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N-CSRS 1 d120801dncsrs.htm BLACKROCK CAPITAL APPRECIATION FUND, INC. BlackRock Capital Appreciation 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: 811-06669

Name of Fund: BlackRock Capital Appreciation Fund, Inc.

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock Capital

Appreciation Fund, Inc., 55 East 52^nd Street, New York, NY 10055

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

Date of fiscal year end: 09/30/2021

Date of reporting period: 03/31/2021

Item 1 – Report to Stockholders

(a) The Report to Shareholders is attached herewith.


		MARCH 31, 2021

2021 Semi-Annual Report

(Unaudited)

BlackRock Capital Appreciation Fund, Inc.

Not FDIC Insured • May Lose Value • No Bank Guarantee

The Markets in Review

Dear Shareholder,

The 12-month reporting period as of March 31, 2021 reflected a remarkable period of disruption and adaptation, as the global economy dealt with the implications of the coronavirus (or “COVID-19”) pandemic. As the period began, the response to the virus’s spread was well underway, and countries around the world instituted economically disruptive countermeasures. Stay-at-home orders and closures of non-essential businesses became widespread, many workers were laid off, and unemployment claims spiked, causing a global recession and a sharp fall in equity prices.

As April 2020 began, stocks were near their lowest point since the beginning of the pandemic. However, a steady recovery began, as businesses started re-opening and governments learned to adapt to life with the virus. Equity prices continued to rise throughout the summer, fed by strong fiscal and monetary support and improving economic indicators. Many equity indices neared or surpassed all-time highs late in the reporting period following the implementation of mass vaccination campaigns and passage of an additional $1.9 trillion of fiscal stimulus. In the United States, both large- and small-capitalization stocks posted a significant advance. International equities also gained, as both developed countries and emerging markets rebounded substantially.

The 10-year U.S. Treasury yield (which is inversely related to bond prices) was near all-time lows as the period began, reflecting a reduced investor appetite for risk. However, inflation concerns from a rapidly expanding economy raised yields late in the reporting period, leading to a negative overall return for most U.S. Treasuries. In the corporate bond market, support from the U.S. Federal Reserve (the “Fed”) assuaged credit concerns and led to positive returns for corporate bonds, particularly high-yield corporates, which gained substantially.

The Fed remained committed to accommodative monetary policy by maintaining near zero interest rates and by announcing that inflation could exceed its 2% target for a sustained period without triggering a rate increase. To stabilize credit markets, the Fed also continued purchasing significant quantities of bonds, as did other influential central banks around the world, including the European Central Bank and the Bank of Japan.

Looking ahead, while coronavirus-related disruptions have clearly hindered worldwide economic growth, we believe that the global expansion will continue to accelerate as vaccination efforts ramp up and pent-up consumer demand leads to higher spending. In early 2021, President Biden signed one of the largest economic rescue packages in U.S. history, which should provide a solid tailwind for economic growth. In our view, inflation is likely to increase somewhat as the expansion continues, but moderate inflation is less likely to be followed by interest rate hikes that could threaten the economic expansion due to the change in Fed policy.

Overall, we favor a positive stance toward risk, with an overweight in equities. We see U.S. and Asian equities outside of Japan benefiting from structural growth trends in technology, while emerging markets should be particularly helped by a vaccine-led economic expansion. While we are neutral overall on credit, rising inflation should provide tailwinds for inflation-protected bonds, and global high-yield and Asian bonds also present attractive opportunities. We believe that international diversification and a focus on sustainability can help provide portfolio resilience, and the disruption created by the coronavirus appears to be accelerating the shift toward sustainable investments.

In this environment, our view is that investors need to think globally, extend their scope across a broad array of asset classes, 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 March 31, 2021
	6-Month	12-Month

U.S. large cap equities (S&P 500^® Index)	19.07%	56.35%

U.S. small cap equities (Russell 2000^® Index)	48.05	94.85

International equities (MSCI Europe, Australasia, Far East Index)	20.08	44.57

Emerging market equities (MSCI Emerging Markets Index)	22.43	58.39

3-month Treasury bills (ICE BofA 3-Month U.S. Treasury Bill Index)	0.06	0.12

U.S. Treasury securities (ICE BofA 10-Year U.S. Treasury Index)	(8.88)	(8.23)

U.S. investment grade bonds (Bloomberg Barclays U.S. Aggregate Bond Index)	(2.73)	0.71

Tax-exempt municipal bonds (S&P Municipal Bond Index)	1.46	5.29

U.S. high yield bonds (Bloomberg Barclays U.S. Corporate High Yield 2% Issuer Capped Index)	7.35	23.65
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		6
Disclosure of Expenses		6
Financial Statements:
Schedule of Investments		7
Statement of Assets and Liabilities		10
Statement of Operations		12
Statements of Changes in Net Assets		13
Financial Highlights		14
Notes to Financial Statements		19
Statement Regarding Liquidity Risk Management Program		27
Additional Information		28
Glossary of Terms Used in this Report		30

LOGO


		3


Fund Summary as of March 31, 2021		BlackRock Capital Appreciation Fund, Inc.

Investment Objective

BlackRock Capital Appreciation Fund, Inc.’s (the “Fund”) investment objective is to seek long-term growth of capital.

Portfolio Management Commentary

How did the Fund perform?

For the six-month period ended March 31, 2021, the Fund underperformed its benchmark, the Russell 1000^® Growth Index, as well as the broad-market S&P 500^® Index. The following discussion of relative performance pertains to the Russell 1000^® Growth Index.

What factors influenced performance?

The largest detractors from the Fund’s relative performance included stock selection within the consumer discretionary, health care and industrials sectors. Within consumer discretionary, an underweight to automobiles, specifically a lack of exposure to Tesla, Inc., detracted the most from results. Within health care, selection in the pharmaceuticals industry weighed on relative performance, specifically an overweight position in Zoetis, Inc. Finally, an overweight within industrials to the professional services segment, specifically an overweight position in CoStar Group, Inc., detracted slightly from results as well.

The largest positive contributors to the Fund’s relative performance over the period were stock selection in the information technology (“IT”) and communication services sectors, along with positioning in consumer staples. Within IT, an overweight to software drove relative performance, most notably an out-of-benchmark position in Palantir Technologies, Inc. Within communication services, stock selection in the interactive media & services subsector with an out-of-benchmark position in Snap, Inc. added to relative results. Lastly, within consumer staples avoiding sub-sectors such as household products proved advantageous as these more defensive areas typically lag in a rising market.

Describe recent portfolio activity.

During the period, exposure to the communication services sector increased, most notably within the interactive media & services segment. Exposure to the industrials sector increased as well. Conversely, exposure to consumer discretionary experienced the most significant decrease due to lowered exposure to the internet & direct marketing retail segment. The Fund’s exposure to the IT sector was reduced as well.

Describe portfolio positioning at period end.

As of period end, the Fund’s largest overweight position relative to the Russell 1000^® Growth Index was in the materials sector, followed by communication services and financials. Conversely, the consumer staples sector was the largest underweight, followed by health care and IT.

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.


4		2 0 2 1 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


Fund Summary as of March 31, 2021 (continued)		BlackRock Capital Appreciation Fund, Inc.

