collateral in money market funds that do not seek to maintain a stable NAV per share of $1.00, which may be subject to discretionary liquidity fees under certain circumstances.

Market Risk: Investments in the securities of issuers domiciled in countries with emerging capital markets involve certain additional risks that do not generally apply to investments in securities of issuers in more developed capital markets, such as (i) low or nonexistent trading volume, resulting in a lack of liquidity and increased volatility in prices for such securities; (ii) uncertain national policies and social, political and economic instability, increasing the potential for expropriation of assets, confiscatory taxation, high rates of inflation or unfavorable diplomatic developments; (iii) lack of publicly available or reliable information about issuers as a result of not being subject to the same degree of regulatory requirements and accounting, auditing and financial reporting standards; and (iv) possible fluctuations in exchange rates, differing legal systems and the existence or possible imposition of exchange controls, custodial restrictions or other foreign or U.S. governmental laws or restrictions applicable to such investments.

Infectious Illness Risk: An outbreak of an infectious illness, such as the COVID-19 pandemic, may adversely impact the economies of many nations and the global economy, and may impact individual issuers and capital markets in ways that cannot be foreseen. An infectious illness outbreak may result in, among other things, closed international borders, prolonged quarantines, supply chain disruptions, market volatility or disruptions and other significant economic, social and political impacts.

Valuation Risk: The market values of equities, such as common stocks and preferred securities or equity related investments, such as futures and options, may decline due to general market conditions which are not specifically related to a particular company. They may also decline due to factors which affect a particular industry or industries. A Fund may invest in illiquid investments. An illiquid investment is any investment that a 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. A Fund may experience difficulty in selling illiquid investments in a timely manner at the price that it believes the investments are worth. Prices may fluctuate widely over short or extended periods in response to company, market or economic news. Markets also tend to move in cycles, with periods of rising and falling prices. This volatility may cause each Fund’s NAV to experience significant increases or decreases over short periods of time. If there is a general decline in the securities and other markets, the NAV of a Fund may lose value, regardless of the individual results of the securities and other instruments in which a Fund invests.

The price a Fund could receive upon the sale of any particular portfolio investment may differ from a Fund’s valuation of the investment, particularly for securities that trade in thin or volatile markets or that are valued using a fair valuation technique or a price provided by an independent pricing service. Changes to significant unobservable inputs and assumptions (i.e., publicly traded company multiples, growth rate, time to exit) due to the lack of observable inputs may significantly impact the resulting fair value and therefore a Fund’s results of operations. As a result, the price received upon the sale of an investment may be less than the value ascribed by a Fund, and a Fund could realize a greater than expected loss or lesser than expected gain upon the sale of the investment. A 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.

Counterparty Credit Risk: The Funds may be exposed to counterparty credit risk, or the risk that an entity may fail to or be unable to perform on its commitments related to unsettled or open transactions, including making timely interest and/or principal payments or otherwise honoring its obligations. The Funds manage counterparty credit risk by entering into transactions only with counterparties that the Manager believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Funds to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Funds’ exposure to market, issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Statements of Assets and Liabilities, less any collateral held by the Funds.

A derivative contract may suffer a mark-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform under the contract.

With exchange-traded futures, there is less counterparty credit risk to the Funds since the exchange or clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, credit risk is limited to failure of the clearinghouse. While offset rights may exist under applicable law, a Fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency). Additionally, credit risk exists in exchange-traded futures with respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Funds.

Geographic/Asset Class Risk: A diversified portfolio, where this is appropriate and consistent with a fund’s objectives, minimizes the risk that a price change of a particular investment will have a material impact on the NAV of a fund. The investment concentrations within each Fund’s portfolio are disclosed in its Schedule of Investments.

Certain Funds invest a substantial amount of their assets in issuers located in a single country or a limited number of countries. When a fund concentrates its investments in this manner, it assumes the risk that economic, regulatory, political and social conditions in those countries may have a significant impact on their investment performance and could affect the income from, or the value or liquidity of, the Fund’s portfolio. Unanticipated or sudden political or social developments may cause uncertainty in the markets and as a result adversely affect the Fund’s investments. Foreign issuers may not be subject to the same uniform accounting, auditing and financial reporting standards and

 

 

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Notes to Financial Statements (unaudited) (continued)

 

practices as used in the United States. Foreign securities markets may also be more volatile and less liquid than U.S. securities and may be less subject to governmental supervision not typically associated with investing in U.S. securities. Investment percentages in specific countries are presented in the Schedules of Investments.

Certain Funds invest a significant portion of their assets in securities of issuers located in the United States. A decrease in imports or exports, changes in trade regulations, 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 may also 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 which may constrain future economic growth. Circumstances could arise that could prevent the timely payment of interest or principal on U.S. government debt, such as reaching the legislative “debt ceiling.” Such non-payment would result in substantial negative consequences for the U.S. economy and the global financial system. If U.S. relations with certain countries deteriorate, it could adversely affect issuers that rely on the United States for trade. The United States has also experienced increased internal unrest and discord. If these trends were to continue, they may have an adverse impact on the U.S. economy and the issuers in which the Funds invest.

Certain Funds invest a significant portion of their assets in securities of issuers located in Europe or with significant exposure to European issuers or countries. The European financial markets have recently experienced volatility and adverse trends due to concerns about economic downturns in, or rising government debt levels of, several European countries as well as acts of war in the region. These events may spread to other countries in Europe and may affect the value and liquidity of certain of the Funds’ investments.