Performance Summary for the Period Ended March 31, 2021


				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		11.81	%		60.11	%		N/A			21.66	%		N/A			14.71	%		N/A
Investor A		11.67			59.72			51.33	%		21.34			20.03	%		14.40			13.78	%
Investor C		11.22			58.39			57.39			20.36			20.36			13.67			13.67
Class K		11.88			60.24			N/A			21.79			N/A			14.83			N/A
Class R		11.51			59.22			N/A			21.00			N/A			14.08			N/A
Russell 1000^® Growth Index^(c)		12.44			62.74			N/A			21.05			N/A			16.63			N/A
S&P 500^® Index^(d)		19.07			56.35			N/A			16.29			N/A			13.91			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)

The Fund invests primarily in a diversified portfolio consisting primarily of common stock of U.S. companies that Fund management believes have exhibited above-average growth rates in earnings over the long term.

^(c)

An unmanaged index that measures the performance of the large cap growth segment of the U.S. equity universe and consists of those Russell 1000 securities with higher price-to-book ratios and higher forecasted growth values.

^(d)

An unmanaged index that covers 500 leading companies and captures approximately 80% coverage of available market capitalization.

N/A - Not applicable as 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^(a)

		Beginning Account Value (10/01/20)	Ending Account Value (03/31/21)	Expenses Paid During the Period	^(b)		Beginning Account Value (10/01/20)	Ending Account Value (03/31/21)	Expenses Paid During the Period	^(b)	Annualized Expense Ratio
Institutional		$ 1,000.00	$ 1,118.10	$ 3.79			$ 1,000.00	$ 1,021.35	$ 3.62		0.72	%
Investor A		1,000.00	1,116.70	5.12			1,000.00	1,020.09	4.89		0.97
Investor C		1,000.00	1,112.20	9.33			1,000.00	1,016.10	8.90		1.77
Class K		1,000.00	1,118.80	3.34			1,000.00	1,021.78	3.19		0.63
Class R		1,000.00	1,115.10	6.82			1,000.00	1,018.48	6.51		1.29

^(a)

Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365.

^(b)

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 182/365 (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
Amazon.com, Inc.		9	%
Microsoft Corp.		8
Alphabet, Inc., Class A		4
Visa, Inc., Class A		4
Mastercard, Inc., Class A		4
Facebook, Inc., Class A		3
ASML Holding NV, Registered Shares		3
Apple Inc.		3
Netflix, Inc.		3
S&P Global, Inc.		3

SECTOR ALLOCATION


Sector^(b)	Percent of Net Assets
Information Technology		42	%
Consumer Discretionary		19
Communication Services		15
Health Care		10
Industrials		6
Financials		4
Materials		3
Real Estate		1

^(a)

Excludes short-term investments.

^(b)

For Fund compliance purposes, the Fund’s sector classifications refer to one or more of the sector sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.


F U N D S U M M A R Y		5

About Fund Performance

Institutional and Class K Shares are not subject to any sales charge. These shares bear no ongoing distribution or service fees and are available only to certain eligible investors.

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.

Investor C Shares 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 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 the 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 on the previous page 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”), the Fund’s investment adviser, has contractually and/or voluntarily agreed to waive and/or reimburse a portion of the Fund’s expenses. Without such waiver(s) and/or reimbursement(s), the Fund’s performance would have been lower. With respect to the 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 the 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 the 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 example shown on the previous page (which is based on a hypothetical investment of $1,000 invested on October 1, 2020 and held through March 31, 2021) is intended to assist shareholders both in calculating expenses based on an investment in the Fund and in comparing these expenses with similar costs of investing in other mutual funds.

The expense example provides information about actual account values and actual expenses. 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 share class under the heading entitled “Expenses Paid During the Period.”

The expense example also provides information about hypothetical account values and hypothetical expenses based on the 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 the Fund and other funds, compare the 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.

The expenses shown in the expense example are intended to highlight shareholders’ ongoing costs only and do not reflect transactional expenses, such as sales charges, if any. Therefore, the hypothetical example is 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.


6		2 0 2 1 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)

March 31, 2021

BlackRock Capital Appreciation Fund, Inc.

(Percentages shown are based on Net Assets)


Security	Shares		Value

Common Stocks

Aerospace & Defense — 0.7%
TransDigm Group, Inc.^(a)		53,696	$	31,568,952


Capital Markets — 3.9%
Morgan Stanley		540,999		42,013,982
S&P Global, Inc.		353,216		124,639,330


				166,653,312

Chemicals — 2.1%
International Flavors & Fragrances, Inc.		156,924		21,908,160
Linde PLC		37,079		10,387,311
Sherwin-Williams Co.		77,615		57,280,646


				89,576,117

Containers & Packaging — 0.6%
Ball Corp.		317,857		26,935,202


Entertainment — 3.0%
Netflix, Inc.^(a)		247,676		129,202,662


Equity Real Estate Investment Trusts (REITs) — 0.9%
SBA Communications Corp.		141,610		39,303,856


Health Care Equipment & Supplies — 4.1%
Abbott Laboratories		356,665		42,742,734
Boston Scientific Corp.^(a)		1,880,952		72,698,795
Danaher Corp.		136,993		30,834,384
Intuitive Surgical, Inc.^(a)		39,919		29,497,746


				175,773,659

Health Care Providers & Services — 3.3%
Humana, Inc.		149,695		62,759,629
UnitedHealth Group, Inc.		209,042		77,778,257


				140,537,886

Hotels, Restaurants & Leisure — 0.5%
Domino’s Pizza, Inc.		63,555		23,374,894


Industrial Conglomerates — 1.6%
Roper Technologies, Inc.		170,888		68,925,966


Interactive Media & Services — 11.3%
Alphabet, Inc., Class A^(a)		88,731		183,009,462
Facebook, Inc., Class A^(a)		511,375		150,615,279
Snap, Inc., Class A^(a)(b)		2,003,517		104,763,904
Tencent Holdings Ltd.		638,000		50,917,220


				489,305,865

Internet & Direct Marketing Retail — 11.3%
Amazon.com, Inc.^(a)		125,178		387,310,746
MercadoLibre, Inc.^(a)		70,180		103,314,785


				490,625,531

IT Services — 12.7%
Fidelity National Information Services, Inc.		323,659		45,509,692
Mastercard, Inc., Class A		470,528		167,531,494
PayPal Holdings, Inc.^(a)		264,634		64,263,721
Shopify, Inc., Class A^(a)		40,094		44,364,011
Visa, Inc., Class A		847,189		179,375,327
Wix.com Ltd.^(a)		179,104		50,009,419


				551,053,664

Life Sciences Tools & Services — 0.6%
Lonza Group AG, Registered Shares		47,483		26,557,218


Metals & Mining — 0.6%
Freeport-McMoRan, Inc.^(a)		793,992		26,146,157


Multiline Retail — 1.3%
Dollar Tree, Inc.^(a)		481,201		55,078,267


Security	Shares		Value

Pharmaceuticals — 2.3%
AstraZeneca PLC, ADR		746,435	$	37,112,748
Zoetis, Inc.		401,846		63,282,708


				100,395,456

Professional Services — 3.0%
CoStar Group, Inc.^(a)		97,412		80,061,949
TransUnion		548,440		49,359,600


				129,421,549

Road & Rail — 0.7%
Union Pacific Corp.		146,818		32,360,155


Semiconductors & Semiconductor Equipment — 8.8%
Analog Devices, Inc.		659,420		102,262,853
ASML Holding NV, Registered Shares		225,975		139,507,926
Marvell Technology Group Ltd.		1,760,616		86,234,972
NVIDIA Corp.		95,558		51,021,283


				379,027,034

Software — 17.7%
Adobe, Inc.^(a)		197,433		93,853,725
Autodesk, Inc.^(a)		216,680		60,052,862
Intuit, Inc.		276,412		105,882,381
Microsoft Corp.		1,451,147		342,136,928
RingCentral, Inc., Class A^(a)		142,586		42,473,518
ServiceNow, Inc.^(a)		239,569		119,810,852