Responses to the financial problems by European governments, central banks and others, including austerity measures and reforms, may not work, may result in social unrest and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets and asset valuations around the world. The United Kingdom has withdrawn from the European Union, and one or more other countries may withdraw from the European Union and/or abandon the Euro, the common currency of the European Union. These events and actions have adversely affected, and may in the future adversely affect, the value and exchange rate of the Euro and may continue to significantly affect the economies of every country in Europe, including countries that do not use the Euro and non-European Union member states. The impact of these actions, especially if they occur in a disorderly fashion, is not clear but could be significant and far reaching. In addition, Russia launched a large-scale invasion of Ukraine on February 24, 2022. The extent and duration of the military action, resulting sanctions and resulting future market disruptions in the region are impossible to predict, but have been, and may continue to be, significant and have a severe adverse effect on the region, including significant negative impacts on the economy and the markets for certain securities and commodities, such as oil and natural gas, as well as other sectors.

Certain Funds invest a significant portion of their assets in securities of issuers located in Asia or with significant exposure to Asian issuers or countries. The Asian financial markets have recently experienced volatility and adverse trends due to concerns in several Asian countries regarding monetary policy, government intervention in the markets, rising government debt levels or economic downturns. These events may spread to other countries in Asia and may affect the value and liquidity of certain of the Funds’ investments.

Significant Shareholder Redemption Risk: Certain shareholders may own or manage a substantial amount of fund shares and/or hold their fund investments for a limited period of time. Large redemptions of fund shares by these shareholders may force a fund to sell portfolio securities, which may negatively impact the fund’s NAV, increase the fund’s brokerage costs, and/or accelerate the realization of taxable income/gains and cause the fund to make additional taxable distributions to shareholders.

 

11.

CAPITAL SHARE TRANSACTIONS

Transactions in capital shares for each class were as follows:

 

 

 
   

Six Months Ended

10/31/23

   

Year Ended

04/30/23

 
 

 

 

   

 

 

 
Fund Name / Share Class   Shares     Amounts     Shares     Amounts  

 

 

Emerging Markets

       

Institutional

       

Shares sold

    30,739,424     $    715,377,234       105,480,964     $     2,478,471,729  

Shares issued in reinvestment of distributions

    690,809       16,703,741       2,503,128       55,782,262  

Shares redeemed

    (33,622,023     (782,777,446     (82,484,053     (1,876,184,192
 

 

 

   

 

 

   

 

 

   

 

 

 
    (2,191,790   $ (50,696,471     25,500,039     $ 658,069,799  
 

 

 

   

 

 

   

 

 

   

 

 

 

Investor A

       

Shares sold and automatic conversion of shares

    1,225,924     $ 27,526,590       3,076,768     $ 68,340,004  

Shares issued in reinvestment of distributions

    66,280       1,540,358       263,313       5,648,239  

Shares redeemed

    (1,926,981     (43,107,330     (4,561,900     (99,442,236
 

 

 

   

 

 

   

 

 

   

 

 

 
    (634,777   $ (14,040,382     (1,221,819   $ (25,453,993
 

 

 

   

 

 

   

 

 

   

 

 

 

Investor C

       

Shares sold

    12,912     $ 240,511       82,316     $ 1,515,541  

Shares issued in reinvestment of distributions

    1,988       38,284       8,950       159,773  

Shares redeemed and automatic conversion of shares

    (75,041     (1,390,284     (235,285     (4,297,337
 

 

 

   

 

 

   

 

 

   

 

 

 
    (60,141   $ (1,111,489     (144,019   $ (2,622,023
 

 

 

   

 

 

   

 

 

   

 

 

 

 

 

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Notes to Financial Statements (unaudited) (continued)

 

 

 
   

Six Months Ended

10/31/23

   

Year Ended

04/30/23

 
 

 

 

   

 

 

 
Fund Name / Share Class (continued)   Shares     Amounts     Shares     Amounts  

 

 

Emerging Markets (continued)

       

Class K

       

Shares sold

    7,282,527     $ 168,116,441       22,191,667     $ 518,013,773  

Shares issued in reinvestment of distributions

    235,362       5,693,411       630,936       14,068,438  

Shares redeemed

    (5,381,676     (128,533,825     (13,679,312     (314,576,395
 

 

 

   

 

 

   

 

 

   

 

 

 
    2,136,213     $ 45,276,027       9,143,291     $ 217,505,816  
 

 

 

   

 

 

   

 

 

   

 

 

 
    (750,495   $ (20,572,315     33,277,492     $ 847,499,599  
 

 

 

   

 

 

   

 

 

   

 

 

 

 

 

 
   

Six Months Ended

10/31/23

   

Year Ended

04/30/23

 
 

 

 

   

 

 

 
Fund Name / Share Class   Shares     Amounts     Shares     Amounts  

 

 

Unconstrained Equity

       

Institutional

       

Shares sold

    15,590,624     $     186,179,529       2,644,394     $     29,126,438  

Shares issued in reinvestment of distributions

                622,244       5,780,641  

Shares redeemed

    (1,735,051     (20,394,129     (1,646,749     (16,789,093
 

 

 

   

 

 

   

 

 

   

 

 

 
    13,855,573     $ 165,785,400       1,619,889     $ 18,117,986  
 

 

 

   

 

 

   

 

 

   

 

 

 

Investor A

       

Shares sold and automatic conversion of shares

    831,663     $ 9,843,982       388,964     $ 4,197,940  

Shares issued in reinvestment of distributions

                2,814,066       26,114,333  

Shares redeemed

    (1,118,524     (13,153,193     (4,015,931     (40,745,900
 

 

 

   

 

 

   

 

 

   

 

 

 
    (286,861   $ (3,309,211     (812,901   $ (10,433,627
 

 

 

   

 

 

   

 

 

   

 

 

 

Investor C

       

Shares sold

    104,501     $ 1,244,591       15,898     $ 174,516  

Shares issued in reinvestment of distributions

                21,738       204,114  

Shares redeemed and automatic conversion of shares

    (40,945     (490,770     (34,138     (351,766
 

 

 

   

 

 

   

 

 

   

 

 

 
    63,556     $ 753,821       3,498     $ 26,864  
 

 

 

   

 

 

   

 

 

   

 

 

 

Class R

       