				764,210,266

Specialty Retail — 2.5%
Lowe’s Cos., Inc.		303,349		57,690,913
TJX Cos., Inc.		742,658		49,126,827


				106,817,740

Technology Hardware, Storage & Peripherals — 3.2%
Apple Inc.		1,128,895		137,894,524


Textiles, Apparel & Luxury Goods — 2.7%
LVMH Moet Hennessy Louis Vuitton SE		55,290		36,931,044
NIKE, Inc., Class B		613,147		81,481,105


				118,412,149


Total Common Stocks — 99.4% (Cost: $2,078,870,671)				4,299,158,081


Preferred Securities

Preferred Stocks — 0.6%

Interactive Media & Services — 0.6%
Bytedance Ltd., Series E-1 (Acquired 11/11/20, cost $20,129,982)^(a)(c)(d)		183,711		24,153,845


Total Preferred Securities — 0.6% (Cost: $20,129,982)				24,153,845


Total Long-Term Investments — 100.0% (Cost: $2,099,000,653)				4,323,311,926


S C H E D U L E O F I N V E S T M E N T S		7

Schedule of Investments (unaudited) (continued)

March 31, 2021

BlackRock Capital Appreciation Fund, Inc.

(Percentages shown are based on Net Assets)


Security	Shares		Value

Short-Term Securities^(e)(f)

Money Market Funds — 0.1%
BlackRock Liquidity Funds, T-Fund, Institutional Class, 0.01%		3,765,236	$	3,765,236
SL Liquidity Series, LLC, Money Market Series, 0.16%^(g)		233,765		233,835


Total Short-Term Securities — 0.1% (Cost: $3,999,071)				3,999,071


Total Investments — 100.1% (Cost: $2,102,999,724)				4,327,310,997

Liabilities in Excess of Other Assets — (0.1)%				(2,299,174	)


Net Assets — 100.0%			$	4,325,011,823

^(a)	Non-income producing security.

^(b)	All or a portion of this security is on loan.

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

^(d)	Restricted security as to resale, excluding 144A securities. The Fund held restricted securities with a current value of $24,153,845, representing 0.6% of its net assets as of period end, and an original cost of $20,129,982.

^(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 March 31, 2021 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:




Affiliated Issuer	Value at 09/30/20		Purchases at Cost			Proceeds from Sale			Net Realized Gain (Loss)				Change in Unrealized Appreciation (Depreciation)				Value at 03/31/21		Shares Held at 03/31/21		Income				Capital Gain Distributions from Underlying Funds

BlackRock Liquidity Funds, T-Fund, Institutional Class	$	22,658,999		$	—	$	(18,893,763)	^(a)		$	—			$	—		$	3,765,236		3,765,236		$	2,239			$	—
SL Liquidity Series, LLC, Money Market Series		43,551,040			—		(43,315,383)	^(a)			(1,584	)			(238	)		233,835		233,765			142,576	^(b)			—


										$	(1,584	)		$	(238	)	$	3,999,071				$	144,815			$	—

^(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.

For Fund compliance purposes, the Fund’s industry classifications refer to one or more of the industry sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.


8		2 0 2 1 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)

March 31, 2021

BlackRock Capital Appreciation 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 investments categorized in the fair value hierarchy. The breakdown of the Fund’s investments 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
Aerospace & Defense	$	31,568,952	$	—	$	—	$	31,568,952
Capital Markets		166,653,312		—		—		166,653,312
Chemicals		89,576,117		—		—		89,576,117
Containers & Packaging		26,935,202		—		—		26,935,202
Entertainment		129,202,662		—		—		129,202,662
Equity Real Estate Investment Trusts (REITs)		39,303,856		—		—		39,303,856
Health Care Equipment & Supplies		175,773,659		—		—		175,773,659
Health Care Providers & Services		140,537,886		—		—		140,537,886
Hotels, Restaurants & Leisure		23,374,894		—		—		23,374,894
Industrial Conglomerates		68,925,966		—		—		68,925,966
Interactive Media & Services		438,388,645		50,917,220		—		489,305,865
Internet & Direct Marketing Retail		490,625,531		—		—		490,625,531
IT Services		551,053,664		—		—		551,053,664
Life Sciences Tools & Services		—		26,557,218		—		26,557,218
Metals & Mining		26,146,157		—		—		26,146,157
Multiline Retail		55,078,267		—		—		55,078,267
Pharmaceuticals		100,395,456		—		—		100,395,456
Professional Services		129,421,549		—		—		129,421,549
Road & Rail		32,360,155		—		—		32,360,155
Semiconductors & Semiconductor Equipment		379,027,034		—		—		379,027,034
Software		764,210,266		—		—		764,210,266
Specialty Retail		106,817,740		—		—		106,817,740
Technology Hardware, Storage & Peripherals		137,894,524		—		—		137,894,524
Textiles, Apparel & Luxury Goods		81,481,105		36,931,044		—		118,412,149
Preferred Securities		—		—		24,153,845		24,153,845
Short-Term Securities
Money Market Funds		3,765,236		—		—		3,765,236


	$	4,188,517,835	$	114,405,482	$	24,153,845		4,327,077,162


Investments Valued at NAV^(a)								233,835


							$	4,327,310,997

^(a)

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

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		9

Statement of Assets and Liabilities (unaudited)

March 31, 2021


	BlackRock Capital Appreciation Fund, Inc.

ASSETS
Investments at value — unaffiliated^(a)(b)	$	4,323,311,926
Investments at value — affiliated^(c)		3,999,071
Receivables:
Investments sold		9,368,858
Securities lending income — affiliated		1,359
Capital shares sold		7,649,851
Dividends — affiliated		712
Dividends — unaffiliated		721,317
Prepaid expenses		105,405


Total assets		4,345,158,499


LIABILITIES
Collateral on securities loaned at value		261,497
Payables:
Investments purchased		11,484,263
Capital shares redeemed		4,586,095
Investment advisory fees		2,233,963
Directors’ and Officer’s fees		7,868
Other accrued expenses		926,659
Other affiliate fees		58,392
Service and distribution fees		587,939


Total liabilities		20,146,676


NET ASSETS	$	4,325,011,823


NET ASSETS CONSIST OF
Paid-in capital	$	1,822,453,053
Accumulated earnings		2,502,558,770


NET ASSETS	$	4,325,011,823


^(a)Investments at cost — unaffiliated	$	2,099,000,653
^(b)Securities loaned at value	$	240,534
^(c)Investments at cost — affiliated	$	3,999,071


10		2 0 2 1 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

Statement of Assets and Liabilities (unaudited) (continued)

March 31, 2021


	BlackRock Capital Appreciation Fund, Inc.

NET ASSET VALUE

Institutional
Net assets	$	999,839,346


Shares outstanding		24,505,179


Net asset value	$	40.80


Shares authorized		300 million


Par value	$	0.10


Investor A
Net assets	$	2,420,562,422


Shares outstanding		65,870,745


Net asset value	$	36.75


Shares authorized		300 million


Par value	$	0.10


Investor C
Net assets	$	71,879,464


Shares outstanding		3,015,004


Net asset value	$	23.84


Shares authorized		300 million


Par value	$	0.10


Class K
Net assets	$	795,874,550


Shares outstanding		19,331,472


Net asset value	$	41.17


Shares authorized		300 million


Par value	$	0.10


Class R
Net assets	$	36,856,041


Shares outstanding		1,297,794


Net asset value	$	28.40


Shares authorized		500 million


Par value	$	0.10

See notes to financial statements.


F I N A N C I A L S T A T E M E N T S		11

Statements of Operations (unaudited)

Six Months Ended March 31, 2021


	BlackRock Capital Appreciation Fund, Inc.

INVESTMENT INCOME
Dividends — unaffiliated	$	9,413,150
Dividends — affiliated		2,239
Interest — unaffiliated		14
Securities lending income — affiliated — net		142,576
Foreign taxes withheld		(71,096	)


Total investment income		9,486,883


EXPENSES
Investment advisory		12,950,130
Service and distribution — class specific		3,451,574
Transfer agent — class specific		1,577,051
Accounting services		132,317
Registration		75,138
Professional		57,192
Printing and postage		23,449
Custodian		22,228
Directors and Officer		8,787
Miscellaneous		27,074


Total expenses		18,324,940
Less:
Fees waived and/or reimbursed by the Manager		(5,305	)


Total expenses after fees waived and/or reimbursed		18,319,635


Net investment loss		(8,832,752	)


REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — unaffiliated		318,972,054
Investments — affiliated		(1,584	)
Foreign currency transactions		(2,706	)


		318,967,764

Net change in unrealized appreciation (depreciation) on:
Investments — unaffiliated		147,545,107
Investments — affiliated		(238	)
Foreign currency translations		1


		147,544,870


Net realized and unrealized gain		466,512,634


NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	457,679,882

See notes to financial statements.


12		2 0 2 1 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


	BlackRock Capital Appreciation Fund, Inc.
	Six Months Ended 03/31/21 (unaudited)			Year Ended 09/30/20

INCREASE (DECREASE) IN NET ASSETS

OPERATIONS
Net investment loss	$	(8,832,752	)	$	(13,778,508	)
Net realized gain		318,967,764			263,468,673
Net change in unrealized appreciation (depreciation)		147,544,870			874,193,288


Net increase in net assets resulting from operations		457,679,882			1,123,883,453


DISTRIBUTIONS TO SHAREHOLDERS^(a)
Institutional		(47,032,427	)		(61,220,948	)
Investor A		(126,248,381	)		(171,947,041	)
Investor C		(6,947,477	)		(27,908,760	)
Class K		(35,787,376	)		(53,180,058	)
Class R		(2,603,694	)		(6,531,099	)


Decrease in net assets resulting from distributions to shareholders		(218,619,355	)		(320,787,906	)


CAPITAL SHARE TRANSACTIONS

Net increase (decrease) in net assets derived from capital share transactions		169,377,889			(27,394,787	)


NET ASSETS
Total increase in net assets		408,438,416			775,700,760
Beginning of period		3,916,573,407			3,140,872,647


End of period	$	4,325,011,823		$	3,916,573,407

^(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		13

Financial Highlights

(For a share outstanding throughout each period)


		BlackRock Capital Appreciation Fund, Inc.


		Institutional

	Six Months Ended 03/31/21 (unaudited)				Year Ended September 30,
	Six Months Ended 03/31/21 (unaudited)				2020			2019			2018			2017			2016


Net asset value, beginning of period		$	38.32		$	30.52		$	33.72		$	29.08		$	25.17		$	24.97


Net investment income (loss)^(a)			(0.05	)		(0.07	)		(0.05	)		0.00	^(b)(c)		0.01	^(d)		(0.03	)
Net realized and unrealized gain			4.53			10.81			0.23			7.97			4.78			2.81


Net increase from investment operations			4.48			10.74			0.18			7.97			4.79			2.78


Distributions from net realized gain^(e)			(2.00	)		(2.94	)		(3.38	)		(3.33	)		(0.88	)		(2.58	)


Net asset value, end of period		$	40.80		$	38.32		$	30.52		$	33.72		$	29.08		$	25.17


Total Return^(f)
Based on net asset value			11.81	%^(g)		38.17	%		1.77	%		30.19	%		19.89	%		11.41	%


Ratios to Average Net Assets
Total expenses			0.72	%^(h)		0.75	%		0.75	%		0.76	%		0.81	%		0.77	%


Total expenses after fees waived and/or reimbursed			0.72	%^(h)		0.75	%		0.75	%		0.76	%		0.81	%		0.77	%


Net investment income (loss)			(0.27	)%^(h)		(0.22	)%		(0.17	)%		0.01	%^(b)		0.05	%^(d)		(0.11	)%


Supplemental Data

Net assets, end of period (000)		$	999,839		$	911,484		$	644,983		$	600,032		$	508,965		$	524,492


Portfolio turnover rate			19	%		42	%		48	%		42	%		62	%		78	%

^(a)	Based on average shares outstanding.

^(b)	Net investment income per share and the ratio of net investment income to average net assets includes $0.06 per share and 0.21%, respectively, resulting from a special dividend.

^(c)	Amount is less than $0.005 per share.

^(d)	Net investment income per share and the ratio of net investment income to average net assets includes $0.04 per share and 0.17%, respectively, resulting from a special dividend.

^(e)	Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

^(f)	Where applicable, assumes the reinvestment of distributions.

^(g)	Aggregate total return.

^(h)	Annualized.

See notes to financial statements.


14		2 0 2 1 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 Capital Appreciation Fund, Inc. (continued)


	Investor A

	Six Months Ended 03/31/21 (unaudited)			Year Ended September 30,
	Six Months Ended 03/31/21 (unaudited)			2020			2019			2018			2017			2016


Net asset value, beginning of period	$	34.74		$	27.99		$	31.25		$	27.16		$	23.63		$	23.66


Net investment loss^(a)		(0.09	)		(0.14	)		(0.12	)		(0.08	)^(b)		(0.06	)^(c)		(0.10	)
Net realized and unrealized gain		4.10			9.83			0.18			7.41			4.47			2.65


Net increase from investment operations		4.01			9.69			0.06			7.33			4.41			2.55


Distributions from net realized gain^(d)		(2.00	)		(2.94	)		(3.32	)		(3.24	)		(0.88	)		(2.58	)


Net asset value, end of period	$	36.75		$	34.74		$	27.99		$	31.25		$	27.16		$	23.63


Total Return^(e)
Based on net asset value		11.67	%^(f)		37.84	%		1.48	%		29.85	%		19.57	%		11.04	%


Ratios to Average Net Assets
Total expenses		0.97	%^(g)		1.01	%		1.01	%		1.04	%		1.08	%		1.08	%


Total expenses after fees waived and/or reimbursed		0.97	%^(g)		1.01	%		1.01	%		1.04	%		1.08	%		1.08	%


Net investment loss		(0.52	)%^(g)		(0.48	)%		(0.43	)%		(0.28	)%^(b)		(0.23	)%^(c)		(0.42	)%


Supplemental Data

Net assets, end of period (000)	$	2,420,562		$	2,195,906		$	1,692,630		$	1,751,581		$	1,597,563		$	1,521,267


Portfolio turnover rate		19	%		42	%		48	%		42	%		62	%		78	%

^(a)	Based on average shares outstanding.

^(b)	Net investment loss per share and the ratio of net investment loss to average net assets includes $ 0.06 per share and 0.21%, respectively, resulting from a special dividend.

^(c)	Net investment loss per share and the ratio of net investment loss to average net assets includes $ 0.04 per share and 0.17%, respectively, resulting from a special dividend.

^(d)	Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

^(e)	Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

^(f)	Aggregate total return.

^(g)	Annualized.

See notes to financial statements.