Shares sold

    7,824     $ 95,003       4,005     $ 44,573  

Shares issued in reinvestment of distributions

                3,454       32,636  

Shares redeemed

    (3,110     (37,652     (3,532     (41,557
 

 

 

   

 

 

   

 

 

   

 

 

 
    4,714     $ 57,351       3,927     $ 35,652  
 

 

 

   

 

 

   

 

 

   

 

 

 
    13,636,982     $ 163,287,361       814,413     $ 7,746,875  
 

 

 

   

 

 

   

 

 

   

 

 

 

 

 
   

Six Months Ended

10/31/23

   

Year Ended

04/30/23

 
 

 

 

   

 

 

 
Fund Name / Share Class   Shares     Amounts     Shares     Amounts  

 

 

Sustainable Emerging Markets Equity

       

Institutional

       

Shares sold

    64,981     $ 833,943       145,529     $ 1,824,043  

Shares issued in reinvestment of distributions

    21,159       277,810       33,719       399,347  

Shares redeemed

    (184,723     (2,344,883     (860,691     (10,418,295
 

 

 

   

 

 

   

 

 

   

 

 

 
    (98,583   $ (1,233,130     (681,443   $ (8,194,905
 

 

 

   

 

 

   

 

 

   

 

 

 

Investor A

       

Shares sold

    19,745     $ 247,060       114,681     $ 1,431,005  

Shares issued in reinvestment of distributions

    22,331       288,296       29,316       340,567  

Shares redeemed

    (305,117     (3,806,709     (576,082     (6,911,190
 

 

 

   

 

 

   

 

 

   

 

 

 
    (263,041   $ (3,271,353     (432,085   $ (5,139,618
 

 

 

   

 

 

   

 

 

   

 

 

 

Class K

       

Shares sold

    12,770     $ 161,442       52,555     $ 654,105  

Shares issued in reinvestment of distributions

    626       8,209       1,195       14,161  

Shares redeemed

    (29,547     (384,517     (50,028     (618,291
 

 

 

   

 

 

   

 

 

   

 

 

 
    (16,151   $ (214,866     3,722     $ 49,975  
 

 

 

   

 

 

   

 

 

   

 

 

 

 

 

N O T E S   T O   F I N A N C I A L   S T A T E M E N T S

  55


Notes to Financial Statements (unaudited) (continued)

 

 

 
   

Six Months Ended

10/31/23

   

Year Ended

04/30/23

 
 

 

 

   

 

 

 
Fund Name / Share Class (continued)   Shares     Amounts     Shares     Amounts  

 

 

Sustainable Emerging Markets Equity (continued)

       

Class R

       

Shares sold

    1,394     $ 12,285       9,668     $ 85,699  

Shares issued in reinvestment of distributions

    399       3,651       528       4,359  

Shares redeemed

    (8,631     (75,935     (32,582     (289,998
 

 

 

   

 

 

   

 

 

   

 

 

 
    (6,838   $ (59,999     (22,386   $ (199,940
 

 

 

   

 

 

   

 

 

   

 

 

 
    (384,613   $ (4,779,348     (1,132,192   $ (13,484,488
 

 

 

   

 

 

   

 

 

   

 

 

 

As of October 31, 2023, shares owned by BlackRock Financial Management, Inc., an affiliate of the Funds, were as follows:

 

   
Fund Name    Class K  

Sustainable Emerging Markets Equity

     10,701  

 

12.

FOREIGN WITHHOLDINGS TAX CLAIMS

The Internal Revenue Service (“IRS”) has issued guidance to address U.S. income tax liabilities attributable to fund shareholders resulting from the recovery of foreign taxes withheld in prior calendar years. These withheld foreign taxes were passed through to shareholders in the form of foreign tax credits in the year the taxes were withheld. Assuming there are sufficient foreign taxes paid which the Unconstrained Equity Fund is able to pass through to shareholders as a foreign tax credit in the current year, the Fund will be able to offset the prior years’ withholding taxes recovered against the foreign taxes paid in the current year. Accordingly, no federal income tax liability is recorded by the Fund.

 

13.

SUBSEQUENT EVENTS

Management has evaluated the impact of all subsequent events on the Funds through the date the financial statements were issued and has determined that there were no subsequent events requiring adjustment or additional disclosure in the financial statements.

 

 

56  

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Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements

 

The Board of Directors of BlackRock Emerging Markets Fund, Inc. (“Emerging Markets Fund”) met on April 18, 2023 and May 23-24, 2023 to consider the approval to continue the investment advisory agreement (the “Emerging Markets Fund Advisory Agreement”) between Emerging Markets Fund and BlackRock Advisors, LLC (the “Manager”), its investment advisor. The Board of Directors of Emerging Markets Fund also considered the approval to continue the sub-advisory agreement (the “Emerging Markets Fund BAMNA Sub-Advisory Agreement”) between the Manager and BlackRock Asset Management North Asia Limited (“BAMNA”) and the sub-advisory agreement (the “Emerging Markets Fund BIL Sub-Advisory Agreement”) between the Manager and BlackRock International Limited (“BIL” and, together with BAMNA, the “Sub-Advisors” and, each individually, a “Sub-Advisor”), each with respect to Emerging Markets Fund.

The Board of Directors of BlackRock Funds VII, Inc. (the “Corporation”) met on April 18, 2023 and May 23-24, 2023 to consider the approval to continue the investment advisory agreement (the “Corporation Advisory Agreement”) between the Corporation, on behalf of BlackRock Sustainable Emerging Markets Equity Fund (“Sustainable Emerging Markets Equity Fund”), and the Manager, its investment advisor. The Board of the Corporation also considered the approval to continue the sub-advisory agreement (the “Sustainable Emerging Markets Equity Fund BAMNA Sub-Advisory Agreement”) between the Manager and BAMNA and sub-advisory agreement (the “Sustainable Emerging Markets Equity Fund BIL Sub-Advisory Agreement”) between the Manager and BIL, each with respect to Sustainable Emerging Markets Equity Fund.