F I N A N C I A L H I G H L I G H T S		15

Financial Highlights (continued)

(For a share outstanding throughout each period)


	BlackRock Capital Appreciation Fund, Inc. (continued)


	Investor C

	Six Months Ended 03/31/21 (unaudited)			Year Ended September 30,
	Six Months Ended 03/31/21 (unaudited)			2020			2019			2018			2017			2016


Net asset value, beginning of period	$	23.27		$	19.81		$	23.29		$	20.88		$	18.52		$	19.19


Net investment loss^(a)		(0.16	)		(0.25	)		(0.24	)		(0.23	)^(b)		(0.20	)^(c)		(0.22	)
Net realized and unrealized gain		2.73			6.65			0.04			5.56			3.44			2.13


Net increase (decrease) from investment operations		2.57			6.40			(0.20	)		5.33			3.24			1.91


Distributions from net realized gain^(d)		(2.00	)		(2.94	)		(3.28	)		(2.92	)		(0.88	)		(2.58	)


Net asset value, end of period	$	23.84		$	23.27		$	19.81		$	23.29		$	20.88		$	18.52


Total Return^(e)
Based on net asset value		11.22	%^(f)		36.73	%		0.72	%		28.77	%		18.61	%		10.19	%


Ratios to Average Net Assets
Total expenses		1.77	%^(g)		1.79	%		1.81	%		1.84	%		1.89	%		1.89	%


Total expenses after fees waived and/or reimbursed		1.77	%^(g)		1.79	%		1.81	%		1.84	%		1.89	%		1.89	%


Net investment loss		(1.32	)%^(g)		(1.26	)%		(1.23	)%		(1.09	)%^(b)		(1.06	)%^(c)		(1.23	)%


Supplemental Data

Net assets, end of period (000)	$	71,879		$	89,336		$	195,908		$	276,097		$	286,460		$	515,154


Portfolio turnover rate		19	%		42	%		48	%		42	%		62	%		78	%

^(a)	Based on average shares outstanding.

^(b)	Net investment loss per share and the ratio of net investment loss to average net assets includes $ 0.06 per share and 0.21%, respectively, resulting from a special dividend.

^(c)	Net investment loss per share and the ratio of net investment loss to average net assets includes $ 0.04 per share and 0.17%, respectively, resulting from a special dividend.

^(d)	Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

^(e⁾	Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

^(f)	Aggregate total return.

^(g)	Annualized.

See notes to financial statements.


16		2 0 2 1 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 Capital Appreciation Fund, Inc. (continued)


	Class K

	Six Months Ended 03/31/21 (unaudited)			Year Ended September 30,
	Six Months Ended 03/31/21 (unaudited)			2020			2019			2018			2017			2016


Net asset value, beginning of period	$	38.63		$	30.71		$	33.91		$	29.24		$	25.27		$	25.04


Net investment income (loss)^(a)		(0.04	)		(0.04	)		(0.02	)		0.04	^(b)		0.05	^(c)		(0.00	)^(d)
Net realized and unrealized gain		4.58			10.90			0.23			8.01			4.80			2.81


Net increase from investment operations		4.54			10.86			0.21			8.05			4.85			2.81


Distributions from net realized gain^(e)		(2.00	)		(2.94	)		(3.41	)		(3.38	)		(0.88	)		(2.58	)


Net asset value, end of period	$	41.17		$	38.63		$	30.71		$	33.91		$	29.24		$	25.27


Total Return^(f)
Based on net asset value		11.88	%^(g)		38.33	%		1.86	%		30.36	%		20.05	%		11.50	%


Ratios to Average Net Assets
Total expenses		0.63	%^(h)		0.64	%		0.65	%		0.65	%		0.67	%		0.67	%


Total expenses after fees waived and/or reimbursed		0.63	%^(h)		0.64	%		0.64	%		0.65	%		0.67	%		0.66	%


Net investment income (loss)		(0.18	)%^(h)		(0.11	)%		(0.06	)%		0.14	%^(b)		0.18	%^(c)		(0.00	)%⁽ⁱ⁾


Supplemental Data

Net assets, end of period (000)	$	795,875		$	682,107		$	552,523		$	568,169		$	425,347		$	411,146


Portfolio turnover rate		19	%		42	%		48	%		42	%		62	%		78	%

^(a)	Based on average shares outstanding.

^(b)	Net investment income per share and the ratio of net investment income to average net assets includes $0.06 per share and 0.21%, respectively, resulting from a special dividend.

^(c)	Net investment income per share and the ratio of net investment income to average net assets includes $0.04 per share and 0.17%, respectively, resulting from a special dividend.

^(d)	Amount is greater than $(0.005) per share.

^(e)	Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

⁽^f)	Where applicable, assumes the reinvestment of distributions.

^(g)	Aggregate total return.

^(h)	Annualized.

⁽ⁱ⁾	Amount is greater than (0.005)%.

See notes to financial statements.


F I N A N C I A L H I G H L I G H T S		17

Financial Highlights (continued)

(For a share outstanding throughout each period)


	BlackRock Capital Appreciation Fund, Inc. (continued)


	Class R

	Six Months Ended 03/31/21 (unaudited)			Year Ended September 30,
	Six Months Ended 03/31/21 (unaudited)			2020			2019			2018			2017			2016


Net asset value, beginning of period	$	27.30		$	22.65		$	26.00		$	23.12		$	20.30		$	20.71


Net investment loss^(a)		(0.12	)		(0.17	)		(0.16	)		(0.13	)^(b)		(0.10	)^(c)		(0.13	)
Net realized and unrealized gain		3.22			7.76			0.09			6.19			3.80			2.30


Net increase (decrease) from investment operations		3.10			7.59			(0.07	)		6.06			3.70			2.17


Distributions from net realized gain^(d)		(2.00	)		(2.94	)		(3.28	)		(3.18	)		(0.88	)		(2.58	)


Net asset value, end of period	$	28.40		$	27.30		$	22.65		$	26.00		$	23.12		$	20.30


Total Return^(e)
Based on net asset value		11.51	%^(f)		37.45	%		1.19	%		29.49	%		19.27	%		10.75	%


Ratios to Average Net Assets
Total expenses		1.29	%^(g)		1.28	%		1.29	%		1.30	%		1.35	%		1.35	%


Total expenses after fees waived and/or reimbursed		1.29	%^(g)		1.28	%		1.29	%		1.30	%		1.35	%		1.34	%


Net investment loss		(0.85	)%^(g)		(0.75	)%		(0.71	)%		(0.54	)%^(b)		(0.50	)%^(c)		(0.69	)%


Supplemental Data

Net assets, end of period (000)	$	36,856		$	37,741		$	54,828		$	84,484		$	75,765		$	76,138


Portfolio turnover rate		19	%		42	%		48	%		42	%		62	%		78	%

^(a)	Based on average shares outstanding.

^(b)	Net investment loss per share and the ratio of net investment loss to average net assets includes $0.06 per share and 0.21%, respectively, resulting from a special dividend.

^(c)	Net investment loss per share and the ratio of net investment loss to average net assets includes $0.04 per share and 0.17%, respectively, resulting from a special dividend.

^(d)	Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

^(e)	Where applicable, assumes the reinvestment of distributions.

^(f)	Aggregate total return.

^(g)	Annualized.

See notes to financial statements.


18		2 0 2 1 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

Notes to Financial Statements (unaudited)

1.	*ORGANIZATION*

BlackRock Capital Appreciation Fund, Inc. (the “Fund”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Fund is organized as a Maryland corporation. The Fund is classified as diversified.