The Board of Trustees of BlackRock Unconstrained Equity Fund (“Unconstrained Equity Fund”) met on April 18, 2023 and May 23-24, 2023 to consider the approval to continue the investment advisory agreement (the “Unconstrained Equity Fund Advisory Agreement”) between Unconstrained Equity Fund and Manager, its investment advisor. The Board also considered the approval to continue the sub-advisory agreement (the “Unconstrained Equity Fund Sub-Advisory Agreement”) between the Manager and BIL with respect to Unconstrained Equity Fund.

Emerging Markets Fund, Sustainable Emerging Markets Equity Fund and Unconstrained Equity Fund are referred to herein individually as a “Fund” or collectively as the “Funds.” The Manager, BAMNA and BIL are referred to herein as “BlackRock.” The Emerging Markets Fund Advisory Agreement, the Emerging Markets Fund BAMNA Sub-Advisory Agreement, the Emerging Markets Fund BIL Sub-Advisory Agreement, the Corporation Advisory Agreement, the Sustainable Emerging Markets Equity Fund BAMNA Sub-Advisory Agreement, the Sustainable Emerging Markets Equity Fund BIL Sub-Advisory Agreement, the Unconstrained Equity Fund Advisory Agreement and the Unconstrained Equity Fund Sub-Advisory Agreement are referred to herein individually as an “Agreement” or collectively as the “Agreements.” For simplicity: (a) the Board of Directors of Emerging Markets Fund, the Board of Directors of the Corporation and the Board of Trustees of Unconstrained Equity Fund are referred to herein individually as the “Board” and collectively as the “Boards” and the members are referred to as “Board Members”; and (b) the meetings held on April 18, 2023 are referred to as the “April Meeting” and the meetings held on May 23-24, 2023 are referred to as the “May Meeting.”

The Approval Process

Consistent with the requirements of the Investment Company Act of 1940 (the “1940 Act”), each Board considers the approval of the continuation of the pertinent Agreement for each Fund on an annual basis. The Board members who are not “interested persons” of the pertinent Fund or, with respect to Sustainable Emerging Markets Equity Fund, the Corporation, as defined in the 1940 Act, are considered independent Board members (the “Independent Board Members”). Each Board’s consideration entailed a year-long deliberative process during which the Board and its committees assessed BlackRock’s various services to each Fund, including through the review of written materials and oral presentations, and the review of additional information provided in response to requests from the Independent Board Members. Each Board had four quarterly meetings per year, each of which extended over a two-day period, as well as additional ad hoc meetings and executive sessions throughout the year, as needed. The committees of each Board similarly met throughout the year. Each Board also had an additional one-day meeting to consider specific information regarding the renewal of the Agreements. In considering the renewal of the Agreements, the Board assessed, among other things, the nature, extent and quality of the services provided to the Fund by BlackRock, BlackRock’s personnel and affiliates, including (as applicable): investment management services; accounting oversight; administrative and shareholder services; oversight of the Fund’s service providers; risk management and oversight; and legal, regulatory and compliance services. Throughout the year, including during the contract renewal process, the Independent Board Members were advised by independent legal counsel, and met with independent legal counsel in various executive sessions outside of the presence of BlackRock’s management.

During the year, each Board, acting directly and through its committees, considered information that was relevant to its annual consideration of the renewal of the Agreements, including the services and support provided by BlackRock to the Fund and its shareholders. BlackRock also furnished additional information to each Board in response to specific questions from the Board. Among the matters each Board considered were: (a) investment performance for one-year, three-year, five-year, and/or since inception periods, as applicable, against peer funds, an applicable benchmark, and other performance metrics, as applicable, as well as BlackRock senior management’s and portfolio managers’ analyses of the reasons for any outperformance or underperformance relative to its peers, benchmarks, and other performance metrics, as applicable; (b) fees, including advisory, administration, if applicable, and other amounts paid to BlackRock and its affiliates by the Fund for services; (c) Fund operating expenses and how BlackRock allocates expenses to the Fund; (d) the resources devoted to, risk oversight of, and compliance reports relating to, implementation of the Fund’s investment objective, policies and restrictions, and meeting regulatory requirements; (e) BlackRock’s and the Fund’s or, with respect to Sustainable Emerging Markets Equity Fund, the Corporation’s adherence to applicable compliance policies and procedures; (f) the nature, character and scope of non-investment management services provided by BlackRock and its affiliates and the estimated cost of such services, as available; (g) BlackRock’s and other service providers’ internal controls and risk and compliance oversight mechanisms; (h) BlackRock’s implementation of the proxy voting policies approved by the Board; (i) the use of brokerage commissions and execution quality of portfolio transactions; (j) BlackRock’s implementation of the Fund’s valuation and liquidity procedures; (k) an analysis of management fees paid to BlackRock for products with similar investment mandates across the open-end fund, exchange-traded fund (“ETF”), closed-end fund, sub-advised mutual fund, separately managed account, collective investment trust, and institutional separate account product channels, as applicable, and the similarities and differences between these products and the services provided as compared to the Fund; (l) BlackRock’s compensation methodology for its investment professionals and the incentives and accountability it creates, along with investment professionals’ investments in the fund(s) they manage; and (m) periodic updates on BlackRock’s business.