The 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 Fund, together with certain other registered investment companies advised by BlackRock Advisors, LLC (the “Manager”) or its affiliates, is included in a complex of equity, multi-asset, index and money market 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. The 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 Fund is 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: The 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.

The 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 Statement 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. The 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.

Foreign Taxes: The Fund 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 the Fund invests. These foreign taxes, if any, are paid by the Fund and are reflected in its Statement of Operations as follows: foreign taxes withheld at source are presented as a 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 March 31, 2021, if any, are disclosed in the Statement of Assets and Liabilities.

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

Distributions: Distributions paid by the Fund 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.


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		19

Notes to Financial Statements (unaudited) (continued)

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

Other: Expenses directly related to the Fund or its classes are charged to the Fund or the applicable class. Expenses directly related to the Fund and other shared expenses prorated to the Fund are allocated daily to each class based on its 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 Fund has an arrangement with its custodian whereby credits are earned on uninvested cash balances, which could be used to reduce custody fees and/or overdraft charges. The Fund may incur charges on overdrafts, subject to certain conditions.

3.	*INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS*

Investment Valuation Policies: The 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 Fund determines the fair values of its financial instruments using various independent dealers or pricing services under policies approved by the Board of Directors of the Trust (the “Board”). 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 a policy approved by the Board as reflecting fair value. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) is the committee formed by management to develop global pricing policies and procedures and to oversee the pricing function for all financial instruments.

Fair Value Inputs and Methodologies: The following methods and inputs are used to establish the fair value of the 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.

Generally, trading in foreign instruments is substantially completed each day at various times prior to the close of trading on the NYSE. Occasionally, events affecting the values of such instruments may occur between the foreign market close and the close of trading on the NYSE that may not be reflected in the computation of the Fund’s net assets. Each business day, the Fund uses a pricing service to assist with the valuation of certain foreign exchange-traded equity securities and foreign exchange-traded and over-the-counter (“OTC”) options (the “Systematic Fair Value Price”). Using current market factors, the Systematic Fair Value Price is designed to value such foreign securities and foreign options at fair value as of the close of trading on the NYSE, which follows the close of the local markets.

•

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

•

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

If events (e.g., a market closure, 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 Global Valuation Committee, or its delegate, in accordance with a policy approved by the Board as reflecting fair value (“Fair Valued Investments”). The fair valuation approaches that may be used by the Global 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 Global Valuation Committee, or its delegate, seeks to determine the price that the Fund might reasonably expect to receive or pay from 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 Global Valuation Committee, or its delegate, deems relevant and consistent with the principles of fair value measurement. The pricing of all Fair Valued Investments is subsequently reported to the Board or a committee thereof on a quarterly basis.

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 Global Valuation Committee and third party pricing services utilize one or a combination of, but not limited to, the following inputs.


*Standard Inputs Generally Considered By 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


20		2 0 2 1 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

Notes to Financial Statements (unaudited) (continued)

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 the Fund. Typically, the most recently available information by a Private Company is as of a date that is earlier than the date the Fund is calculating its NAV. This factor may result in a difference between the value of the investment and the price the 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 the 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 Global 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 Global 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 March 31, 2021, certain investments of the Fund were fair valued using NAV per share 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.

Securities Lending: The Fund may lend its securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund 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 the 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 Fund is entitled to all distributions made on or in respect of the loaned securities, but does 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 Schedule 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 Fund’s Schedule of Investments. The market value of any securities on loan and the value of any related collateral are shown separately in the Statement of Assets and Liabilities as a component of investments at value – unaffiliated and collateral on securities loaned at value, respectively.

Securities lending transactions are entered into by the Fund 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 Fund, 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 Fund 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


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		21

Notes to Financial Statements (unaudited) (continued)

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 Fund’s securities on loan by counterparty which are subject to offset under an MSLA:


Counterparty	Securities Loaned at Value		Cash Collateral Received^(a)			Net Amount

J.P. Morgan Securities LLC		$ 240,534		$ (240,534	)		$ —

^(a)

Collateral received in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by the Fund is disclosed in the Fund’s Statement 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 Fund benefits 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. The 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 Fund.

5.	*INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES*

Investment Advisory: The Fund entered into an Investment Advisory Agreement with the Manager, the Fund’s 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 the Fund’s portfolio and provides the personnel, facilities, equipment and certain other services necessary to the operations of the Fund.

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


Average Daily Net Assets	Investment Advisory Fees

First $1 billion		0.650	%
$1 billion - $1.5 billion		0.625
$1.5 billion - $5 billion		0.600
$5 billion - $7.5 billion		0.575
Greater than $7.5 billion		0.550

Service and Distribution Fees: The Fund entered into a Distribution Agreement and a Distribution and Service Plan 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, the 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 the Fund as follows:


Share Class	Service Fees			Distribution Fees

Investor A		0.25	%		N/A
Investor C		0.25			0.75	%
Class R		0.25			0.25

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

For the six months ended March 31, 2021, the following table shows the class specific service and distribution fees borne directly by each share class of the Fund:


	Investor A		Investor C		Class R		Total

Service and distribution fees — class specific		$ 2,952,290		$ 406,214		$ 93,070		$ 3,451,574

Transfer Agent: Pursuant to written agreements, certain financial intermediaries, some of which may be affiliates, provide the Fund 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 March 31, 2021, the Fund did not pay any amounts to affiliates in return for these services.

The Manager maintains a call center that is responsible for providing certain shareholder services to the Fund. Shareholder services include responding to inquiries and processing purchases and sales based upon instructions from shareholders. For the six months ended March 31, 2021, the 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 Statement of Operations:


	Institutional		Investor A		Investor C		Class K		Class R		Total

Reimbursed amounts		$ 1,332		$ 34,313		$ 4,982		$ 1,421		$ 145		$ 42,193


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Notes to Financial Statements (unaudited) (continued)

For the six months ended March 31, 2021, the following table shows the class specific transfer agent fees borne directly by each share class of the Fund:


	Institutional		Investor A		Investor C		Class K		Class R		Total

Transfer agent fees — class specific		$ 424,390		$ 1,056,427		$ 58,414		$ 7,255		$ 30,565		$ 1,577,051

Other Fees: For the six months ended March 31, 2021, affiliates earned underwriting discounts, direct commissions and dealer concessions on sales of the Fund’s Investor A Shares of $47,526.

For the six months ended March 31, 2021, affiliates received CDSCs as follows:



Share Class	Amounts

Investor A	$	12,529
Investor C		3,613

	$	16,142

Expense Limitations, Waivers and Reimbursements: The Manager contractually agreed to waive its investment advisory fees by the amount of investment advisory fees the Fund pays to the Manager indirectly through its investment in affiliated money market funds (the “affiliated money market fund waiver”) through January 31, 2022. The contractual agreement may be terminated upon 90 days’ notice by a majority of the directors who are not “interested persons” of the Fund, as defined in the 1940 Act (“Independent Directors”), or by a vote of a majority of the outstanding voting securities of the 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. This amount is included in fees waived and/or reimbursed by the Manager in the Statement of Operations. For the six months ended March 31, 2021, the amount waived was $5,305.

The Manager has contractually agreed to waive its investment advisory fee with respect to any portion of the Fund’s assets invested in affiliated equity and fixed-income mutual funds and affiliated exchange-traded funds that have a contractual management fee through January 31, 2022. The contractual agreement 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 the Fund. For the six months ended March 31, 2021, there were no fees waived and/or reimbursed by the Manager pursuant to this arrangement.

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 the Fund’s business (“expense limitation”). The expense limitations as a percentage of average daily net assets are as follows:


Share Class	Expense Limitations
Investor C		1.94	%
Class K		0.72

The Manager has agreed not to reduce or discontinue these contractual expense limitations through January 31, 2031, unless approved by the Board, including a majority of the Independent Directors, or by a vote of a majority of the outstanding voting securities of the Fund. For the six months ended March 31, 2021, there were no fees waived and/or reimbursed by the Manager pursuant to this arrangement.

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 Fund, subject to applicable conditions. As securities lending agent, BIM bears all operational costs directly related to securities lending. The Fund is 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 Fund. The Money Market Series may, under certain circumstances, impose a liquidity fee of up to 2% of the value withdrawn or temporarily restrict withdrawals for up to 10 business days during a 90 day period, in the event that the private investment company’s weekly liquid assets fall below certain thresholds. 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. The 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, the Fund retains 77% 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, the Fund, pursuant to the securities lending agreement, will retain for the remainder of that calendar year securities lending income in an amount equal to 81% 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.

Prior to January 1, 2021, the Fund retained 75% of securities lending income (which excluded collateral investment expenses) and the amount retained could 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


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		23


Notes to Financial Statements (unaudited) (continued)

securities lending income earned across the BlackRock Multi-Asset Complex in a calendar year exceeded a specified threshold, the Fund would retain for the remainder of that calendar year 80% of securities lending income (which excluded collateral investment expenses), and the amount retained could 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 the Fund is shown as securities lending income — affiliated — net in the Statement of Operations. For the six months ended March 31, 2021, the Fund paid BIM $41,623 for securities lending agent services.

Interfund Lending: In accordance with an exemptive order (the “Order”) from the SEC, the 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 the Fund’s investment policies and restrictions. The Fund 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 six months ended March 31, 2021, the Fund did not participate in the Interfund Lending Program.

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

6.	*PURCHASES AND SALES*

For the six months ended March 31, 2021, purchases and sales of investments, excluding short-term investments, were $804,482,906 and $845,933,455, respectively.

7.	*INCOME TAX INFORMATION*

It is the 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.

The 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 the Fund’s U.S. federal tax returns generally remains open for a period of three fiscal years after they are filed. The statutes of limitations on the 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 Fund as of March 31, 2021, 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 Fund’s financial statements.

As of March 31, 2021, 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:



	Amounts

Tax cost	$	2,105,826,983

Gross unrealized appreciation	$	2,235,911,462
Gross unrealized depreciation		(14,427,448	)

Net unrealized appreciation (depreciation)	$	2,221,484,014

8.	*BANK BORROWINGS*

The Fund, along with certain other funds managed by the Manager and its affiliates (“Participating Funds”), is a party to a 364-day, $2.25 billion credit agreement with a group of lenders. Under this agreement, the Fund may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Fund, 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) one-month LIBOR (but, in any event, not less than 0.00%) on the date the loan is made plus 0.80% per annum or (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. The agreement expires in April 2021 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 March 31, 2021, the Fund did not borrow under the credit agreement.

9.	*PRINCIPAL RISKS*

In the normal course of business, the Fund invests in securities or other instruments and may enter into certain transactions, and such activities subject the 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


24		2 0 2 1 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


Notes to Financial Statements (unaudited) (continued)

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 Fund and its investments. The Fund’s prospectus provides details of the risks to which the Fund is subject.

The Fund 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 redemption gates or liquidity fees under certain circumstances.

Market Risk: An outbreak of respiratory disease caused by a novel coronavirus has developed into a global pandemic and has resulted in closing borders, quarantines, disruptions to supply chains and customer activity, as well as general concern and uncertainty. The impact of this pandemic, and other global health crises that may arise in the future, could affect the economies of many nations, individual companies and the market in general in ways that cannot necessarily be foreseen at the present time. This pandemic may result in substantial market volatility and may adversely impact the prices and liquidity of a fund’s investments. The duration of this pandemic and its effects cannot be determined with certainty.

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. The Fund may invest in illiquid investments. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. The 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 the 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 the Fund may lose value, regardless of the individual results of the securities and other instruments in which the Fund invests.

The price the Fund could receive upon the sale of any particular portfolio investment may differ from the Fund’s valuation of the investment, particularly for securities that trade in thin or volatile markets or that are valued using a fair valuation 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 the 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 the Fund, and the Fund could realize a greater than expected loss or lesser than expected gain upon the sale of the investment. The Fund’s ability to value its investments may also be impacted by technological issues and/or errors by pricing services or other third party service providers.

Counterparty Credit Risk: The Fund 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 Fund manages 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 Fund to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Fund’s exposure to market, issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Statement of Assets and Liabilities, less any collateral held by the Fund.

Concentration 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 the Fund’s portfolio are disclosed in its Schedule of Investments.

The Fund invests a significant portion of its assets in securities within a single or limited number of market sectors. When a Fund concentrates its investments in this manner, it assumes the risk that economic, regulatory, political and social conditions affecting such sectors may have a significant impact on the Fund and could affect the income from, or the value or liquidity of, the Fund’s portfolio. Investment percentages in specific sectors are presented in the Schedule of Investments.

LIBOR Transition Risk: The United Kingdom’s Financial Conduct Authority announced a phase out of the London Interbank Offered Rate (“LIBOR”). Although many LIBOR rates will be phased out by the end of 2021, a selection of widely used USD LIBOR rates will continue to be published through June 2023 in order to assist with the transition. The Fund may be exposed to financial instruments tied to LIBOR to determine payment obligations, financing terms, hedging strategies or investment value. The transition process away from LIBOR might lead to increased volatility and illiquidity in markets for, and reduce the effectiveness of new hedges placed against, instruments whose terms currently include LIBOR. The ultimate effect of the LIBOR transition process on the Fund is uncertain.

10.

CAPITAL SHARE TRANSACTIONS

Transactions in capital shares for each class were as follows:


	Six Months Ended 03/31/21						Year Ended 09/30/20
Share Class	Shares			Amounts			Shares			Amounts
Institutional
Shares sold		2,580,393		$	104,083,453			8,826,926		$	281,748,539
Shares issued in reinvestment of distributions		1,007,995			40,138,359			1,783,274			52,232,104
Shares redeemed		(2,868,817	)		(115,881,277	)		(7,958,971	)		(261,953,622	)

		719,571		$	28,340,535			2,651,229		$	72,027,021


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		25

Notes to Financial Statements (unaudited) (continued)


	Six Months Ended 03/31/21						Year Ended 09/30/20
Share Class	Shares			Amounts			Shares			Amounts
Investor A
Shares sold and automatic conversion of shares		4,552,705		$	165,798,524			11,625,894		$	349,131,626
Shares issued in reinvestment of distributions		3,267,552			117,272,474			6,005,152			159,797,108
Shares redeemed		(5,163,931	)		(187,721,312	)		(14,886,082	)		(430,482,828	)

		2,656,326		$	95,349,686			2,744,964		$	78,445,906

Investor C
Shares sold		314,351		$	7,504,360			1,143,520		$	22,141,923
Shares issued in reinvestment of distributions		295,390			6,894,411			1,472,411			26,415,050
Shares redeemed and automatic conversion of shares		(1,434,182	)		(34,274,711	)		(8,667,920	)		(181,302,036	)

		(824,441	)	$	(19,875,940	)		(6,051,989	)	$	(132,745,063	)

Class K
Shares sold		1,956,883		$	79,702,174			3,812,856		$	123,140,219
Shares issued in reinvestment of distributions		875,745			35,178,672			1,765,721			52,106,434
Shares redeemed		(1,156,471	)		(46,968,828	)		(5,911,987	)		(195,998,137	)

		1,676,157		$	67,912,018			(333,410	)	$	(20,751,484	)

Class R
Shares sold		153,259		$	4,393,478			449,533		$	10,062,423
Shares issued in reinvestment of distributions		93,417			2,594,192			311,109			6,520,841
Shares redeemed		(331,150	)		(9,336,080	)		(1,798,651	)		(40,954,431	)

		(84,474	)	$	(2,348,410	)		(1,038,009	)	$	(24,371,167	)

		4,143,139		$	169,377,889			(2,027,215	)	$	(27,394,787	)

11.