Prior to and in preparation for the April Meeting, each Board received and reviewed materials specifically relating to the renewal of the Agreements. The Independent Board Members continuously engaged in a process with their independent legal counsel and BlackRock to review the nature and scope of the information provided to the Board to better assist its deliberations. The materials provided in connection with the April Meeting included, among other things: (a) information independently compiled and prepared by Broadridge Financial Solutions, Inc. (“Broadridge”), based on either a Lipper classification or Morningstar category, regarding each Fund’s fees and expenses as compared with a peer group of funds as determined by Broadridge (“Expense Peers”) and the investment performance of each Fund as compared with a peer group of funds

 

 

D I S C L O S U R E   O F   I N V E S T M E N T   A D V I S O R Y   A G R E E M E N T S   A N D   S U B - A D V I S O R Y   A G R E E M E N T S

  57


Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements   (continued)

 

 

(“Performance Peers”); (b) information on the composition of the Expense Peers and Performance Peers and a description of Broadridge’s methodology; (c) information on the estimated profits realized by BlackRock and its affiliates pursuant to the Agreements and a discussion of fall-out benefits to BlackRock and its affiliates; (d) a general analysis provided by BlackRock concerning investment management fees received in connection with other types of investment products, such as institutional accounts, sub-advised mutual funds, ETFs, closed-end funds, open-end funds, and separately managed accounts, under similar investment mandates, as well as the performance of such other products, as applicable; (e) a review of non-management fees; (f) the existence, impact and sharing of potential economies of scale, if any, with the Funds; (g) a summary of aggregate amounts paid by each Fund to BlackRock; (h) sales and redemption data regarding each Fund’s shares; and (i) various additional information requested by the Board as appropriate regarding BlackRock’s and the Funds’ operations.

At the April Meeting, each Board reviewed materials relating to its consideration of the Agreements and the Independent Board Members presented BlackRock with questions and requests for additional information. BlackRock responded to these questions and requests with additional written information in advance of the May Meeting.

At the May Meeting, each Board concluded its assessment of, among other things: (a) the nature, extent and quality of the services provided by BlackRock; (b) the investment performance of each Fund as compared to its Performance Peers and to other metrics, as applicable; (c) the advisory fee and the estimated cost of the services and estimated profits realized by BlackRock and its affiliates from their relationship with the Funds; (d) each Fund’s fees and expenses compared to its Expense Peers; (e) the existence and sharing of potential economies of scale; (f) any fall-out benefits to BlackRock and its affiliates as a result of BlackRock’s relationship with the Funds; and (g) other factors deemed relevant by the Board Members.

Each Board also considered other matters it deemed important to the approval process, such as other payments made to BlackRock or its affiliates relating to securities lending and cash management, and BlackRock’s services related to the valuation and pricing of the portfolio holdings of the pertinent Fund. Each Board noted the willingness of BlackRock’s personnel to engage in open, candid discussions with the Board. The Board Members evaluated the information available to it on a fund-by-fund basis. The following paragraphs provide more information about some of the primary factors that were relevant to each Board’s decision. The Board Members did not identify any particular information, or any single factor as determinative, and each Board Member may have attributed different weights to the various items and factors considered.

A. Nature, Extent and Quality of the Services Provided by BlackRock

Each Board, including the Independent Board Members, reviewed the nature, extent and quality of services provided by BlackRock, including the investment advisory services and the resulting performance of each Fund. Throughout the year, each Board compared each Fund’s performance to the performance of a comparable group of mutual funds, relevant benchmarks, and performance metrics, as applicable. The Boards met with BlackRock’s senior management personnel responsible for investment activities, including the senior investment officers. Each Board also reviewed the materials provided by each Fund’s portfolio management team discussing the Fund’s performance, investment strategies and outlook.

Each Board considered, among other factors, with respect to BlackRock: the experience of investment personnel generally and each Fund’s portfolio management team; research capabilities; investments by portfolio managers in the funds they manage; portfolio trading capabilities; use of technology; commitment to compliance; credit analysis capabilities; risk analysis and oversight capabilities; and the approach to training and retaining portfolio managers and other research, advisory and management personnel. Each Board also considered BlackRock’s overall risk management program, including the continued efforts of BlackRock and its affiliates to address cybersecurity risks and the role of BlackRock’s Risk & Quantitative Analysis Group. Each Board engaged in a review of BlackRock’s compensation structure with respect to each Fund’s portfolio management team and BlackRock’s ability to attract and retain high-quality talent and create performance incentives.

In addition to investment advisory services, each Board considered the nature and quality of the administrative and other non-investment advisory services provided to each Fund. BlackRock and its affiliates provide the Funds with certain administrative, shareholder and other services (in addition to any such services provided to the Funds by third parties) and officers and other personnel as are necessary for the operations of the Funds. In particular, BlackRock and its affiliates provide the Funds with administrative services including, among others: (i) responsibility for disclosure documents, such as the prospectus, the summary prospectus (as applicable), the statement of additional information and periodic shareholder reports; (ii) oversight of daily accounting and pricing; (iii) responsibility for periodic filings with regulators; (iv) overseeing and coordinating the activities of third-party service providers, including, among others, each Fund’s custodian, fund accountant, transfer agent, and auditor; (v) organizing Board meetings and preparing the materials for such Board meetings; (vi) providing legal and compliance support; (vii) furnishing analytical and other support to assist the Board in its consideration of strategic issues such as the merger, consolidation or repurposing of certain open-end funds; and (viii) performing or managing administrative functions necessary for the operation of the Funds, such as tax reporting, expense management, fulfilling regulatory filing requirements, overseeing each Fund’s distribution partners, and shareholder call center and other services. The Board reviewed the structure and duties of BlackRock’s fund administration, shareholder services, and legal and compliance departments and considered BlackRock’s policies and procedures for assuring compliance with applicable laws and regulations. The Board considered the operation of BlackRock’s business continuity plans.

The Board noted that the engagement of the Sub-Advisors with respect to the applicable Funds facilitates the provision of investment advice and trading by investment personnel out of non-U.S. jurisdictions. The Board considered that this arrangement provides additional flexibility to the portfolio management team, which may benefit the Fund and its shareholders.