SUBSEQUENT EVENTS

Management’s evaluation of the impact of all subsequent events on the Fund’s financial statements was completed through the date the financial statements were issued and the following items were noted:

On April 7, 2021, the Board approved a change in the fiscal year-end of the Fund, effective as of May 31, 2021, from September 30 to May 31.

Effective April 15, 2021, the credit agreement was extended until April 2022 under substantially the same terms.


26		2 0 2 1 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

Statement Regarding Liquidity Risk Management Program

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the “Liquidity Rule”), BlackRock Capital Appreciation Fund, Inc. (the “Fund”), has adopted and implemented a liquidity risk management program (the “Program”) which is reasonably designed to assess and manage the Fund’s liquidity risk.

The Board of Directors (the “Board”) of the Fund, met on November 10-11, 2020 (the “Meeting”) to review the Program. The Board previously appointed BlackRock Advisors, LLC or BlackRock Fund Advisors (“BlackRock”), each an investment adviser to certain funds, as the program administrator for the Fund’s Program, as applicable. BlackRock also previously delegated oversight of the Program to the 40 Act Liquidity Risk Management Committee (the “Committee”). At the Meeting, the Committee, on behalf of BlackRock, provided the Board with a report that addressed the operation of the Program and assessed its adequacy and effectiveness of implementation, including the management of the Fund’s Highly Liquid Investment Minimum (“HLIM”) where applicable, and any material changes to the Program (the “Report”). The Report covered the period from October 1, 2019 through September 30, 2020 (the “Program Reporting Period”).

The Report described the Program’s liquidity classification methodology for categorizing a Fund’s investments (including derivative transactions) into one of four liquidity buckets. It also referenced the methodology used by BlackRock to establish a Fund’s HLIM and noted that the Committee reviews and ratifies the HLIM assigned to the Fund no less frequently than annually. The Report also discussed notable events affecting liquidity over the Program Reporting Period, including the impact of the coronavirus outbreak on the Fund and the overall market.

The Report noted that the Program complied with the key factors for consideration under the Liquidity Rule for assessing, managing and periodically reviewing a Fund’s liquidity risk, as follows:

The Fund’s investment strategy and liquidity of portfolio investments during both normal and reasonably foreseeable stressed conditions. During the Program Reporting Period, the Committee reviewed whether each Fund’s strategy is appropriate for an open-end fund structure with a focus on Funds with more significant and consistent holdings of less liquid and illiquid assets. The Committee also factored a Fund’s concentration in an issuer into the liquidity classification methodology by taking issuer position sizes into account. Where a Fund participated in borrowings for investment purposes (such as tender option bonds and reverse repurchase agreements), such borrowings were factored into the Program’s calculation of a Fund’s liquidity bucketing. Derivative exposure was also considered in such calculation.

Short-term and long-term cash flow projections during both normal and reasonably foreseeable stressed conditions. During the Program Reporting Period, the Committee reviewed historical net redemption activity and used this information as a component to establish each Fund’s reasonably anticipated trading size (“RATS”). Each Fund has adopted an in-kind redemption policy which may be utilized to meet larger redemption requests. The Committee may also take into consideration a Fund’s shareholder ownership concentration (which, depending on product type and distribution channel, may or may not be available), a Fund’s distribution channels, and the degree of certainty associated with a Fund’s short-term and long-term cash flow projections.

Holdings of cash and cash equivalents, as well as borrowing arrangements. The Committee considered the terms of the credit facility committed to the Funds, the financial health of the institution providing the facility and the fact that the credit facility is shared among multiple Funds (including that a portion of the aggregate commitment amount is specifically designated for BlackRock Floating Rate Income Portfolio, a series of BlackRock Funds V). The Committee also considered other types of borrowing available to the Funds, such as the ability to use reverse repurchase agreements and interfund lending, as applicable.

There were no material changes to the Program during the Program Reporting Period. The Report provided to the Board stated that the Committee concluded that based on the operation of the functions, as described in the Report, the Program is operating as intended and is effective in implementing the requirements of the Liquidity Rule.


S T A T E M E N T R E G A R D I N G L I Q U I D I T Y R I S K M A N A G E M E N T P R O G R A M		27

Additional Information

General Information

Quarterly performance, semi-annual and annual reports, current net asset value and other information regarding the Fund 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 Fund and does not, and is not intended to, incorporate BlackRock’s website in this report.

Householding

The Fund 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 Fund at (800) 441-7762.

Availability of Quarterly Schedule of Investments

The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Fund’s Form N-PORT is available on the SEC’s website at sec.gov. Additionally, the 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 Fund uses to determine how to vote proxies relating to portfolio securities and information about how the Fund voted proxies relating to securities held in the Fund’s portfolio 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.


28		2 0 2 1 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

Additional Information (continued)

BlackRock Privacy Principles

BlackRock is committed to maintaining the privacy of its current and former fund investors and individual clients (collectively, “Clients”) and to safeguarding their non-public personal information. The following information is provided to help you understand what personal information BlackRock collects, how we protect that information and why in certain cases we share such information with select parties.

If you are located in a jurisdiction where specific laws, rules or regulations require BlackRock to provide you with additional or different privacy-related rights beyond what is set forth below, then BlackRock will comply with those specific laws, rules or regulations.

BlackRock obtains or verifies personal non-public information from and about you from different sources, including the following: (i) information we receive from you or, if applicable, your financial intermediary, on applications, forms or other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our 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		Independent Registered Public Accounting Firm
BlackRock Advisors, LLC		Deloitte & Touche LLP
Wilmington, DE 19809		Boston, MA 02116

Accounting Agent and Transfer Agent		Distributor
BNY Mellon Investment Servicing (US) Inc.		BlackRock Investments, LLC
Wilmington, DE 19809		New York, NY 10022

Custodian		Legal Counsel
The Bank of New York Mellon		Sidley Austin LLP
New York, NY 10286		New York, NY 10019

		Address of the Fund
		100 Bellevue Parkway
		Wilmington, DE 19809


A D D I T I O N A L I N F O R M A T I O N		29

Glossary of Terms Used in this Report


Portfolio Abbreviation

ADR		American Depositary Receipt


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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 Fund unless preceded or accompanied by the Fund’s 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.

CapApp-3/21-SAR

(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 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 –

Exhibits attached hereto

(a)(1) Code of Ethics – Not Applicable to this semi-annual report

(a)(2) Section 302 Certifications are attached

(a)(3) Not Applicable

(a)(4) 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 Capital Appreciation Fund, Inc.

By:		/s/ John M. Perlowski
		John M. Perlowski
		Chief Executive Officer (principal executive officer) of
		BlackRock Capital Appreciation Fund, Inc.

Date: June 3, 2021

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 Capital Appreciation Fund, Inc.

Date: June 3, 2021

By:		/s/ Trent Walker
		Trent Walker
		Chief Financial Officer (principal financial officer) of
		BlackRock Capital Appreciation Fund, Inc.

Date: June 3, 2021