B. The Investment Performance of the Funds and BlackRock

Each Board, including the Independent Board Members, reviewed and considered the performance history of the Fund throughout the year and at the April Meeting. In preparation for the April Meeting, each Board was provided with reports independently prepared by Broadridge, which included an analysis of the Fund’s performance as of December 31, 2022, as compared to its Performance Peers. Broadridge ranks funds in quartiles, ranging from first to fourth, where first is the most desirable quartile position and fourth is the least desirable. In connection with its review, each Board received and reviewed information regarding the investment performance of the Fund as compared to its Performance Peers and the respective Morningstar Category (“Morningstar Category”). Each Board and its Performance Oversight Committee regularly review and meet with Fund management to discuss the performance of each Fund throughout the year.

 

 

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Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements    (continued)

 

In evaluating performance, the Boards focused particular attention on funds with less favorable performance records. Each Board also noted that while it found the data provided by Broadridge generally useful, it recognized the limitations of such data, including in particular, that notable differences may exist between a fund and its Performance Peers (for example, the investment objectives and strategies). Further, each Board recognized that the performance data reflects a snapshot of a period as of a particular date and that selecting a different performance period could produce significantly different results. Each Board also acknowledged that long-term performance could be impacted by even one period of significant outperformance or underperformance, and that a single investment theme could have the ability to disproportionately affect long-term performance.

The Board of Trustees of BlackRock Unconstrained Equity Fund noted that for each of the one-, three- and five-year periods reported, Unconstrained Equity Fund ranked in the first quartile against its Morningstar Category. The Board noted that BlackRock believes that the Morningstar Category is an appropriate performance metric for the Fund, and that BlackRock has explained its rationale for this belief to the Board. The Board noted that effective March 1, 2022, the Fund had undergone a change in its investment strategy and in that connection had changed its name from BlackRock Long-Horizon Equity Fund to BlackRock Unconstrained Equity Fund.

The Board of Directors of Emerging Markets Fund noted that for the one-, three- and five-year periods reported, Emerging Markets Fund ranked in the third, second and first quartiles, respectively, against its Morningstar Category. The Board noted that BlackRock believes that the Morningstar Category is an appropriate performance metric for the Fund, and that BlackRock has explained its rationale for this belief to the Board. The Board and BlackRock reviewed the Fund’s underperformance relative to its Morningstar Category during the applicable period.

The Board of Directors of the Corporation noted that for each of the one-, three- and five-year periods reported, Sustainable Emerging Markets Equity Fund ranked in the third quartile against its Morningstar Category. The Board noted that BlackRock believes that the Morningstar Category is an appropriate performance metric for the Fund, and that BlackRock has explained its rationale for this belief to the Board. The Board and BlackRock reviewed the Fund’s underperformance relative to its Morningstar Category during the applicable periods.

C. Consideration of the Advisory/Management Fees and the Estimated Cost of the Services and Estimated Profits Realized by BlackRock and its Affiliates from their Relationship with the Funds

Each Board, including the Independent Board Members, reviewed each Fund’s contractual management fee rate compared with those of its Expense Peers. The contractual management fee rate represents a combination of the advisory fee and any administrative fees, before taking into account any reimbursements or fee waivers. Each Board also compared each Fund’s total expense ratio, as well as its actual management fee rate, to those of its Expense Peers. The total expense ratio represents a fund’s total net operating expenses, including any 12b-1 or non-12b-1 service fees. The total expense ratio gives effect to any expense reimbursements or fee waivers, and the actual management fee rate gives effect to any management fee reimbursements or waivers. The Boards considered that the fee and expense information in the Broadridge report for the Fund reflected information for a specific period and that historical asset levels and expenses may differ from current levels, particularly in a period of market volatility. The Boards considered the services provided and the fees charged by BlackRock and its affiliates to other types of clients with similar investment mandates, as applicable, including institutional accounts and sub-advised mutual funds (including mutual funds sponsored by third parties).

Each Board received and reviewed statements relating to BlackRock’s financial condition. Each Board reviewed BlackRock’s profitability methodology and was also provided with an estimated profitability analysis that detailed the revenues earned and the expenses incurred by BlackRock for services provided to each Fund. Each Board reviewed BlackRock’s estimated profitability with respect to each Fund and other funds the Board currently oversees for the year ended December 31, 2022 compared to available aggregate estimated profitability data provided for the prior two years. Each Board reviewed BlackRock’s estimated profitability with respect to certain other U.S. fund complexes managed by the Manager and/or its affiliates. Each Board reviewed BlackRock’s assumptions and methodology of allocating expenses in the estimated profitability analysis, noting the inherent limitations in allocating costs among various advisory products. Each Board recognized that profitability may be affected by numerous factors including, among other things, fee waivers and expense reimbursements by the Manager, the types of funds managed, precision of expense allocations and business mix. Each Board thus recognized that calculating and comparing profitability at the individual fund level is difficult.

Each Board noted that, in general, individual fund or product line profitability of other advisors is not publicly available. Each Board reviewed BlackRock’s overall operating margin, in general, compared to that of certain other publicly traded asset management firms. Each Board considered the differences between BlackRock and these other firms, including the contribution of technology at BlackRock, BlackRock’s expense management, and the relative product mix.

Each Board considered whether BlackRock has the financial resources necessary to attract and retain high quality investment management personnel to perform its obligations under the Agreements and to continue to provide the high quality of services that is expected by the Board. The Boards further considered factors including but not limited to BlackRock’s commitment of time and resources, assumption of risk, and liability profile in servicing the Funds, including in contrast to what is required of BlackRock with respect to other products with similar investment mandates across the open-end fund, ETF, closed-end fund, sub-advised mutual fund, separately managed account, collective investment trust, and institutional separate account product channels, as applicable.

The Board of Directors of Emerging Markets Fund and the Board of Directors of the Corporation noted, respectively, that each of Sustainable Emerging Markets Equity Fund’s and Emerging Markets Fund’s contractual management fee rate ranked in the first quartile, and that the actual management fee rate and total expense ratio each ranked in the first quartile relative to the pertinent Fund’s Expense Peers.

The Board of Trustees of BlackRock Unconstrained Equity Fund noted that Unconstrained Equity Fund’s contractual management fee rate ranked in the third quartile, and that the actual management fee rate and total expense ratio each ranked in the third quartile relative to the Fund’s Expense Peers.

The Boards also noted that the pertinent Fund has an advisory fee arrangement that includes breakpoints that adjust the fee rate downward as the size of the Fund increases above certain contractually specified levels. The Boards additionally noted that the breakpoints can, conversely, adjust the advisory fee rate upward as the size of the pertinent Fund decreases below certain contractually specified levels. The Boards further noted that BlackRock and the Boards have contractually agreed to a cap on the pertinent Fund’s total expenses as a percentage of the Fund’s average daily net assets on a class-by-class basis.

 

 

D I S C L O S U R E   O F   I N V E S T M E N T   A D V I S O R Y   A G R E E M E N T S   A N D   S U B - A D V I S O R Y   A G R E E M E N T S

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Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements    (continued)

 

D. Economies of Scale

Each Board, including the Independent Board Members, considered the extent to which economies of scale might be realized as the assets of the Funds increase, including the existence of fee waivers and/or expense caps, as applicable, noting that any contractual fee waivers and contractual expense caps had been approved by the Board. In its consideration, each Board further considered the continuation and/or implementation of fee waivers and/or expense caps, as applicable. Each Board also considered the extent to which the Funds benefit from such economies of scale in a variety of ways, and whether there should be changes in the advisory fee rate or breakpoint structure in order to enable the Funds to more fully participate in these economies of scale. Each Board considered each Fund’s asset levels and whether the current fee schedule was appropriate.

E. Other Factors Deemed Relevant by the Board Members

Each Board, including the Independent Board Members, also took into account other ancillary or “fall-out” benefits that BlackRock or its affiliates may derive from BlackRock’s respective relationships with the Funds, both tangible and intangible, such as BlackRock’s ability to leverage its investment professionals who manage other portfolios and its risk management personnel, an increase in BlackRock’s profile in the investment advisory community, and the engagement of BlackRock’s affiliates as service providers to the Funds, including for administrative, distribution, securities lending and cash management services. With respect to securities lending, during the year the Board also considered information provided by independent third-party consultants related to the performance of each BlackRock affiliate as securities lending agent. The Boards also considered BlackRock’s overall operations and its efforts to expand the scale of, and improve the quality of, its operations. The Boards also noted that, subject to applicable law, BlackRock may use and benefit from third-party research obtained by soft dollars generated by certain registered fund transactions to assist in managing all or a number of its other client accounts.

In connection with its consideration of the Agreements, the Boards also received information regarding BlackRock’s brokerage and soft dollar practices. The Boards received reports from BlackRock which included information on brokerage commissions and trade execution practices throughout the year.

The Boards noted the competitive nature of the open-end fund marketplace, and that shareholders are able to redeem their Fund shares if they believe that the pertinent Fund’s fees and expenses are too high or if they are dissatisfied with the performance of the Fund.

Conclusion

At the May Meeting, as a result of the discussions that occurred during the April Meeting, and as a culmination of the Board’s year-long deliberative process, the Board of Emerging Markets Fund, including the Independent Board Members, unanimously approved the continuation of (i) the Emerging Markets Fund Advisory Agreement between the Manager and Emerging Markets Fund, (ii) the Emerging Markets Fund BAMNA Sub-Advisory Agreement between the Manager and BAMNA with respect to Emerging Markets Fund and (iii) the Emerging Markets Fund BIL Sub-Advisory Agreement between the Manager and BIL with respect to Emerging Markets Fund, each for a one-year term ending June 30, 2024.

At the May Meeting, in a continuation of the discussions that occurred during the April Meeting, and as a culmination of the Board’s year-long deliberative process, the Board of the Corporation, including the Independent Board Members, unanimously approved the continuation of (i) the Corporation Advisory Agreement between the Manager and the Corporation, on behalf of Sustainable Emerging Markets Equity Fund, (ii) the Sustainable Emerging Markets Equity Fund BAMNA Sub-Advisory Agreement between the Manager and BAMNA with respect to Sustainable Emerging Markets Equity Fund and (iii) the Sustainable Emerging Markets Equity Fund BIL Sub-Advisory Agreement between the Manager and BIL with respect to Sustainable Emerging Markets Equity Fund, each for a one-year term ending June 30, 2024.

At the May Meeting, as a result of the discussions that occurred during the April Meeting, and as a culmination of the Board’s year-long deliberative process, the Board of Unconstrained Equity Fund, including the Independent Board Members, unanimously approved the continuation of (i) the Unconstrained Equity Fund Advisory Agreement between the Manager and Unconstrained Equity Fund and (ii) the Unconstrained Equity Fund Sub-Advisory Agreement between the Manager and BIL with respect to Unconstrained Equity Fund, both for a one-year term ending June 30, 2024.

Based upon its evaluation of all of the aforementioned factors in their totality, as well as other information, the Boards, including the Independent Board Members, were satisfied that the terms of the Agreements were fair and reasonable and, in the best interest of each Fund and its shareholders. In arriving at its decision to approve the Agreements, the Boards did not identify any single factor or group of factors as all-important or controlling, but considered all factors together, and different Board Members may have attributed different weights to the various factors considered. The Independent Board Members were advised by independent legal counsel throughout the deliberative process.

 

 

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Additional Information

 

Tailored Shareholder Reports for Open-End Mutual Funds and ETFs

Effective January 24, 2023, the SEC adopted rule and form amendments to require open-end mutual funds and ETFs to transmit concise and visually engaging streamlined annual and semiannual reports to shareholders that highlight key information. Other information, including financial statements, will no longer appear in a streamlined shareholder report but must be available online, delivered free of charge upon request, and filed on a semiannual basis on Form N-CSR. The rule and form amendments have a compliance date of July 24, 2024. At this time, management is evaluating the impact of these amendments on the shareholder reports for the Funds.

General Information

Quarterly performance, semi-annual and annual reports, current net asset value and other information regarding the Funds may be found on BlackRock’s website, which can be accessed at blackrock.com. Any reference to BlackRock’s website in this report is intended to allow investors public access to information regarding the Funds and does not, and is not intended to, incorporate BlackRock’s website in this report.

Householding

The Funds will mail only one copy of shareholder documents, including prospectuses, annual and semi-annual reports, Rule 30e-3 notices and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called “householding” and is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. 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 call the Funds at (800) 441-7762.

Availability of Quarterly Schedule of Investments

The Funds file their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to their reports on Form N-PORT. The Funds’ Forms N-PORT are available on the SEC’s website at sec.gov. Additionally, each Fund makes its portfolio holdings for the first and third quarters of each fiscal year available at blackrock.com/fundreports.

Availability of Proxy Voting Policies, Procedures and Voting Records

A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities and information about how the Funds voted proxies relating to securities held in the Funds’ portfolios during the most recent 12-month period ended June 30 is available without charge, upon request (1) by calling (800) 441-7762; (2) on the BlackRock website at blackrock.com; and (3) on the SEC’s website at sec.gov.

BlackRock’s Mutual Fund Family

BlackRock offers a diverse lineup of open-end mutual funds crossing all investment styles and managed by experts in equity, fixed-income and tax-exempt investing. Visit blackrock.com for more information.

Shareholder Privileges

Account Information

Call us at (800) 441-7762 from 8:00 AM to 6:00 PM ET on any business day to get information about your account balances, recent transactions and share prices. You can also visit blackrock.com for more information.

Automatic Investment Plans

Investor class shareholders who want to invest regularly can arrange to have $50 or more automatically deducted from their checking or savings account and invested in any of the BlackRock funds.

Systematic Withdrawal Plans

Investor class shareholders can establish a systematic withdrawal plan and receive periodic payments of $50 or more from their BlackRock funds, as long as their account balance is at least $10,000.

Retirement Plans

Shareholders may make investments in conjunction with Traditional, Rollover, Roth, Coverdell, Simple IRAs, SEP IRAs and 403(b) Plans.

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.

 

 

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Additional Information   (continued)

 

BlackRock Privacy Principles (continued)

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 websites.

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.

Fund and Service Providers

 

Investment Adviser

BlackRock Advisors, LLC

Wilmington, DE 19809

Sub-Adviser

BlackRock Asset Management North Asia Limited(a)

Hong Kong

BlackRock International Limited

Edinburgh, EH3 8BL

United Kingdom

Accounting Agent

State Street Bank and Trust Company

Boston, MA 02114

Custodian

Brown Brothers Harriman & Co.

Boston, MA 02109

 

Transfer Agent

BNY Mellon Investment Servicing (US) Inc.

Wilmington, DE 19809

Distributor

BlackRock Investments, LLC

New York, NY 10001

Independent Registered Public Accounting Firm

Deloitte & Touche LLP

Boston, MA 02116

Legal Counsel

Sidley Austin LLP

New York, NY 10019

Address of the Funds

100 Bellevue Parkway

Wilmington, DE 19809

 
(a)  

For Emerging Markets and Sustainable Emerging Markets Equity.

 

 

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Want to know more?

blackrock.com | 800-441-7762

This report is intended for current holders. It is not authorized for use as an offer of sale or a solicitation of an offer to buy shares of the Funds unless preceded or accompanied by the Funds’ current prospectus. Past performance results shown in this report should not be considered a representation of future performance. Investment returns and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Statements and other information herein are as dated and are subject to change.

GLEQ4-10/23-SAR

 

 

LOGO

   LOGO


(b) Not Applicable

 

Item 2 –

Code of Ethics – Not Applicable to this semi-annual report

 

Item 3 –

Audit Committee Financial Expert – Not Applicable to this semi-annual report

 

Item 4 –

Principal Accountant Fees and Services – Not Applicable to this semi-annual report

 

Item 5 –

Audit Committee of Listed Registrant – Not Applicable

 

Item 6 –

Investments

(a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1(a) of this Form.

(b) Not Applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSR filing.

 

Item 7 –

Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not Applicable

 

Item 8 –

Portfolio Managers of Closed-End Management Investment Companies – Not Applicable

 

Item 9 –

Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not Applicable

 

Item 10 –

Submission of Matters to a Vote of Security Holders –There have been no material changes to these procedures.

 

Item 11 –

Controls and Procedures

(a) The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 15d-15(b) under the Securities Exchange Act of 1934, as amended.

(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

Item 12 –

Disclosure of Securities Lending Activities for Closed-End Management Investment

Companies – Not Applicable

 

Item 13 –

Recovery of Erroneously Awarded Compensation – Not Applicable

 

Item 14 –

Exhibits attached hereto

(a)(1) Code of Ethics – Not Applicable to this semi-annual report

(a)(2) Section 302 Certifications are attached


(a)(3) Any written solicitation to purchase securities under Rule 23c-1 – Not Applicable

(a)(4) Change in Registrant’s independent public accountant – Not Applicable

(b) Section 906 Certifications are attached


Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BlackRock Emerging Markets Fund, Inc.

 

  By:     

/s/ John M. Perlowski                            

       John M. Perlowski
       Chief Executive Officer (principal executive officer) of
       BlackRock Emerging Markets Fund, Inc.

Date: December 21, 2023

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

  By:     

/s/ John M. Perlowski                            

       John M. Perlowski
       Chief Executive Officer (principal executive officer) of
       BlackRock Emerging Markets Fund, Inc.

Date: December 21, 2023

 

  By:     

/s/ Trent Walker                            

       Trent Walker
       Chief Financial Officer (principal financial officer) of
       BlackRock Emerging Markets Fund, Inc.

Date: December 21, 2023